Bloomberg News

Treasury’s ‘Corvette Geeks’ Helped Save Car, GM Engineer Says

January 13, 2013

As General Motors Co. (GM:US) worked through bankruptcy in 2009, the chief engineer for the Corvette was called on to discuss the future of the iconic sports car.

Revamping of the Corvette, last redesigned in 2004, had been halted a few times as the automaker struggled financially and ended up in a government-backed reorganization (GM:US), said the engineer, Tadge Juechter. GM had to answer to President Barack Obama’s Treasury Department and auto task force.

“We were really worried that the mood in Washington would be ‘I don’t care if it makes money, it’s not politically correct to be doing fun cars; as a partially taxpayer-owned company, we need to be serious, buttoned-up,’” Juechter said. “But actually, in the Treasury Department there are Corvette geeks.”

The Chevrolet car’s overhaul survived government scrutiny, and the redesigned 2014 Corvette is being unveiled today in Detroit in advance of the North American International Auto Show. The new model, set to reach dealers in this year’s third quarter, is part of the push to breathe new life into the Chevy brand, which accounted for 71 percent of GM’s 2012 U.S. sales.

“A lot is riding on this Corvette,” Alexander Edwards, president of San Diego-based consulting firm Strategic Vision’s auto division, said last week. “I actually believe that they’re going to get a bump in consideration across all models.”

Market Share

New models, also including a redesigned Silverado pickup and Impala large sedan, should contribute to “modest” growth in U.S. market share this year, after GM slid to an 88-year low in 2012, Chief Executive Officer Dan Akerson said last week.

The company’s market share last year fell 1.7 percentage points to 17.9 percent, according to Woodcliff Lake, New Jersey- based Autodata Corp. That was the lowest since 1924, Alfred P. Sloan’s first full year running the automaker. GM lost share as some competitors such as Toyota Motor Corp. rebounded from reduced production caused by natural disasters in Asia.

Akerson took a personal interest in the Corvette revamp, said Ed Welburn, Detroit-based GM’s vice president for global design. The most noticeable exterior design change is to the rear of the car, Welburn said in an interview last week.

In a meeting early in Akerson’s tenure, the CEO complained about how the back end of the current Corvette “was just chopped off,” Welburn said.

“It was done for aero at the sacrifice of design,” Welburn said. “The new Corvette has got even better aero with no scarify in design.”

‘Big Smile’

Akerson kept asking about the Corvette until Welburn took him into the studio to see clay models of the car still being worked on by sculptors, the design executive said.

“He immediately walked around to the rear and he stood there with a big smile on this face,” Welburn said. “And that’s been his favorite area of the car ever since.”

Akerson told reporters last week that the new Corvette “is one of the most beautiful cars I think this company has ever made. It’ll be one of the most beautiful cars ever made.”

The Corvette’s interior also got a major overhaul. Analysts, such as Dave Sullivan of Tustin, California-based consulting firm AutoPacific Inc., had criticized the current model’s interior as lacking, especially for a car with starting prices of almost $50,000.

“The interior is probably the single most upgraded area of the car,” Juechter said.

In the jetlike, wraparound cockpit, GM offers premium materials such as Napa leather, carbon fiber and micro-suede. The size of the steering wheel was reduced, to give it more of a race-car feel. The seats are made of magnesium for improved strength and reduced weight.

‘Perfect Shifts’

New technologies for the Corvette include active rev matching that GM said will anticipate gear selection and conform to engine speed “for perfect shifts every time.”

The new 6.2-liter V-8 engine provides 450 horsepower, the most powerful ever for the sports car and the quickest, able to accelerate from zero to 60 miles (97 kilometers) per hour in fewer than four seconds, the automaker said. Fuel efficiency also reaches a record of more than 26 miles per gallon in highway driving, GM said.

Engineers used a new aluminum frame that is 57 percent stiffer while being 99 pounds (45 kilograms) lighter than the current steel version, according to the company.

GM hasn’t disclosed pricing on the redesigned Corvette. The 2013 versions have starting prices ranging from $49,600 to $111,600, according to the company’s website.

Corvette U.S. sales last year rose 7.4 percent to 14,132, while Chevrolet’s total was up 4.3 percent. GM reported a 3.7 percent gain, trailing the industry’s 13 percent increase.

Selling Stake

The revamped Corvette and other new GM models come as the Treasury prepares to sell the remainder of its stake in the company, acquired as part of the bankruptcy. A deal announced last month calls for the automaker to buy 200 million of the Treasury’s shares (GM:US) for $5.5 billion. The government’s other 300 million shares are to be sold within 12 to 15 months, GM said on Dec. 19.

Juechter recalled officials of the Treasury and Obama’s auto task force as curious about the Corvette redesign and having an “open mind” about going forward with it.

“We wouldn’t have been able to do it without” government approval, he said. “They saw the value the car brings to Chevrolet, to General Motors and, frankly, just a business proposition. They saw it as a good investment.”

GM's senior management ultimately made all product decisions, Harry Wilson, a former member of Obama's task force, said last week in an e-mail.

``While a number of us on the task force felt the Corvette was a compelling car, our support for it was driven by the quality, market appeal, brand value and product-level profitability of the car itself, not any personal sentiment,'' he said. ``It was (and is) a compelling product for General Motors.''

To contact the reporter on this story: Tim Higgins in Southfield, Michigan at thiggins21@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • GM
    (General Motors Co)
    • $37.95 USD
    • 0.20
    • 0.53%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus