Episode 301 – GM Predicts 2010 Profit, No Hope For Saab, Ford Redesigns Interiors

January 7th, 2010 at 12:00pm

Runtime 7:29

GM chairman Ed Whitacre predicted the company will return to profitability this year. Whitacre also said GM does not expect any deal to come through to save Saab. Some insight on how Ford is redesigning its interiors. All that and more, plus John answers viewer questions about Toyota and Smart in the “You Said It!” segment.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM says it’s going to turn a profit this year. It also says there’s no hope for saving Saab. And some insight on how Ford is redesigning its interiors.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Thursday, January 7, 2010. And now, the news.

In speaking to the media yesterday, GM chairman Ed Whitacre predicted the company will return to profitability this year. Of course, he didn’t attach any numbers to that prediction, nor did we learn if he’s talking about an operating profit, a pre-tax profit, or, the one that really counts in my book, a net profit. Even so, the profit announcement is a pleasant surprise and brings the US government one step closer to getting back the $50 billion it poured into saving the automaker.

Whitacre also said GM does not expect any deal to come through to save Saab. He says none of the buyers have been able to come up with the financing needed to restructure the company. I think that GM knew several months ago that this was probably going to happen, but had to go through the motions that it was doing everything possible to save Saab.

Tata is bringing the Nano to Detroit but it won’t be where you’d expect to find it. According to the AFP, Tata will unveil the Nano at a press conference at the Detroit Science Center rather than Cobo Hall. Also, according to the Detroit Free Press, Tata’s CEO, Ratan Tata, says the car could be on sale in the U.S. in three years. But it needs a more powerful engine and needs to meet more stringent safety standards before it hits U.S. showrooms.

Ford had a great year in China last year with sales growing over 40 percent and it plans to continue that success this year. According to Reuters, Ford predicts the market will grow 8 percent and obviously plans to beat that number.

Chinese vehicle exports in November, grew for the first time in 15 months. According to Gasgoo.com, exports were up 13 percent overall but only passenger cars saw exports grow, vans and buses continued to decline. Many analysts believed Chinese automakers would be consumed by satisfying their domestic market, but this indicates Chinese vehicles could flood the global market sooner than expected.

Ford is using the Consumer Electronics Show to reveal a new infotainment system. The latest version of SYNC features an overhauled user interface called MyFord Touch and it offers an array of upgrades too long to list. But what the company was really going for is a common-sense, easy-to-use interface to control all those functions. At the heart of the redesigned UI are five-way buttons mounted on the steering wheel, which work just like an iPod. Ford found that this is the easiest-to-use interface around. Center stack controls are all touch-based. The instrument cluster features customizable LCD screens – a la the Fusion Hybrid. The company showed the system in what has to be the redesigned Edge and MKX. Interestingly, if you look at the Lincoln’s interior there are NO buttons or knobs on the center stack. You control radio volume and fan speed by touch sliders., you just slide your finger across them. We’ll have more on the MyFord Touch system in the coming days.

Ahead of the Detroit Auto Show, Buick revealed its new Regal GS. Amazingly, it’s focusing on performance. The reborn Regal features a turbo four with an estimated 255 horsepower, which on its own is significant, but a six-speed manual transmission is also available. That’s what I said, a six-speed stick! Even though it’s just a rebadged Opel Insignia, Buick is calling the car a performance successor to its Grand Sport models of the past. Zero to 60 should take less than six seconds. Buick needs to do the unexpected, and this is certainly not what anyone expected from Buick.

Coming up next, it’s time for your comments.

This is “You Said It,” Every day you post all kinds of comments and questions and “You Said It” gives me a chance to respond.

A number of you saw our report that Toyota wants to cut the cost of components its buys from suppliers and responded with dismay. Zieke seems to have captured it best, writing in to say, “Toyota wants parts costs cut 30 percent? Easiest way to do that is to use cheaper materials in the construction, translating to shorter life. Bet I know what this means. We will be driving Toyotas that have planned obsolescence with their vehicles just like GM cars are now.”

Zieke, knowing Toyota, that’s not how they’re going to do it. The best way to take cost out of a car is to design it out. Check out the Autoline After Hours we did with Sandy Munro, an expert in how to design things so it’s easier to manufacture them. He explained one of the ways to quickly cut cost and boost quality is to design products so they don’t need fasteners.

And you definitely did not like hearing that the federal tax credit on biodiesel was allowed to elapse on January 1. LEX wrote in to say, “The petroleum industry lobbyists must be loving this one! If Obama and Congress do not act quickly we could see the failure of the entire biodiesel industry in a few short months or weeks. This will mean the loss of countless American Jobs!”

Lex, I’m with you on this one. Biofuels could be this country’s ticket to energy independence.

And regarding the changes at smart USA, Nick Stevens has this, “Napoleon was 100-times smarter than Penske, but blundered anyway by invading Russia. Even brilliant people make grievous mistakes, and Penske made his when he got the SMART for the USA, long before he hired Lajdziak to bury it.”

Nick, I admire Roger Penske, but I have to admit, I’m puzzled by why he ever saw a future with smart. It was a failure in Europe, and I don’t know why anyone thought it would do better here.

And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you next week.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog, The Auto Channel, Car Chat, WardsAuto.com and WWJ Newsradio 950

27 Comments to “Episode 301 – GM Predicts 2010 Profit, No Hope For Saab, Ford Redesigns Interiors”

  1. Nick Stevens Says:

    That 4-cyl turbo Buick with 6-sp manual is sure impressive, and has little resemblance with the Buicks of the past, but how many customers that go to a Buick showroom would be interested? Let alone that 95% or so of all vehicles sold in the US are Autos.

    Such a car would be a typical sporty PONTIAC, but in their infinite wisdom, the “czars” in Detroit and DC shut the division down..

  2. JB Says:

    I think the 255hp from a turbo four is the perfect engine for this new buick.

    Rather than a manual transmission I believe GM should opt for a dual clutch sequential performance option for transmissions..

    Other than that? I think this new Regal is awesome. Thanks for the heads up!

    JB

  3. Dave Says:

    I LIKE the buick GS, and I am not even 40 yet!!!!The only problem will be the joking around I would get driving a Buick, does that come with a AAA sticking on the bumper and a dash compass?

  4. Nick Stevens Says:

    John Mc Elroy,

    are you 100% sure that the Regal is just a re-badged Opel Insignia? Because the sheetmetal of the Buick is far fancier than any Opels I have ever seen.

  5. Drew Says:

    If Buick was REALLY serious, it would have intalled the direct injection 304hp V-6 that the Cadillac CTS uses.
    GM could have saved money by not having to make yet another engine option, and utilizing what they already have.

  6. Chuck Grenci Says:

    The new Regal sure does look good. Surely a vast majority will still be equipped with an automatic (but it’s good to see a manual is at least available).

  7. Puremoose Says:

    It sure is a sad day to see Saab go.
    I have owned 2 Saabs and they were great cars.
    Maybe Buick is putting the Saab 4 cyl turbo in the Regal.

  8. Nick Stevens Says:

    That’s what caused the downfall of Saab, they shared their platforms and engines with Opels, Lancias, There was a third euro maker I forget, so they lost their exclusivity. Why would anyone pay $10k more if one can buy the same car as an Opel?

  9. paulstewart Says:

    Nick Stevens just Google Opel of Europe and track it down on any number of info/websites. The Opel Insignia is already in Europe.

  10. Andrew Charles Says:

    Drew, it’s not another engine option, it’s the same engine GM debuted in the Solstice and also uses in the HHR and Cobalt SS. A low-boost version is also used in the Opel Insignia, the new Saab 95 and the Chinese Regal (this version will be offered later in 2010 in the US).

    Nick, the Regal is not “just” a rebadged Insignia, but the initial US version isn’t much more than a rebadge and is built in the same plant. This show car has a few more changes in the styling details but most of the sheetmetal remains the same as the Insignia.

    Zieke repeats the common misconception of planned obsolescence. A product does not become obsolete because it breaks down, it becomes obsolete when it is replaced by a newer better product that renders the old product undesirable. The typical 4-5 year product cycle, not “designed-in failure”, is the epitome of “planned” obsolescence.

  11. Pedro Fernandez Says:

    I have to disagree with John when he says that Toyota will not lessen the quality of their cars by using cheaper materials. Having owned a 1986 Camry and now a Corolla, I can assure the quality of the interior has indeed declined quite a bit. Almost every 8th gen Corolla I’ve seen has pieces of molding, plastics and headliner falling off. That is not the case with the 7th gen. (1993-1997) Apparently they decide to save on the interior. I don’t know if the new ones have this same condition.

  12. HyundaiSmoke Says:

    “Amazingly, it’s focusing on performance. The reborn Regal features a turbo four with an estimated 255 horsepower, which on its own is significant, but a six-speed manual transmission is also available. That’s what I said, a six-speed stick! Even though it’s just a rebadged Opel Insignia, Buick is calling the car a performance successor to its Grand Sport models of the past. Zero to 60 should take less than six seconds. Buick needs to do the unexpected, and this is certainly not what anyone expected from Buick”

    Big deal John, the Sonata Turbo will have 20 more ponies, and still get 35 MPG, and it will be a lighter car than the Buick=Much quicker.

  13. HyundaiSmoke Says:

    Its a shame that I have to say big deal becuase GM is trying hard, its just that they are so far behind its not good enough.

  14. HyundaiSmoke Says:

    Pedro/John, of course Toyota has lessened the quality of its cars, the reliability stats say so, while Hyundai is in 4th place in reliability Toyota is 8th place, and KIA is in 9th place. Ford was a reliability laughing stock 5 years ago, and Ford has passed them in reliability too. Even VW is about to pass Toyota in reliability as well.

    Its not just interiors they cant do right anymore, its their creed, their alma matter: reliability-they cant do right anymore either.

    Many Toyota fans are insolent in coming to terms with their problems, and its showing with their lackluster quality of late.

  15. Kit Gerhart Says:

    If they sell a wagon or hatch version of the new Regal here, Buick has a chance of making my shopping list in a couple years.

  16. HyundaiSmoke Says:

    Kit, the Opel Insignia has a wagon, so it wouldnt be a shock if GM were to decide to bring it over. The Wagon I think is the better looking version anyway.

    The Sedan is missing that something, and I think the Sonata found that missing something. The Regal looks too plain/too understated/too overweight to be as successful as it should be.

  17. Mike Says:

    I am glad that Mr. Munro agrees that cutting the number of fasteners is a good way to cut costs. I and most other designers have been doing that for many, many years. I would offer a different path to cost savings. If a better connection between DVP&R could be made to real world results, zillions of dollars could be saved. We test things to death with very little believeable correlation to actual field results. We design and redesign and add value to pass tests that cannot be proven to be necessary. That to me is where the money is wasted.

  18. HyundaiSmoke Says:

    HEY JOHN!!! Next gen Aveo Spotted=Leaked photos, it looks SWEET!!! I hate GM, and I actually like it.

    http://blog.naver.com/quattro_rs4/50079932276

  19. Nick Stevens Says:

    “# paulstewart Says:
    January 7th, 2010 at 4:20 pm

    Nick Stevens just Google Opel of Europe and track it down on any number of info/websites. The Opel Insignia is already in Europe.”

    How does this answer my Q to John M.? it does not.

  20. Nick Stevens Says:

    Andrew wrote:

    “Nick, the Regal is not “just” a rebadged Insignia, but the initial US version isn’t much more than a rebadge and is built in the same plant. This show car has a few more changes in the styling details but most of the sheetmetal remains the same as the Insignia.”

    Thanks, that answers my Q. to John. The Equinox and the GMC Terrain are probably also built in the same plant, and should have identical platforms and mechanicals, but on the outside they look quite different.

    When I say something is “Just a rebadge” I mean like these so-called Saabs that were Chavy trailbazers with the Saab logo up front, but the sheetmetal was identical on the sides and back. Same thing with that subaru wagon that was rebadged as a saab. None of these sold that well.

  21. Nick Stevens Says:

    “Zieke repeats the common misconception of planned obsolescence. A product does not become obsolete because it breaks down, it becomes obsolete when it is replaced by a newer better product that renders the old product undesirable. The typical 4-5 year product cycle, not “designed-in failure”, is the epitome of “planned” obsolescence.

    A close friend’s wife is a senior engineer at Ford (currently the only successful domestic) and told me that they design their cars to last 100k miles and their trucks to last 150k miles.

  22. Nick Stevens Says:

    “# Pedro Fernandez Says:
    January 7th, 2010 at 4:50 pm

    I have to disagree with John when he says that Toyota will not lessen the quality of their cars by using cheaper materials. Having owned a 1986 Camry and now a Corolla, I can assure the quality of the interior has indeed declined quite a bit.”

    That’s very puzzling and totally contrary to my observations. When I was looking for a car in 94, I test-drove a tinny 4-door corolla whose interior was the typical poor 80s interior all cars had at the time. In contrast, when my friend bought a 2005 corolls (Euro-spec) 5-door hatch, every time I get into it, I am always impressed by the quality of the materials, the excellent gauges, almost lexus-like, etc. I found that 86 corolla unacceptable, and ended up buying a 90 Accord coupe 5-speed which was day and night, far better interior, exterior styling, and perfiormance than that 80s corolla.

  23. Pedro Fernandez Says:

    Nick: I was referring to 8th gen. (1998-2002) having the weak interiors; the previous (1993-1997) had better quality materials inside. Even the steering wheel surface on a lot of them have peeled off like mine, that’s why a lot of them end up with wheel covers on. Perhaps down here in the hot Fl. weather they come off worse than in other climates. But I have carefully looked at photos of used Corollas from that period and most of them seem to have “peeling” interior trim.. Drive-train,though, you cant’ do better than these cars.

  24. Kit Gerhart Says:

    HyundaiSmoke Says:
    January 8th, 2010 at 3:20 am

    “HEY JOHN!!! Next gen Aveo Spotted=Leaked photos, it looks SWEET!!! I hate GM, and I actually like it.”

    Yep, it definitely LOOKS a lot better than the current Aveo, but will it BE any better? Deawoo seems to pretty consistantly produce worst-in-class cars, at least the ones that have been sold in North America. I hope the new Aveo works as well as it looks.

  25. Pedro Fernandez Says:

    isn’t the new Aveo a Chevy spark? sure looks like it. ps I would never buy anything made by Daewoo, unlike Hyundai/Kia that has made great strides in quality and reliability and attractive products, Daewoo has remained in the dark ages of Korean automotive history.

  26. Nick Stevens Says:

    Daewoo does not exist. It went broke some years ago and was bought by GM. Daewoos are sold as Chevys all over the world, except in CHina, where they are rebadged as… Buicks. (LOL)

  27. HyundaiSmoke Says:

    Pedro, Actually Chevy Spark is an A Segment City Car. Aveo/Viva or whatever they are going to call it is a B Segment Subcmpact car. It’s historical as the last A segment car GM sold in Ameirca was the Chevette.

    Kit, I hear its supposed to get 47 MPG on the Highway using Direct Injection.

    There is a benefit with Daewoo guys. In Korea GM/Daewoo is Hyundai/KIA principal #1 competitor. They have an arms race with Hyunda/KIA and as Hyundai/KIA is really stepping up its game, it will force Daewoo to step the game up as well=Much better cars for GM.