GM faces uphill road to respect
2010 Buick LaCrosse CXS
General Motors Corp. may have become General Motors Co., but to consumers it's still the same old GM.
As the Detroit-based carmaker moves forward, every car, truck and crossover sold by its shrinking group of dealerships must amaze customers. The company alienated a generation of customers with lousy machines and to change perceptions around the world, it will have to provide more amenities for less money than the competition.
The automaker certainly has a chance to impress people. Friday, Fritz Henderson, GM's president and CEO, said the company will debut 10 vehicles in the United States over the next 17 months. And it will launch 17 new models overseas -- though some are actually the same vehicles, such as the compact Cruze coming first to America, and then to Asia.
Now, we've all heard executives wax about how GM's lineup is as good as anyone else's and it's only a matter of time before people realize it. The lineup is good, but it's still not complete. Some vehicles are great, but others are not even close and consumers know the difference. "GM got into this mess because it was not building competitive vehicles," said Jack Nerad, Kelley Blue Book's director of news. "During the '80s and '90s, the Japanese passed GM like it was a telephone pole on the highway."
"In some segments, GM builds world-class entrants," he added, "but in other segments, they are not competitive."
There have been great successes recently, such as GM's pickups, the Cadillac CTS and the Chevrolet Malibu. Development of all of these vehicles was led by GM Vice Chairman Bob Lutz, who was scheduled to retire at the end of this year. But Henderson said Friday that Lutz would remain in his position, overseeing all creative elements of products. Lutz knows compelling design and will help keep GM on track.
Every new vehicle needs care and precision as if the company's life depends on it -- because it does.
More importantly, GM will need to maintain or build stronger leadership in all the segments its brands compete. Here are the five most important products for GM.
Chevrolet Silverado/GMC Sierra: Redesigned for the 2007 model year, GM must continue to update and build upon the success of its trucks. It's the highest volume vehicle at the company and needs to remain at the top. GM can't let its guard down or go too long without updating the Silverado and Sierra; the competition is too good.
"The pickups are big moneymakers for GM," said Mike Levine, editor of Pickuptrucks.com. "They're easy to build and can demand a high price, but GM needs to be careful to not slip against anyone."
Chevrolet Volt: The Volt carries as much gravitas for environmental concerns as the Chevrolet Corvette does for speed. For three years, GM has promised the gas-electric four-passenger car. Now, it must deliver it. It has to be perfect.
"The Volt is more important image-wise than volume-wise," Nerad told me. "GM has a chance to make a big ecological statement and zoom past Toyota."
Buick LaCrosse: This disheveled brand is poised for an extreme makeover, and that begins with the new LaCrosse. Buick is alive because of its popularity abroad. China buys more Buicks than America. The LaCrosse hopes to help change that. The new LaCrosse loses its optional V-8, debuting with a 3-liter direct injection V-6 and an overhauled interior and ride. But is it enough? This is the riskiest vehicle in GM's immediate future because it needs to change people's minds. If it can't, Buick will die a slow death.
Chevrolet Cruze: The new compact car arrives next year to replace the unimpressive Cobalt. This car has to make Malibu-like first impressions with buyers. It needs to top 40 miles per gallon on the highway, have a luxury interior and carry a price below $20,000. For first-time buyers, the Cruze could win GM important young customers; but GM will only get one time to make a first impression. People need to buy the Cruze because that's the car they want, not because it's the only car they can afford.
Powertrains: Perhaps the most important product GM will continue to develop are its engines. Henderson stressed all of the different types of energy-saving technologies including hybrids, bio fuels and fuel cells. Interestingly, he did not mention diesel engines, which could instantly boost the mileage of many vehicles GM makes. A diesel Cruze could hit 50 mpg. While it has done amazing work with direct injection gas engines, such as the new 3-liter direct injection V-6 and the 2.8-liter turbocharged V-6, it needs even smaller direct injection engines.
While these five products may play important roles in GM's future, every new vehicle could convince a customer to give the new GM a chance. Reputations are not lost in a day, and they are not rebuilt with a bankruptcy judge's gavel. To compete, the new GM can no longer act like the old, on any one vehicle, ever.
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