Don't ever say General Motors Corp. (GM
) can't design cool road machines. Long derided for its low style quotient, the world's largest carmaker lately has been dazzling auto show crowds with its concept models. Last January at the Detroit show, company Vice-Chairman Robert A. Lutz wowed his audience with the Pontiac Solstice two-seat roadster. A few months later, GM's tour de chic hit Chicago, where Lutz and crew unveiled the ultracute Saturn Sky convertible. The year before, even stodgy Buick turned heads with the stylish Bengal coup.
So why aren't GM's cars lighting up dealer showrooms as they do auto shows? Because most of the hot prototypes prove too costly to make. Indeed, Lutz and his boss, CEO G. Richard Wagoner Jr., would love to shine up dull divisions such as Saturn, Buick, and Pontiac with new models. But GM has a tough time justifying the $400 million it takes to get a new vehicle into production--especially if the vehicle and its offshoots are expected to sell fewer than 80,000 units a year. That's the magic number GM typically aims for to cover the costs of tooling up for a new model, salaries for its union workforce, and the huge pension costs of its 450,000 retirees. "Niche cars bring excitement to the brand and people to the showroom," Wagoner says, "[but] you don't want them to be profit-eaters."
The solution to GM's woes may already exist in a combination of technologies GM itself helped to perfect. The first, which the carmaker began to explore in the the mid-1980s, is beguilingly simple: build autos around a "space frame"--a single welded structure that integrates a safety cage with the heavy rails that give a car its stiffness. To make this frame, GM hopes to use a second trick its engineers came up with: "hydroforming" space-frame components. Instead of shaping the frame using costly stamping components, the metal is molded using ultra-high-pressure water. Together, the two technologies promise to help GM get new models rolling for $100 million to $200 million--less than half today's price. What's more, they offer designers new, more flexible ways to shape the body panels that give a car its character.
GM could certainly use a few hot cars. While its truck sales continue to surge, passenger-car sales are down 8.4% this year. GM lately has been spending thousands of dollars per car on advertising and rebates while offering 0% financing to keep them selling. Foreign auto makers are far better at rolling out niche-mobiles as well as small-run luxury models--and it's done largely without financial sweeteners.
Consider the Mini Cooper, a limited-run roadster that has created big buzz for BMW. The hard-to-find model has some buyers waiting four months for delivery. Plus, the retro coup holds its value better than any other car, according to Automotive Leasing Guide. It follows that if the U.S. giant can economically build the Solstice--a jazzy two-seat sports car--"it would do wonders for GM's image," says Rebecca Lindland, an analyst for Global Insight Inc., an auto-industry research firm in Boston.
GM's hydroformed space frame could make that happen. Since the frame does all of the structural and safety work, GM could make several different sports cars--say, the Solstice, Sky, and Bengal--using a lot of the same hardware underneath the skin. And that skin need not be heavy-gauge steel, as in most of today's cars. Both the Saturn ION compact and the VUE sport-utility vehicle have a conventionally manufactured space frame, but GM is using plastic body panels that are cheaper to make and fix. Since they're lighter, the cars also gain an edge in mileage. The space-frame option also means that different models could be assembled on the same compact-car platform and in the same plant, says Mark T. Hogan, GM's group vice-president for advanced vehicle development. That would let GM further cut initial spending on the sports cars by borrowing parts from other small models and by boosting productivity at its plants.
Synergies like these promise big savings for GM. The load-bearing beams for conventional car frames are made by stamping thick sheet metal into a lengthy trough with a U-shaped cross section. Two of the resulting beams are welded together to make the strong rails that form the foundation of the frame. The stamping dies used to press the steel sheets cost some $250,000 apiece. That's because these machines are engineered to be both super-durable and highly precise. They're able to generate hundreds of heavy metal forms an hour, each to millimeter accuracy. Each new car model needs about 400 such dies, or $100 million worth. The dies are so precious that before union workers at GM's Flint (Mich.) truck plant walked off their jobs for two months in 1998, GM moved the dies for its new pickup trucks to another plant so production would not be interrupted.
Hydroforming tools cost far less since water, rather than metal dies, delivers the force. Instead of stamping sheets into long beams, pipelike steel tubes are placed into a die. Water is then blasted into the tubes at such high pressure that the steel expands like a balloon, filling even the tiniest forms of the mold. Hydroform dies can even be bent into complex forms that would be more costly and difficult otherwise.
All told, the conventional die-and-stamp tools needed to make a frame and body on a new car can cost up to $150 million. That figure falls significantly--some say by up to 75%--if GM relies instead on hydroforming tools, used together with a smaller set of stamps. Applied to the Solstice, for example, GM's target for initial development costs is $100 million, though some insiders say $200 million is more realistic.
Using the two technologies together will be a first for GM. Both, however, already have proven themselves on the road. In the mid-1980s, GM used conventional stamp-and-die methods to build its first space frames. At first, the complexity and cost of assembling the frames proved daunting. By 1990, the costs had fallen enough for the auto maker to start using conventionally assembled space frames in its Saturn line. GM began hydroforming frame elements in 1998, and they've since proven tough enough to use as frame members in the Chevy Silverado full-size pickup as well as the Corvette sports car and the midsize Trailblazer SUV.
Can space-frame technology solve GM's production bottleneck? GM engineers are hopeful, but they acknowledge that it's hard to dislodge proven methods. For example, some GM insiders have proposed building the Solstice using conventional technology. Yet GM design studios are littered with blueprints for futuristic models that couldn't be built using the old ways. GM's latest such bid is the Chevy SSR, a combination hot rod-pickup truck, which is turning into an expensive gamble. To develop the pickup economically, GM borrowed hardware from its midsize SUVs. The SSR will still debut next summer, say GM sources, but its costs have already ballooned beyond its original $300-million budget. "There's a strong learning effect," Lutz concedes.
If Lutz wants to come through on his wish to decorate each U.S. division with a fresh, stylish car, GM's engineers will have to find a way around cost overruns. Hydroforming and space-frame technology are the most promising--but GM still seems to be waffling. Nonetheless, the carmaker is jumping through hoops to make the twin technologies work and come up with cash to build the Solstice, Bengal, Sky, and, if everything goes well, the Hummer H4, a Jeep-like addition to the Hummer family. "We think it can work," says Lutz. But if GM can't cut costs, Lutz and his team may never see that auto-show magic reenacted where it really counts: in the showroom.
By David Welch in Detroit
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