Wednesday night, I watched Phil LeBeau’s hour-long special on CNBC, which was titled “Saving GM.” And I must say, I came away impressed — and not just because they got my name right (although, not quite my title — I am, after all, vice chairman of global product development, not global quality).

No, I was impressed with the balance, the fairness, and the journalistic integrity of the entire piece. Our story is there, warts and all, but so are the things we’re trying to do to help this company survive and thrive in the future. The missteps we’ve made in the past were clearly spelled out, as are the challenges we face today. It’s no puff piece, that’s for certain.

After everything I’ve seen written about GM in the past couple of weeks — some of it fair analysis, but a good bit of it irresponsible speculation or uninformed opinion and bias — it was refreshing to see someone pointing out that we’ve been getting a lot of things right, too. And CNBC’s conclusion is much like our own, that we need the words “smash hit vehicle from GM” to make more people think of cars in showrooms, not museums.

If you’re interested in seeing an unflinching but unquestionably fair look at General Motors — not to mention getting an inside look at some of our design studios and test tracks — you should check out “Saving GM” when it re-airs on Sunday evening, August 10, on CNBC at 10 pm EDT. And for those of you who saw the program, let us know what you thought.

via  fastlane.gmblogs

Ailing automakers look to save costs of developing powertrains

Bryce G. Hoffman / The Detroit News

General Motors Corp. and Ford Motor Co. are discussing a possible collaboration to develop new engines and other powertrain technologies, according to sources at both companies.

The rival automakers are keen to find ways to reduce research-and-development costs even as they struggle to respond to a dramatic shift in consumer demand from big trucks and sport utility vehicles toward smaller, more economical cars and crossovers.

A deal could give Ford access to GM's Volt technology -- if it becomes commercially viable. It could also help GM offset cuts to its product development budget.

GM first approached Ford more than a month ago, two sources familiar with the situation said. GM told Ford that it was willing to discuss a wide range of possible collaborations.

GM's overture drew a mixed reaction inside Ford. Some executives felt that previous joint projects had benefited GM more than they had Ford, but others -- including Ford's global product development chief, Derrick Kuzak -- saw it as an opportunity to leverage some of GM's technology while at the same time reducing Ford's own development costs.

The matter went to Ford's board of directors last month, which voted to authorize negotiations with GM.

Since then, there have been at least three meetings between the two companies involving Barb Samardzich, Ford's head of powertrain operations, and her counterpart at GM. No agreements have been reached, but the talks were characterized as promising.

Neither company would confirm or deny the reports. GM spokesman Tom Wilkinson said his company does "not comment on speculation about future products or product development."

Ford spokesman Said Deep said Ford is concentrating on bringing its fuel-efficient European platforms to North America, but did not rule out working with another manufacturer.

"Our focus and greatest opportunity is to create 'One Ford,' and we're doing that leveraging our own global assets," he said. "(But) we're always open to talking to others in the industry. Beyond that, we're not going to comment."

Success worth replicating

Powertrains are the logical focus of any collaboration, say insiders in both companies.

Engines and transmissions represent a huge portion of the development cost of a new car or truck, yet they are not immediately obvious to the consumer in the way that a new navigation system or body design is. Developing an entirely new engine can cost $1 billion. Splitting those costs with another car company can save an automaker $500 million. A new transmission can easily cost $800 million -- or $400 million if the development costs are split.

Moreover, the onboard computers that control these components have a lot to do with how they operate, controlling things like shift timing and acceleration. Each automaker could create distinctive driving experiences using the same underlying components.

Such a move would not be unprecedented.

Ford and GM successfully collaborated on the development of a fuel-saving six-speed transmission that is rapidly becoming the backbone of both companies' powertrain lineup. Kuzak has pointed to the success of that program internally as something worth replicating.

Word of a possible collaboration between GM and Ford came as little surprise to analyst Jim Hall of 2953 Analytics LLP. Following the completion of the six-speed transmission tie-up two years ago, he gave GM CEO Rick Wagoner and other senior executives a presentation demonstrating the benefits of working with Ford on other powertrain technologies. He remains convinced that it represents a real opportunity for both companies to control research-and-development costs while accelerating the introduction of new, more fuel-efficient cars and trucks.

"The transmission deal has worked well for both companies," Hall said. "I told them, 'Don't stop there.'"

He said GM is ahead of Ford on four-cylinder engine development, but added that GM could learn a lot from Ford about combining turbo-charging and direct injection -- the technologies behind its EcoBoost technology, which promises to deliver more power and better fuel economy.

Electric technology useful

Then there is Volt, GM's promised vehicle that runs primarily on electricity.

While it remains to be seen whether GM will succeed in bringing it to market, Ford is reportedly keen on getting access to the technology if it does. And Hall said that is something GM should welcome.

"I would think that would be part of it and, if GM is smart, they will proliferate Volt technology," he said.

Doing so would provide GM with much needed revenue while at the same time reducing its own piece-cost for Volt components. It would be a way for GM to create economies of scale not possible with its own products alone, and would ultimately reduce the cost of such technology for consumers.

"Ford has more experience in getting the costs down, and that could really help GM," Hall said.

You can reach Bryce Hoffman at (313) 222-2443 or bhoffman@detnews.com.

via detnews 

GM, which will mark its centennial on Sept. 16, will let employees take a peek at the extended range electric vehicle but not allow them to use any cameras because of concerns about the competition. GM has been working feverishly on the Volt to begin production in late 2010, with assembly set for its Hamtramck plant.

No final decision has been made on when and where the Volt will be revealed to employees -- and eventually the public, but spokeswoman Karla Coleman said, "It's going to be soon."

The Detroit automaker confirmed Tuesday that it had filed the necessary paperwork to construct a $326 million, 530,000-square-foot plant in Flint to build 1.4-liter turbo engines for the Volt as well as its new compact car, the Chevrolet Cruze. Construction of the plant is pending negotiations with state and local officials on tax incentives.

GM spokeswoman Sharon Basel confirmed the paperwork to build the plant had been filed. The new facility will be built near Flint Engine South and Flint Truck. The Flint City Council will meet on Aug. 25 to consider granting tax incentives for the plant.

The public won't have to wait too long to see a near-production version of the Volt. GM plans to unveil the revised Volt at either the Los Angeles International Auto Show in November or the Detroit auto show in January, a person familiar with the company's plans said.

The production model will be different than the concept version that was first unveiled at the North American International Auto Show in Detroit in January 2007; the original wasn't aerodynamic enough, according to GM.

GM's board of directors formally approved production of the vehicle last month.

The automaker recently showed a near-production version of the Volt to a focus group in southern California.

"It was very positive," Coleman said. "It's not like we can change the design at this point, but we want to hear feedback about how we're doing."

GM's engineers are driving the "real architecture" of the Volt under the bodies of other GM vehicles.

More than 200 engineers and 50 designers are working on the Volt, and another 400 are working on related subsystems and electric components. The Volt will be able to travel up to 40 miles on electric power alone and will have a gas engine that powers a generator to recharge the battery and keep the vehicle running when its lithium-ion battery pack is low on power.

GM is also working on a plug-in electric Saturn Vue that it also plans to start producing in late 2010. That will be able to go about 10 miles on electric power.

The Volt will operate like a plug-in hybrid; it will be rechargeable by plugging the vehicle into a standard 110-volt outlet. The vehicle could cost as much as $40,000 because of its expensive batteries.

GM announced this month that it is working with a consortium of 34 utilities to overcome technical challenges in introducing tens of thousands of plug-in electric vehicles to the market.

Congress is considering tax breaks for plug-in vehicles that would defray purchase costs of the Volt.

Toyota Motor Corp. announced in January it would produce and begin leasing a limited number of plug-in hybrid vehicles in late 2010 to fleet customers. The experimental version currently has a 7-mile electric range in testing.

GM said it plans to build tens of thousands of Volts beginning in late 2010. The News reported the company currently plans to build up to 200,000 through 2015, with many of them being exported to other markets and some to be sold under different nameplates.

The automaker began road testing the Volt in April after completing its design and cramming 10 years of battery testing into two. Executives lifted a sheet to reveal part of the Volt's restyled front to journalists during a tour in April.

Larry Burns, GM's vice president for research and development, has said the final version would bear "a clear family resemblance" to the concept vehicle "but it won't be a twin." The Volt will have a T-shaped battery, weighing about 400 pounds and in 64 inches in length.

In a related matter, GM won tax breaks in Ohio this week to build the Cruze, which will get 45 miles per gallon, at its Lordstown assembly plant. The automaker won a 15-year, 75 percent state tax credit worth $77.7 million. It also won a $4.4 million tax credit to create at least 200 jobs at the plant.

via detnews 

PONTIAC, Michigan - The world's largest car company is ready to respond to the public's newfound craving for increased fuel economy with a range of smaller engines. But customers are going to have to indicate they're really serious about downsizing their powerplant expectations.

Thomas G. Stephens, General Motors Corp.'s executive vice president, global powertrain and global quality, said at the recent inauguration of the company's new Powertrain Engineering Development Center here that he's delighted with the engine options at his disposal for answering growing demand for better fuel economy. But that's going to mean U.S. customers will have to signal their readiness to accept smaller engines - in effect reversing a long trend for ever-larger engines and more horsepower.

For one example, Stephens says of the potential for a turbocharged 4-cylinder engine for a vehicle such as the Cadillac CTS midsize sedan: "From a technical point of view, we could do it today."

But, Stephens cautioned, marketing in many segments traditionally has focused on engine cylinder count and power ratings - totems Stephens isn't certain all customers, particularly those shopping in the premium- or sporty-vehicle segments, are entirely ready to give up.

Stephens said GM Powertrain already has a selection of smaller but feisty engines capable of delivering better fuel economy. The turbocharged 4-cylinder Ecotec, for example, replacing a larger-displacement V6. Or a direct-injected V6 standing in for the time-honored V8.

"We're ready. When (customers) want it (the option of smaller engines) - we'll do it."

GM already has said it will cut back on V8 production, and recently decided to suspend the development program for an all-new V8 that effectively would have replaced the aging Northstar architecture.

Stephens also said GM is continuing with a strategy to reduce the number of engine architectures used globally. He said GM is working to settle on fewer engine designs, retaining only those "which have the greatest bandwidth," enabling use in a wide variety of vehicle applications.

Stephens insisted the engine-family reduction won't curtail powerplant variety, however. He said all manner of technical options mean the company can produce several variants of the same engine, all with markedly different "character." He said engine technologies such as turbocharging, direct injection and variable valve timing, to name a few, can be mixed and matched to deliver many different variants of what effectively is the same engine.

Regardless of many automakers' efforts to reduce the proliferation of engine architectures, Stephens said the industry isn't anywhere close to a single engine solution for the future.

"When I look around, the world will not be (exclusively) a V6," he said.

Photos by GM

1 - GM's Tom Stephens.

2 - New GM direct-injection 3.6-liter V6 develops as much power as many much-larger and thirstier V8s.

via autoobserver 

The cuts -- to take effect by year's end -- will result in nearly 5,000 of the company's 32,000 salaried workers leaving the automaker by year's end. A GM official confirmed details of the plan reported by The Wall Street Journal today.

The company said earlier it would reduce its salaried work force spending by more than 20 percent. That includes ending its salaried retirement health coverage for employees over 65 starting Jan. 1. The company also said salaried workers wouldn't get pay raises through the end of 2009.

GM is offering early retirement packages to older salaried workers, taking advantage of an overfunded pension plan to pare down the work force. In the company's media relations department for example, GM is offering the packages to about 40 employees -- and plans to reduce its headcount by 17 positions.

The company official stressed the 15 percent staff reductions may vary by department -- with some departments seeing larger cuts than others. Early retirement offers should go out to white-collar employees by August, with employees deciding by September or October on whether to accept them.

GM said today it would announce second-quarter financial results Friday, including "significant losses."

The automaker earlier said it would boost liquidity by $15 billion by the end of 2009 -- including $5 billion through asset sales and borrowing. Analysts say the company is burning through at least $1 billion a month amid a sharp downturn in light truck sales.

GM has reduced its salaried work force from 44,000 in 2000 to about 32,000 today.

via detnews 

The gloomy financial results were followed by word from GM's chief financial officer today that the company might make another round of buyout and early-retirement offers to U.S. hourly workers due to production cuts.

The deficit of $27.33 a share compares with a profit of $891 million, or $1.56 a share in the same period last year. And sales fell 18 percent to $38.2 billion, according to financial results released this morning.

The restructuring and $9.1 billion in one-time, mostly non-cash charges plagued the most recent financial results. GM said the charges included $3.3 billion for the buyouts of about 19,000 U.S. hourly workers and $1.3 billion worth of write-offs because of a decline in the value of GMAC Financial Services' portfolio of trucks and sport utility vehicles. GM owns 49 percent of GMAC, which along with other financial arms, has taken sizable losses on lease turn-ins because the residual values for SUVs and trucks are falling, meaning that the finance arms sell them for less than they anticipated at auction. Cerberus Capital Management LP owns the remaining 51 percent.

Aside from those losses, GM lost $6.3 billion, or $11.21 per share.

The fourth-straight quarterly loss comes amid a sweeping restructuring plan and a shift among consumers from profitable pickups and SUVs to more fuel-efficient -- and less profitable -- cars and crossovers. Since 2006, the company has 35,000 fewer hourly employees and has idled six factories -- three in Michigan -- in the last three years.

"As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting rapidly to the challenges facing the U.S. economy and auto market, and we continue to take the aggressive steps necessary to transform our U.S. operations," GM Chairman and CEO Rick Wagoner said in a statement. "We have the right plan for GM, driven by great products, building strong brands, fuel-economy technology leadership and taking full advantage of global growth opportunities."

The results fared worse than Wall Street estimates, which pegged the automaker's loss at $2.63 per share.

The second-quarter losses eclipsed those of Ford Motor Co., which posted an $8.7 billion second-quarter loss last week -- the worst quarterly results in the Dearborn automaker's 105-year history.

GM's second-quarter loss was huge, but not historic.

In the third quarter of 2007, GM posted a record $39 billion net loss, which included a $38.6 billion charge related to future tax benefits. The charge was an accounting adjustment and did not affect GM's cash flow or long-term prospects for profitability.

In addition to the cost of buyouts and GMAC losses, the automaker recorded the following charges:

• $2.8 billion in costs related to Delphi, the former GM parts division.

• $1.1 billion in restructuring for its North American operations and capacity-related costs.

• $340 million in accounting charges related to the Canadian Auto Workers contract.

• $197 million related to settlement of a 12-week-long strike at American Axle & Manufacturing Holdings Inc. The walkout at least partially idled 30 GM plants due to parts shortages.

Plus, GM posted a $1.6 billion charge related to lower residual values for off-lease vehicles, which had a total $2 billion impact on second-quarter earnings. That total includes impairments of lease assets for both GM and GMAC.

And despite the charges, GM still had $21 billion in cash and other readily-available assets on June 30, down from $23.9 billion three months earlier. Including available credit, GM has access to about $26 billion in liquidity --about $12 billion less than the amount rival Ford Motor Co. announced last week.

The financial news follows a series of cost-cutting measures announced by Wagoner on July 15 that included white-collar job reductions, a suspension of the dividend and cutting health care coverage for Medicare-eligible salaried retirees designed to boost cash flow by $15 billion.

In the last two months, GM has said it would close four truck plants in North America by 2010, cut shifts at two truck plants and added shifts at two other plants. The automaker also has suspended the dividend, and is exploring the sale of its Hummer brand.

North American revenues fell almost $10 billion to $19.8 billion compared to last year as sales fell 20 percent.

Outside North America, however, sales rose 10 percent.

The automaker sold 2.29 million vehicles worldwide, down 5 percent compared to the same period last year.

A record 65 percent of GM sales for the second-quarter came outside the United States, though global market share was 12.3 percent, down 0.9 percent.

There were bright sales spots aside from slumping truck and SUV sales.

Sales of the new Chevrolet Malibu and Cadillac CTS were up 113 percent and 33 percent, respectively compared to last year.

via  

 detnews

THE prime minister has pledged £90m in government money to help make Britain “the European capital for electric cars”, a promise that has already sparked interest from motor-industry giants such as General Motors.

Gordon Brown made his commitment at the British International Motor Show last week — arriving in a motorcade of Jaguars and Range Rovers. He said the money would be available over five years to support electric, hybrid and other environmentally clean car projects.

It is far from clear how this money will be spent. There were plenty of environmentally friendly cars at the motor show in London’s Excel exhibition centre. Most were small city cars imported from as far away as China and India, but there were also high-performance models from Tesla (an American company that subcontracts chassis construction to Lotus in Norfolk) and Lightning, a British start-up firm.

Of the leading manufacturers represented at the show, General Motors and Renault-Nissan have the biggest commitment to the development of electric cars. Carl-Peter Forster, president of General Motors Europe, took the opportunity to pitch a deal to Brown.

GM has already previewed its Flexstream concept car — a hybrid vehicle that is part of the company’s E-Flex programme — which it hopes to launch in America by the end of 2010. By 2011 it intends to sell the car in Europe as a Vauxhall or Saab. Although very cheap to run, the price will be high — about £32,000.

Like other carmakers, GM is faced with the high cost of reducing the fuel consumption and thereby carbon-dioxide emissions of its conventional cars to meet forthcoming European rules that are expected to require a fleet average of 130 g/km carbon dioxide.

Forster said that it was seeking a national sponsor for a “super credit” scheme that would allow ultra-low carbon-dioxide vehicles (below 50g/km) — like its E-Flex cars — to offset larger and more polluting models. If Britain was prepared to champion this idea within the EU, GM would consider making its electric vehicles at the Ellesmere Port plant on Merseyside.

The first E-Flex model will be based on the next generation of Vauxhall Astra, which will be made at Ellesmere Port. GM anticipates first-year production of 30,000 cars for Europe. Bob Lutz, GM vice chairman in charge of production development, believes that worldwide production of E-Flex cars could be 1m by 2020.

Unlike Renault, Nissan and many smaller companies that are climbing on to the electric bandwagon, GM does not believe in the pure electric car. E-Flex models are hybrids, driven by an electric motor and designed to be plugged into the mains but also include a small petrol engine to charge the batteries if the driver wants to go further than the 50 miles provided by the household charge.

Batteries remain the biggest hurdle for the all-purpose electric car. The advanced lithium-ion battery packs for E-Flex will cost £5,000 apiece. GM is about to announce which of its two development partners — CPI, a subsidiary of LG of Korea, and Continental — will provide the cells for E-Flex but, because it believes that electrics will play a large part in the future of the car, it is now bringing battery technology in-house.

Renault-Nissan has linked with Project Better Place, run by Silicon Valley entrepreneur Shai Agassi, which is to develop an electric-car infrastructure in Israel and Denmark — a network of service stations that swap depleted battery packs for fully charged ones.

This idea was rejected by GM on cost and logistical grounds, but it is an essential step if electric vehicles are to stand any chance of gaining ground on their oil-dependent cousins.

via business.timesonline 

Update: I've just spoken with Joanne Krell, Cadillac/Hummer/Saab Communications, and gotten the scoop. The WSJ incorrectly states a 7/100,000 warranty term, it should be 5/100,000. I've also heard back from John Stoll at the WSJ and he's fixing the article. Saab's cutback on powertrain coverage by 1 year and 50,000 miles, while unfortunate, is certainly less troublesome than VW's scaling back its bumper to bumper coverage from 4/50 to 3/36. The change is effective with the 2009 model year.



GM Reduces Saab Warranty Terms - WSJ.com

Saab is cutting back its warranty coverage in the States, but it is wisely leaving its bumper to bumper coverage at four years, 50,000 miles and its free scheduled maintenance at 3/36,000.

The WSJ article states "Saab vehicles will now come with a four-year, 50,000 mile warranty rather than the seven-year, 100,000 mile warranty offered on vehicles sold through GM's other seven divisions in the U.S. " Which warranty are they talking about? GM's powertrain warranty is 5/100,000 and not 7/100,000.

Above, I have posted a snapshot of Chevy's 2008 warranty coverage. As you can see there is no warranty that is 7/100.

via allcarsallthetime 

GM spokeswoman Susan Garontakos says the company will allow employees to offer the discount to their friends and extended family through July 31.

She says employee discounts were previously limited to employees and their immediate family.

Garontakos says Mark LaNeve, GM's vice president of North American sales, informed employees of the new program in an e-mail Thursday evening.

Garontakos says the decision to extend the discounts was made Thursday.

via detnews 

Technology can hurt a driver as much as it can help him. For example, those convenient automated toll systems (i.e. EZ Pass, FasTrak, SunPass, etc.) can also use their time/distance data to figure out if you were speeding. GM may be hitting even closer to home with a new OnStar feature. Right now General Motors will use OnStar to pass on information to their GMAC Insurance arm about your annual driving mileage for possible insurance discounts.

This is purely voluntary program, and GM assures that the data will go no further than annual mileage. But how soon before they want data on speed or acceleration, all disguised under the cloak of lower insurance premiums?

The same side of me who wants to build a bomb shelter in my tool shed is also having trouble with this new OnStar service. After all, Ford is developing cars that talk to each other, GM is putting money into cars that drive themselves, and now your car wants to tattle on your driving habits. Big Brother is no longer trying to get in the passenger seat; it’s trying to drive!

I think it’s too late for me; I’ve already given in to sat nav and climate control. At least for now GM is doing no evil, and instead letting you save some additional cash on car insurance if you drive less then 15k miles a year. Besides, Big Brother technology is nothing new in cars. For almost a decade GM and other manufactures have been installing a “black box” like device that records driver stats, but your car has kept the secret to itself …so far.

via topspeed