Before it even was 50% off the ground, the zeta platform appears to be dead.


by Jerry Flint

Every day there seems to be more bad news from General Motors. It's like a parody of BBC news in the early days of World War II.

"And now, news of fresh disaster."

The latest is that GM is killing the Zeta program for America. Zeta was an Australian-developed platform--or architecture, as GM likes to call it--for rear-wheel-drive cars. I've never been totally comfortable with the concept of a global platform--particularly one sourced from Australia--but Zeta was intended to fill a huge gap in GM's U.S. lineup.

Zeta was to be the basis for a range of midsize and large rear-drive models, like a new Chevy Impala, Pontiac GTO and, most important, a new fleet of big Buicks.

GM had said it planned to spend $3 billion resurrecting Buick. Those rear-drive cars were the heart of the program. Kill them, and the great plan to save Buick is back on the shelf. There's just a reskinned LeSabre/Park Avenue coming out in this fall, renamed Lucerne.

After years of not offering a V-8 engine option in its sedan lineup, Buick will have one in the Lucerne. That's good, but a warmed-over front-wheel-drive car is not as good as a brand-new lineup of rear-drive cars. Last year GM showed a gorgeous Buick dream car convertible to be built off that Zeta architecture. Everyone who saw it was excited. Well, it's gone.

How come?

Here's what I say: That $2 billion given to Fiat in February drained the kitty, so Zeta died. General Motors has another problem. Its most important program is what they call T900, a replacement for GM's big sport-utility and pickup trucks, such as the Chevrolet Suburban and Silverado, GMC Yukon and Sierra, and Hummer H2. GM has made up to 1.8 million of its big truck nameplates in a year. It's been the one great success story at GM, and highly profitable.

The current versions of these vehicles, as good as they are, have been around a while and are getting tired. The T900 program replaces them. The new sport-utility models are to begin rolling out early next year. Pickups would start the following fall. But something must be going wrong. GM is diverting manpower and money into the program. I say you don't make a move like that, only nine months from Job 1, unless there's a problem.

On his blog, GM Vice Chairman Robert A. Lutz says that the cancellation of Zeta is simply a reallocation of resources. Lutz also claims that the company remains committed to developing rear-rear-wheel vehicles. All this may be true, but the scrapping of the Zeta program will definitely push back the date that GM rolls out new rear-wheel-drive and all-wheel-drive mass-market sedans and coupes.

It is clear that the market is making a shift back to rear-wheel-drive cars, and that all-wheel-drive is also gaining traction with consumers. The American arm of DaimlerChrysler got a jump on its U.S. rivals last year when it introduced its big rear-drive sedan, the Chrysler 300C, which is also available with all-wheel drive. Ford Motor has been surprised at the demand for the AWD versions of its new Ford 500 and Mercury Montego sedans.

Buicks will have to soldier on for a few more years with just two front-wheel-drive sedans, plus a few light trucks. And if you were wondering, Buick sales in the first two months this year are running 20% behind last year. Its current sales rate is about 250,000 units per year, which is terrible.

Right now--just when rising gasoline prices are starting to put a crimp in sales of big trucks--GM is worried about its next generation of trucks. And I'm hearing strange things about those T900 vehicles. For example, I hear that the new big SUVs coming next year don't have fold-flat rear seats. It's difficult to imagine any manufacturer building such vehicles today without fold-flat seats. Chrysler went through a hugely expensive emergency crash program to get them into its minivans in the middle of the model cycle. Fold-flat seats are what they call "the price of admission" today.

And now, news of fresh disaster. Vice Chairman Bob Lutz was quoted in the March 24 edition of The Wall Street Journal as saying GM could "phase out" Pontiac or Buick if such "damaged brands" fail to improve. "I hope we don't have to do that," he was quoted as saying at a conference.

Lutz has been in the industry too long to be suckered into this kind of quote. Whether he meant to or not, he has put the divisions in play. What critics don't understand is that the best thing GM has is its dealer force. You kill the dealers if you kill such well-entrenched nameplates as Pontiac and Buick, and you kill GM. It's that's simple.

GM seems to be in a state of organizational chaos. Where it will end? Stay tuned.


The article can be found at forbes.com

 

Dude, are you serious?

 

Welcome to last week

 

How are the dealers the best thing for GM? I thought too many dealers was a bad thing. Isn't that part of the reason Olds was killed?

 

Did a search for it and didn't find anything...so I posted