Copyright ©2009 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

MICHELE NORRIS, host:

This is All Things Considered from NPR News. I'm Michele Norris.

MELISSA BLOCK, host:

And I'm Melissa Block. Time was the big auto show in Detroit was all about glamorous gas guzzlers on turntables and models pointing suggestively at fins and fenders. Not this year. The North American International Auto Show in Detroit is about to open to the public. It's part high-tech expo and part pep rally for the U.S. auto industry. It is such a bad time for the industry that some familiar exhibitors aren't even there - Nissan, for example. But our colleague Robert Siegel is there, and he reports today on the stakes for the biggest U.S. automaker, General Motors.

(Soundbite of auto show)

Unidentified Announcer: Please welcome the chairman and CEO of General Motors, Rick Wagoner.

ROBERT SIEGEL: GM's auto show exhibition is all about battery-powered vehicles like the plug-in Chevy Volt. So this morning, GM's top exec announced that the company will partner with the South Korean firm LG Chem to make lithium-ion battery packs.

(Soundbite of auto show)

Mr. RICK WAGONER (CEO, General Motors): And this morning, I'm pleased to announce that GM will manufacture this battery pack right here in the United States.

SIEGEL: At the very soonest, the Volt will hit the market in late 2010. So GM's success in the short term is a lot more dependent on conventional automobiles like the family sedan that GM vice chair Bob Lutz showed me yesterday.

Mr. BOB LUTZ (Vice Chairman, General Motors): This is the Chevy Malibu which was 2008 Car of the Year, selected by a jury of 50 independent North American journalists. And I think basically it has a very long wheelbase which makes it extremely roomy. And if you look in the backseat here, you'll see really incredible amounts of leg room, almost limousine-like proportions. And people really appreciate that when they're traveling with the family.

SIEGEL: Bob Lutz at the auto show is like Jack Nicholson at the Oscars or Ted Kennedy in the Senate. At 76, he is trim and tanned. He still epitomizes the swagger of the car business as it used to be. He was Phi Beta Kappa at Berkeley. He was a Marine Corps aviator. He's been a big deal at Ford, Chrysler, BMW, and GM, where he has returned from retirement to be vice chair. If GM is to survive, Americans who've been buying Camrys and Accords have to start buying more of his Malibus. The car did get good reviews. I test drove one last week, and it's certainly comparable to driving a Camry. And Lutz insists it is beautifully designed.

Mr. LUTZ: We set out to give it a style that is reminiscent of German luxury cars, so it's got a lot of sort of a Volkswagen Phaeton feel. And we added a lot of chrome trim, which is typical usually on luxury cars that cost quite a bit more than this vehicle, but all in an effort to make it look like a $40,000 car that sells at $22,000. And visual value counts for a lot.

SIEGEL: But in all likelihood, selling Toyota and Honda owners on a Chevrolet is going to be a hard sell. A few days ago, I asked some people who were near the car rental counter at Washington's Reagan National Airport about American cars. There were a couple of staunchly American car owners. One woman who works for a labor union considers it a point of solidarity. But most of the people whom I asked, would you buy an American car?

Mr. SERGIO RODRIGUERRA: Are you serious?

(Soundbite of laughter)

Mr. RODRIGUERRA: I don't think I've owned an American car in my whole life.

SIEGEL: That's Sergio Rodiguerra of Washington, D.C. Here's Lester Goins of San Antonio, Texas.

Mr. LESTER GOINS: Buy an American car. Right now, the way I feel about buying American cars is somewhat unreliable.

SIEGEL: Unreliable.

Mr. GOINS: Unreliable.

SIEGEL: Do you own an American car?

Mr. GOINS: Yes, I do.

SIEGEL: What kind?

Mr. GOINS: I've got a Ford Explorer. And I've had three Fords. And its like, OK, that's going to be my last one.

SIEGEL: Justin Crauter of Houston told me he owns both foreign and domestic cars, a Nissan and a Jeep.

Mr. JUSTIN CRAUTER: I drive the Jeep in most cases, but it all depends on if I'm going to higher-end to like a luxury-type vehicle, then I prefer foreign.

SIEGEL: Prefer foreign, why?

Mr. CRAUER: Better quality in my opinion just by the - simply by just the feel of the leather in the seats. That's the main thing in the interior, because to me, the engines, the break, everything outside of the vehicle is American comparable. But once you get into the interior, to me that's where the difference is when you're looking at luxury vehicles.

SIEGEL: And Jaime Kraft of Washington, D.C., said the American carmakers lost her over safety.

Ms. JAIME KRAFT: At a certain point, Volvo started installing safety features and General Motors did not. And they simply abandoned, as far as I was concerned, their consumers. And I've been buying Volvo cars ever since.

SIEGEL: So there is a sampling of skeptics saying what I've heard Americans say about American cars for 15 years. And back here in Detroit, here is Bob Lutz, like many Detroit execs, saying, read the reviews, test drive the cars. They're much better now. Why the gap between what the automotive press says and what the public says?

Mr. LUTZ: These are just perceptions that die hard.

SIEGEL: But...

Mr. LUTZ: And it's the trickledown effect, you know? Back 15 or 20 years ago, it was the people who really knew about cars and knew what they were doing who made those statements. And then it filters down to the less and less knowledgeable. And now it's the whole cycle is starting it again at the top where the knowledgeable people who truly understand the business now say the new range of General Motors cars are probably the best vehicles of their types in the world, and that's going to trickle down, but it takes time.

SIEGEL: But it's not as though GM doesn't advertise. I mean, we're constantly hearing about Chevrolets.

Mr. LUTZ: No, no frankly we don't do enough.

SIEGEL: You don't do enough.

Mr. LUTZ: No we can't. We just can't afford it right now. And there is not enough advertising dollars in the world to change the perceptions of people who are, you know, absolutely locked in and who basically block you out.

SIEGEL: But when they let you in, it helps to actually have cars for them. A year ago, Lutz's Malibu was heavily advertised. General Motors generated real consumer interest in the Car of the Year, but it underestimated its own success and sent Chevrolet dealers far fewer Malibus than they could sell. Did GM under-produce, I mean, given the success of the cars?

Mr. LUTZ: Well, yeah, we under-produced. But, you know, that's better than overproducing. Our history has been our plans were always too grandiose, and then we built too many cars. And then you have to incentivize them to get rid of them, and that destroys the value of the car. It's much better to be behind demand and trying to catch up than the other way around. And the car is still gaining momentum. It is an extremely well-accepted car.

SIEGEL: In all of 2008, GM sold 177,000 Chevy Malibus, Toyota sold 436,000 Camrys. Being here at the auto show with GM and Chrysler on federal life support and Ford only slightly better off, I wonder will Washington second-guess questions like, how many Malibus is the right number to produce? I asked Bob Lutz, who's been in the car business 45 years, what it's like to be operating on Washington's nickel.

Mr. LUTZ: Well, I've never quite been in this situation before of getting a massive pay cut, no bonus, no longer allowed to stay in decent hotels, no corporate airplane. I have to stand in line at the Northwest counter. I've never quite experienced this before. I'll let you know a year from now what it's like.

SIEGEL: Apart from the comforts that this has cost you, in terms of the decisions that you make at GM, how are they different?

Mr. LUTZ: We don't know.

SIEGEL: Because he says Washington has not yet appointed a car czar, the government's designee to oversee the loans to GM and Chrysler. In an interview this morning, GM Chairman and CEO Rick Wagoner told me that he hopes that person will dig deep into GM's finances and get a real understanding of its costs. Wagoner also talked about the Chevy Volt and how GM can survive with just a fifth of the U.S. auto market. We'll have that interview at the auto show in Detroit on tomorrow's program. This is Robert Siegel.

Copyright © 2009 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.