For the past two decades, GM and its Detroit rivals counted on earnings from pickups and sport utility vehicles, where Toyota and other foreign automakers weren't strong, said Jack R. Nerad, an analyst for Kelley Blue Book in Irvine, Calif. Rising fuel prices and new competition wrecked big trucks profits.
"Suddenly the imports were breathing down their necks on trucks, and they had the definite desire to fight back in cars."
The review of the Malibu plans culminated in a 90-minute meeting in July 2006 at GM's Warren, Mich., technology center with Wagoner, Lutz and North American marketing chief Mark R. LaNeve. Kovacic and his engineers gave an "honest assessment."
The changes included shoehorning in a new, unplanned six-speed transmission with the four-cylinder engine, without delaying the start of production in October 2007. The team needed to make the car quieter and smoother to drive, and plan to sell more high-mileage versions, Kovacic said.
"Rick said, `OK, that sounds good, go do it,' " Kovacic said. "There was no debate about whether it was worth doing it, or a question about resources."
In about August 2006, Lutz and Jon Lauckner, Lutz's top deputy, drove an early model at GM's test track in Milford, Mich. The four-cylinder engine was too noisy, and Lutz concluded the car wasn't yet "good enough," Kovacic said. "His criticism sort of rang through the company here," Kovacic said.
Kovacic's team added an engine cover equipped with five chambers, called attenuators, that change the air flow around the motor and cancel out the frequencies of unwanted noise, Lauckner said. The upgrades probably added $100 to $200 to the cost of the car, he said.
GM's Malibu advertising budget of more than $100 million is bigger than any car campaign at the company in the past two decades and comparable to Toyota and Honda spending on new sedans, LaNeve said.
