dcbingaman

As I understand GM's accounting system, they DO NOT use program accounting methods that tie facility capital costs to any particular car model. The also do not tie R&D and development costs directly to any particular car. GM is VERY functionally organized.....program managers (like Corvette) have very small staffs and have to beg, borrow or steal help from the functional departments to get anything done.

Powertrains, for instance, are produced by a dedicated powertrain team for ALL GM vehicles. Corvette can provide this team their "desirements" for a new engine / transmission, but ultimately the powertrain team makes the decisions and a lot of those decisions are based on whether any particular development is useful for MORE THAN ONE product line. The current Gen. 5 small block owes its existence more to Silverado and GMC Sierra than Corvette.

That said, each product manager has to have a business plan which starts with a "top line" - how much revenue will this product bring into GM ? That top line is driven by sales volume more than any other factor. Earnings are calculated based on that sales volume and the estimated "cost of goods sold (COGS)", which, itself, is strongly driven by anticipated sales volume. (When you order 33,000 Tremec DCT's a year, your costs will likely be a fraction of what Ferrari would pay FOR THE EXACT SAME PART with a volume of 3000 per year.) COGS includes direct labor which includes the assembly line (1000 hourly workers in BG) and everything that supports it upstream.

The top line estimate of revenue brought in, minus the COGS determines the gross profit before overhead costs are applied to the equation. Overhead costs can be spread a number of ways, but at a company like GM are typically spread over many lines of cars from all four brands. Gross margins for every car line are added together, overhead costs are subtracted and the result is gross earnings for the GM Corporation or EBITDA (earnings before taxes, interest, depreciation and amortization). It is not until you calculate Net Earnings from EBITDA that you take into the capital costs associated with putting up a new factory, or assessing the impact of a factory expansion like GM's recent investment in BG.

Bottom line is GM won't even consider a business case for a car with insufficient volume to keep 1000 teammates in BG busy for 52 weeks of the year. It has nothing to do with how much $$ they put into BG, it has to do with the scale the GM has to have to be profitable. A 2000 unit business plan will end up on the cutting room floor.

For example - the C7 ZR1 will sell 2000 units in one year - MY2019, (pretty successful for such a high price car - the Ford GT will only sell 1000 units in 4 years). Reportedly GM is either losing a small amount of $$ OR only breaking even on these sales because the production was truncated to 2000 in one year vs. the ORIGINAL plan of 2000 per year for 2 or 3 years. The plan was reportedly revised this summer for two reasons - the C8 was ready to go for MY2020, and C7 sales generally, have tanked at a sharper rate than anticipated.

rmorin1249

I agree. Luggage space may well be an issue for Corvette owners like me that use the car for road trips.

PCMIII

BGA has a rated capacity of 74k/year but the ME at best will not even make half that number so it would be a non-starter unless more vehicles are built there. Apparently a Cadillac ME will be built, but that seems even more dubious than the Corvette ME. So what is going to make up the difference and get BGA to at least its rated capacity? It makes no sense to run a plant at less than 80% of capacity because it is unprofitable especially when GM has just invested nearly $1 billion in BGA. GM must increase its bottom line and show Wall Street that it has a plan to increase profits going forward. Developing untested, unproven cars is not very convincing.

dcbingaman

Not sure where you get 74,000 cars per year. Kai Spande has said that they can produce 33,000 a year there with the plant as configured and 1000 teammates. GM has NEVER produced more than 40,000 units at this plant. Going above 33,000 is possible with overtime, but significantly above this would require a second production shift and ANOTHER 1000 teammates. The Corvette Boom-Bust cycle insures that's not gonna happen. In either case, projections that GM would ever be satisfied selling less than 15,000 Corvettes a year (C7's or C8's) is ludicrous.

Even if GM wanted to build a $169,000 supercar, it wouldn't do it in BG. There are numerous assembly shops from Multimatic to Pininfarina to Dallara that can build 2000-3000 supercars a year, CHEAPER than GM can on its own. A GM supercar will be outsourced, just like Ford outsourced the Ford GT and Cadillac outsourced the Allante luxury coupe of yore. (Pininfarina built 21,000 Allante's for GM in Italy over a 7-year period.....since they are on the outs with Ferrari right now, I'm sure they'd would be happy to do it again for GM.)

mschuyler

It might be, but people adjust. I was very wary of my C7 vert, but we just changed luggage to duffels and it all worked out. Most of the 20K miles on the car are road trips. With an ME we'll probably get a trunk and a frunk. Just another adjustment, but not impossible. If people really need SUV space, perhaps they ought to buy one. I think we've been spoiled by the C6 and C7 because technically they are hatch backs with cavernous storage.

PCMIII

If you watch the video of Spande speaking at the NCM Bash last spring, he said Corvette production was being limited to 33K apparently referring to the ME since they were then producing only 368 cars/week which is less than 20k/year even working 52 weeks. He did not say the plant could only produce 33k when obviously it produced 40k before all the expansions and improvements. LMC Automotive said that currently production is only 27% of capacity. Assuming LMC was using 20k/year which is what BGA will produce in 2018, that equates to 74k rated capacity for 2 shifts of 8 hours 6 days/week. To hit 74k/year would require a line speed of 17.5/hour, which BGA was running prior to the plant upgrades, and 44 workweeks. Obviously, BGA could produce a lot more than 74K/year and no doubt that is what GM wants.

ViperFan1

rear engine and mid engine are NOT the ssme. Get real. Most people dont even know porsches are ME.

zora will be rear engine. We can get real technical and say the c7 is already a MEFM layout.. having the entire engine showing through a glass panel like a lambo isnt the same as a boxster.

and only people who are lacking a third leg buy porsches (gt2rs and cgt excluded)

pietro c7

Sub Driver

I'm not sure what any of this means since nothing I said referred to any rear engine cars, only mid-engine. Also the new C8 will not be rear engine, it will be mid-engine. Adding a see through panel over the engine cover doesn't really add any complexity either. Maybe you could try clarifying some of your thoughts because right now none of this makes sense.

CRABBYJ

jimmyb

How many times are you going to type the same thing?

jcsperson

A rear engine car has its engine over or behind the rear axles. A mid-engine car has it forward of the rear axles.

The only road Porsches with a mid-engine design are the Boxster/Cayman, Carrera GT, and 918 Spyder. 911s have the engine out back as they've always done.

Foosh

PLEASE, ignore those two.

PCMIII

Why do you keep reading my posts? Obviously you can't help yourself.

PCMIII

OK boss. Whatever you say because YOU have inside information!

ArmchairArchitect

Bingo. Technically the Corvette is already mid-engined and has been so for a long time.

Terminology in the auto world should be updated to distinguish between "Front Mid-Engine" and "Rear Mid-Engine".

John T

I agree Crabby, this car is oddly gorgeous and fast as hell!

Atari_Prime

This is a bunch of hooey and you know it. The technicalities of it all are irrelevant. It's like being a grammar ****, all that matters is people understanding the meaning. By the 'technical' information you present most cars are mid-engine. And while your idea of front mid-engine and rear mid-engine is likely more appropriate it is sound and fury signifying nothin as it will never happen. Most would consider Motor Trend, Road & Track, and well every other automotive journalism outlet to be educated if not authoritative on the topic of cars. None have ever classified a Corvette as mid-engine. What you did above is the social equivalent of 'well actually' and then get punched in the face. Everyone knows where the engine is, and everyone knows the definition of mid-engine even if that definition is not appropriate. Front engine, engine anywhere in front of the driver. Mid-engine, engine behind the driver (unless it's a Porsche). Many Porsches that we call 'rear-engine' are no longer 'technically' rear-engine so even that definition is a bunch of poo, but we call Porsche's rear-engine anyway and as long as there is a 911 that won't change.

jcsperson

It's pretty clear that the Boxster/Cayman are mid-engine cars and the 911 is rear engine. Nobody confuses that except complete noobs. Hanging the motor out back enables the 911 to be a 2+2, something a ME car could never be without looking like a stretch limo.

PCMIII

Interesting that Porsche has kept the same rear-engine configuration for 70 years and built a loyal following of buyers around the world who pay premium prices for the rear-engine model.
OTOH, Corvette is now rumored to be abandoning its front-engine configuration even though it has made Corvette the longest running passenger car ever produced. Look what happened to the VW bug when it abandoned its classic rear-engine. Kaputt as they say in German.