GM comeback shifting into high gear: Lutz

Executive talks up Camaro revival but won't confirm any role for Oshawa plant
GREG KEENAN
AUTO INDUSTRY REPORTER; With files from Canadian Press
From Globeandmail.com

General Motors Corp. has survived the worst and is on an upswing, says company vice-chairman Bob Lutz, who expressed confidence yesterday that the auto maker's board of directors will approve a plan to revive the Camaro muscle car.

"The turnaround of General Motors is in full progress, gaining momentum and the low point has definitely been passed," Mr. Lutz said yesterday from Montreal, where the Camaro and its sister the Pontiac Firebird were built until an assembly plant in the suburb of Ste. Thérèse, Que., was closed in 2002.

The board should approve the plan to bring back the Camaro some time this year, he said in a telephone interview from a Chevrolet dealership, where he was meeting with Canadian automotive writers.

GM showed off a new Camaro at the North American International Auto Show in Detroit in January and it was a show-stopper.

The Camaro is slated for a leading-edge, flexible assembly plant in Oshawa, Ont., as part of a plan to redevelop two car plants in that city and transform them into one plant that will turn out about 500,000 cars a year by early next decade, sources have said.

Mr. Lutz, who heads global product development for the world's largest auto maker, said there are no plans for new vehicles at Oshawa at this point and the board has not approved the allocation of money necessary to bring Camaro to market.

"They're certainly not admitting anything," said Canadian Auto Workers union president Buzz Hargrove, who noted that union members at the two car plants in Oshawa have agreed to major changes in their contract with GM in order to win the new investment.

"This is big for us," Mr. Hargrove said yesterday.

"We sure want it and we put a lot of effort in."

GM is scheduled to close Oshawa car plant No. 2 in 2008, a move that would eliminate about 2,500 jobs.

Other union officials said they have been told by GM that the $400-million investment to redevelop the plants and turn them into one flexible manufacturing facility is Oshawa's to lose.

GM is confident it can sell 100,000 Camaros a year, Mr. Lutz said, in a market that Ford Motor Co. has virtually to itself now with the Ford Mustang, but which the Chrysler division of DaimlerChrysler AG is also studying with a potential revival of its Challenger muscle car.

Such cars have a value beyond profit or revenue, he pointed out.

"In terms of being highly visible mind changers or opening people's minds who have never been to an American brand dealership, I think that that alone just about legitimizes the investment that you make in this type of vehicle," he said.

"I really believe that these heritage-themed vehicles are a very good way for American producers to go," he said.

"People have a tremendous fondness and nostalgia for those vehicles.

"They're different from Japanese or German vehicles and it's something that frankly, the Japanese can't do their version of."

The next hurdle for GM to pass during its restructuring is settling the Delphi Corp. situation, Mr. Lutz said.

Delphi, which is GM's largest parts supplier and was spun off by the auto maker in 1999, is operating in bankruptcy protection and wants to close 21 of its 29 U.S. parts plants and slash wages to about $16 (U.S.) an hour from more than $27 an hour now.

Those moves have created a firestorm of anger within the United Auto Workers union, although the threat of a strike against Delphi -- which has the potential to cripple GM -- has diminished in recent weeks with buyout deals reached between the union and the two companies.

GM is encouraged, Mr. Lutz said, that the union realizes that it's no longer business as usual.

The restructuring at GM and similar job cut and plant-closing initiatives under way at Ford have been sparked by the deep drop in market share the two companies have experienced since the mid-1990s.