GM Slashes Pickup and SUV Production

by Robert Farago

August 23rd, 2007 7:04 AM

On August ninth, GM Car Czar Maximum Bob Lutz announced that his employer had increased incentives in response to its competitors' spending– not to shore-up sliding market share. On Elvis' Death Day (August 16), Bob pronounced himself "reasonably pleased" with the month's progress– despite our spies' reports that GM's sales were continuing their disastrous slide. Yesterday, GM ended the charade (at least for anyone other than Bob Lutz) by announcing production cutbacks on their cash cows: pickup trucks and SUVs. Reuters reports that the automaker has eliminated previously scheduled overtime through the rest of the year at truck-making plants in Arlington, Texas; Janesville, Wisconsin; Silao, Mexico; Fort Wayne, Indiana; Flint, Michigan; and Oshawa, Ontario. Spokesman Tom Wickham explained that "reducing overtime production enables us to reduce pressure for excessive incentive spending." True, but it also reduces the amount of cash GM's North American operations will generate. If August pans out the way we've heard, look for more production cuts AND increased incentives.

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Pch101 on Aug 24, 2007
When the Malibu is launched and the critics and the good folks at TTAC have all had a look/drive.Then and only then we can decide if its a winner or a loser. I think that sales of the Aura, which is the Malibu's badge-engineered Saturn sibling, are a good indicator of things to come. And it's not selling particularly well. I expect that the market will be relatively indifferent to the Malibu. It is not particularly unique or interesting enough to steal many Camry, Altima and Accord buyers from their preferred product. I'm sure that Avis will like it, though. GM takes baby steps when it needs to be leaping and bounding. Benchmarking a five-year old Accord and still missing the mark in the process is simply not enough to turn skeptical car shoppers into buyers. Speaking of The Enemy, the new 2008 Accord will be out soon enough. Is there really any doubt which one of these two is going to win that race?

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Starlightmica on Aug 24, 2007
Pch101: GM takes baby steps when it needs to be leaping and bounding. Benchmarking a five-year old Accord and still missing the mark in the process is simply not enough to turn skeptical car shoppers into buyers. Exactly. GM is introducing the Aura and Malibu 1 year apart, but for what? to avoid cannibalization? The two cars are dimensionally almost identical. Hard points appear to be unchanged, and the Malibu's back seat is fractionally smaller than the Aura's. The 1FL's light grey interior trim will be right at home with Avis. It's just one step away from badge engineering, not what would be described as thinking out of the (3-)box. Contrast that with the previous Accord and Acura TL, where the cars were also 1 year apart but are visually and dimensionally quite different. Camry and Lexus ES350 are another example, but launched simultaneously. That's difference between a company with the big Mo and a company without, which takes us all the way back to the original news article and GM's need production cutbacks.

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Captain Tungsten on Aug 24, 2007

Pch: Aura sales are not a good indicator of how Malibu will do; there are way fewer Saturn dealers than Chevrolet (GM probably wishes it were the other way around...) Chevy will have way more marketing $$ behind the launch and whereas most people (correctly) think an Aura is what surrounds the face of God, Malibu is one of the most well known names in the industry, and the car is true to the heritage of it's name(midsize, good value, performance and comfort). I think the sales performance of the Malibu will be a much bigger signal of whether GM is "back in the game" than Aura ever will be, a shame since Aura is a fine automobile.

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Pch101 on Aug 24, 2007
Malibu is one of the most well known names in the industry, and the car is true to the heritage of it’s name(midsize, good value, performance and comfort). The Malibu's heritage is that of a rental car! That alleged "heritage" (if one dare call it that) is an albatross of a burden, not a benefit. GM might actually start producing real profits if would just bite the bullet, recognize that its badges and nameplates have largely negative value, and figured out how to rise above its present status. As it stands now, the Accord is going to eat the Malibu for breakfast and spit it out for lunch. There is absolutely nothing that is so compelling about the Malibu that it can expect to gain much in the way of conquest sales. It's just too little, and it may already be too late.

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