New cars will require investment of millions

Years after steering its customers toward front-wheel-drive vehicles, General Motors Corp. is planning a new series of passenger cars with traditional rear-wheel drive, Vice Chairman Robert Lutz said.

The rear-wheel-drive series is slated for one or more of GM's high-volume U.S. brands -- Chevrolet, Pontiac and Buick.

GM will invest hundreds of millions of dollars to develop the cars and either refit existing assembly plants or build new ones to produce them.

The plan represents a major philosophical shift within GM's engineering and sales organizations. The world's largest automaker committed its high-volume passenger-car programs to front-wheel drive decades ago, spending vast amounts of time and money developing the cars and convincing the American public that front-wheel drive is safer than and superior to rear-wheel drive.

"Over time, we will have a nice blend of some architectures that remain front-wheel drive and other architectures that go rear-wheel drive," Lutz said in an interview at the North American International Auto Show.

The new cars will be based on a less-costly, higher-volume version of GM's new Sigma luxury vehicle architecture, said Lutz, GM vice chairman for product development and chairman of GM North America.

The likely GM candidates to switch to rear-wheel drive include the Chevrolet Impala and Monte Carlo, Pontiac Grand Prix or Bonneville and Buick Century, Regal or LeSabre. GM has also considered the Sigma architecture as a basis for a Camaro or Firebird replacement. The program would also likely spawn the replacement for GM's successful Australian sedan, the Holden Commodore.

Because rear-drive is associated with the classic powerful American sedan and offers the potential to sell image-building, high-performance models, the program could reinvigorate GM's passenger-car sales. GM traditionally dominated that market, but has been losing ground for three decades.

"It's a gamble, unless they plan on a massive rethinking of their product lines," said Jim Hall, vice president for industry analysis at consultant AutoPacific. "GM needs more rear-drive cars, but not every division needs one. It must be based on what's the right car for each division. There are plenty of very happy Toyota Camry and Avalon owners who don't know or care that their car is front-wheel drive."

The Sigma platform is the foundation of the new Cadillac CTS sport sedan. Its basic components and dimensions -- the architecture, in GM development parlance -- will spawn a wide range of future Cadillacs, including the rear-drive replacement for the Seville luxury sedan and an all-wheel-drive crossover wagon based on the Cadillac Vizon concept car. All of those cars will be assembled in GM's new Lansing plant, which opened Jan. 9.

The upcoming Cadillac vehicles will take that plant to its production capacity, meaning that any additional models will have to come either from new assembly plants or existing plants reconfigured to build the cars.

GM would probably need to sell around 200,000 of the new rear-drive cars annually to justify the investment needed to build a new plant, Hall said. However, if the cars replace models GM already builds, such an investment would be part of the normal cost of doing business as GM replaces models at the end of their life cycles.

Changing volume brands to rear-wheel drive will take time, said Lutz, who was hired by GM Sept. 1 and has been charged with revitalizing its product line.

The Sigma architecture was developed as the basis for Cadillacs priced from the CTS's $29,990 to a possible $60,000 flagship sedan, people close to the program say. Lutz refers to the Cadillac architecture as the "premium Sigma platform," while the less-expensive cars will derive from what he called the "high-volume Sigma platform."

Executives at GM's higher-volume brands have previously expressed guarded interest in adding a rear-wheel-drive sedan to their lineups. However, they were concerned over whether their high-volume brands could afford the sort of sophisticated electronic traction and stability control systems that Cadillac will use to make its rear-drive cars manageable on snow and ice.

GM executives close to the Sigma program have said that the architecture could be used for less-expensive cars, but that sales projections would have to justify at least another assembly plant's worth of production before GM would approve any non-Cadillac cars using the architecture.

"It gets very expensive to be the next GM division that wants a Sigma product," one senior executive said. "You have to be willing to commit to the cost of a new plant."

It's very unlikely any existing GM assembly plant could produce the high-volume Sigma cars without being gutted and rebuilt.

The vehicles and the assembly process are intended to be flexible enough that a single assembly line can produce vehicles as different as the compact CTS, full-size Seville and the Cadillac crossover wagon based on the Vizon. The difference for drivers

If the new high-volume rear-drive cars succeed, the program could be the key to reversing decades of eroding market share for GM. It could also change the face of the U.S. auto industry, by forcing GM's competition to respond with similar products.

The Chrysler Group has already committed to rear-drive replacements for its full-size 300M and LHS family of full-size sedans.

While Chrysler's rear-drive program is well underway, GM's move could put Ford Motor Co. at a competitive disadvantage. Ford's only North American rear-drive sedans are the aging Mercury Grand Marquis and Ford Crown Victoria, and the expensive Lincoln LS and Town Car.

GM built its last North American full-size sedan in 1996, when it phased out the Chevrolet Caprice Classic, Impala SS, Buick Roadmaster and Cadillac DeVille. It began its move to front-drive to develop smaller, more fuel-efficient cars following the 1970s oil shortages. GM built 167,103 of those cars in their last year of production.

Front-wheel drive better uses interior space, but it is widely considered a compromise when used in big cars. While it improves traction in slippery or wet conditions, front-drive cars generally cannot handle as much torque or horsepower as rear-drive, meaning that a full-size car often feels underpowered.

New developments in electronic traction control and stability control now allow automakers to make their rear-drive cars more practical for snowy climates.

While those systems can still cost several hundred dollars per car, suppliers and some GM engineers say they believe the cost will fall to the point that they can be offered on high-volume cars without a substantial price increase. The same thing happened with antilock brake systems, which began as $1,000-plus options on luxury sedans.