Alive and kicking!
BY NEIL MCDONALD | 13th Apr 2005
Well-placed GM sources have indicated the sickly program may actually pave the way for a wider range of big rear-drive sedans for the United States.
If GM chooses to go down this path it could sustain Holden’s involvement in the program rather than diminish it after speculation the Australian car manufacturer faces a depleted status in GM’s global product engineering plans.
GoAuto understands Zeta is alive and progressing and may actually be bigger than first thought as GM rethinks its product strategy.
However, despite company assurances, some US reports have suggested it is on hold indefinitely.
One GM executive said the company was reassessing the model mix of rear-drive vehicles and that there was possibly a need for more "bread-and-butter" big sedans in favour of lower-volume coupes and convertibles.
Earlier this month, GM shocked the car industry by announcing it was not proceeding with North American applications of its Zeta-based rear-drive cars so it could concentrate on more profitable sports utility vehicles in its home market.
In North America, GM’s mid-size SUV sales have slumped 35 per cent this year and the company is worried it needs to source new off-roaders quickly to regain market share.
It has slashed prices on 22 mid-size SUVs and fast-tracked development of its next-generation mid-size Chevrolet TrailBlazer and GMC Envoy models.
It is also accelerating the replacement of its family of full-size trucks known as the GMT-800 series. These vehicles are important for the auto giant, accounting for 34 per cent of its total production last year, according to Ward’s Automotive.
GM is hurting. Its overall US market share has gone from 45 per cent in 1980 to 27.3 per cent last year and rising health-care costs, huge pension obligations and growing competition in the United States and abroad are putting pressure on it.
Locally, the fallout from Zeta has put pressure on Holden to explain just exactly what it means to its own workforce, suppliers and key program engineers.
Holden will be the first GM affiliate to use the Zeta architecture when its VE Commodore goes on sale in mid-2006. Under the Zeta plan, Holden was to get the role of engineering the Pontiac GTO, among other vehicles.
The company was responsible for all engineering work on Zeta vehicles for North America with a volume forecast of 400,000 globally.
GM’s North American operations are beset with problems.
Earlier this month, it said it would lose almost $US1 billion in the first three months of this year and cut its earnings outlook for the year by $US1.7 billion. GM stock has plummeted to 10-year lows in trading.
At last week’s New York motor show, GM vice chairman Bob Lutz had to fight off speculation the company was working on a full-blown global restructuring role similar to that undertaken by Ford and DaimlerChrysler, both of which have produced plant closures and workforce cuts.
Mr Lutz told US media at the show he had perceived the company’s problems as a marketing failure.
GM executives have also been forced to back away from Lutz’s comments that under-performing brands like Pontiac and Buick could also face the chop. It is already phasing out the Oldsmobile brand.
Executives suggested later that Lutz’s comments had been misreported.
No setback for VE
GENERAL Motors’ decision last month to abandon certain North American passenger cars built on Holden-engineered Zeta rear-drive architecture will not affect the forthcoming VE Commodore, according to Holden executive director of sales and marketing, Ross McKenzie.The VE series, which is based on the Zeta architecture, is still due for release in about 12 months.
"The (General Motors) Zeta decision doesn't affect the local decisions in any way," Mr McKenzie said. "The engineering side of things were local investment decisions for Commodore. The development of the plan here and the (global) program was entirely around the Commodore requirement.
"We were going to have a global vehicle line engineer (Gene Stefanyshyn) ... who at the last minute didn’t come. He would have come here and begun work on the specific engineering requirements for the US program so the cancellation of the program doesn’t have any bearing on us in that respect."