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Discussion Starter · #1 · (Edited)
Automotive News
October 29, 2008 - 12:01 am ET

Jamie LaReau and Robert Sherefkin

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.

http://www.autonews.com/apps/pbcs.d...289945/1182/emailblast01&refsect=emailblast01
 

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"GM DELAYS MOST FUTURE PRODUCT": That headline should have been scheduled for Friday; It's scarier than any Halloween event.

Here is a little something contained in the article that just can not happen:

"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."

Thus, we are (apparently) now three full model years from the Cruze.

So what do we get? Two more years of media writing like this (from Edmunds):

"Unlike some other fuel sippers emblazoned with all manner of stickers and badges, the 2009 Chevrolet Cobalt is unassuming, a traditional American sedan. It looks just like any other Cobalt sedan you might encounter in an airport rental lot. If this sort of anonymity appeals to you, well, there it is.

As far as fit and finish goes, the Cobalt has none of it. We're sorry to say that from the first day we had the car, its hubcaps buzzed and rattled with every road reflector and driveway entrance. Body panel gaps are large enough to actually see the scissor hinges when the trunk is closed. The metallic paint showed several spots of orange peel plus uneven application. And there's that wrinkly pinch weld running the length of both running boards that we haven't seen since, well, window cranks went away.

This car really is a throwback to a bygone era. How did we ever survive the 1970s? We must've had so much more time and patience."
 

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GM needs to get the Cruze here sooner, not later. The Cobalt just continues the mediocre if not poor image of GM. Sure the gas mileage is up but for those that want a 4door it only applies to the stripper models. Sales might be up but the image it gives GM is NOT positive. The Cruze looks to be a great car. Good looking inside and out with a great fuel efficient 1.4L turbo motor. They must be desperate for cash to make these decisions because they are going to hurt sales in the long run.
 

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It does make sense to have the two automakers that have stopped investing in future products merge together... at least you won't have the kind of corporate culture clash that was seen in past "mergers".
 

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... at least you won't have the kind of corporate culture clash that was seen in past "mergers".
I'd expect that there would be significant corporate culture issues. Different business processes, top to bottom. Detroit vs Auburn Hills. Us vs Them. Completely different I.T. models. And consolidating the financial systems? Give me a scotch, my head hurts.
 

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I have heard it before and it never gets easier, the Cruze is one of the more important cars for North America, Europe will have it in a few months so why are they so stupid.....Delay something that doesn't make sense like the G3 or the Equinox (rather have an Orlando anyway), this is so frustrating.
 

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Insanity. In-freakin-sanity.

This 11b cash stash is a MIRAGE. Not the Mitsu or French aeroplane, mind you.

Yes, if GM and Chrysler merged, there would be cost savings on normal operations moving forward.

The product area IS the problem here.

GM is going to need to spend a LOT of that money either redesigning existing Chrysler products, or giving Chrysler reskins of GM products. Even in an ultimate cheap-out scenario, it is NOT cheap to sling Dodge skins over Chevrolets.

Cut brands you say? Hello dealer lawsuits... and all aboard the BK express.

Chrysler loyalists are going to be livid that their beloved cars and trucks are now just reskins of GM products they hate, and the sales will go away.

Yes, it is possible that the merger could work out in the end, but GM can't be seriously thinking they'll be able to use Chrysler's cash to shore up their own operations. It's like tying the Titantic to the Andrea Doria, and ripping up the Doria's hull to patch the Titantic. Sure, the Titantic floats, but only until the A.D. sinks, bring the whole operation down.
 

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I have heard it before and it never gets easier, the Cruze is one of the more important cars for North America, Europe will have it in a few months so why are they so stupid.....Delay something that doesn't make sense like the G3 or the Equinox (rather have an Orlando anyway), this is so frustrating.
It isn't even delayed. This is the third (if not more) time that a news source has started such a rumour. Wait until you hear a press release from GM to confirm that it is delayed. Until then don't believe what you are hearing, the media hasn't been at all truthful lately.
 

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Insanity. In-freakin-sanity.

This 11b cash stash is a MIRAGE. Not the Mitsu or French aeroplane, mind you.

Yes, if GM and Chrysler merged, there would be cost savings on normal operations moving forward.

The product area IS the problem here.

GM is going to need to spend a LOT of that money either redesigning existing Chrysler products, or giving Chrysler reskins of GM products. Even in an ultimate cheap-out scenario, it is NOT cheap to sling Dodge skins over Chevrolets.

Cut brands you say? Hello dealer lawsuits... and all aboard the BK express.

Chrysler loyalists are going to be livid that their beloved cars and trucks are now just reskins of GM products they hate, and the sales will go away.

Yes, it is possible that the merger could work out in the end, but GM can't be seriously thinking they'll be able to use Chrysler's cash to shore up their own operations. It's like tying the Titantic to the Andrea Doria, and ripping up the Doria's hull to patch the Titantic. Sure, the Titantic floats, but only until the A.D. sinks, bring the whole operation down.
The cash isn't what GM would going for. If the deal were to fail, Cerberus would be losing a lot of money. You might think Ford is perfect and GM is making the worse decisions, but have a look at the other threads (http://www.gminsidenews.com/forums/f12/gm-seeks-10-billion-aid-merger-sources-70767/index6.html ) And you will see that there is more to it than what you mention
 

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It isn't even delayed. This is the third (if not more) time that a news source has started such a rumour. Wait until you hear a press release from GM to confirm that it is delayed. Until then don't believe what you are hearing, the media hasn't been at all truthful lately.
Yes I know, but I am still peeved that the Cruze isn't out for the 2010 model year and have to complain accordingly. :)
 

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The cash isn't what GM would going for. If the deal were to fail, Cerberus would be losing a lot of money. You might think Ford is perfect and GM is making the worse decisions, but have a look at the other threads (http://www.gminsidenews.com/forums/f12/gm-seeks-10-billion-aid-merger-sources-70767/index6.html ) And you will see that there is more to it than what you mention
I meant it would be insane if GM WERE just going for the cash. None of us really know, and I'm a stone's throw from where the talks are taking place.
 

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Cut brands you say? Hello dealer lawsuits... and all aboard the BK express.
Cutting brands may have become easier this year - the economy not withstanding.

By merging Buick/Pontiac/GMC dealer points, GM can simply starve one or two of the divisions of product. Keeping just one vehicle in the lineup is basically the equivalent of closing the division. Example - GM can reduce costs at Pontiac by simply providing the dealer network with a four door Cruze reskin - and nothing else. Buick can work with the Enclave, LaCrosse and Lucerne - and nothing else. GMC can sell reskined pickup trucks - and nothing else. All of a sudden, you have three brands combining to offer one simple product line.

Chrysler Group dealers in my area are becoming Dodge/Chrysler/Jeep stores. Same thing here - just getting rid of overlapping product will dramatically cut costs and confusion on the part of the public. Dodge pickup trucks, Chrysler cars and Jeep SUVs = One complete product line under one roof.
 

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I meant it would be insane if GM WERE just going for the cash. None of us really know, and I'm a stone's throw from where the talks are taking place.
The cash is a ridiculous reason to go for a company is what I am saying. A merger such as this also requires cash and whatever Chrysler may have will be reduced to pennies to make the deal work.
 

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Cutting brands may have become easier this year - the economy not withstanding.

By merging Buick/Pontiac/GMC dealer points, GM can simply starve one or two of the divisions of product. Keeping just one vehicle in the lineup is basically the equivalent of closing the division. Example - GM can reduce costs at Pontiac by simply providing the dealer network with a four door Cruze reskin - and nothing else. Buick can work with the Enclave, LaCrosse and Lucerne - and nothing else. GMC can sell reskined pickup trucks - and nothing else. All of a sudden, you have three brands combining to offer one simple product line.

Chrysler Group dealers in my area are becoming Dodge/Chrysler/Jeep stores. Same thing here - just getting rid of overlapping product will dramatically cut costs and confusion on the part of the public.
Not entirely. Dealerships sue GM, dealerships win, GM loses millions per dealership. The merger on the other hand would allow GM to close several dealerships without lawsuits.
 
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