GM has no room to fail, says product chief

As the new chief of product development for General Motors, Tom Stephens knows he has no margin for error.

Petrol, he says, will dictate what cars or trucks people buy. Pump prices, he says, will rise again owing to simple world supply and demand, raising the need for small cars. Yet GM has to plan for low prices, too.

And amid the gas price swings, GM's new vice-chairman says there cannot be any mistakes in quality or appearance, given the company's recent emergence from bankruptcy protection.

"We cannot afford to have anything but a hit. Every launch of every nameplate has to be a home run."

Stephens, 60, who has spent his entire career at GM, plans to build on GM's recent product launches including the Chevrolet Malibu midsize car; the Cadillac CTS luxury sport sedan, the Camaro, a retro-style muscle car; and new crossover vehicles that carry people like sport utilities but perform more like cars. Most have sold well and received good reviews from the automotive press.

All new vehicles, he said, will be more fuel efficient than their predecessors as GM tries to meet government fuel economy standards and satisfy the marketplace, both of which point to higher gas mileage.

He also sees a time when most passenger cars and lighter-duty vehicles will run largely on electricity as battery and other costs drop.

And he doesn't see any conflicts brewing with his predecessor, vice-chairman Bob Lutz, who announced his retirement in February but opted to stay on to run the creative side of GM's marketing and product development.

While there's pressure on both men given GM's precarious finances, there's more on Stephens, who is responsible for a wide swath of GM's operations: engine and transmission development, research, the quality of its manufacturing and the look of cars and trucks inside and out.

But Stephens, who has known he wanted to be an auto engineer since he was 10 years old, building minibikes from scratch in Center Line, Michigan, just north of Detroit, said the same team is in place that developed GM's recent vehicles, most of which have been successful.

A former head of global engines and transmissions, he plans to continue working long hours because he loves it, and said the hard work will yield results.

"As long as you did everything humanly possible every day to do your best at making the world's best cars and trucks, then there are no regrets," he said of the pressure.

Stephens, who started with GM in 1969 in a student co-op programme at the University of Michigan, rose through the company and was part of the culture that was more concerned about rules and specifications than what customers wanted to buy.

But he says he has worked with Lutz since 2001 when a big change began, emphasising smart designs that appeal to buyers. The old GM, by nearly all accounts, was more concerned about internal rules that yielded frumpy machines such as the Pontiac Aztek or the old Malibu, which Lutz recently called an "appliance."

"It took all the emotion out of our designs," Stephens said of the culture. "Bob has brought the passion back into cars and trucks and he has brought around the right-brain emotion to them."

Stephens said he will make sure that continues through leadership, and he sees no conflict with Lutz even though both have overlapping responsibility for the way cars look, because they've always seen designs the same way.

"We have a great relationship. If I were to characterise it, I'd probably say that he's been somewhat of a mentor to me on a lot of these areas," said Stephens. "From a design perspective all of the great things that Bob has put into place will continue."

Stephens says GM should be able to make money on the Chevrolet Volt rechargeable electric car, but not in the first generation where volumes are low and prices are high.

The Volt, due in showrooms by November 2010, has a lithium-ion battery that can carry the car 64km on a single charge from a home outlet before a small internal combustion engine kicks in. Generally, it takes three generations or several years of a new technology for prices to come down and sales volumes to go up, allowing the company to make money, Stephens said.

GM, he said, has enough money available to pursue a number of strategies to free the country from its dependence on foreign oil, including E85 ethanol, compressed natural gas and technology changes to conventional engines that will make them more efficient.

- AP