DETROIT - Despite slowing auto sales, General Motors will maintain heavy product-development spending, according to Tom Davis.|
'We're still tracking at record capital spending. That's not the way it played out in the press, but that's what we're doing,' said Davis, GM's group vice president for product development. 'We've gotten more efficient at the capital we are spending, and that translates to more programs.'
Davis' plan to retire early next year triggered GM's hiring of Robert Lutz as vice chairman for product development. Lutz is a former vice chairman of Chrysler Corp. Davis says he will be handing over a product development operation that is being rejiggered to target GM's weakest market segments, especially cars.
'We looked at everything we're doing, and the timing of it, and made some readjustments,' Davis said. 'We actually brought some programs forward, targeted at where we're not doing as well in the marketplace as we need to.'
GM's product rescheduling has spurred considerable speculation among suppliers and industry observers. In recent months, the company has killed two luxury sport wagons for Pontiac and Buick, speeded up plans for an Opel-based replacement for the Chevrolet Cavalier and stalled the Lambda platform for full-sized, front-wheel-drive sport wagons, pickups and minivans.
Asked about Lambda, slated for a new plant near Lansing, Mich., Davis said, 'That's going to happen.'
GM typically doesn't reveal product budgets. But in one instance, the company has said it will spend $4 billion in the next three years to bring out new Cadillac models.
Davis, 55, had headed truck development before the merger of truck and car development late last year. He said a strategic shift of resources a few years ago set the stage for GM's booming light-truck business today.
'There was a reallocation of resources based on the strong direction of Ron Zarrella and Rick Wagoner before him,' he said. 'We were given the financial resources to do the best trucks in the world, and we did them.'
Car guy, too
Although Davis is quick to point out that he spent most of his 37-year GM career - begun as a General Motors Institute student - in cars, he is best known as the architect of much of GM's success with light trucks.
Davis says he began discussing retirement with Wagoner 18 months ago. But he agreed to stay on for several key launches, including the Cadillac Escalade, the mid-sized sport-utilities - the GMC Envoy, Oldsmobile Bravada and Chevrolet TrailBlazer - and the Chevrolet Avalanche.
Davis also managed the merger of truck and car product development. One supplier executive said GM would be wise to let the truck group's lean, quick-moving culture permeate the car side, rather than vice versa.
'When you go over to truck, they're rocking and rolling,' the supplier said.
But Davis said he'll be rolling out the door early next year to spend time with family, restoring a recently purchased 1966 Chevrolet Corvette and kicking back.
'I went on full overtime in 1973 and I haven't come off yet,' Davis said. 'I'm a scuba diver and I haven't been diving in a year and a half. I only put 50 miles on my Harley this year.'