GM has a problem. Hell, GM has a lot of problems. The first problem is, not even Oprah Winfrey could build any excitement for Pontiac's new G6:
As evidence of the car's meager performance, auto experts note that the world's largest automaker has dramatically ramped up rebates on the car just to get it selling at modest levels. The automaker offered more than $3,600 in incentives on it last month, and it sold less than half of what the Grand Am was averaging per month.
This, just months after Oprah gave 200 of them away in an hour-long publicity/marketing stunt watched by millions of people, and read about by millions more.
However, GM's problems aren't limited to a struggling start for a single model. Down the road, they face a bigger hurdle:
In an internal memo last week, GM product chief Robert Lutz told employees that "until further notice," the automaker has stopped plans to introduce a new line of rear-wheel drive passenger cars that were scheduled to debut in North America by 2008.
Why is a RWD product delay a big deal? In one word: Power.
American drivers want more power. Asian drivers want more power. Even European drivers want more power. There comes a point, however, where you just can't put any more power through the drive train of a front wheel drive vehicle. Get too much over 200 horses, and torque steer becomes a serious problem. For automakers looking to sell more, and more powerful, cars with big power plants and fat profit margins (like the drool-worthy RWD Chrysler 300C), they have to switch back to Rear Wheel Drive platforms.
All that power comes at a price, too. Not just in developing fancier engines, but also in keeping emissions down and fuel economy up. And, oh yeah