Limited Cash to Keep GM from Green-Lighting Cadillac Converj?

[Intrepidation]

General Motors' increasingly empty coffers could consign the Cadillac Converj show car to 'concept only' status. The Detroit Auto Show coupe has been the subject of production rumors since before it rolled onto the stage in Cobo earlier last week, but now Automotive News is reporting that GM may not have enough money to make Converj a reality.

AN quotes GM vice chairman Bob Lutz as saying that the Converj is far from a done deal:

"Ready to go? Well, first we have to prove to ourselves that we have the money... and then that it's a high enough priority to displace something else, and that we can actually make money on the vehicle, and that there is potential customer interest and so forth. We haven't done any of that work yet."

Our take? The angularly gorgeous Cadillac was designed around the same extended-range Voltec architecture as Chevrolet's forthcoming Volt, itself a spectacularly expensive research and development effort. GM is clearly committed to making the Volt a production reality, and if it ever has hopes of making money on its plug-in hybrid technology, a higher-priced, higher-margin product like from an upper-crust brand like Cadillac would seem like one of the best ways to defray R&D costs. In short, GM may still have to conduct due diligence on the Converj's business case, but if there's any money at all left in the company's bank accounts, we still think the future for the showstopper is a bright one. Given the 2011 date attached to the Volt, we would expect the Caddy to roll into showrooms for 2012.

Let's just hope it arrives in showrooms wearing a new name.

Source: Autoblog

[ZL-1]

Push the front wheels forward and do it on a RWD architecture, then... even if it has to go the expensive way and use a chopped Sigma...

[Intrepidation]

Hmm, a showstopping vehicle that could not only help offset the costs of the Volt but actually make a profit and they are still debating whether or not to build it?

[smk4565]

Another example of how broke GM is right now. This is why for years I have said they can't have 8 brands. When they have to cut back on a Cadillac or a Chevy in order to build yet another full size truck/suv or another rental feet sedan, something is wrong. The money being wasted on Hummer could build this car, the money wasted on Saab could build a Civic rivaling car, etc.

[turbo200]

the financial situation is certainly one most or none of us are completely familiar with. but this is one of those vehicles that helps define a brand and is a potential big hit/cult status builder. there is a built in audience for this kind of car, and as long as the performance is good it's hit status will only build. being the size of a civic, and FWD mfgrs having proven that is a viable platform for small cars....heck they could build it on the foundations of the current cobalt ss...so long as the interior quality was right, that performance level [cobalt ss turbo] was kept intact, and the concept translated exactly to production, then this would be an application where FWD wouldn't be such a bad thing. sport sedans otoh...

[Dragon]

Push the front wheels forward and do it on a RWD architecture, then... even if it has to go the expensive way and use a chopped Sigma...

that would require a bunch more money GM doesn't have since they'd have to modthe a chasis, redesigning the battery back so that there's room for the driveshafts, diff, rear axle, suspension while keeping the the charge capacity the same, etc

[daves87rs]

They should build it...cost be damned....

[ZL-1]

that would require a bunch more money GM doesn't have since they'd have to modthe a chasis, redesigning the battery back so that there's room for the driveshafts, diff, rear axle, suspension while keeping the the charge capacity the same, etc

I did not explain myself clear enough, sorry. I meant to say that, if needed be, GM should get that design into production in a RWD platform instead of as a hybrid E-Flex model.

Edited January 19, 2009 by ZL-1

[PurdueGuy]

The money being wasted on Hummer could build this car, the money wasted on Saab could build a Civic rivaling car, etc.

I'll agree with Saab being a waste of money, but Hummer has made GM gobs of money with vehicles that required little money to develop, and it's not like GM is pouring money into Hummer anymore. From what I have seen & heard, Hummer was a flash in the pan... but a flash that made money at the right time. It has reached a point where it needs to be gotten rid of (though it'd be nice if they could have no Hummer dealers, but simply offer something along the lines of the Hx through Chevy dealers), and guess what... they're getting rid of it.

Complaining about Hummer is like complaining about GMC. Yes, they're mildly reskinned Chevys. But guess what? THEY'VE MADE MONEY. And guess what it is GM is in business to do...

GM needs more product that inspires passion and loyalty, even if among a select buyer group, like GMC and Hummer have. That's where you get improved profit margins. They just need to figure out how to do it without having a burdensome dealership network left over after the trends have shifted...

[wildcat]

"Ready to go? Well, first we have to prove to ourselves that we have the money... and then that it's a high enough priority to displace something else, and that we can actually make money on the vehicle, and that there is potential customer interest and so forth. We haven't done any of that work yet."

Hey, I know... why don't they show it to the people to gauge their feedback, then not pay attention to them?

Hey... why don't they have a contest where the public suggests names for the vehicle, then use Converj anyway?

Hey... why don't they put it on sale somewhere else before it comes to the United States two years afterwards?

Hey... why don't they go back-and-forth and change their minds several times, and blame it on take your pick?

Hey... why doesn't Mark LaNeve say it's one of several options on the table for Saturn?

Hey... why not let another manufacturer announce plans for something similar first, and it'll be out in 2010?

Oh, right... they tried all that already.

[FUTURE_OF_GM]

Hey, I know... why don't they show it to the people to gauge their feedback, then not pay attention to them?

Hey... why don't they have a contest where the public suggests names for the vehicle, then use Converj anyway?

Hey... why don't they put it on sale somewhere else before it comes to the United States two years afterwards?

Hey... why don't they go back-and-forth and change their minds several times, and blame it on take your pick?

Hey... why doesn't Mark LaNeve say it's one of several options on the table for Saturn?

Hey... why not let another manufacturer announce plans for something similar first, and it'll be out in 2010?

Oh, right... they tried all that already.

LMFAO!

Priceless...

[smk4565]

Hummer has made GM gobs of money

Complaining about Hummer is like complaining about GMC. Yes, they're mildly reskinned Chevys. But guess what? THEY'VE MADE MONEY.

Notice you put both in past tense. Has made and have made money, but not making money now. GM needs to quit making decisions on the past and do what is right for the future. Pontiac and Hummer are the past, Saab and Saturn are failed experiments, all should go.

[PurdueGuy]

Notice you put both in past tense. Has made and have made money, but not making money now. GM needs to quit making decisions on the past and do what is right for the future. Pontiac and Hummer are the past, Saab and Saturn are failed experiments, all should go.

You failed to address the issue: GM isn't wasting any money on Hummer, they're already looking for the best "out" they can get. You're saying they should do exactly what they are already doing.

Also, last I checked Pontiac makes money. Why should they get rid of that? They certainly need to work on the image, but it's pretty stupid to tell GM they should spend billions to get rid of a profitable (if not generally cherished) brand. I agree Saab should go, and I'm on the fence about Saturn.

[hyperv6]

I expect the Converj to be built.

The platform drive train is already being done. So most of the major cosr is right there.

I see GM using this model as a non competing way to bring the cost down on the Volt or a way to reduce the loses. Either way what money GM spends here will save money they will lose the question is can they keep the cost to the point it will help the Volt or the Evoltech plaform or hurt it.

Are there enough sales or buyers for a electric car like this? I would like to think so.

Either way the Volt is not going to make money for a good while and needs help. The question is will this car help or hurt? This is not a case for Profit but stemming losses till a profit can be made. Will this car help stem the loss or just add to it?

I think it would help and if sold world wide as it will find buyers with money. For it any reason the novalty. I could see all the Hollyweird idiots trade off their Prius for one of these.

Note I am not a big eco guy but I do respect Ed Begley Jr. He really lives the eco life vs the many Hollyweird frauds. Besides it is fun to watch his wife beat on him on that show they do on the eco channel.

[smk4565]

You failed to address the issue: GM isn't wasting any money on Hummer, they're already looking for the best "out" they can get. You're saying they should do exactly what they are already doing.

Also, last I checked Pontiac makes money. Why should they get rid of that? They certainly need to work on the image, but it's pretty stupid to tell GM they should spend billions to get rid of a profitable (if not generally cherished) brand. I agree Saab should go, and I'm on the fence about Saturn.

GM hasn't made money since 2004, the current structure and strategy are not working. They didn't make money when the market had 17 million sales, now that it is 10 million sales a year, they could be dead within 2 years unless they take action.

[Intrepidation]

GM hasn't made money since 2004, the current structure and strategy are not working. They didn't make money when the market had 17 million sales, now that it is 10 million sales a year, they could be dead within 2 years unless they take action.

Actually I think Q1 of `07 it made a profit. Maybe it was `08, I know it was recent. I'd have to look it up.

[Z-06]

Actually I think Q1 of `07 it made a profit. Maybe it was `08, I know it was recent. I'd have to look it up.

Q1, Q2 - 2007.

[PurdueGuy]

GM hasn't made money since 2004, the current structure and strategy are not working. They didn't make money when the market had 17 million sales, now that it is 10 million sales a year, they could be dead within 2 years unless they take action.

You again sidestepped the issue.

[smk4565]

I just read the Alpha based Cadillac has been delayed 2 years to end of 2014 because of GM's finances. Conversely, BMW is already working on the new 3-series that comes out in 2012. Cadillac can't compete with BMW without money, and Chevy can't compete with Honda and Toyota without money, I am almost to the point that I think GM should become a 2 brand company.

[Robert Hall]

I just read the Alpha based Cadillac has been delayed 2 years to end of 2014 because of GM's finances. Conversely, BMW is already working on the new 3-series that comes out in 2012. Cadillac can't compete with BMW without money, and Chevy can't compete with Honda and Toyota without money, I am almost to the point that I think GM should become a 2 brand company.

Years and years of focusing most of their investments on obese trucks and SUVs have caught up with GM, a big part of why they don't have money to invest in new cars these days, I think...

[SoCalCTS]

Dump all of the brands except for Chevrolet and Cadillac. Everything else is not needed.

Cadillac needs new product fast. Cadillac is the only brand that anyone takes seriously.

Chevrolet is still the volume leader so it must stay.

GM should not spend a single dime on anything other than Chevrolet and Cadillac.

[regfootball]

i dont want a chevy and can't afford a caddy. they still need mid level brands. i would buy an opel, saturn, or pontiac.

[SoCalCTS]

i dont want a chevy and can't afford a caddy. they still need mid level brands. i would buy an opel, saturn, or pontiac.

It would be easier to take Chevrolet up-market than it would be to repair the image of Pontiac or Buick.

[Intrepidation]

Buick is staying, it has a good image, sells well in China, and is working towards repairing its image in the US. All GM needs is Chevrolet for basic/everyday cars, Cadillac for luxury cars, and Buick for premium cars that slot between the other two brands.

[hyperv6]

Buick is staying, it has a good image, sells well in China, and is working towards repairing its image in the US. All GM needs is Chevrolet for basic/everyday cars, Cadillac for luxury cars, and Buick for premium cars that slot between the other two brands.

What he said!

[Intrepidation]

I think it's all GM knows how to manage, because every other brand is a clusterf**k of mismanaged mediocrity.

[smk4565]

I'd like to see Chevy a mid-level and Cadillac, but they might not even be able to afford that. Buick is the logical fit in between, but their image is badly damaged.

Cadillac is facing a 2011-2012 where the CTS is their only sedan, and SRX and Escalade are their SUV offerings, thus they'll be forced to take an Epsilon II car and turn it into a Cadillac so the dealers have something to sell. Cadillac is in deep trouble, without a huge injection of funds, to develop 2-3 all new platforms, all new engines and 8-speed transmission.

[hyperv6]

Buick is not as damaged as one may think. It has been so long since they have had really bad cars. Infact it has been a really long time since they had many cars to offer to the public.

The Lucerne and Lacrosse. were not great cars but not horrid either . They were not Skyhawk bad but not Audi great. The SUV and mini vans were ok but sold in such small numbers few people remember them or even name one.

The present Enclave is a great product.

For the most Buick is going to have a fresh start since they have has so little to offer for so long most people can even remember what they used to offer and even how bad they were. Lets face it we have drivers today that were born after the last RWD Buick was built.

The key is for Buick to bring some quality cars out in the next couple years. The new Lacrosse will do well. The new Opel Insigna based sedan I think will do very well.

The key to Buick is a few quality mid size to larger sedans in the medium price range. No cheap stuff below an Accura. If they want to do the new Astra replacment make it special like a GTI or Mini. But no more FWD Skyhawk and Skylark type cheap cars. Anything Buikc offers should sell as well in Europe as it would here. It is time to set standards.

As for the Return of the Grand National as it always comes up, forget it. Times have changed and people expect better. Time has moved on and we remember it better than it really was.

Buick is not going to break out in one year. Just as when Lexus originally came about it will take a few good quality models and a few years to earn their place.

Lets face it. All the new GM product are their we just needs some time to earn respect and some good marketing to let people really know what they are all about.

[regfootball]

honestly, the Lucerne now is a good looking car on the outside. its flaws are lack of tech, dated powertrains, dead dynamics, and some interior sins. the platform is so dated though, is why they didn't bother to fix it.

[PurdueGuy]

honestly, the Lucerne now is a good looking car on the outside. its flaws are lack of tech, dated powertrains, dead dynamics, and some interior sins. the platform is so dated though, is why they didn't bother to fix it.

Don't forget worse fuel economy than the LeSabre/Park Avenue it replaced, even with the V6. My in-laws regret the day they traded their Park Avenue in on the Lucerne, as it's really not that much nicer, and it gets worse fuel economy. My mother in law is digging the XM Radio, tho.

[Daryl Z71]

Buick is staying, it has a good image, sells well in China, and is working towards repairing its image in the US. All GM needs is Chevrolet for basic/everyday cars, Cadillac for luxury cars, and Buick for premium cars that slot between the other two brands.

I agree its just that this should have been done years ago. Saab, Hummer, and Saturn should have been sold off as soon as they quit making GM any profit. GM would have been in a better position today if this would have happened, and off coarse if the media didn't bash the hell out of them evey five minutes. Maybe even Pontiac could have been in better shape?

[GXT]

Hmm, a showstopping vehicle that could not only help offset the costs of the Volt but actually make a profit and they are still debating whether or not to build it?

I'm not sure it could make a profit.

Lutz's comment about the price being "two volts" puts it in the $80K range. Not many can afford that, and those that can may not want to put $80K down on a car with the 0-60 performance of a 4cyl $20K sedan.

In the end they would probably have to sell it for much less than $80K and that would mean more development costs and two EFLEX models being sold at a loss rather than one.

[eldiablobanshee]

did they ever figure out how big the tax deduction will be for the volt and other voltech cars.

[Camino LS6]

did they ever figure out how big the tax deduction will be for the volt and other voltech cars.

No, but I expect it to be substantial.

Timing will be the key for both the Volt and the Converj.

Unfortunately, timing isn't GM's strong suit.

[Camino LS6]

I'm not sure it could make a profit.

Lutz's comment about the price being "two volts" puts it in the $80K range. Not many can afford that, and those that can may not want to put $80K down on a car with the 0-60 performance of a 4cyl $20K sedan.

In the end they would probably have to sell it for much less than $80K and that would mean more development costs and two EFLEX models being sold at a loss rather than one.

I highly doubt that it will be anything like 80k when all is said and done, just as I doubt that the Volt will be an actual 40K.

As this tech proliferates the costs will go down and the tax incentives promise to be large. Both should be a success, if GM doesn't fumble the PR, the lobbying, and most importantly, the timing.

I see both cars turning a profit at some point.

[smk4565]

The tax credit is supposed to be $5,000-7,000 for the Volt. GM was hoping for $7,000, but I don't remember if they got that or if was less. Even with that, the Volt will be $33-35k. Which is pricey since it offers Cobalt like performance and amenities.

[Satty]

It has the "green" image, so its worth a premium over a Cobalt. That said, the tax credit doesn't come off the sticker price, so you've still got to get $40,000 financed. Thats not the easiest thing in the world to do, especially in a longterm economic slowdown.

[Camino LS6]

It has the "green" image, so its worth a premium over a Cobalt. That said, the tax credit doesn't come off the sticker price, so you've still got to get $40,000 financed. Thats not the easiest thing in the world to do, especially in a longterm economic slowdown.

It's looking like Congress will be mandating the purchase of the Volt for government fleets as well as subsidizing its purchase elsewhere. Once we know the true shape of that, it will be easier to predict a few things.

[smk4565]

It has the "green" image, so its worth a premium over a Cobalt. That said, the tax credit doesn't come off the sticker price, so you've still got to get $40,000 financed. Thats not the easiest thing in the world to do, especially in a longterm economic slowdown.

But is it worth the $12-15k price premium over a Prius? The Prius is the green image icon and the 2010 model gets over 50 mpg so while not electric, it still has a low cost of ownership and is seen as environmentally friendly. Plus the "green" crowd tends to not look at domestics very often. The Volt will have a lot of hurdles to overcome.

[balthazar]

The prius is tired, even hearing the name incessantly is tiring - plenty of room for a newcomer here. Plus, for the hardcore greenies, 50 MPG is nothing compared to a potentially advertised "100 MPG".

[Satty]

The sales number dont suggest its tired. The Prius alone outsold the entire Buick brand in 2008.