GM's CEO: We're A Year Behind On R&D
January 12, 2010
by Tom Krisher, AP Auto Writer
DETROIT (AP) - A big cut in research and development spending while General
Motors was in bankruptcy protection set the company's new product plans back
by about a year, its top executive told reporters Tuesday.
Chairman and CEO Daniel Akerson said GM is working to accelerate vehicle
plans that were postponed when R&D spending was cut to $5 billion per year
as the company was trying to save money during its 2009 stay in bankruptcy
protection. The spending has since been restored to $7 billion.
GM executives have been scrambling to get the new products back on track,
trying not to fall too far behind competitors such as Ford Motor Co. as they
update cars and trucks on a more regular basis. Newly redesigned cars and
trucks tend to sell faster because they take advantage of new technology and
are quieter, handle better and generally are more efficient.
Akerson wouldn't identify which vehicles have been fast-tracked for
development. The company had delayed its next-generation Chevrolet Silverado
and GMC Sierra pickup trucks during its financial crisis, and its Impala
full-size sedan also is among its older vehicles.
He also told reporters that new hatchback and small van versions of the
Chevrolet Volt are in the works for 2012 or 2013. The Volt, a rechargeable
electric car, is a hatchback. Akerson gave no more details about the new
"With the bankruptcy we lost roughly a year in terms of development, so
that's why '12 and '13 are more pivotal here for us in the United States,"
He said the company's product lineup is competitive with the industry now,
having introduced the Volt, Chevrolet Cruze compact and Chevrolet Sonic
subcompact in the past few months.
Joel Ewanick, GM's chief marketing officer, said in an interview at the
Detroit auto show Monday that the lull in new products will actually help
the company market its existing new cars and build awareness of its four
remaining brands: Chevrolet, Buick, GMC and Cadillac.
GM, he said, has a lot of new products in the pipeline, but the gap will let
the company concentrate on the Cruze, the first credible compact car in GM's
history. The Cruze's predecessor, the Chevrolet Cobalt, is described even by
GM engineers as mediocre, with numerous compromises made to cut costs. The
Cruze has a far nicer interior than the Cobalt, is much quieter and handles
better. GM engineers say the handling is comparable to a BMW 3-Series sedan,
which is far more expensive.
GM, he said, will spend a lot of money advertising the Cruze, including on
the upcoming Super Bowl, because the company needs to convince people to
look at a GM small car and establish itself in a market now controlled
mainly by the Honda Civic and Toyota Corolla.
"What we really need to do is concentrate on the Cruze," Ewanick said. "It
gives us an opportunity to invest in that car and really make sure we do the
best we possibly can in a segment that we haven't done well in."
Without the gap, Ewanick said he would have had to spend advertising dollars
on additional new products.
"It's somewhat fortunate the way things shook out," he said. "What would
have happened is you would have launched the car and moved on to the next
launch. We are going to be able to concentrate on that car, and that's going
to pay dividends for years to come" he said of the Cruze.
GM's new products were noticeably absent from the North American
International Auto Show in Detroit this year. In past years the company has
rolled out several new products and concept cars that turn into new
vehicles. The Volt was unveiled in 2008 as a concept car due in showrooms in
This year GM's only truly new car was the Buick Verano, a luxury version of
the Cruze that will be in showrooms later this year. The company also
unveiled the Sonic subcompact, but a version of it was shown at last year's