Lutz: Nutz To Naysayers

Bob Lutz of GM rebuts his plan's skeptics:

We did not cancel the Zeta plans to save money, or to divert funds elsewhere that would've been used for product development.

We are simply reallocating resources (human and financial) to pull some other programs ahead and get other vehicles to market sooner. The press speculates this means we're doing it to get our next-generation large SUVs and pickups out sooner. You could see how one might reasonably come to such a conclusion.

Autoguy forwards a Detroit News article by Daniel Howes excoriating GM for their weak product design, high costs, and unjustifiable assumptions about volume making up for basic cost escalation. Jerry Flint in Forbes goes further, blaming the Zeta's fate on GM's recent $2 billion divorce settlement with Fiat.

But all this is just so much rearranging of deck chairs; the big issue remains oil dependency. In a January post on GM Fastlane Blog, Powertrain Group Vice President Tom Stephens "explodes" some "myths" about GM's lagging position by pointing out the large number of GM models with high fuel economy. However, that's hardly an answer when the World Resources Institute estimated that only 42% of GM's vehicles will qualify under Phase I of the new Chinese fuel economy law slated to go into force in 2005/2006 (PDF document). Worse, the WRI suggests GM will need to make very expensive modifications of their production lines to achieve the reductions required by law. Undoubtedly, Stephens relies on product brand line duplication to achieve the modest results he refers to, but the overall problem remains: GM isn't reading the big fat signs of an impending oil crisis, and their big-engined cars will be the cinderblock pulling their sales to the bottom of the sea.