General Motors Death Watch 159: What's GMNext? Panic!
Contrary to popular belief, panic is a logical reaction to an external threat. When a cornered animal’s fight or flight responses are unavailable or exhausted, acting erratically is its only hope. GM has been showing signs of panic for some time: on-again off-again product plans, vainglorious boasts, mistimed marketing, ill-advised divestiture and more. Recent events indicate that the domestic automaker’s aberrant behavior is escalating; leading, I’m afraid, to extinction. But let’s start with the meta-weirdness and work our way back to specific inexplicability.
“What should power the world's vehicles in 20 years? How can personal transportation become more sustainable in an age of increasing global competition for resources? What role will the automotive industry play in developing markets?” The PR folk introducing GMNext.com have a firm grasp on the do-or-die issues facing GM. Equally obvious: their employer doesn’t have a coherent plan for addressing them.
Why else would GM open the “debate” to the general public? OK, sure, CEO Rick Wagoner says the site’s about “introducing some of our ideas for addressing critical issues concerning energy, the environment and globalization” to “spark a broader, global discussion on these important topics.” But GMNext’s overarching, underlying message is that the company’s product plans are an ill-defined work in progress. No wonder GMNext.com suffers from the usual GM ADD, promoting everything from OnStar’s Slow Down technology to the Volt’s erstwhile battery.
On one hand, fair enough. It’s an internet world. Power to the people! (As if.) Technology is in flux. React quickly and go with the flow! (As if.) On the other hand, if General Motors doesn’t already have a well-established plan for its future– from next Monday to 20 years away– we know someone who does.
Unlike Toyota, GM is panicking; flailing about; trying to find a way out of truck-heavy Hell. Instead of rallying the troops and heading in one direction, GM’s flying off in all directions, with predictably bizarre results. For example, GM’s “import fighter” is importing and rebadging a Belgian subcompact– and taking pride in the fact that Californians can’t identify it as a Saturn (see: GMNext.com). It's launching a bread-and-butter sedan with a $150m ad campaign– calling the Malibu “the car you can’t ignore”– with only a handful of new ‘Bu’s on the ground.
After dismissing the hybrid Prius as a marketing gimmick, GM’s poured billions into their own gas – electric system– for 5000lbs. SUVs. Meanwhile, after pronouncing that the new Chevrolet Volt will kick the current and next generation Prius’ ass come Spring, GM’s pulled back from the timeline– while continuing to promote the Volt some THREE YEARS before its POSSIBLE launch.
The confusion continues. GM’s just announced that they’ve killed their Ultra-V8 engine project: the new powerplant that would have [finally] replaced the ageing Northstar to power the next generation of GM luxury cars. Are they seriously suggesting that big Caddies– supposedly the standard of the world– don’t need the world’s best V8? Which reminds me: GM’s on-again, off-again plans for a range of rear wheel-drive models remains… undecided.
The last issue brings us to the other hallmark of panic (besides illogical behavior): anger. A panicking animal is suffused with adrenalin. In this case, anger’s afflicting GM Car Czar “Maximum Bob” Lutz, the man who must [eventually] decide on GM’s new drivetrains and platforms in the face of a new, more restrictive legislative environment.
"Now that we have the 35 miles-per-gallon fuel economy mandate by 2020, I am hoping that in 2008 'Professor Doktor' David Friedman (research director, clean vehicles program, Union of Concerned Scientists) and his 'highly-qualified' band of allegedly concerned, self-proclaimed scientists will turn their energy toward showing the world's automotive industry exactly how those numbers, using existing technology and 'costs of a few hundred dollars at the most' can be attained with a vehicle selection that even remotely resembles the cars and trucks Americans want to buy today.”
The new federal regs represent a sea change in the regulatory landscape that all but the most ostrich-like industry players saw coming years ago. It scarcely seems credible that GM was waiting for the laws to be officially official before deciding on how to meet their requirements, including GM's platform strategy. But that’s the simple truth of the matter. Having waited too long, having no concrete plans for answering the vital mpg questions, Maximum Bob lashes out.
Mr. Lutz’ anger is an astonishing indication of the denial, confusion, paranoia and panic going on behind the scenes at GM. But it’s no surprise. The automaker’s non-existent branding strategy is all the evidence needed that GM is simply lurching from crisis to crisis, without rhyme or reason. While it's true that panic can work to an animal’s advantage– combining energy, surprise and luck to overcome mortal danger– panic is the survival strategy of last resort. After that, nothing.
More by Robert Farago
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I have had to dispell misconceptions and mistruths about the Prius battery system now for several years. It seems that anti-hybrid propaganda is still alive and well. Jerry Weber: “When you put $40.00 in your tank and the Prius owner at the next pump hangs up his hose with $18.00 tell me you aren’t going to pay attention. When you put in $60.00 in the spring and he puts in $25.00 you may look even harder.” Yes indeed! I spent nearly $30 to fill up my Prius yesterday. But I had driven almost 450 miles and gotten over 50 MPG on that tank. I get better fuel economy than most motorcycles, and I can ride in peace and comfort, without getting hot, cold, or wet. Stu Sidoti: "My daily driver gets a city-highway average of 34mpg and I have measured that over several occasions…so no the Prius driver is not going to save a lot of money on gas over me... You can go 34 Miles on a gallon and I can typically go about 48. I'm talking "TOTAL average," not just highway miles. Like many, I spend about half of my time in rush-hour stop and go traffic. But I still get 48 MPG. I have no idea what you drive, but just for grins, let's assume that what you have and what I have are roughly in the same class (mid-size, A/C, all power, has a trunk or hatch area that can carry a few guitars or at least a couple golf bags, and can carry four adults in comfort). I believe I probably paid $3,000 more for the hybrid components in my car (compared to a similar non-hybrid car). On average, I can go 14 miles farther on a gallon of gas than you, or 41% farther. For every 1,000 miles you drive, you pay about $88.00 for regular unleaded (at $3.00 per gallon). For driving the same distance, I pay about $62.00. That may or may not be a "significant percentage" of your budget or mine, but that $26 will almost fill up my tank one more time! In (very) round figures, I've calculated that I will have to drive my Prius 115,000 miles to reach my break-even point. Assuming that gas remained constantly priced at $3.00 per gallon (which I don't believe it will; I believe it will rise to $4.00 or $5.00 within the next 18 to 24 months). At $4.00 per gallon, the equation is the same, but the end-result changes significantly. I would only have to drive my car about 86,000 miles. I've oversimplified it, because fuel prices won't stay constant over the span of my ownership of the car, but I figured that my cocktail-napkin math was "close enough" for me to just go for it. It's been a great car, reliable, comfortable, quiet. Hell, what was I going to do, wait for GM? "and besides Jerry, gasoline cost is a tiny percentage of our household budget…but what you are overlooking is battery replacement cost." Uh oh, here we go again... According to Dave Hermance, one of the Prius’ Chief Engineers, they estimate that the cost of a replacement Prius battery will be around $2500 I don't know your source for that comment, or when it was made. But let's factor in the following: 1. What kills batteries' life-expectancies is repeated deep-discharge cycles, followed by overcharging. Hence, the Prius's computer system was designed to maintain a state-of-charge range of 40-70%. And in four years of ownership, I think it does a pretty good job of this. Just don't let yourself run out of gas (THAT would be embarrassing)! And if you do, don't keep driving it until the hybrid battery is worn down to zero! 2. Greater efficiencies through mass-production and applying "lessons learned" as new technologies become mainstream. Toyota is saying now that the next-generation Prius should have a 20% improvement in fuel-economy. Are you still waiting for GM? 3. Yes, eventually things DO wear out. It's a fact of life. But contrary to popular (mis)conception, in the event of a failure, the "whole" battery typically wouldn't need to be replaced. The Prius battery technology is modular, requiring that only the failing module be replaced. Used battery modules recovered from wrecks could conceivabley be put back into service for this. So fear not! The cost is not expected to be anywhere near $2,500 for a "whole" battery. 4. The failure rate for Prius batteries simply hasn't been a factor. Rumours of two battery problems in ten years of Prius production is a pretty good track record. 5. In four years of living and driving in the blazing Florida heat, I have not had any problems with the batteries in my car. That says a lot, because I can't even get a laptop computer battery to last longer than a year or a cell phone battery to last longer than 18 months or so! 6. Nobody considers this one, but it's very important. The Prius' Hybrid Synergy Drive has NO TRANSMISSION. I won't ever have to repair or replace any transmission parts. Depending on the car, some transmissions can easily cost $2,500 to $3,000. I like to keep my cars a long time, so I can expect the cost of a "new battery" (as mentioned above, it's a fallacy; it's actually multiple batteries in modules) to be a wash compared with a transmission in any "old fashioned" car... 7. There are some Prius taxicabs in service in Pennsylvania, New York, and other cities. They're even being used as community-officer patrol cars on some college campuses and small towns. With lots of stop-n-go driving, the reports are that these Priuses are STILL going nearly 100,000 miles before needing brake pad replacements. You see, unless you step on the brakes really hard, the car uses generator resistance to slow the car while recharging the battery. So brake pads just aren't wearing out as often. At this rate, I may only need one brake job during the 115,000 mile "break even" period I mentioned above. Any "ordinary" car might need new brakes three or four times in the same time period that I might only need one! New brake pads usually are not expensive, but it's the little things that do add up... So if you're scared of battery replacement costs, you needn't be. First, it simply shouldn't be a factor. Second, there are plenty of other things that will balance out the equation. I just ask you to please be careful about spreading everything you hear just because it fits in with your preconceptions. Spreading misinformation is just wrong when the truth is easily available. First learn. Then speak! On the plus side, Toyota does warranty the car for 150,000 miles/10 years and many owners are over 200,000 miles on the original battery…but sooner or later, unless Toyota starts giving away batteries, you are going to see Priuses piling up on the back line of used car lots because at a certain used car price point, virtually no one is going to put $2500 in a car with 150,000 plus miles…of course you’ll never read about that story in the mainstream media because according them Domestic OEMs are Evil and Toyota can do no wrong… Go back to my comment regarding ten years of Prius manufacture, and my own experience with the car. Battery failures have simply not happened, and the car lots are simply not filling up with used dead Prii.
It doesn't take a genious to know how to fix GM. It's a really easy 4 step process. (1) Kill or sell off all GM brands and replace with rebadged "GM" for the masses...and retain Cadillac as the luxury segment. (2) Drop redundant models and focus efforts on quality and reliability on 1 model for each market class. (3) Create new unique and modern "GM" style that is both bold and futuristic but also classically American. (4) There are some amazing new engine designs, configurations and technology out there...be bold , assertive and aggressive. Go for broke because you have nowhere else to go anyway.