guionM

WARNING! This is going to seem anti-climatic once you finish reading this......

Here's the honset truth.

GM's RWD programs are in delay because GM needs to get the money together to fund them and (equally responsible) it's also a matter of factory timing (coordinating things in a way where GM can move models to underutilized factories and close down others).

That's it.


The latter point first:

GM has tremendous overcapacity. They want to get levels back up into the 90% range. This means factories will be consolidated to make multiple models, and others will be closed.

You can't completely redo an entire factory when it's in full operation (even at 70% capacity), so you have to wait till the vehicle that's being produced reaches the end of it's run. That's going to happen to at least 2 factories I know of in the near future.

A car like GM's North American RWD vehicle line is going to likely all be made in the same plant, or at least the coupes in one plant and sedans in another (smaller) plant. A plant currently in use is going to have to finish a production run & it's replacement is going to have to be set up in another factory and then the factory is going to be redone. Much like a shell game, but bigger and a few shells are going to be crushed in the process.



On the other issue, it takes alot of money to launch a new vehicle. GM has limited resources. GM depends (disproportionately IMHO) on current sales to fund current projects.

With a limited amount of money, GM is going to put it's cash where it's going to generate the most additional cash for the amount invested. If you're going to invest in stocks, are you going to put all your savings in a stock to show faith at 2% returns or put your money in a hot stock that's doing 15-20% returns?

See things are different whan it's YOUR cash, huh?

It has nothing to do with current mismanagement, mass corperate confusion, or stupidity.

It DOES have alot to do with vaults full of shortsightedness. Instead of using the good years to enact fixes and invest in cars that would be needed, GM now has to do this right in the midst of a serious cash and sales collapse. Because of the timetable it takes to get vehicles to market, the things GM has been attempting to do are things that should have been done back in 2000 (but could have been prevented as late as 2002, so while the previous management is definately responsible, the current team was, seemingly, initially slow to act).

GM is now scrounging for cash where ever they can find it. The UAW, Holden, selling off parts of itself, consolidating it's lineup. The good news is that GM isn't making the same mistake it's made in the past (taking cash from product development to run the company). The bad news is that it's begining to look alot like the last years of Studebaker and AMC, both of which sold off alot of holdings and scrounged cash in an attempt to fund projects that would "turn them around" (Studebaker missed a chance to merge with Rambler & Nash to make AMC and crashed a short time later after selling off everything including their engine foundry to try to get the redesigned '67s going, AMC sold off everything and in the end was bought by Chrysler).

GM is coordinating their new vehicle production to better utilize their factories (and close some), and is streching things out so they can get the money together to fund these introductions.

Yes, Zeta is mostly done. Yes, if GM gave the word "GO" tomorrow, we could see things as soon as March 2007 (18 months) as 2008s. But it's the factories and cash flow that's slowing things down.

That's it.

91_z28_4me

So Guy what factories right now are flexible building factories? At least 1 Oshwa plant I know of. What is going on with D-ham? Is Willmington as under capacity as some people think, expected produciton in the 200k? What plants are most likely for closing, I am thinking the Oklahoma TB EXT and Envoy XL plant?

IREngineer

Guy's comments instantly make me think Spring Hill or D-ham. I can speak very confidently that SHP is not going to be closing, but I can't say the same for D-ham. I have an idea of what else might be going into SHP, but that would leave it down for around a year, where "Zeta" could be seamless.

Hmmm, we've been hearing a lot about GM getting out of one of the GMT-360 plants around the same time as well.

Z28x

What plant did they used to build the Astro Van in? Baltimore?

Willmington as under capacity by 160,000 units

Chrome383Z

Aside from all the rest, this is good to hear.

Big Als Z

There are several plants that are being shut down. But which plants are getting what? In your post you say the Sedans will be built in a smaller plant? Isnt it the other way around?
the OKC plant where they make the Envoy XUV and the EXT is closign down. They are set up for large, flexable, RWD cars.

falchulk

The Baltimore plant wont be around:

http://www.baltimoresun.com/business...ck=1&cset=true

evok

SH and OK City are already spoken for.

Chuck!

Morane is the other 360 plant and there were rumors around the of it closing earlier.

Fbodfather

God Bless ya...........but I've been telling you (at the bar in the Marriott at LAX )and everyone else that would listen this info. for.......oh...........say............4 years?

I wouldn't necessarily call it shortsightedness, tho............

You more than most know why some things weren't talked about for quite some time.

It has always come down to funding and bricks and mortar.........plus one other thing you left out: Personnel. You can work an engineer for 24/7, but they tend to die quickly when you try it.

PacerX

Only the weak ones, bub.

routesixtysixer

Hmmm. Care to elaborate on the OKC plant?
I have a "native" interest.
I know they spent a BUNCH of money rebuilding after tornado hit the plant a few years ago...

guionM

Geeze!!! You have a long memory!

I'll bring everyone into that little sliver of the conversation if you don't object (if not, I'll come back & delete this post).

Back when a 'certain person' came to GM and began really pushing the system to get cars out at what once was Chrysler-like speed, another person mused aloud that 'said person' was moving way too quickly, and he didn't know how in the world 'said person' was going to pull it off. I think "impossible" was the word. I doubted this assesment because at the time, I bought into 'said person's' intent to make GM operate like Holden in product development.

Since that time, the "full speed ahead" Solstice took about 4 years, Holden's VE is running a 6 month delay, GM-NA had what amounted to a sales implosion...twice in 1 year, and GM has so many new vehicles sitting around waiting for money to fund production startup, it's begining to look like a backed up runway at LAX!

In a way 'said person' succeeded, but the rest of GM couldn't keep up. Running massive losses this year hasn't helped.

guionM

Wilmington is likely dead after the current Kappas do their run.
As mentioned, Spring Hill and Oklahoma have vehicles assigned.
There isn't anything at DH that can't be moved to another plant, leaving it open.
All I'll say about Oshawa is GM invested a ton of money in one of plants, and after the 2007 model year run, there's going to be an opening.



There is one really BIG elephant that I think everyone has missed in all this hoopla, and no one here has even wondered about:

Holden's plant, now that GM invested in some serious expansion, has a capacity for nearly 200K cars, but typically sells 150-175K vehicles per year both in Austraila and exports to other countries excluding the US. When GTO expires next year, that's still 25-50K in excess capacity. Holden's next coupe is likely to be made here.

Now, the bonus question....

Has anyone ever said Holden wouldn't import a version of the VE sedan to the US once production ramps up as capacity (oh, say.. 2008 model year)?

ehaase

My uneducated, non-insider guess is that 2007 could be the last year for the Grand Prix, and perhaps the LaCrosse could be moved over to the Impala plant, opening a space for a RWD car (maybe a Sigma-lite/Zeta Chevrolet coupe and sedan) to be built in Oshawa sometime late in 2007 or early 2008.

Perhaps the Grand Prix could be replaced by a version of the Holden VE, although sales would be much lower. That would make more sense than giving a VE to Buick, which already has two sedans close in size.

I found this post at Edmunds - which seemed interesting - http://townhall-talk.edmunds.com/Web...@.ef6a13c/8915 - which is further evidence that much of what is discussed here is accurate.