GM Product Development chief and Vice President Bob Lutz is calling on Washington to give U.S. automakers large loans and suspend some crash test requirements. He is concerned that some product lines may need to be scrapped due to CAFE, but is confident the Chevy Volt will be a hit. (Source: GM)
General Motors' product development chief encourages the government to lift crash test restrictions to help U.S. automakers
It's no secret that America's largest automakers -- General Motors, Ford Motor Company, and Chrysler -- are struggling. Weighted by the burden of a troublesome economy, and facing increasingly strict legislation on fuel economy, the future of the trio seems uncertain. Still, each has forged ahead with its efforts to produce hybrid vehicles, generally accepted to be the future of the auto industry.
None has put as much effort into the field, perhaps, as GM. GM has invested a great deal of money into the development and advertising of the all-electric Chevy Volt, to launch in November 2010 and the development of biofuels. However, despite its best efforts, GM remains concerned about the effects of CAFE (coporate average fuel economy) legislation.
General Motors Corp.’s vice chairman and product-development chief, Bob Lutz, is calling on the federal government to take an unusual step to ease pressure on automakers and allow them to focus on fuel economy -- suspend crash testing requirements. Mr. Lutz is particularly worried about, among other vehicles, the future of the fuel hungry Corvette.
Mr. Lutz encourages the presidential hopefuls to push through new loans and/or to consider dropping crash safety standards, stating, "I’m not going to get into individuals, but I will tell you what we want from whoever it is. We have tremendous pressure from mandates on fuel economy and safety that are going to add weight to vehicles, and so we are victims of the federal government. So it’s not unreasonable to request federal loan guarantees from the government to fund the new technology needed to meet the mileage and safety mandates."
GM and its fellow Detroit automakers are pushing Washington to make available a proposed $50B USD in loans to help them finance their efforts to make cars more fuel efficient. In addition, Mr. Lutz says some crash testing requirements need to go. He states, "We also would like a 3-year moratorium on certain U.S. front- and side-impact crash test regulations. The regulations impact our ability to bring in several high-mileage small cars we make elsewhere in the world. In Europe, the crash-test procedures are different than in the U.S., so the tests are different. If our government says cars that meet crash tests in other countries are good enough to be sold here, we would have more high-mileage, small-car flexibility."
In addition to challenging lawmakers to act, Mr. Lutz detailed the effects that the CAFE standards and high gas prices are having. The fullsize rear-drive Chevrolet and Buick have both been dropped, due to being to gas hungry. He rejected wide speculation that GM would drop the Lamdba-based Saturn Outlook cross/utility vehicle in 2009. Mr. Lutz says he'd like to include a new Camaro sports coupe that GM fans are pleading for, but that he feels his hands are tied. He describes, "I get letters from people saying they heard we were going to add a supercharged 600-hp V-8 to the Camaro lineup, and I write back saying ‘Sorry, with new (corporate average fuel economy) standards (for 2020), we aren’t going to do it.‘"
The automaker is pressured by the CAFE regulation that mandates that by 2020 cars get a minimum of 35 mpg (6.7 L/100 km). Trucks and SUVs will have their own, slightly lower targets. As a result of the upcoming restrictions and state mandates in California and 15 other states on carbon emissions, Chrysler is considering ditching its Viper high-performance model. It announced this week that it was considering selling the unit.
Mr. Lutz gripes, "Setting lower CO2 limits would equal setting CAFE at 43 mpg (5.5 L/100 km). This is why the sale of the Dodge Viper by Chrysler makes sense, because anyone selling fewer than 50,000 vehicles annually would be exempt (from fuel-economy requirements). So if someone else bought Viper, they could sell to capacity, but Chrysler couldn’t. This is why we are concerned about Corvette. The reason California set the exemption for less than 50,000 units is that it would mean the Hollywood folks could keep driving their Lamborghinis and Ferraris."
He continues to criticize this loophole, pointing out, "Porsche could sell 11-mpg (21.4 L/100 km) Cayennes, but we couldn’t sell 20-mpg (11.8 L/100 km) Chevy Tahoes."
At least he can take comfort that the Chevy Volt development is finally on track, according to his estimates. He states, "The batteries have proven trouble free. It’s almost frightening. We’ll start releasing (the car) to the public in November of 2010. No one, no one, will get one any earlier."
He warns that the car will not be profitable at first. When asked how small cars, many of which are not making profits, can be made viable he answered, "Profits follow demand. When SUVs were in big demand it meant profits. When small cars are in big demand, it will mean profits. The Chevy Malibu transaction price is up by $4,000 this year because it is in big demand. The old Malibu it replaced we had to give away with incentives."
As for his own plans and working arrangements, Mr. Lutz concluded, "I have no plans to retire, but that doesn’t mean someday Rick (Wagoner, GM’s chairman) or the board might say, ‘Hey, you’re starting to ramble.’ When I’m 80 we’ll have a party in my office and have cake. (Mr. Lutz is currently 76) I’m not shy about taking my vacation time, I just don’t take it all at once -- as I get older, I think I’ll probably take more time off. I think I’ve figured out the perfect work week – Fridays and Mondays off."
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