Automotive News - May 19, 2008 - 28

28 • MAY 19, 2008 TA L K F R O M T H E T O P Clarke aims to get GM back on track in N.A. rom the chairman’s conference room atop General Motors, you can see the headquarters of American Axle & Manufacturing Holdings Inc. That room is where Troy Clarke, GM’s president of North America, talked with Automotive News about GM’s future and the problems that plague it now. GM continues to lose money in the United States, its largest market. It faces a potentially crippling strike at American Axle, a key supplier. UAW workers are on strike at important plants — such as Fairfax in Kansas City, Kan., where GM builds the hotselling new Chevrolet Malibu. And, like other automakers, GM is battling a weak market with high gasoline prices. Clarke spoke recently with Editorial Director Peter Brown, Editor David Sedgwick and Staff Reporter Jamie LaReau. For years, everybody said GM needs to have good product. Well, you’ve got good product, and it’s coming at a time when it’s tough for everybody. How are you going to get from here to the time when the economy starts to breathe again? Certainly, a good product really helps. The second thing is that we have exited the period where we were launching a lot of trucks. The preponderance of our launches over the next two years are in car and crossover segments. The market is tough out there. The market in April was a surprise to a lot of people. It was not only the level of the market but it was the mix. That begs the question: How much of what we saw in the first quarter, how much of what we saw in April is structural and how much is cyclical? And I would assume that kind of question is what everybody in my position in the industry right now is asking themselves. Do you have a guess at this point? We have our best and brightest who are kind of pulling numbers together on that. I’m not saying that it’s all cyclical. I believe that there is a structural component. And I think that component is people who look at things like full-sized pickups as — I don’t want to say lifestyle vehicles — but they didn’t necessarily use the functionality. Are you begging your organization for more small cars? We think we’ve got a lot of product in the pipeline, and I am asking us to re-examine the timing as quickly as we can. You’ve gotten tremendous reviews on the Malibu. How long does it take before the perception of GM catches up to Toyota and Honda? It could probably happen faster than we think if we approach it a certain way. The Malibu represents a level of effort beyond what we would normally do and a plan that was very well-executed. People look at us as a great truck company. I don’t know that they look at us as a great car company. That journey starts on the Malibu, and that’s the plan we sought to execute. You’re building a plant in Mexico to Troy Clarke How many deals do you need to put money in to get these Pontiac, Buick and GMC dealers to consolidate? Fewer than we originally thought. JOE WILSSENS produce Opel Corsas, I believe for Mexico and South America. Might some of those vehicles find their way into the United States? We currently have no plans to bring the Corsa into the U.S. What about the next generation? Next generation, that’s different. Next generation, I would suggest to you, you bet, we will be looking very hard at the product we could drive off of that global platform for application in the U.S. It’s probably 2011 or 2012. What about a minicar such as the Chevrolet Beat? Is that possible for the United States? The Beat, Groove and Tracker, which we showed in New York (in 2007), were all concept cars off of the M300 platform, which is a minicar platform of GM Daewoo. That platform is not federalized, so you couldn’t do that exact car in that time frame. So would the next iteration of the minicar platform be federalized? We’ll take a real serious look at that. How do you see Hummer going forward in the era of $4 gasoline? Hummer is not a brand problem. It is a very well-understood and positioned brand. It’s the validity of the brand in the era of $4 gas. But ultimately, I think the business question is, can you develop a portfolio of Hummer products which play smaller, more fuel-efficient and less con- troversial? There’s a bunch of ways to do that. What are your fleet sales as a percentage of total sales for the year to date, and what is your target? Through April, fleet sales were 25.6 percent of total sales. Last year it was 25.8 percent. Are you tracking similarly this year? That’s what the target was. The target for this year was just to do the same as we did last year with fleet sales. We had seen fleet transaction prices come up. How satisfied are you with the pace of the Buick-Pontiac-GMC channel? I’m very satisfied with that. We’re definitely past the 20 yard line and headed toward the goal line. I think we can see our way to getting that done in the next couple of years. Is the premium Cadillac-HummerSaab channel something you’re really driving, or is that something that is OK if it happens? We’re serious as a heart attack on having a premium channel, right, and with Cadillac being the anchor of that channel, basically. The Chevrolet Volt plug-in electric vehicle has gotten a lot of ink. When is it going to happen? I know that the intention is to do it as quickly as we can and that we put invention, so to speak, on the critical path. So the time frames that you’ve heard discussed are the time frames that we’re targeting. There are a couple of real technical feasibility hurdles we’ve got to get over. Is it for sure that it would be a Chevy? Yes. Will it also be called the Volt? Yes. I think that’s a good bet. I’d hate to be the one to go in and suggest something else. (Laughs) It’s also clear that it won’t be the vehicle that we saw at the Detroit auto show — I mean the style? You know, there might be some differences, but the intent is to deliver something pretty close to that. Describe what the GM lineup might look like in 10 years. We have CAFE that’s starting to kick in earlier than we thought. You now know directionally where the rules are going, where fuel prices are going. I don’t think trucks go away. We’ll probably have more powertrains available in those full-sized trucks There will be full-sized utilities in the market — but, you know, again, does it look like today in terms of volume and, therefore, justify all the brands that we’ve assigned to those? Or does it go back and look like the days when we had a Chevrolet version and a GMC version? The answer to that question then tells you how large this crossover segment grows. My personal bet is that that segment becomes more expansive in terms of powertrain combinations and maybe some slight variations of the vehicle. So you’ll probably see three or maybe four well-spaced-out crossovers. In cars, you’ll see something very similar that you have today. So I think in those you’ll have a mix of powertrains. The powertrains are probably scaled down a little bit for better fuel economy, and those platforms are optimized as such. There will be hybrid vehicles available on those; might be some diesel applications. Let’s talk strikes. I was with a Chevy dealer a couple of weeks ago, and he was begging for Malibus. How are you handling Malibu ordering on the part of your dealers? We’re still accepting orders, I think, on Malibus. Are you able to fulfill orders for the Malibu with the plant on strike? Well, yeah, depends on how long the strike lasts. We do have a model year change here sooner or later, and you run out of a bunch of capacity before you actually go to the new model. But right now we’re still taking orders on Malibus, and we’re hopeful that the issues at Fairfax, my old plant, will get resolved. Don’t make me come down there. c

Automotive News - May 19, 2008

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