General Motors Death Watch 118: Too Much Too Little Too Late

Andrew Dederer
by Andrew Dederer

When Car Czar Bob Lutz told the world that GM was putting the Zeta platform on hold, it was the second time the rear-wheel drive (RWD) program had been chopped. Two years ago, GM killed Zeta for being too pricey. Less than half a year later, the RWD program was resurrected; working with GM’s Holden division supposedly made it feasible. When Bob announced GM had second thoughts about its second thoughts, he blamed the double volte-face on government fuel economy and emissions legislation. In fact, there’s both less and more to this decision than meets the eye.

First, understand this: the regulations in question have yet to be finalized, let alone codified. While politicians have discussed the possibility of increasing federal CAFE (Corporate Average Fuel Economy) standards, no changes have been made. And while the Supreme Court has ruled that the EPA (Environmental Protection Agency) can/should regulate carbon emissions, any such action must first go through a lengthy process of debate, drafting and implementation.

Bottom line: any GM carping about government interference is preemptive/speculative. And there’s nothing about the regulations that prohibits the development of fuel-efficient RWD cars through alternative propulsion, displacement-on-demand, turbo-diesels or any number of technological solutions. In fact, GM’s decision to kill Zeta may have less to do with government regulations than commercial realities.

On January 9, 2006, GM announced they were going to build a rear-wheel drive Camaro. The automaker took considerable heat for being late to the RWD party. The fifth-generation Ford Mustang had been on sale for over a year; the fifth-generation Camaro wouldn’t arrive until (model year) 2009. GM also announced the ’09 Chevrolet Impala would switch to the Zeta platform to take on the Chrysler 300 (which also arrived in ’05).

At first glance, the Mustang and 300 were worthy targets. But, as pundits warned at the time, the Mustang and 300 were niche products— big niches, but niches nonetheless. Their stellar sales success occurred within an untapped market with limited potential growth.

Recent sales data has vindicated the soothsayers. In the last two months, Mustang sales have dropped 15 percent. Year to date, 300 sales have tanked by 22.8 percent. Both market segments– rear-wheel drive gas guzzling nostalgia-mobiles and big-ass RWD American sedans– have cooled. There is little reason to believe that GM’s “new blood” will re-ignite sales.

Zeta’s crib death could well reflect the fact that it isn’t worth the cost to develop the RWD platform for the North American market– where it would have to be produced in much larger numbers at a much lower price-point than down under (where Holden lives). Holden is still getting the Zeta platform, and the Canadian-built RWD Camaro will debut as planned, but it looks like Zeta is an evolutionary dead end.

No matter what the reason, GM has spent a lot of money NOT to build a car. And the hit to their bottom line could well be ongoing. Changing plans for the next Impala pretty much force the next design to be a “refreshing” of a car that's hardly a world-beater.

Replacements for the Impala et al will have to wait for plan L (or thereabouts). With development times as slow as GM’s, continuity has to be job one. GM hasn’t just lost a couple of cars– they’re back to square one in their single most important car class in their most important market.

Just before Bob’s Zeta obituary (officially it’s “on hold”), the company revealed the Beat, Trax and Groove micro-concept cars. The “triplets” were nice enough small car designs, but they were nothing but pretty skins. GM gives away very little to the competition in terms of styling. Their weak point is running gear.

If GM had revealed a new global platform and matching engine, which could have worn any of the skins shown (heck, they could build them all, haven’t they seen the Scion xA/xB?), THAT would have been a suitable replacement for the ill-fated Zeta platform. Instead they gave us an ageing Emperor wearing new clothes, riding a wooden horse.

I’m not ripping GM for dumping RWD. The question of which wheels are driven isn't nearly as important as some pistonheads believe. Nor am I all that concerned about who's responsible for GM's expensive start – stop development process. The real problem is that Zeta’s demise leaves GM’s car cupboard looking distinctly bare for another three to four years.

In the short term, GM will serve-up the Pontiac G8, updated Cadillac CTS, hybrid Saturn Aura, new Chevrolet Malibu and Camaro, a couple of over-engined Buick variants and the inherently unprofitable Astra. It's not enough. The automaker needs some revolutionary/evolutionary new small and mid-sized cars. Unfortunately, they need them NOW. If Lutz and Co. took the wrong path three years ago, once again, GM is doomed to continue offering too little, too late.

Andrew Dederer
Andrew Dederer

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  • Sherman Lin Sherman Lin on Apr 24, 2007

    I Think Opel was bought in the 1920's So it may be German engineering but it is really GM.

  • Jurisb Jurisb on Apr 25, 2007

    Sherman lin- for example Mack Trucks is owned by volvo. do you consider all mack trucks as actually volvo. do you consider Mack swedish company now? the joke is that in S&P or nasdaq indexes is included GM. at the same time opel manufacturing and engineering is included in germany`s GDP.

  • Mike What percentage of people who buy plug in hybrids stop charging them daily after a few months? Also, what portion of the phev sales are due to the fact that the incentives made them a cheaper lease than the gas only model? (Im thinking of the wrangler 4xe). I wish there was a way to dig into the numbers deeper.
  • CEastwood If it wasn't for the senior property tax freeze in NJ I might complain about this raising my property taxes since most of that tax goes to the schools . I'm not totally against EVs , but since I don't drive huge miles and like to maintain my own vehicles they are not practical especially since I keep a new vehicle long term and nobody has of yet run into the cost of replacing the battery on an EV .
  • Aquaticko Problem with PHEV is that, like EVs, they still require a behavioral change over ICE/HEV cars to be worth their expense and abate emissions (whichever is your goal). Studies in the past have shown that a lot of PHEV drivers don't regularly plug-in, meaning they're just less-efficient HEVs.I'm left to wonder how big a battery a regular HEV could have without needing to be a PHEV.
  • El scotto ooops, the third shot is at the gas pump voice-over saying "Yep, you can refill whenever you want."
  • El scotto The opening shot of the ad: Show a PHEV running a quarter mile, in about seven seconds and silently with the voice-over saying "What you want to do, all on electrons"; segue to bumper-to-bumper traffic and the voice-over saying "What you really do; all on electrons for your first 80 miles".