General Motors is assuming this year will be no better than the last, its ‘product czar’ said in Detroit.
Go deeper with GlobalData
Vice-chairman of product development, Bob Lutz, an industry veteran of several waves of boom and bust in his long career with GM, Chrysler and Ford, said: “I’m not sure we’ve issued an official projection but for planning purposes we’re assuming 09 will be no better than 08.”
“Frankly I don’t think you’ll find anybody who can tell you with any certainty – look how wrong we were in 2007 about 2008.”
Lutz believes the days of a US market of 17m-plus units are gone. Now GM is planning to cut its cloth to a much lower level.
“We’re going to plan on a very low industry level, and if it gets any better, it’ll take some of the pressure off,” he said.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThat could be as low as 11m a year – in the short-term at least.
“To dial the industry back to a point where it’s viable at 11m is going to be hard – though we’re going to try.
“But there’s a question as to whether any car company in the world can survive on an 11m market for a sustained period of time. If it continues I would imagine you’d see massive consolidation in the industry, massive plant shutdowns, massive layoffs and much smaller product programmes.”
In the medium term, the optimum is somewhere in the middle.
“A better proposal is not to get it back up to 17.5m because on a sustained basis you could argue that was an unrealistic number with a financial and housing ‘bubble’ effect,” Lutz said.
“But I don’t think it’s unreasonable to expect an industry level of 13 or 14m – with the restructuring we’re undergoing, that’s going to be OK.”
Will GM need more US government money in order to survive?
“Talk to Rick Wagoner– I don’t do money – I do product development – I only spend it,” Lutz said.
