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Posted Jul 21st 2008 at 7:57PM by Jeremy Korzeniewski

Filed under: Chevrolet, GM, USA
The General, along with the rest of the American automakers, has a long established history of making the most profits from the largest vehicles. Small cars from the Detroit 3 have therefore fallen way behind the imports when it comes to desirability. GM Global Design Chief Ed Welburn went so far as to say, "In North America, we never did a good small car." Ouch. Instead, all the best designs come from overseas, which GM has plenty of experience in. "Today, we are able to draw on resources of design centers in Korea, Brazil and Europe who really know how to do small cars," says Welburn. Like the ones who designed the Aveo?

So, if the Cobalt and Aveo are not good small cars, at least they'd better be cheap, right? Sure, but expect that to change too as upcoming replacements for its aging small cars will be more expensive than current models. The Chevrolet Cruze, not expected in the U.S. for at least a few more years, will cost an extra few thousand dollars compared to the Cobalt. Hopefully by then, the Beat will be properly engineered for the American market as well.
 

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Posted Jul 21st 2008 at 7:57PM by Jeremy Korzeniewski

Filed under: Chevrolet, GM, USA
The General, along with the rest of the American automakers, has a long established history of making the most profits from the largest vehicles. Small cars from the Detroit 3 have therefore fallen way behind the imports when it comes to desirability. GM Global Design Chief Ed Welburn went so far as to say, "In North America, we never did a good small car." Ouch. Instead, all the best designs come from overseas, which GM has plenty of experience in. "Today, we are able to draw on resources of design centers in Korea, Brazil and Europe who really know how to do small cars," says Welburn. Like the ones who designed the Aveo?

So, if the Cobalt and Aveo are not good small cars, at least they'd better be cheap, right? Sure, but expect that to change too as upcoming replacements for its aging small cars will be more expensive than current models. The Chevrolet Cruze, not expected in the U.S. for at least a few more years, will cost an extra few thousand dollars compared to the Cobalt. Hopefully by then, the Beat will be properly engineered for the American market as well.



This is a tough one to call. On one hand you have competitors that are beating the pants off of GM (Honda, Toyota, etc.) in the small car segment that are making money. On the other hand you have a situation where the cost to transport imported cars and parts is going though the roof. This should actually give car companies that are manufacturing in America a slight break.

My biggest concern is that the unions of the Big Three will not allow enough automation to make the cars cost competitive. Now that transportation costs are rising quickly local manufacturing along with automation can start to win back the cheap labor game we have been fighting with China and the rest. Finally! Massive automation projects have been on hold for a long time because of cheap labor around the world. It's hard to build a robot that can compete with the human eye and hand at 25 cents a day. However, $150 per barrel of oil is helping to flatten the playing field.

Are the US unions smart enough to realize that it’s better to have fewer really good technical jobs than a lot more simple repetitive jobs that can go away very easily if Honda, Toyota and others are producing with less labor costs? Probably not. Just look how they are striking as the ship is going down. It's like yelling at the guy that decides who gets the next lifeboat.

Thus, I'm deeply worried about GM's chances of becoming strong again if they feel they can beat others at the small car game with their current team. I don't think so. However, if they can work with the unions to secure the right to automate as needed (perhaps tied to competition labor costs - they only need to be on fair ground) Then they have a chance, even though they are several years behind. My God, have you looked at the cars in Japan and Europe?! They are a lot smaller and energy efficient then anything we have in the US (besides maybe the Prius).

I feel the only real chance GM has is if they fully embrace the electrification of the automobile and run with the ball like their lives depended on it. It does.
 

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I feel the only real chance GM has is if they fully embrace the electrification of the automobile and run with the ball like their lives depended on it. It does.
I agree, but I worry that there are people at GM who think otherwise. If they have any brains they'll aggressively push small fuel efficient cars while they do all they can to ramp up volt production.
 

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I agree, but I worry that there are people at GM who think otherwise. If they have any brains they'll aggressively push small fuel efficient cars while they do all they can to ramp up volt production.
GM has plenty of brains, and knows they can't make profits on small cars until the new labor contracts kick in. It has nothing to do with the design of the small cars, and everything to do with the cost structure which limits the comfort / amenities GM can offer for the same price as their foreign competitors.
 

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GM has plenty of brains, and knows they can't make profits on small cars until the new labor contracts kick in. It has nothing to do with the design of the small cars, and everything to do with the cost structure which limits the comfort / amenities GM can offer for the same price as their foreign competitors.


That and GM is several years behind the market leaders. The cars you see coming out now have replacements that are well into the design cycle. New car platforms take at least 5 years (just look at how long the Volt is taking). It is not as easy as it seems to catch up to market leaders. Not ones that have superior balance sheets and the drive to stay in the lead. Let's just admit that without the shift to the electrification of the automobile that GM is in a tough situation to all of a sudden start kicking the market leader's butts.

I sometimes wonder if executives at GM are jealous of the clean slate that a company like Tesla has. Did you see Tesla’s new showrooms? They have complete control of the product (much like Apple does with it’s products), no unions and that certain new tech cool feel. I know I’m drooling at the possibilities.
 

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Noah,.....

Just to clarify a few points. Honda, Toyota, Subaru, Mazda, Hyundai, etc all have manufacturing plants in the US, making small cars and presumably making a profit. Wasn't it Hyundai that just dropped 4 billion in a new plant ?? These products are made by robots, automated if you please. The ones made in China are and will be made by robots, not $0.25 and hour slave laborers. That crap all goes to Walmart, then the landfill where it can convert naturally to natural gas................ :) GM made excellent small cars here for at least 10 years, the original Saturn line of cars. They never updated, invested, or really did anything to the marque other than start it, and let it wither. And their fanaticaly loyall consumers were left in the cold. And scrap the original all-alloy motor/plastic panel 40 mpg model just in time for ................... .$4.35/gallon gasoline. The Saturn Sl weighs 2350 lbs, and its replacment, the Cobalt, well over 500 lbs more. GM has so many problems...............the biggest is and always seems to be their dedication to their stockholders, instead of their workers and their product. Very Un-Honda like. And a counter productive culture of war with their workers and unions. Their best small car, the Saturn Astra, is imported (Belgium and Hungary !!) just in time for crippling exchange rates. Brilliant !!! The music starts...............

Edit: BMW has always made a profit, and their trademark, what got them on the map, was small 4 cylinder cars in the US market.
 
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