Scott Burgess

With gas at $4, GM to overhaul its small cars

Plummeting truck, SUV sales prompt new direction

Small is big news at General Motors Corp.

As the company struggles with plummeting sales of its big trucks and SUVs, it announced Tuesday plans to overhaul its small cars.

First up is a new Chevy compact for 2010 — the next generation Chevy Cobalt. Instead of turning to the 2.2-liter four-cylinder engine, GM Chairman and CEO Rick Wagoner said the new compact would use a 1.4-liter turbo-charged four-cylinder engine.

This could provide the best of both worlds: More power and better mileage. Wagoner said the new compact with a manual transmission could best the current Chevy Cobalt by 9 mpg — giving it the potential to hit 42 mpg.

As $4-a-gallon gas becomes the norm, any car hitting more than 40 mpg will certainly bring people into the dealer’s showroom.

Wagoner also promised better "content," car-code talk for better interiors. The Cobalt needs an interior overhaul when compared to the likes of the Ford Focus, the Mazda 3 and Honda Civic.

But evidence suggests The General can pull it off.

Look inside GM’s new sedans, such as the Chevrolet Malibu and Cadillac CTS, and you’ll find reasonably priced cars with excellent interior packages.

GM also will build the next-generation subcompact Aveo in America, using a small four-cylinder engine that already gets 34 mpg on the highway. GM already has the Pontiac G3 in place in Canada (where it’s known as the Pontiac Wave) and is considering bringing it to America before the new Aveo arrives in the second half of 2010.

New small cars are the just beginning.

Chevy continues to move forward with the 2010 production of the Chevy Volt — a plug-in electric car that will use a gas engine to extend its range. With an electric range of 40 miles, the Volt could theoretically never have to fill up between recharging.

By the end of this year, GM will offer eight hybrids, including the two-mode gas-electric hybrid Saturn Vue. By the end of 2012, GM promises to have 20 hybrids on sale.

After introducing a Chevy Malibu with a four-cylinder engine and a six-speed transmission a month ago — a first in the American auto industry — GM plans to drop six-speed transmissions into another 2 million vehicles.

A six-speed transmission, however, doesn’t look like it can save GM’s Hummer brand. Once the image of garish American excess, Hummer has become the poster child for needless waste and threat to the environment.

The Hummer brand will need a dramatic makeover, Chief Operating Office Fritz Henderson told The Detroit News, or it may have to go.

In an era where small is chic, it’s just too big.

Detroit News staff writer Sharon Terlep contributed to this report. Scott Burgess is the auto critic for The Detroit News. He can be reached at (313) 223-3217 or sburgess@detnews.com.