Last Auto News - Cash-Starved GM Delaying Cars it Can’t Afford to Delay

Last Auto News -

2011 Chevy Cruz.

General Motors has been cutting every expense it can in a move to save cash, but several new announcements have automotive reporters scratching their heads.

Reuters reports, “General Motors Corp on Friday said it would delay the unveiling of a new Buick LaCrosse model that it had planned to show at the Los Angeles auto show in November in part to reduce costs. In addition, GM has scrapped a working plan to show off the coupe version of its Cadillac CTS in Los Angeles.” The CTS has been a sales success for GM, and a coupe edition might bring in badly needed cash. More significantly, the current LaCrosse is outdated and selling slowly, but a replacement based on the highly-successful Chevy Malibu could be a huge boost to GM.

Cadillac CTS Coupe

Motor Trend agrees, commenting “We’re a little lost as to how delaying these debuts will save GM money.”

Perhaps the most desperate report, however, is one that GM is now denying. Business Week reports, “The company is beginning to delay even some new-vehicle programs that will be pivotal to its turnaround effort. Sources in the company say the Chevrolet Cruze compact will be delayed until 2011, almost a year after it was originally set to launch. The next-generation Chevy Malibu may also be delayed by six months, into 2013, sources say. ”

The Cruze, a new small car allegedly capable of more than 40 mpg in highway driving “could provide a major boost to GM’s bottom line,” Motor Trend predicts. “Delaying the launch of a competitive vehicle in the growing compact segment could erode sales further, making the General’s long-term financial outlook even worse. Then again, given that the company is said to be turning off lights, removing refrigerators, and lowering thermostats to 66 degrees in order to save on electric bills, GM may not have the luxury of focusing on long-term strategy right now.”

But GM has denied the report. Company spokesman Chris Less told Ohio’s Youngstown Vindicator, “The timing is still mid-2010 as we announced.”

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