Ghosts of Diesels Past: Failed cars from 20 years ago still haunt GM, U.S. market

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Thread: Ghosts of Diesels Past: Failed cars from 20 years ago still haunt GM, U.S. market

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    GMI Staff Member Premium Member nadepalma's Avatar
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    Ghosts of Diesels Past: Failed cars from 20 years ago still haunt GM, U.S. market

    http://www.autoweek.com/news.cms?newsId=102354

    Ghosts of Diesels Past: Failed cars from 20 years ago still haunt GM, U.S. market

    RICHARD TRUETT | Automotive News
    Posted Date: 5/13/05

    It's been two decades since General Motors halted production of its infamous trio of passenger-car diesel engines. And the smoke still hasn't cleared.

    Ask a powertrain or marketing executive about consumers' poor image of diesels and they'll talk about the smoke-belching big-rig trucks hauling heavy loads, the grungy diesel fuel pumps at filling stations and GM's diesel cars from 20 years ago.

    Read an article about today's new generation of high-performance, clean-running European diesel engines and you'll almost always see dredged up the disastrous trio of GM diesels built from 1978 to 1985.

    Perhaps no other engine failure casts such a dark shadow today.

    GM is dragging its feet on developing diesels for the U.S. market.

    Why? Attend a press event at which someone mentions the outlook for diesels in the United States, and it's not long before the woes of GM's diesel past are regurgitated.

    Too bad, because GM is in danger of being eclipsed on a technology it may need to remain competitive in this era of high gasoline prices.

    Here's why GM needs light-duty diesels:

    >>> BMW AG and Honda Motor Co. plan to put diesels in U.S. vehicles.

    >>> Ford Motor Co., with a large and growing cadre of engineers working on light-duty diesels for North America, is planning to do the same, possibly as early as 2007.

    >>> Toyota Motor Corp. and Nissan Motor Co. are likely to offer diesels in Toyota Tundra and Nissan Titan pickups.

    >>> With Jeep Liberty diesel SUV sales off to a strong start, the Chrysler group may put diesels in more models.

    GM, on the other hand, has shelved plans for a V-6 version of the Duramax diesel and says it can't yet meet stringent diesel exhaust regulations coming in two years.

    Other automakers say they can already meet those standards and are working to lower the cost of the after-treatment systems.

    With its new generation of clean-running European diesels, GM could quickly overcome negative images from its past, says Anthony Pratt, senior manager for global powertrain analysis at J.D. Power and Associates in Troy, Mich.

    "GM would have to educate the consumer," Pratt says. "But GM could do it by exposing people to its new (European) diesel technology."

    As gasoline prices rise, consumers once again are thirsty for fuel-sipping vehicles. President Bush has mentioned diesels as one way to improve fuel economy and says he supports a tax break for diesels.

    A diesel engine delivers about 30 percent greater fuel economy than a similar-sized gasoline engine. But there are just five diesel-powered car nameplates and two small SUV nameplates available in North America.

    Missed opportunity

    Had GM's diesel disaster never happened, diesels might account for as much as 10 percent of the new-vehicle market today, says Clarence Ditlow, executive director of the Center for Auto Safety, a Washington consumer lobbying group.

    Instead, diesels account for fewer than 1 percent of new-vehicle sales in North America, with only those few nameplates available from four automakers. Even if Ditlow is wrong by 50 percent on his estimate of diesel market share, the implications are still enormous.

    According to The Washington Post, the Environmental Protection Agency says that if diesels accounted for one-third of all vehicle miles traveled in the country by 2010, the United States could save $20 billion per year in fuel costs.

    Because of high fuel taxes and revolutionary fuel injection advances that have transformed the diesel engine from a smoky, chattering laggard to a clean, quiet, smooth-running performance engine, diesel sales have exploded in Europe.

    A ghost in the attic

    But in North America the specter of the GM diesel disaster clanks around in the auto industry's attic like a restless ghost that won't disappear.

    Responding to the high fuel prices and odd-even rationing of the 1970s, GM rolled out the diesel engines to boost fuel economy of its bigger cars. At the same time, the automaker was developing a new generation of smaller, more fuel-efficient cars and engines.

    The defunct Oldsmobile Division produced a 5.7-liter V-8 and two different 4.3-liter diesel engines for mid-sized and large cars that were used by all GM car divisions. GM sold around 1 million vehicles with diesel engines from 1978 to 1985.

    GM developed the diesels on the cheap. The 350-cubic-inch (5.7-liter) V-8, for instance, was based on a gasoline engine.

    The diesels were notoriously unreliable. They often suffered catastrophic internal failures curable only by a replacement engine that - made with the same defects - also failed. GM's engineering reputation took a major bruising.

    GM diesels stunk up the market so badly that other automakers' diesel sales suffered.

    In the late 1970s, nearly 80 percent of Mercedes-Benz's U.S. sales were of diesel-powered cars.

    "I think the GM diesel did hurt Mercedes-Benz's sales a bit," says Fred Heiler, who worked in Mercedes' communications department in the 1980s and 1990s.

    "While most Mercedes-Benz buyers were knowledgeable enough to know that one had nothing to do with the other, there had to be some who were swayed by the bad press."

    And what bad press it was.

    "The 5.7-liter diesel did more for grass-roots consumer organizing than anyone since Ralph Nader," recalls the Center for Auto Safety's Ditlow.

    "We got the Federal Trade Commission to set up its arbitration program with no time or mileage limits for buybacks, and we helped in the class-action suits that eventually got consumers about 80 cents on the dollar."

    GM's problems aside, diesels still probably would have had a tough uphill struggle to gain U.S. market share.

    The key: Gasoline prices

    "What's kept diesels out of the U.S. light-vehicle mainstream is the low price of gasoline," says Lindsay Brooke, a senior powertrain analyst at CSM Worldwide in Farmington Hills, Mich.

    Tom Stephens, GM's vice president for global powertrain, says consumers' interest in diesels in the 1970s and 1980s was driven only by the prospect of lower fuel costs. When gasoline prices stabilized, and even dropped, diesel sales plunged.

    But that explanation doesn't take into account the fact that many consumers gave up on diesels because GM's engines sullied their reputation for reliability.

    Says Kurt Liedtke, CEO of Robert Bosch Corp.: "If we take a look at Europe, it provides an excellent example of how modern, clean-diesel technology, specifically common-rail fuel injection, positively impacted market share. Since diesel vehicles featuring common-rail were introduced in Europe in 1997, new-car registrations have grown from 20 percent to nearly 52 percent."

    Had the GM diesels run without trouble, other automakers would have had to compete - and that likely would have fostered development of technology to improve emissions and performance.

    "It really is hard to say where diesels would be today but for the GM fiasco," Ditlow says. "It's easy for you or me to say that it killed the market, but it's a lot harder to say what the market would have been. It's hard to imagine that it would not have stabilized at least at 10 percent of the fleet given that other companies would have had to offer a diesel as well."

    Diesels are only now slowly and quietly starting to gain acceptance again in North America. Last year Mercedes-Benz launched its diesel-powered E320 CDI sedan and easily met its estimate of 3,000 sales. And, in February, Jeep's Liberty CRD hit the market.

    There's at least one cruel irony born from the failure of GM's past diesel engines: GM has become a leader in sales of diesel engines in Europe and Asia. But mindful of its past, GM can't or won't sell diesel-powered cars in the United States.

    Tough testing

    Stephens says the mistakes that were designed into the Oldsmobile diesels in the 1970s and 1980s could not happen again.

    "Today, we also have a very robust design process that incorporates a strong process of initial product analysis and modeling long before a part is even produced," Stephens says.

    "Once every possible scenario with that component is analyzed and it meets our design requirements, the physical component is tested. Once the product is complete, we once again look at every step in the design and production process to determine how to improve it or enhance its capabilities."

    The first new diesel engine GM designed after the Oldsmobile diesels was a 6.5-liter V-8 built to military specifications and used in the Army's Humvee. The engine, though not very refined, was bulletproof, often going more than 500,000 miles through the worst terrain with little maintenance and no major failures.

    GM's next diesel, the quiet, powerful and smooth-running 6.6-liter Duramax V-8, developed with Isuzu, has proved that at least some consumers will forgive GM for past mistakes.

    The Duramax has been such a hit that it increased GM's market share in diesel heavy-duty pickups from about 2 percent in 1999 to more than 25 percent today. GM is mulling another expansion of the Duramax plant in Ohio to meet increased demand.

    The new generation of European diesel engines proves GM can build world-class diesels for cars. If GM is going to compete in the United States with diesels, the company has to get consumers and a wary press to forget about the failed diesels of the 1970s and 1980s - if that's possible.

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    GMI Staff Member Premium Member nadepalma's Avatar
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    Re: Ghosts of Diesels Past: Failed cars from 20 years ago still haunt GM, U.S. market

    Quote Originally Posted by nadepalma
    GM, on the other hand, has shelved plans for a V-6 version of the Duramax diesel and says it can't yet meet stringent diesel exhaust regulations coming in two years.
    I don't understand this. A V6 version of the Duramax would be a great engine to have for the smaller GM pickups and maybe even for a few RWD passenger cars (would something like this be good for a European application of the STS or CTS?). I could imagine a nice Colorado or H3 with a nice Duramax V6 quite nicely. But to say that they shelved it rather than overcame the regulations coming in the next few years is just a real let down. I mean, if they say they can't meet regulations in two-years with a proposed Duramax V6, then what will they do for the Duramax V8? Will they discontinue it b/c of these regulations? GET TO WORK GM, bring the V6 to market soon!

    Quote Originally Posted by nadepalma
    GM's next diesel, the quiet, powerful and smooth-running 6.6-liter Duramax V-8, developed with Isuzu, has proved that at least some consumers will forgive GM for past mistakes.
    This in itself is pretty amazing. Seems that when you put out a good product then folks respond to it favorably. Good for GM -- I hope that sales of this continue since it will help GM's CAFE standard regualations and get the word out that GM's new line of diesels aren't horrible.

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