GM postpones product development spending until 2010

Article by Christian Andrei, on August 27, 2010

To cut costs, GM will postpone spending on development of products for two years, in 2009 and 2010. This postponement will affect engineering, research and design and is expected delay the introduction of critical models like the Chevrolet Cruze compact sedan. An insider said that no actual models planned for 2009 and 2010 has been cancelled.

This is divergent from prior reports that alleged GM had canceled plans for its next-generation Cadillac Escalade and Chevrolet Tahoe full-size SUVs. It does however agree with news that versions such as the new Buick LaCrosse, Cadillac CTS Coupe, and the aforesaid Cruze have all been subject to delays.

One of the sources said, "The 2009 stuff that's too late to cancel is coming out, then everything else gets pushed out anywhere between three months and up to a year. It's not just capital budget, it's also engineering, design, and everything else that would cause money to flow out in 2009."

GM's delay strategy is calculated to bring the company a savings totaling $1.5 billion. The source further said that the much publicized Chevrolet Camaro and Volt plug-in hybrid will not be affected by the spending cuts.

Official GM spokesperson refused to make a statement on the latest reports but affirmed that the manufacturer's entire portfolio was being evaluated. GM union members at the Lordstown plant in Ohio, which is responsible for building the new Cruze, said they did not know of any delays.

Together with the Cadillac CTS wagon, the new LaCrosse was initially planned for launch in the first half of 2009. These were intended to be followed by the new CTS Coupe later that same year, and the Cruze in early part of 2010. The source said, the particular launches of these cars could be delayed from three months to one year.

Topics: gm, united states

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