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Tech Center's Innovations Will Determine GM's Direction
By Warren Brown
Washington Post Staff Writer
Sunday, June 19, 2005; Page G02
WARREN, Mich. -- Much of General Motors Corp.'s future is planted on the grounds of the sprawling GM Technical Center in this southeastern Michigan town. It is here that GM will come up with new cars and trucks that will fortify its current status as the world's largest automotive manufacturer, or consign it to the history books as a fallen empire.
For it is here, many critics argue, that GM has stumbled badly -- not only by failing to lead competitors but also by failing to keep up with them.
It is that alleged failure, more than anything else, that has led to drastic declines in the company's share of the U.S. automotive market; a first-quarter 2005 loss of $1.1 billion; junk-bond ratings on their corporate debt; and the need to cut at least 25,000 assembly plant jobs in the United States, critics say.
No one argues that market changes, especially in the matter of fuel prices, have been unkind to truck-reliant GM, said John F. Smith Jr., who three months ago took over as the company's group vice president for global product planning. But the charge that GM lacks imagination, that it has no new or credible ideas for the development of segment-leading products, "does not speak to the facts," Smith said.
My tour of GM's future products was based on the condition that I not provide specifics, including the prospective names of those products. But Smith and his staffers vowed that everything shown was an approved new-vehicle program, and that all would enter the U.S. market by model year 2008, with the first entries occurring in calendar 2006 for model year 2007. What follows here are general descriptions of what was shown, along with some notes on potential market positioning.
The war rages on. After much head-scratching over whether GM should pursue Honda Motor Co., which is offering what might be called a "soft" pickup in the new Honda Ridgeline, or strengthen its defenses against Nissan Motor Co., which has launched the rock-crushing Titan pickup, GM apparently has decided to do both. The company's new full-size pickup trucks are the sleekest it has ever developed. Seams are super-tight. The interiors are more luxurious and comfortable but are designed for work and rough treatment. By contrast, the new interiors of truck-based sport-utility vehicles sold by Cadillac and Chevrolet are luxury/family-oriented. In general, GM's new interior design philosophy for all of its new, mainstream vehicles is based on "affordable luxury."
There will be new crossover vehicles. GM is going for "uniquely American design" here, inasmuch as Buick's traditional customer base is Middle America, young and old. GM also is hedging its bets here. To wit: If GM is guessing wrong about the durability of the traditional pickup truck and SUV markets, "we'll have all of our bases covered" with high-utility (seating seven passengers) yet fuel-efficient crossover, car-based SUVs, Smith said.
Totally radical! Buyers will either love or hate the new Cadillac styling, heavily derived from the Cadillac Sixteen concept car introduced in 2003 at the North American International Auto Show in Detroit. Edgy design inside and out. Loaded with new consumer convenience and entertainment technology. Look for more horsepower.
Assuming that GM sticks with the plan presented to me here, Chevrolet will continue to mean "affordable." But it in no way will resemble "cheap" or "economy." It's about time GM figured that out. New exterior and interior designs will give basic models, such as the Chevrolet Malibu sedan, the look and feel of substance. Fuel efficiency has been improved without sacrificing power. GM has rediscovered the family car.
The "professional grade" truck theme, which has sold well for GM by emphasizing pickup trucks and SUVs designed for people who use them in commercial and construction enterprises, will continue. Again, new expressive and functional interiors will rule the day. So will technology, including the availability of what GM calls "dual mode" electric-gasoline hybrids capable of functioning longer and doing more with available battery power.
The old Pontiac chief, John Z. DeLorean, may be gone, but his rambunctious spirit, which helped to define Pontiac as GM's "action division," is being rekindled. Evidence of rejuvenation should come later this year with the launches of the Pontiac Solstice roadster and Pontiac G6 coupe. GM marketing chief Mark LaNeve has succeeded in getting the company's top executives to abandon the nonsense of trying to make Pontiac be everything to everyone, including those people who want minivans. That's a good thing.
Saturn effectively is getting a completely revised line of cars and trucks; and that's a good thing, too. Saturn brought GM -- and the retail industry in general -- much-improved practices in customer handling and treatment. But, until now, Saturn's products largely have fitted automobile industry analyst Maryann Keller's descriptions of GM's products as "dull" (Outlook, June 12, "Dull at Any Speed: GM Never Learned to Shift Gears"). That will change. The Saturn Sky roadster, which shares a platform with the Pontiac Solstice, is a beautiful piece of work, available for about $25,000 (compared with $20,000 for the Solstice). Saturn is getting a new, very attractive sedan, the Aura. The division also will offer new mid-size and compact SUVs.
Will any of this help GM? I think so, especially if the company abandons its destructive sense of false modesty, which is just as bad as its former unfounded arrogance. The fact is that GM is not nearly as bad as current media reports and many pundits make it out to be. Some examples: Its U.S. plants are receiving top ratings for assembly quality. It still sells more cars and trucks than any of its rivals; and many of those models, on a segment-by-segment basis, are as competent and fuel-efficient as any of their rivals. But GM, for some odd reason, has been reluctant to brag where it has a right to brag.
But neither is GM as good as it once thought it was. There is no divine right of kings or corporations. Business leaders aren't anointed; they move into first place by beating the competition. They stay there only as long as they recognize the need and maintain the will to continue fighting.