- May 8, 2007
Would GM really kill its mid-size SUVs?
These are trying times for GM, so it's only natural that decisions made today will suddenly be in flux tomorrow. First RWD platforms were on hold, then they weren't on hold, then some were pushed back. Now it's reported that GM will be "taking a hard look" at the vehicles supposed to replace its mid-sized SUV's like the Trailblazer.
Fritz Henderson, GM's CFO hedged his bets on the issue, first saying "We need to step back and think about fuel prices and regulation as we develop our portfolio. We shouldn't just leave it static. We obviously need to consider the dynamics of the market as we think future choices." He then followed that up with "[G]iven the uncertainty it's something we're looking at. But I wouldn't say I have anything to announce today. It's just natural that we should be looking at our portfolio choices in a different regulatory/fuel economy environment." All of which sounds like he's saying that GM can't realistically keep pumping out a full range of SUV's in light of the current gas and environmental regulation issues . . . but that doesn't mean that GM is actually going to stop pumping out a full range of SUV's in light of gas and environmental regulation issues. At least, it doesn't mean that today. Perhaps this just means they are, like RWD cars recently were, on "pause."
Interestingly, the same article noted that GM is expected to ring up $9 billion in capital expenditures this year, while Toyota expects $14 billion -- and it costs GM more than Toyota to borrow money. In light of the issues already mentioned, and with additional development costs, and with GM getting outspent by its competitor, the outlook for putting more energy and money into GM's mid-sized SUV's looks less than positive, if only slightly.
[Source: The Car Connection]