Stick a Fork In It; GM Delays… Everything
October 29th, 2008 8:13 AM Share
Well you kinda knew GM was pulling the plug on its cap ex (capital expenditure) when they announced the Chevrolet Cruze would be delayed a year (to 2013). The Cruze was supposed to be The General’s next big small thing. The great wheeled hope. The economy car that would put GM back in the non-SUV game. Fuhgeddaboutit. Or, as the Brits would say, GM’s dropped the other shoe. Automotive News [sub] reports that the cash-strapped American automaker is postponing “nearly all of its spending on product development in 2009 and 2010.” According to an unnamed source, “The 2009 stuff that’s too late to cancel is coming out, then everything else gets pushed out anywhere between three months and up to a year. It’s not just capital budget; it’s also engineering, design… everything that would cause money to flow out in 2009.” Except, of course, executive salaries. So what else is spared? The Camaro, the Hail Mary-shaped plug-in electric – gas Chevrolet Volt, the “restyled” Buick LaCrosse (whew!) and, maybe, just maybe, the Cadillac CTS Wagon (thank God!). And here’s the really scary part. “General Motors is taking drastic action to avoid running out of money sometime next year. With its product delays, GM hopes to save as much as $1.5 billion, said the source.” Just $1.5b? That’s only a month-and-a-half’s worth of GM’s current cash burn. Desperate days.
Published October 29th, 2008 8:04 AM
Join the conversation
4 of 19 comments
At the very least, if GM is not spending money on product development then they should be spending some on getting their house in order, like eliminating Saturn, Pontiac & GMC for starts as well as the related dealer network, end-dating Hummer and finding a buyer for Saab. These are necessary basics if GM ever has a hope of getting their house in order again and they will cost $$$ to implement. Of course these basics will ultimately be for naught if there is no new product to sell. As for the Camaro, I agree they should continue with it. It will be helpful if it can be sold in volume numbers like the Mustang. I do agree however with NickR that GM will ultimately need vehicles with broader appeal. The biggest unknown will be Chrysler which is so moronic a link-up that it is hard to discuss with a straight face. It looks like the product plan there will be to slap some lipstick on Jeep (the Hope Diamond of automobiles) and then deep-six Chrysler & Dodge in the Detroit river.
turbosaab : October 29th, 2008 at 11:51 am "So what exactly are all of their engineers going to do if not developing products?" They are going to either be laid off or work on decontenting existing products.
You all need to quit complaining. Just drink the Kool-aid. Try it! It's really good.