Real reasons for cancellation of Zeta in US???

[V-Car]

There have been a few stories circulating in the US that the real reason why Zeta was cancelled for US cars was that it wasnt up to scratch after they evaluated it for their vehicles over there (Buick, Pontiac etc.) so it was rejected till they could design their own cheaper version of the Sigma.
The stuff about needing the money for the next generation of trucks was just a smokescreen.
I believe Opel rejected Zeta also for the next generation Omega if they decided to do one.

Reading between the lines of this story on Automotive News sort of confirms that Zeta wasnt good enough for them.
I guess we will find out next year if Zeta is any good, or if, as some have suggested, its really just a heavily rehashed version of what we already have?
Could it be that all they money that Holden was hoping to recoup from Zeta worldwide has just vanished, hence all the engineering cancellations and staff sackings?


--------------------------------------------------------------------------

Automotive News / April 04, 2005 / By Rick Kranz

The Sigma architecture is used for the Cadillac STS, CTS and SRX.

General Motors may derive rear-drive Buicks and Pontiacs from an exclusive Cadillac vehicle architecture. But don't expect any Chevrolets based on Cadillac underpinnings.

A less costly version of Cadillac's Sigma vehicle architecture is a candidate for several rwd cars now that GM has killed plans for its rwd Zeta architecture in North America.

"A natural place to land would be Sigma," Jim Taylor, Cadillac general marketing manager, said last month at the New York auto show.

Taylor said another option is re-engineering Holden's VT architecture, which is the basis for the Holden Monaro and Commodore and Pontiac GTO.

GM's financial difficulties were blamed for the Zeta decision announced last month. The architecture was being developed for a variety of rwd Buick, Pontiac and Chevrolet cars that would begin to debut in 2007. All-wheel-drive versions also were planned.

The GM product plan would have emulated the Chrysler group's strategy by replacing its front-drive, mid-sized high-volume car lineup of rwd models.

"I don't think I would conclude that plans for rear-wheel vehicles at GM are cancelled forever," GM Vice Chairman Robert Lutz said last month at the New York auto show. "I see it more as a delay. We will study other ways to get at rear-wheel-drive passenger cars."

Taylor said some rwd cars originally based on the Zeta architecture remain in the product plan.

He said a possible architecture for some of these models is a less costly version of the Sigma vehicle architecture, referred to internally as "Sigma-lite."

The Sigma architecture is used exclusively for the rwd Cadillac CTS, STS and SRX.

Before taking his current position at Cadillac in August 2004, Taylor was vehicle line executive for Sigma. The first Cadillac to use the architecture was the 2003 CTS.

When the Sigma architecture was being developed, Taylor said his team investigated whether it was possible to use cheaper components to create vehicles for brands below Cadillac.

"It was a quick study on the component side to see whether we could create Sigma-lite, and it was feasible to do," he said.

GM later decided to do a range of rwd cars for Chevrolet, Buick and Pontiac. But the Sigma-lite architecture proved too expensive for models that might be priced below $25,000.

The automaker decided to develop the less costly Zeta architecture, which could be used on a global basis and applied everywhere from Chevrolet to Cadillac. But on March 21, Lutz announced that GM had canceled plans for using Zeta in North America.

According to supplier sources, Zeta was going to be used for the next-generation Chevrolet Impala and Monte Carlo; Pontiac Grand Prix and GTO; and two Buick models - a coupe or convertible based on the Velite concept and a sedan. The Chevrolet Camaro name also was going to be resurrected for a four-passenger coupe.

Zeta was one of two vehicle architectures under consideration for an ultraluxury sedan planned by Cadillac that is expected to debut at the end of the decade.
--------------------------------------------------------------------------

[Dacious]

I don't know if we'll know the real reason, but I suspect that Zeta ( or likely any rear-wheel drive architecture) is too expensive for family cars in the US. With rebates an Avalon competitor would have to be profitable at $US20K and I don't think Zeta will do that combined with a good motor and appointments.

That and the crisis of confidence at GM, especially after the GTO's slow start.

Holden who were developing Zeta before Bob Lutz discovered Australia would be creating it to take the plethora of models Holden makes. That means expense and weight when you use a light commercial chassis for a sedan or coupe. Sigma uses forged alloy suspension arms which would likely be replaced with steel fabrications in Zeta, but still double-wishbone. Sigma-lite if there is such a thing is probably the same.

The Americans (now that they can sell LHD cars in Brittain, the major RHD market) probably thought 'Why the hell are we using this RHD, LHD, RWD, AWD, long, short, 2-door, 4-door, ute, wagon, crewcab platform?'.

Holden needs it - the average American family man appears to own several vehicles including a truck or SUV for winter and backwoods, sportscar for summer etc. One chassis in the US might come in different brands, bodykit ad badging, but they only use a sedan for a sedan - not a wagon and ute, too. Holdens business model is different.

When Ford took the Jaguar chassis for the new Mustang they comprehensively rehashed it, solid rear axle, McPhersons and steel suspension arm in place of double-wishbones at both ends. Most of those changes appear to be to get the cost down. It's still a $US20K car in econobox form - meaning rebated in a year or two it'll be $15-16K. That's probably not enough profit margin compared to the FWDs like the Taurus where they don't have to recoup the development cost.

The fact that report says GM US might seriously consider using the old VT chassis shows that this is desperation, not consideration. I think that is a furphy. I just think GM would like to get to where Holden is, selling most of it's stock without rebates or incentives of more than 5-10%. But they can't see how to get there, which would be enough to make Zeta uneconomic.

[Oldmonroman]

Hummmm interesting.

[Growler]

It sounds like bad news, but not necessarily. It leaves Holden again in a the desirable position of having unique products within the GM empire that has been developed to be sold to the world. The biggest problem I can see is the same problem that they have at the moment, a market bigger than they can supply. Only time will tell.

[Phido]

I think there are a lot of reasons why Zeta won't be picked up immediately.

Cars in the US are sold for crazy low prices. There isn't the kind of profit margins as they are here, its all volume and making money off extras (insurance, financing, options). How the GTO doesn't sell with a LS2 for a RRP of ~$45k I will never know. Americans aren't interested in a finely tuned chassis in a regular sedan or performance sedan or maybe even a performance car.. I guess its a tough argument to fight for a really sweet platform in a market where its not going to be appricatated..

American market likes, leather, gizmos, styling, and performance (in a line kind).. They have 0% financing deals and really low prices.

Plus I imagine this is one way to pull the rug on Holdens center of GM empire plans..

Hopefully Holden has enough money to finish Zeta for itself to a really good degree.

Oh well, I hear the new Falcon is ment to be pretty spectacular.. Holden may be forced to drop the ball on VE (Due to GM) but no doubt Ford will be watching with keen interest.

[FPV GTHO]

Oh well, I hear the new Falcon is ment to be pretty spectacular.. Holden may be forced to drop the ball on VE (Due to GM) but no doubt Ford will be watching with keen interest.

They have an advantage there though as the next Falcon will be released a while after VE, so if Holden can establish it in the market well then it might be good enough.

[HFV6]

I posted this in another thread, although it is probably more appropriate here.

I think its obvious what is going on, just think of it logically. GM is bleeding, they had to cut projects for north america that weren't 100% necessary for survival, hence cutting rwd zeta for north america. They didnt see that the huge development dollars necessary to introduce a plethora of rwd models in north america was absolutely necessary in the short run. They will introduce rwd in north america in the long run as that is what fits with their long-term plans. In the immediate future what matters is minimising outlays and maximising revenues, hence diverting all development dollars to the short term cash cows (ie. SUVs). Holden has spent a fortune developing VE zeta, this being justified by North America being confirmed as a market. Given at that time the annual market for zeta was therefore set at about 500,000, the big development dollars ($1 billion +) were justified. Now that GM North America has pulled the pin on Zeta in their market, Holden's business plan is looking a little pear shaped with its market now cut in half. Hence the slashing of jobs and downscaling of final development for VE. Forget all of the conspiracy theories, it comes down to basic economies of scale. A big market can justify big dollars, a market half the size will justify a much smaller development budget. What will this mean for VE? Delayed releases for variants and cancellations of certain variants, ie. Coupe, Wagon. And don't be surprised if corners get cut in the final stages of development, and don't expect the huge leaps forward we have been hoping for in areas such as materials quality, manufacturing quality, component quality, weight etc.. The VE will have HFV6 and LS2 engines across the entire range, the current 5L-40E 5-speed auto will fit the V6 models, the new 6-speed auto is for the V8's, but that's probably the only good news.

Ultimately, if you want to look at things practically, the Australian car market is far too small and crowded to justify the big development dollars necessary to build a world-class vehicle. This is why car makers are focusing on exports. It expands their market dramatically, allowing them to produce a far better vehicle. BA Falcon may be good, but an investment of $500 million isnt too much when you compare it with the $Billions spent on phenomenal cars from overseas, they can easily justify huge development dollars through the millions of vehicles they exportl. Without North America, Holden will be lucky to crack the 300,000 pa mark for zeta, meaning that corners must be cut somewhere to keep the project profitable.

I agree with Simcoe and Mooney, everyone needs to stop pissing and moaning about Commodore becoming more global. Would you rather a shitty quality, low-end, poorly developed Monaro made in Australia, or a fantastic, world-class Monaro with fantastic quality that just so happens to be made in the US. Great cars mean big development dollars, and big development dollars only happen with big exports. Get used to it.

[Dacious]

IMO I think VE is largely unaffected - the additional US input was likely a distraction, but this far out the basic sedan would be 99% done. They'd be doing durability testing and suspension/brake settings etc- finalising specs and build details.

As VE would have been engineered both-hand-drive anyhow I think Holden will be sitting pretty, and maybe GM NA actually paid for some of the work.

I bet the reason the other cars are gone is to make room for the Buick and possibly other export vehicles.

I think Phido is right - some of the people on US websites believe they are going to get a 2008 '67-clone Camaro with an LS7, vinyl seats and rear drums for $US20,000 - so it'll be quicker than a McLaren F1 but still affordable....

[jnicholson]

It sounds like bad news, but not necessarily. It leaves Holden again in a the desirable position of having unique products within the GM empire that has been developed to be sold to the world. The biggest problem I can see is the same problem that they have at the moment, a market bigger than they can supply. Only time will tell.


Holden has nothing unique to export in the future anymore.

The only two remaining Zeta-platform cars are Commodore sedan and ute. Wagon, coupe, 4WD, crewman have all been cancelled due to lack of $$$ - the engineering team working on these project has been fired a few weeks ago - some of these engineers are already working for Toyota.

Wagon and AWD will be replaced by US and Daewoo based cars.

GM is seriously bleeding at the moment and most new projects have been cancelled (oficially postponed). GM worldwide is worth less than Toyota's last year's profit. All GM money were spent on health funds and sales rebates in the US - Rick Wagoner's policy to increase sales was to discount cars as much as possible. Well, it didn't work and now the whole company is in serious financial trouble.


JN

[jnicholson]

IMO I think VE is largely unaffected -

Well, VE is seriously affected.

Durability testing hasn't started yet as the whole project is predicted to be four months behind schedule (due to engineering dept cull last month). Even the number of prototypes has been halved as Holden can't afford to build them. Holden will be lucky to have four prototypes build.

Obviously all mechanical issues will be fixed when VE series 2 is introduced.


JN

[Falcon Freak]

GM worldwide is worth less than Toyota's last year's profit.

I heard that same comment last Wednesday from a work colleage. If true then it is a dismal picture of GM's situation.

This same colleague told me that the financial institutions haven't downgraded GM's share (or was it bond?) rating to 'junk' status as they are concerned that the impact may push GM even closer to the edge and cause a world wide recession because of GM's size.

Not a good time for anybody involved either directly or indirectly with GM.

FF

[jnicholson]

This same colleague told me that the financial institutions haven't downgraded GM's share (or was it bond?) rating to 'junk' status as they are concerned that the impact may push GM even closer to the edge and cause a world wide recession because of GM's size.

FF

GM worldwide has debt of around US $300 billion, including bonds ($16.5 billion coming due this year) - banks absolutely love such good customers, as long as they can make their loan repayments.

Good indicator of company's financial situation and future prospects is return on investment. GM is 0.2%, Toyota is 9%, Porsche is 17%.


JN

[Falcon Freak]

Well, VE is seriously affected

A different work colleague whose brother works for Holden told me that VE has been delayed almost 12 months.


They have an advantage there though as the next Falcon will be released a while after VE, so if Holden can establish it in the market well then it might be good enough.

VE was supposed to be launched March 2006 and Orion (next all new Falcon) launched September 2007. So originally Holden had an 18th month lead.

Ford has delayed Orion launch by six months as a lot of focus was put onto the Territory launch. So this would have given Holden a 2 year head start. But it is likley that VE will be delayed between six to 12 months. Therefore best case Holden has is an 18 month head start and worst case is a 12 month head start.

Anyway you look at it Holden will have a sizeable head start with the next model.

FF

[Jag530G]

Reading this is seriously depressing, I was looking forward to the VE and in particular the VE Monaro, but now that seems no more, looks like I'll be hanging on to the V2 series 1 for a bit longer. Mind you if the VE Monaro is canned it will do wonders for resale value of V2-VZ Monaros.

[corbz]

Well, VE is seriously affected.

Durability testing hasn't started yet as the whole project is predicted to be four months behind schedule (due to engineering dept cull last month). Even the number of prototypes has been halved as Holden can't afford to build them. Holden will be lucky to have four prototypes build.

Obviously all mechanical issues will be fixed when VE series 2 is introduced.


JN

jnicholson, i think the question we all want answered is the zeta platform good? like world class good? because we all have high hopes for this platform and i remember a holden engineer saying that they wanted to make it better than sigma even though its a lower cost platform... but then again i think we all want to hear your oppinion on the platform

[Dacious]

Holden has nothing unique to export in the future anymore.

The only two remaining Zeta-platform cars are Commodore sedan and ute.

JN

That's two unique products. GM US still wants RWD cars and would appear to have no facilllity to build them. If GM wants them - and they say they do - Holden appears to be their only option.

If Holden does can the other models it gives them additional plant capacity to build more of these. They always said they wanted to cut models to achieve an annual build target of 200K. I'm sure losing the Wagon and Crewman wasn't in the game plan but you gotta do what you gotta do.

If you were a contractor, didn't you sign an NDA? No skin off my nose, but this is a lot of commercially sensitive information you've posted.

[EGG]

Would you rather a shitty quality, low-end, poorly developed Monaro made in Australia, or a fantastic, world-class Monaro with fantastic quality that just so happens to be made in the US.
But the US doesn't have any kind of a reputation for building world-class fantastic quality vehicles.... I'd rate them above China, but below Korea.

[Knight Phlier]

I will quite happily take a Corvette or Camaro over a Kia or Hyundai :lol:

[Knight Phlier]

Can mods deletet his duplicate!

[V-Car]

GM is seriously bleeding at the moment and most new projects have been cancelled (oficially postponed). GM worldwide is worth less than Toyota's last year's profit. All GM money were spent on health funds and sales rebates in the US - Rick Wagoner's policy to increase sales was to discount cars as much as possible. Well, it didn't work and now the whole company is in serious financial trouble.

Like i said earlier, things just dont add up here.
Firstly, GM says they are in serious financial trouble and have to have a huge cutback in plans, so projects get cancelled and many staff are sacked...because it has to be done to survive.

Funny then how they can just find over US$100 million to upgrade a plant in South Africa to build RHD Hummer H3's there.
There is Holdens future AWD plans!
Do they really think that people in Australia and England are going to rush out in droves to buy Hummers? :confused:
Anyone else feel that GM has lost the plot?

[seldo]

But the US doesn't have any kind of a reputation for building world-class fantastic quality vehicles.... I'd rate them above China, but below Korea.
I reckon you are being kind...

[anon]

Well, VE is seriously affected.

Durability testing hasn't started yet as the whole project is predicted to be four months behind schedule (due to engineering dept cull last month). Even the number of prototypes has been halved as Holden can't afford to build them. Holden will be lucky to have four prototypes build.

Obviously all mechanical issues will be fixed when VE series 2 is introduced.


JN

4 protos??

as if

there will be at least 80 builds for gamma 2 A and B

[anon]

jnicholson, i think the question we all want answered is the zeta platform good? like world class good? because we all have high hopes for this platform and i remember a holden engineer saying that they wanted to make it better than sigma even though its a lower cost platform... but then again i think we all want to hear your oppinion on the platform

thats a good question. problem is, no-one has driven a production representative car yet to make the call. it certainly looks good visually and on paper but the suspension is still has a long way in terms of having production intent parts to go to make any evaluation