GM Shuts Down High-Performance Vehicle Unit

Closure is temporary, GM insists, and the unit's 60 engineers will be reassigned to work on ‘core, volume products.’

VANCOUVER (CP) -- The brief news release was sandwiched between the rest of the bad news: General Motors, bleeding cash, was shutting down its High Performance Vehicle Operations department.

The closure is temporary, GM insists, and the unit's 60 engineers will be reassigned to work on "core, volume products."

"They're a very talented group, a very passionate group of engineers," says Vince Muniga, a GM spokesman in Detroit. "They're going to take their knowledge and they're going to spread it across the various vehicle lines."

Clearly, an in-house shop that does nothing but think up ways of hot-rodding GM products is a luxury when what was once the world's largest automaker is slashing production, laying off thousands and begging government for money to avoid bankruptcy.

But High Performance Vehicle Operations, and its counterparts in other automakers, have an impact on the troubled automaker's image out of proportion with its size.

People who follow the car business see its closure as a sign that performance is headed for automotive limbo, comparable to the 1970s when high fuel prices and new emission standards killed the golden age of muscle cars.

Performance cars may be niche products but they burnish a company's reputation with auto enthusiasts and the publications they read. Car buffs are considered opinion leaders, often influencing the purchase decisions of relatives, friends and neighbors.

Now car enthusiasts worry the renaissance of high performance that began in the 1990s is ending as companies rethink their lower-volume offerings. Honda has shelved a second-generation Acura NSX and Toyota is cancelling the Lexus LF-A.

High Performance Vehicle Operations, part of its larger Performance Division, was set up in 2001 and headed by GM executive and veteran racer John Heinricy until he retired last fall. It was the automaker's department of "what if we ..."

Brainstorming engineers loaded up regular production models with outsized motors and other performance goodies, then turned them over to auto-enthusiast magazines to wring out.

It also developed concept cars for the Specialty Equipment Manufacturers Association (SEMA) annual trade exhibition in Las Vegas, which is highly influential in setting trends in design and performance.

Some SEMA cars make it to production, like the Cadillac CTS-V, a 556-horsepower sedan that Heinricy drove to a record-setting lap time for production cars around Germany's challenging Nurburgring north circuit.

It also spawned the Cobalt SS, which gave Chevrolet's econobox rental-fleet favorite surprising performance cred.

But while they gave often mundane product lines a welcome halo, these low-volume models weren't hugely profitable.

Muniga says engineers came into the unit and typically stayed three years to learn how high-performance applications could be used in production vehicles and componentry. As well, they'd learn to work with exotic materials like carbon fiber.

Automotive websites and blogs were quickly revved up by GM's announcement late last month. Opinions ranged from pragmatic resignation to hand-wringing laments about another nail in Detroit's coffin and the death of performance.

Muniga says existing performance models, such as the Corvette-engined CTS-V, will remain in production but no future projects are planned.

The same goes for performance cars developed outside the defunct unit, such as the crown jewel Corvette and the revived Chevrolet Camaro -- built at GM's Oshawa, Ont., plant -- that was designed from the start to include a hot SS model.

"That car was actually developed on our regular vehicle line team," says Muniga.

But future products such as the upcoming Chevy Cruze compact may not get performance versions.

"I know our emphasis right now is going to be on fuel economy and focusing on advanced vehicle technologies or alternate fuels, things like that," says Muniga.

A spokesman for SEMA, whose show last year drew 15 automakers among its 2,000 exhibitors, says the Detroit Three remain committed to the annual November show.

"I suspect there'll be some economizing but I think they'll all be back with major presence," says communications vice-president Peter MacGillivray.

SEMA is a touchstone for the major manufacturers, he says, because the automotive aftermarket routinely spawns products and ideas that become mainstream, from the in-dash radio to GPS navigation systems.

But MacGillivray agrees that the current performance era -- at least driven by the automakers themselves -- is ending.

"There is a huge emphasis on alternative fuel and hybrid vehicles, vehicles that are more practical and economical than some of them that we've seen in the past," he says.

That simply means performance will head back to its roots in the performance parts aftermarket.

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