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mikeyb
07-08-2005, 12:49 PM
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The Inside Story


By Michelle Krebs

The General in its Labyrinth

07-07-2005

The future of General Motors' products has been revealed (to a select few), and it is promising.

Over the past few weeks, the financially troubled automaker has invited analysts and journalists — individually and in small groups — to its usually off-limits design center for a peek into the GM showroom of the future. Dotting that showroom were a dozen and a half completely new models, a few of which already have been publicly shown, along with examples of interiors and powertrains that will go in them. The new vehicles will arrive at GM dealerships within the next 30 months.

The deal struck between the invitees and GM doesn't allow revelation of details about specific vehicles and their features. But sharing some general impressions are within the rules. So here are some:

GM's got its styling mojo back. GM once had it. With a distinctively American style and GM flavor, that mojo was evidenced by the flamboyant 1959 Cadillac Eldorado, the classic Buick Roadmaster and the sexy Chevrolet Corvette, to name a few. Of late, with some exceptions, GM lost it.

The future designs, particularly of some of the bread-and-butter models, will go a long way toward boosting the perceived value of GM vehicles. One reason GM has been forced to offer such hefty incentives to consumers is that buyers don't perceive GM cars being worth as much as the competitors. And in fact, they aren't, according to statistics on resale values. Some of the cars of the future appear as if they'll finally give the competition a solid run for the money — and while some will cost roughly the same money as they do now, they look far more expensive.

Brands are better focused. When you see a Buick, a Cadillac or a Chevy cruising down the highway in the future, you should readily recognize what it is. It won't blend into the landscape with other models on the road, nor will it look like its cousin.

GM is on record as saying Buick, GMC and Pontiac, which it wants grouped together at retail, will have less breadth of products. Buick and Pontiac, for instance, will have three or four models each, about half what they have today. The promise is that while they will have fewer models, they will be distinctive ones, not rebadged versions of a family member, although underpinnings will be extensively shared.

For a glimpse of where Pontiac is headed, look at the soon-on-sale Pontiac Solstice roadster. Recall earlier auto show concepts like the Velite and the Centieme for a sense of where Buick is going. GMC sets itself further apart from Chevy, continuing in its industrial-strength vein.

Cadillac carries on. Cadillac has enjoyed a phenomenal turnaround as a result of GM pumping $4 billion into new models that share a consistent styling and technology theme, dubbed Art & Science. In the first go-round of revamping its product line, Cadillac had a blank sheet to be bold and distinctive. It worked, and there lies the challenge. How does Cadillac redo its entire line again, making it fresh while continuing what worked? Having seen a couple of key Cadillac models for the future, it appears it has succeeded. Hint: Recall the Cadillac Sixteen's glamorous styling.

Saturn sets a new course. Perhaps the most impressive and radical change comes with GM's once neglected Saturn division. Saturn has long been GM's division described as producing cars for people who really don't care about cars but want a hassle-free buying experience. Saturn of the future will have vehicles — like the midsize Aura sedan (http://www.edmunds.com/future/2007/saturn/aura/100462447/preview.html), the Sky roadster (http://www.edmunds.com/future/2007/saturn/sky/100500273/preview.html) and others that can't be named — that buyers will not only care about but will be proud to own. Saturn could be killer with the combination of its customer pampering and terrific vehicles.

The real story is inside.GM finally gets it on interiors and may well leapfrog the competition in that regard. The Saturn Aura and Sky, nearing introduction, demonstrated at the 2005 North American International Auto Show (http://www.edmunds.com/news/autoshow/articles/103626/article.html) in Detroit that there was indeed life in GM's interior styling studios. But unique and knockout interiors are not confined to Saturn. Gone are cheap-looking, cookie-cutter interiors. In fact, just as you'll be able to recognize the identity of a car from a specific GM brand, you'll be able to tell the same about the interior. Sit inside a Chevy of the future, and you'll immediately recognize it as a Chevy because it pays homage to its heritage in a contemporary way.

But the proof is in the pudding. While GM's future showroom was impressive, the automaker faces huge challenges. It requires a major downsizing to put its infrastructure in line with its smaller sales volume and market share. It needs to address skyrocketing health care and pension costs, which amount to more than $5 billion a year. That will be no easy task as the United Auto Workers union is already balking at any changes to its current contract, which expires in 2007, including individual employees and retirees paying for any of their health care costs.

And on the product side, GM absolutely must execute its promising new models flawlessly. There's no waiting until the next time this time.

http://www.edmunds.com/insideline/do/Columns/articleId=106326#2

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