GM Delays Several New Vehicles

Several new General Motors Corp. vehicles, including its next generation of minivans, will reach showrooms three to six months later than the automaker had planned.

GM has portrayed the decision as a result of a routine reappraisal of product schedules. But Wall Street analysts said GM's seven-month struggle to introduce two new small cars had diverted engineers from the other vehicle programs, contributing to the delay.

Whatever the cause, the scheduling change will give GM's competitors more breathing space in crucial market segments. Chrysler Corp., for example, plans to start selling a new minivan this spring, and can now look forward to a year and a half without serious competition from GM.

GM brought out its current line of front-wheel-drive minivans, including the Chevrolet Lumina, in 1989, and their doorstop shape never caught on.

Further, the later the new cars and trucks arrive in showrooms, the more likely GM could find itself with more new vehicles than buyers, should the economy weaken.

But Wall Street analysts said that if the delay prevented, with future vehicle introductions, the kind of production problems GM has experienced lately, it would be a boon.

"They could rush the program, and then you end up with problems," said Joseph S. Phillippi, an auto stock analyst with Lehman Brothers in New York. "The delay is more than likely going to result in _ I would hope, I would expect _ in launching cleaner."

GM President and Chief Executive John F. Smith Jr. has made establishing a strict "cadence" for new product introductions a cornerstone of his turnaround strategy. Too often, he has said, GM postponed or canceled product plans when the economy went sour, allowing its lineup to grow stale.

While GM has managed new light-truck introductions without serious delays, it has had great difficulty bringing out some cars. GM began producing the new small cars _ the Chevrolet Cavalier and Pontiac Sunfire _ last August, but executives say the plant where they are made might not reach full production before the third quarter of this year.

GM denied that the scheduling changes would cause even short-term competitive woes.

"We can assure you that our product lineup of offerings will be very competitive, in terms of their timing," said Linda Cook, a GM spokeswoman. "There were some minor adjustments made in a few programs, but no more than a few months."

She acknowledged that GM's next generation of minivans was among those programs. The vans were originally set to arrive in late spring 1996, but are now unlikely to reach showrooms until fall 1996.

At a meeting with securities analysts near New York on Wednesday, GM's top executives indicated that the new Pontiac Grand Prix would also be delayed from mid-1996 to late 1996, analysts who were present said. And an all-new model, the Chevrolet Malibu, is also likely to be delayed, since it shares a basic chassis with the two other vehicles.

David Healy, auto industry stock analyst with S.G. Warburg, said he had already expected the vehicles to arrive late. "It appeared to me that GM had almost nothing for 18 months, and then a lot coming all at once, which sort of conflicted with the objective of a smooth regular introduction of new models," he said.

The bunching of new models at GM means that at least for the next two years, its "market share will tend to continue to drift down," Healy said.

But David Bradley, a stock analyst at J.P. Morgan, said that the new vehicles would be worth the wait. "They're stunning," he said after getting an early look at them."

Phillippi of Lehman Brothers said GM executives told analysts that the difficulties in introducing the Cavalier and Sunfire contributed to the delay.

One big headache has been the body shop, where metal-stamping dies for body parts were sized incorrectly, Phillippi said. GM has had to pull engineers off other programs to try to fix the problems, he said.

Cook denied, however, that the difficulties had hampered the other introductions.

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