Next Solstice CANCELLED?

[JeffInDFW]

GM Inside News is reporting that the Solstice replacement scheduled to appear around 2011 is no longer being developed. The article states that GM loses $10,000 on each Kappa sold. I do not remember ever hearing that before and am very skeptical on that. Does anyone have any information on whether that is true or not? Anyway, here is the article:

GMI Exclusive: Kappa II Platform Axed From R&D - GM Inside News Forum

It is no secret by now that General Motors has been shaking up its product programs left and right. We first heard of the slashing of the Buick Zeta car, apparent death of the Cadillac Zeta car, and the impending death of a couple GMC product programs. Now GMI is hearing that the Kappa II program, successor to the current lineup of Kappa roadsters, has been pulled from the product plans. The reasons for all of these changes are obvious; uncertain gas prices, an uneasy economy, poor financial situation within the company and an overall product shake up are just a few reasons.

The Kappa line of products makes the "cut" bill rather easily. GMI has been told that when the Pontiac Solstice and Saturn Sky came to the market, GM was losing around $10,000 per unit built. Needless to say, that is not a money-making product line by any stretch of the imagination. It is not entirely surprising that Kappa has been a money pit of a product program. From the ground up Kappa cars are costly; starting with the frame no less. The Kappa architecture is hydra-formed as part of the fabrication process to achieve the dimensions and frame rails needed. Many of the body panels (namely the hood, deck-lid, and fenders) are hydra-formed as well. Hydra-forming is a costly fabrication method, particularly for vehicles that have such low starting prices and low volume to boot. Add on the fact that the Kappa vehicles are largely “hand built” cars (at least by today’s standards); it becomes quite evident why GM will likely never get a return on investment with the Kappa products.

There has been speculation throughout the last year that Kappa II would be a more usable platform, supposedly loosely based off of the quite-mainstream Zeta that underpins the new Camaro. Speculation has also arisen in recent years that the next-generation Kappa products would [have been] built at GM’s new plant in Mexico to help offset the staggering loss it has taken with Kappa. Apparently such plans have been scrapped as market conditions have since changed and Kappa II is off the table

What this obviously means is that the Pontiac Solstice, Saturn Sky, Daewoo SX2 and Opel GT roadsters are “once and done” products. All of these vehicles were introduced as “image cars” for their respective brands, which is how GM justified the losses on them. Possibly one generation of the Kappa’s was enough to boost their respective brand’s image?

As always, we want to add that product plans, particularly in today’s world at GM, change constantly. As of late last week though, the Kappa II program was shelved. That does not mean that GM may not open it up tomorrow, next month or a year from now. However, we suspect that unless the financial situation at GM changes dramatically soon, the Kappa II program will likely maintain its “shelved” status.

[Lenny]

I have not heard this at all. It seems odd based on other developments that have occurred this year, and plans in place for next year.

[StevieG]

Originally Posted by Lenny I have not heard this at all. It seems odd based on other developments that have occurred this year, and plans in place for next year.

I have not heard this yet from inside sources. But, the GMI article seems credible. Some of the responses were fairly spot-on too. Some not so, like the one who stated that a Cobalt SS convertible would have accomplished the same thing as the Kappas---RIGHT, FWD vs RWD with no understanding of the complete difference.

[BadgerHound]

Not surpising if they did decide to eliminate Kappa platform...if in fact they do lose on each car, that is not going to help in these days of high gas prices and pressure from Wall Street. Not sure if anyone saw that Dodge is selling off its Viper operations as well. And you might remember there was a big rumor years back about Chevy selling off Corvette.
With pressure to cut costs and increase profits, this move might make financial sense to keep GM alive.

The silver lining is that if in fact we have the one and only generation of Kappas then that makes them that much more collectible! Only time will tell....

[JeffInDFW]

Stevie, have you ever heard ANYWHERE that the Kappas lost $10,000 for each unit sold? I have not, and they have really grabbed hold of that over at GMI as gospel.

And yes, the post about the Cobalt SS convertible filling the same hole as the Solstice/Sky just shows how many people on these boards have no clue. There is NO chance in hell that I would have even considered a Solstice if it was based on the Cobalts FRONT WHEEL DRIVE unibody platform instead of the excellent Kappa which has full frame rails and is rear wheel drive. The Kappa platform looks very much like the platform you find under the Corvette. How do you compare that to the Cobalt? Give me a break.

They can make a car look good, but if it is a wimpy unibody front wheel drive vehicle, you can forget it.

[wolfdogs]

one thing i can tell you about the car industry having been in it up to my neck since 1970......

don't believe anything till it happens. period.

[silversolstice]

Five model years? Who had 5 years in the pool when everyone was comparing it to the Fiero?

I love my car and I would hope they would continue to make them for years to come, but I am more concerned with what happens to the cost of maintaining my ride once it becomes an orphan?

Think about how easy it is to restore a chevelle compared to a javelin?

[JeffInDFW]

I own a 1996 Viper GTS. In 2004, Dodge sent a letter to all the "first gen" Viper owners telling them that since Dodge had moved on to the second generation, they would no longer be producing many of the parts for the first generation cars. They actually suggested that "you should contact your local dealership parts department about stockpiling parts you think you will need for your Viper". Several years ago, they had already run out of a lot of parts you never think about. The little things like the removable rear windows....Certain wheel center caps....various interior trim pieces, etc.

The good news with our Solstices is, our entire drivetrain is used in other GM vehicles. Our HVAC (air conditioner/heater controls) are from the Hummer H3, etc. The Solstice specific items will get in short supply many many years from now (my guess is like 15 years or so). GM has sold a lot of Kappas already. Dodge sells 1,500 Vipers per year.

It is starting to look like I am the kiss of death! I own and love Camaros, and Gm killed them in 2002 (thank God they are coming back). I own and love my Viper and it is dead after this generation unless some group of outsiders buys it. I own and love my solstice, and it looks to be in trouble!

[Fformula88]

I wouldn't go overreacting to this news too much. That said, I would not consider it "fasle" either.

Does GM lose money on these? Definately. Is it $10,000? That is more than figures I have heard. Regardless, when your running low on cash, programs that do not run in the black are the first to see cuts.

Does this mean the car is doomed? Definately not. First, they can continue to sell the current version relatively unchanged for the foreseeable future. Next, the investment in the coupe will mean that they will want to sell a few model years to help recover that investment.

Maybe this is the best way to look at it. GM is in some financial trouble, in large part due to the economic downturn as much as the lower truck sales (although both are partially tied together). Due to this trouble, GM has to focus it's resources on core projects and programs it cannot live without. The kappa's, although important for image (and damaging to image if cancelled), are not products essential for GM to survive as a corporation.

So GM shelves some of the redesign/continued development programs now. Sends that money to projects like the Volt, Cruze, and other core products. Then, if the economy rebounds in a year or two, and their bottom line gets better, they pull kappa2 off the shelf and hit the ground running.


That is the cup half full viewpoint anyway. GM could just pull the plug now, based on volume, profit, etc. Cut their losses. They are not. Instead, maybe they are willing to try and buy time by shelving the plans and soldiering on with the current car until their condition improves.

So although not great news, it is better than it could be too... and I think it is way too early to accept the fatalistic viewpoint of the article (that there will be now kappa after 2011).

[stang]

The whole $10,000 thing sounds off to me. If the Solstice was a money loser, they would have never made the coupe. My guess is that they have delayed a Kappa II or will move it to another RWD platform (like maybe Caddy's upcoming 1-Series fighter).

Pontiac needs the Solstice if for no other reason than to pretend to be the Performance division.

[Fformula88]

PS... in the meantime... it may HELP A LOT to tell GM what you think.

Back in the days of the Fiero, there was no internet to quickly spread the word to enthusiasts in this fashion. Today, the kappa community can hear about such possibilities almost instantly. As a result a far greater number of people have a chance to voice their opinion before the fact.

If you think pulling the plug is bad, now is the time to let them know.

[Fformula88]

Originally Posted by stang The whole $10,000 thing sounds off to me. If the Solstice was a money loser, they would have never made the coupe. My guess is that they have delayed a Kappa II or will move it to another RWD platform (like maybe Caddy's upcoming 1-Series fighter). Pontiac needs the Solstice if for no other reason than to pretend to be the Performance division.

It was expected to be a money loser before the first car rolled off the line, and GM accepted that. Lutz had made comments something to the effect that the kappas would be better for marketing than a typical advertising campaign, and would cost no more than that per year (250 million range).

I'd guess that any plans to move it to another rwd platform appear dead, and if it has a future it will be on a second generation kappa platform.

[stang]

Originally Posted by Fformula88 It was expected to be a money loser before the first car rolled off the line, and GM accepted that. Lutz had made comments something to the effect that the kappas would be better for marketing than a typical advertising campaign, and would cost no more than that per year (250 million range). I'd guess that any plans to move it to another rwd platform appear dead, and if it has a future it will be on a second generation kappa platform.

That's very interesting. I know tooling costs would take time to get back, but I would imagine that after 6 years, a lot of the costs should be paid for. At some point the project has to break even.

[perris]

I know I am in the minority, but as far as I am concerned, I am a very happy man this car will not become as "seen" as the fiero

the fiero was one beutiful car till it became so seen to be mundane

I love my car, didn't expect to keep it if it became a popular and often bought car

now that it is limited production, I might by myself another

I agree with lutz, this car more then paid for it's overage with the advertising of brand, that makes it a money winner for pontiac

now off to mothball my rarew exotic

[RADRIV]

I don't believe that Kappa loses money. Lutz said (after the concept Solstice made it's debut) that the business case could be justified to build the Solstice and make it profitable at $19,995.00....then they added the Sky and then the 2.0 turbos.

Plus, the Sky versions that go to Opel and Daewoo are just rebaged and exported (huge profits, ROE).

The GXP and Redline sells for $30K+ new and the only difference is an engine w/ a turbo and tires...so they must make money.

And the price of the Sol/Sky base models have gone up since we bought the first ones in 2005.

So, to make money, GM would have to charge $30K+ to make money on the Sol/Sky line? Yeah, right. The Hydroformed frames are supposed to be faster and cheaper to produce than conventional stamping on low volume cars (Otherwise why would GM move forward with this technology???). The technology is used in their Trucks (and Dodge trucks too) and the Vette among others. So, this is not costly production. The quote that they are largely "Hand Made" is also false. Yes, they have humans doing the welding, but it's highly automated. The Body panels are glued to the frame by a robot.

I've been to the plant for the tour....this car does not cost that much to make. The parts are from the GM parts bin from around the world. This car is cheap to make. This article is full of holes....and the gas issue...WTF???? The GXP makes 30mpg+++ I'm sure it could be tuned to make a lot more. Or put that new 1.4L turbo in the Sol and get 43mpg.

Relax everyone. GMI isn't the end all. The Coupe is on it's way...if the Kappa wasn't making money, do you think they would spend the money on the Coupe?