GM delays most future product, r&d in cash crunch

October 29, 2008 - 12:01 am ET


DETROIT -- General Motors is postponing nearly all of its spending on
product development in 2009 and 2010 -- a cost-cutting move that could delay
the introduction of key vehicles such as the Chevrolet Cruze.

The automaker also is cutting spending on engineering, design and r&d, say
sources familiar with GM's plans. So far, nothing has been officially
canceled, but nearly everything is delayed, the sources say.

"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," said
one of the sources. "It's not just capital budget; it's also engineering,
design ... everything that would cause money to flow out in 2009."

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.

GM spokesman Dee Allen declined to comment on plans for individual products.
"There have been all kinds of speculation," he said. "We've said we're
reviewing our portfolio, and we do that as a regular course of business."

Two high-profile vehicles -- the Chevrolet Camaro and the Chevrolet Volt
plug-in hybrid -- are protected from the cutbacks, says one source close to
GM. Likewise, the restyled Buick LaCrosse, the Chevrolet Traverse and
possibly the Cadillac CTS wagon are still due to market as planned.


Since those products are ready for production, GM would not save much money
by delaying them. In addition, the Volt is pivotal to GM's plan to match
Toyota Motor Corp. as a technology leader and environmentally conscious
corporation.

The LaCrosse is due in spring, and the Traverse will debut in the first
quarter. The CTS wagon is due for the 2010 model year, but the launch date
has not been set.

But GM tentatively will push back the launch of the Chevrolet Cruze, which
was supposed to debut in the 2011 model year. That launch will be delayed
six months to a year, say sources familiar with GM's plans.

Union members at GM's Lordstown, Ohio, plant, which would build the Cruze,
say they have not been told of a holdup.

"Everything I've heard is that we're in the process of moving forward," said
Dave Green, president of UAW Local 1714 in Lordstown. "There has been
speculation that it would get delayed, but leadership said GM has not
notified us of any delay."

Meanwhile, the Chevrolet Malibu sedan was to be restyled and re-engineered
in the 2012 model year. But with the cost cutting, the revamped Malibu
probably won't debut until the 2013 model year.

GM executives are meeting daily to find ways to shift money out of other
things and into key product launches. Said one source: "There's still a lot
of fine-tuning, and a lot of it could change."

Wow, saving $1.5 billion. That will buy them an extra month and a half.
And with no further product development, just like Chrysler, they will fall
further behind the competition. Ford is bringing out new models with more
in the pipeline and I'm sure they're poised to increase market share at GM's
expense. Then there's Toyota, Honda, Nissan and Hyundai, all of which will
bring out new models ever few years. What I can't understand is why GM's
board of directors hasn't long ago fired all of the top executives who have
brought GM to this pass.

Max

"rob" > wrote in message
g.com...
>
>
> October 29, 2008 - 12:01 am ET
>
>
> DETROIT -- General Motors is postponing nearly all of its spending on
> product development in 2009 and 2010 -- a cost-cutting move that could
> delay the introduction of key vehicles such as the Chevrolet Cruze.
>
> The automaker also is cutting spending on engineering, design and r&d, say
> sources familiar with GM's plans. So far, nothing has been officially
> canceled, but nearly everything is delayed, the sources say.
>
> "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," said
> one of the sources. "It's not just capital budget; it's also engineering,
> design ... everything that would cause money to flow out in 2009."
>
> 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.
>
> GM spokesman Dee Allen declined to comment on plans for individual
> products. "There have been all kinds of speculation," he said. "We've said
> we're reviewing our portfolio, and we do that as a regular course of
> business."
>
> Two high-profile vehicles -- the Chevrolet Camaro and the Chevrolet Volt
> plug-in hybrid -- are protected from the cutbacks, says one source close
> to GM. Likewise, the restyled Buick LaCrosse, the Chevrolet Traverse and
> possibly the Cadillac CTS wagon are still due to market as planned.
>
>
> Since those products are ready for production, GM would not save much
> money by delaying them. In addition, the Volt is pivotal to GM's plan to
> match Toyota Motor Corp. as a technology leader and environmentally
> conscious corporation.
>
> The LaCrosse is due in spring, and the Traverse will debut in the first
> quarter. The CTS wagon is due for the 2010 model year, but the launch date
> has not been set.
>
> But GM tentatively will push back the launch of the Chevrolet Cruze, which
> was supposed to debut in the 2011 model year. That launch will be delayed
> six months to a year, say sources familiar with GM's plans.
>
> Union members at GM's Lordstown, Ohio, plant, which would build the Cruze,
> say they have not been told of a holdup.
>
> "Everything I've heard is that we're in the process of moving forward,"
> said Dave Green, president of UAW Local 1714 in Lordstown. "There has been
> speculation that it would get delayed, but leadership said GM has not
> notified us of any delay."
>
> Meanwhile, the Chevrolet Malibu sedan was to be restyled and re-engineered
> in the 2012 model year. But with the cost cutting, the revamped Malibu
> probably won't debut until the 2013 model year.
>
> GM executives are meeting daily to find ways to shift money out of other
> things and into key product launches. Said one source: "There's still a
> lot of fine-tuning, and a lot of it could change."
>
>

"Max Magister" > wrote in message
g.com...
> Wow, saving $1.5 billion. That will buy them an extra month and a half.
> And with no further product development, just like Chrysler, they will
> fall further behind the competition. Ford is bringing out new models with
> more in the pipeline and I'm sure they're poised to increase market share
> at GM's expense. Then there's Toyota, Honda, Nissan and Hyundai, all of
> which will bring out new models ever few years. What I can't understand
> is why GM's board of directors hasn't long ago fired all of the top
> executives who have brought GM to this pass.
>
> Max
>
They did, a long time ago. The damage is so deep and far reaching, the
present management can't be held responsible. Even the last group couldn't
stop the bleeding, but they had no clue on how to do it. The guys in there
now know how, look at the product they have on line. It's not too little,
it's just too late.