GM puts its faith in raft of new models

Four times a day for two weeks, General Motors designers and engineers are guiding market analysts, journalists and select groups of employees through a dimly lit dome at the car maker's sprawling technical centre in suburban Detroit.

A security guard keeps watch at the door, cameras are banned and GM has imposed strict rules on what may be reported.

Parked inside the dome are 18 cars, sport-utility vehicles and trucks which could make or break the world's biggest carmaker as they are rolled out in show rooms in the US and Canada over the next 2-3 years.

The vehicles comprise the backbone of perhaps the most crucial, but also the most risky, component of GM's recovery strategy.

Outlining the strategy last week, Rick Wagoner, GM's chief executive, said: “We know that you can't turn around, or be successful in our business, without great cars and trucks.”

The other elements of Mr Wagoner's turnround plan are: a realignment of GM's eight brands; shrinking capacity to fit its slipping market share; and action to rein in spiralling healthcare costs. GM is also reorganising its highly profitable financing arm, GM Acceptance Corporation, and may dis pose of part of its interest.

The carmaker has pushed up capital spending by $1bn this year. While it plans to cut its North American blue- collar workforce by 25,000 by 2008, its 11 design centres around the world are work ing at full tilt.

“We're adding designers because we have so much work to do,” says Clay Dean, design director for small and mid-size cars.

Csaba Csere, editor-in- chief of Car and Driver magazine, says: “A company's willingness to show its future products is inversely proportional to its current success.” Mr Csere recalls Nissan and Chrysler putting on similar events to GM's presentation when their for tunes were at a low ebb.

Pride of place in the dome goes to the next generation of the big GMC Yukon and Chevrolet Tahoe sport-utility vehicles, the Chevrolet Silverado pick-up truck and Cadillac Escalade SUV, all built on the new T-900 frame.

GM accounts for more than half the North American market for big pick-ups and SUVs, and these vehicles until recently con tributed the bulk of its North American profits.

But at a time when demand for big SUVs is faltering, GM wants to drive home the message that it is not putting all its eggs in the T-900 basket.

It is also bringing other vehicles to market, including two sectors crossover SUVs built on car frames, and petrol-electric hybrids where it has so far lagged behind Asian rivals.

One crossover is designed to add some pizzazz to the ailing Buick brand. Ed Hell wig, senior editor at Edmunds.com, a research service, described the Buick as a “very distinctively styled” vehicle which conveyed “the upscale image that they have been meaning to get to for some time”. Another crossover is part of a stable of five new vehicles aimed at reviving the Saturn marque.

In addition, GM hopes that a new Cadillac sedan, aimed at younger buyers than in the past, will prove that the brand's recent revival is more than a flash in the pan.

Some of the new vehicles look dramatically different from GM's current line-up. The Chevrolet HHR cross over, due for release later this month, is directed at the youth market, going head-to- head against the boxy Honda Element, Toyota's Scion and the retro-looking Chrysler PT Cruiser.

Besides appearance, GM officials promise the new line-up will offer tangible performance improvements.

The T-900s will not only have more horsepower and higher torque than their pre decessors, but also improved fuel consumption. The gap between the trucks' doors and body has been halved, bringing it close to the much smaller gap found on cars.

GM considers gaps so criti cal that it is holding up one of the most eagerly awaited new models, the Pontiac Sol stice sports car, to narrow the gap between the bonnet, the front fascia and the headlights. GM officials promise the Solstice will be on sale by September 22.

The new models’ interior fittings include higher-quality grained - rather than glossy - finishes, and redesigned instrument panels to give an impression of space. “The interiors are vastly improved in terms of their refined and upscale look”, Mr Hellwig said.

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