GM’s current agony seen on the highway

By Warren Brown

WESTLAKE VILLAGE, Calif. — Getting here on “the 405,” that north-south stretch of interstate running through the greater Los Angeles area, is hell. But it’s also instructive agony for anyone trying to understand the problems of General Motors in North America.

My assessment is based on empirical observations made on a drive from the Los Angeles International Airport to this resort/bedroom community straddling the Ventura and Los Angeles County line.

Did I say “drive”? Allow me to correct that. No one drives on the 405. They sit. They park. They creep. They attempt to make forward progress, only to be blocked by one obstruction or another, which requires them to sit some more, engines thrumming, exhaust gases pouring from hundreds of cars and trucks going nowhere.

In that stagnant motorized melange lies the current agony of GM North America. In one lane, for example, is GM’s Cadillac Escalade sport-utility vehicle. In another is a giant GM Chevrolet Silverado pickup truck. It’s a “dualie,” or a “DRW,” meaning that it has dual rear wheels. It’s a work truck. But whoever owns it apparently doesn’t work much. The thing is free of dust, dirt, dents and scratches.

Creep down the road a little farther. Aha! There’s another GM truck — this one a GMC pickup. Look around. How is it possible? How can it be true? I see only two GM cars. Two! They are a Chevrolet Corvette Z06 and a Saturn Aura.

Foreign cars

I’m on a road in the United States of America, albeit in the grand Republic of California. There are foreign cars all around me ... but only two cars from GM, the biggest car company in the country. California is still America, isn’t it?

An estimated 11 percent of all new vehicles sold in the United States are sold in California. GM obviously sells trucks here. But does it sell cars in California? The sad answer for GM is “not many.” The same goes for Ford and Chrysler. When it comes to cars in this land of automobiles, apparently most of them parked on the 405, the domestics get kicked to the curb.

Statistics vary by source. But empirical observation says it’s safe to assume that automotive dealer groups here are correct when they say that domestic cars account for about 30 percent of new-car sales — that’s “cars” as in sedans, coupes and wagons — in California.

On the truck side, domestic manufacturers do better — still holding the lion’s share of trucks sold in California and elsewhere on the West Coast. But therein is a problem in a place where traffic does not move and where the price of regular unleaded gasoline is approaching $5 a gallon.

Sucking fuel

Big trucks suck fuel. That is not a good thing for commuters who burn as much gasoline idling as they do actually moving from one place to the next. Those people are abandoning trucks and the companies that make them. Those still in the truck market are asking for more fuel-efficient models, including gas-electric hybrids and trucks with four-cylinder engines.

GM, Ford and Chrysler, all of which have concentrated on big trucks with big engines — the kinds of trucks American consumers wanted when gasoline was cheap — have been caught in the lurch. That is why GM, as it announced last week, is cutting truck production (again), white-collar jobs (again), suspending its dividend and borrowing $2 billion in an effort to help save $15 billion through the end of 2009.

GM needs the money to dig itself out of the hole it dug with trucks. If the company uses the money as wisely as it did in remodeling the estimable Chevrolet Malibu LTZ, for example, it has more than a fighting chance of success.

But GM is going to need something else — a better sense of balance. When the truck market returns, as it will, GM is going to have to avoid going truck crazy, shoving trucks into every available and conceivable truck niche at the expense of developing worthy cars.

I mean, it’s just odd sitting there on the 405, surrounded by a sea of cars from Toyota, Honda, Nissan, Mazda, Hyundai, BMW, Mercedes-Benz, Mitsubishi and — can it be? — an old Fiat, with a relatively few big GM trucks floating in the distance.