GM Jumps Back Onto Truck Bandwagon
By Chris Haak
According to articles both in the Wall Street Journal and in the Detroit News, GM’s Chairman Ed Whitacre and an eight-member executive committee approved allocation of about $1 billion USD to fund development of the company’s next generation of full-size trucks. The update to the full-size pickups had been put on hold pending clarity on US fuel-economy standards – which has now come – and perhaps more importantly, the availability of money to actually pay for development of these new vehicles.
GM’s full-size trucks were last redesigned and re-engineered in 2006 for the 2007 model year. Meanwhile, both Ford and Dodge launched competing pickups two years later, and the Ford F-150 and Dodge Ram each have certain features that the GM trucks are lacking.
Although light trucks are required to average 24.1 miles per gallon in 2011, even a fuel economy-focused engineering effort isn’t going to be enough to get the behemoths to reach that number. All is not lost, however; the new-generation trucks will improve on the current trucks’ numbers, and other light trucks such as crossovers and the like will help ratchet GM’s average upward toward the magic number.
The focus on trucks is a tacit acknowledgment that, in spite of the company’s recent focus on fuel-efficient smaller cars such as the Chevrolet Cruze, Aveo, and Volt, and in spite of the enormous amount of liabilities and costs that the company shed during its 2009 bankruptcy filing, its best chance of generating big revenues and big profits is still in large trucks. The profit on a $30,000 Silverado is probably close to the entire cost to build a new Aveo, and obviously a $30,000 Silverado pulls in considerably more revenue than does a $13,000 Aveo.
The new pickups aren’t expected to launch until 2012 or 2013. According to the WSJ, a team of designers recently showed off their latest mock-ups of the vehicles and said more funding would help create a more eye-catching look. I personally find the design of the current Chevrolet and GMC pickups disappointingly derivative of the earlier generations, so any additional work in that regard would be welcome news.
Tom Stephens, GM’s head of product development, then took the request for additional funding to Mr. Whitacre and the executive committee, who approved the additional expense within a matter of days. The Detroit News article said that under the previous product-approval process at GM prior to bankruptcy, such approval could have required approval of up to 70 committees. With bureaucracy like that, is it any wonder that GM had to declare Chapter 11? At any rate, let’s hope that the new trucks raise the competitive bar in their segment, improve performance and fuel economy, and now – apparently – looks as well.
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