GM WILL BUILD REAR WHEEL DRIVE CARS!

Automotive News / April 18, 2005

DETROIT -- General Motors is scouring its shelves to find an architecture for its next generation of rear-wheel-drive vehicles. One option under consideration is something GM executives are calling "Zeta light," a lower-cost version of the Zeta architecture that was supposed to be the basis for a new generation of premium rwd vehicles in North America.

In March, GM put several 2008 vehicle programs in limbo, including a production version of the Buick Velite concept and replacements for the Pontiac GTO and Buick Park Avenue. GM insiders say Zeta light is one of many rwd proposals floating around the company that use existing platforms and components. Other possibilities include Sigma, the rwd architecture used by Cadillac's sedans and sport wagons; and Kappa, GM's small, sporty rwd car architecture debuting this year with the Pontiac Solstice. No direction is clear.

The bottom line: GM insiders say they want rwd vehicles, including one in the mold of the Camaro muscle car, which was discontinued in 2002. "It's something everybody wants to do," one GM insiders says. "We just have to do it right." Last week GM Vice Chairman Robert Lutz told the SAE World Congress in Detroit: "We're going to take another look at high-performance rear-wheel drive. But it's going to be something I call Zeta light." Jim Hall, an auto analyst for Auto-Pacific Inc. in Southfield, Mich., and a former GM employee, says there is an appetite for high-image, moderately priced vehicles inside GM. But there's a problem. "The margin is very low on those vehicles," Hall says. "That's not what GM needs right now. What they need is a high-margin home run."

In a recent interview with Automotive News, GM Chairman Rick Wagoner said Sigma could be another option for rwd. Wagoner said GM could decide to use either a Sigma derivative or a cheaper version of Zeta. Wagoner said the economics of the derailed Zeta program didn't add up. It was "too expensive for what we wanted to do with it," he said. "This needs to cover a range of price-sensitive segments. The initial designs we saw of Zeta were not what we wanted, so that's where the costs began to come apart."

Wagoner also said rwd cars are "not a massive profit-driver decision in the near term." He added: "We need to do it right. In the scheme of things of what's going to drive the business over the next three or four years, this isn't the most critical item we're looking at." GM spokesman Pat Morrissey says anything is possible: "We have different, flexible architectures on the shelf that we can look at other options. We're not starting from ground zero."