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GM puts brakes on new rear-wheel drive vehicles

From detnews| April 13 , 2007

General Motors Corp. is holding off on plans for virtually all new rear-wheel drive cars in response to the threat of far stricter fuel economy standards from the federal government.

Concerned that heightened mileage requirements will penalize the automaker for producing new versions of high-performance rear-wheelers, GM is halting all but a few of the vehicles in its future lineup.

Word of GM's change in plans came this week from GM product czar Bob Lutz in an interview with the Chicago Tribune. A GM spokesman confirmed the information on Wednesday.

While GM wouldn't give specifics, the move could mean consumers will never see a rear-wheel replacement for the full-size Buick Lucerne and Chevrolet Impala sedans or a small rear-drive Cadillac compact.

Still in the works, however, are a Chevy Camaro sports coupe due out next year and the Pontiac G8 sedan, which is being developed with GM subsidiary Holden in Australia.

"It says they are making a commitment to maximizing fuel economy and maximizing fuel efficiency, and that makes sense," said Tom Libby, an analyst with J.D. Power and Associates' Power Information Network.

The Bush administration wants to reduce U.S. gasoline usage 20 percent by 2017, in part by raising fuel economy standards an average of 4 percent annually. That would bring cars to an average 34 mpg by 2017, up from 27.5 mpg today. Also, the Supreme Court ruled last week that the Environmental Protection Agency has the authority to regulate cars' carbon dioxide emissions.

Lutz has been a scathing critic of the Bush plan, arguing that such a mandate could add $5,000 to the average cost of vehicles. "It would bring the market to a standstill," he told The Detroit News in an interview last week during the New York Auto Show. "We've pushed the pause button. It's no longer full speed [email protected]@[email protected]@

Rear-drive uses more gas

Front-wheel drive vehicles became popular alternatives to rear-drive cars during the oil crisis in the 1970s. Rear-drive vehicles typically suck more gas because they are heavier and tend to be tuned for high-performance driving.

GM appears to be the first automaker to shift its product pipeline based on the growing possibility of strict fuel economy mandates, though its crosstown rivals say they're watching fuel economy regulations closely.

Ford Motor Co. spokesman Jim Cain said its plans already are heavy on vehicles that feature fuel-saving technologies, with no all-new rear-drive cars in the works. Ford, however, will continue producing new versions of its Mustang muscle car.

DaimlerChrysler AG's Chrysler Group, which has spawned several rear-drive vehicles from the Chrysler 300 architecture, on Wednesday said it has no plans to back away from that market. The Auburn Hills automaker has plans to revive the Dodge Challenger muscle car at the end of next year.

"We've had some great success with that architecture," Chrysler Group spokesman Rick Deneau said. Fuel economy regulations aren't "affecting plans for anything we're going forward with."

Instead, he said, Chrysler will focus on improving technology on rear-wheel drives to make them more fuel-efficient. It does, however, plan to ramp up investment in fuel-sipping small vehicles.

"You arrive at a balanced product plan and then you work on the technology to deliver the fuel economy that isn't just what the government requires, but what consumers expect," Chrysler spokeswoman Colleen O'Connor said.

Change of heart seen

GM's decision to put the brakes on rear-wheel drive models is the latest twist in GM's on-again, off-again attraction to the vehicles. Lutz first championed GM's new rear-wheel-drive platform, known as Zeta, in 2003 as the industry was turning its attention toward rear-wheel-drive vehicles. The Chrysler 300C and revamped Ford Mustang were smash hits.

Two years later, though, GM killed plans for a line of rear-wheel drive sedans set to come out in 2008, largely to free up resources to speed up production of new lines of large pickups and sport utility vehicles. But the automaker reversed that decision, laying the groundwork for rear-drive vehicles in several of its brands.

Now, it seems, most of those plans are off. "It's too late to stop Camaro, but anything after that is questionable or on the bubble," Lutz told the Tribune. "We'll decide on our rear-drive cars when the government decides on CO2 levels and CAFE regulations."

While the move is bound to upset some rear-drive loyalists, GM's approach makes sense, said Jesse Toprak, senior analyst with Edmunds.com, an automotive resource tailored for consumers.

"They are prioritizing their resources and putting those funds into next-generation trucks and sport utility vehicles," he said. "They're being forced to do it."

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