GM's Bad Marriage: SUVs and Trucks Until Death Do Them Part?

I don't really understand General Motors. The company is totally on the ropes, reporting a three-month loss of $15.5 billion in early August, with North American sales down 20 percent. Some 74,000 workers could lose their jobs in a new round of buyouts and early retirements. And more factories making big SUVs and trucks will close.

The Tahoe XFE: only modest fuel-efficiency gains.

We're still waiting for competitive small cars that would get people excited about going into a GM showroom. Meanwhile, the company's strategy is...to make minuscule improvements to its big Silverados, Sierras, Tahoes and Yukons and paint them PR green.

The new Xtra Fuel Economy (XFE) models (all with two-wheel-drive and the 5.3-liter V-8 engine), deliver a five percent improvement in highway mileage and seven percent in city driving! Wow! A combination of weight loss, aerodynamics and mechanical improvements gets them to 15 city and 21 highway! Standard big boys are at 14/20, so if you do much highway driving you'll hardly notice an improvement.

The same basic problem exists with GM's big hybrids. The '06 Chevy Silverado Hybrid, for instance, delivers 16/19 mpg. Not exactly impressive, and again hardly better than the standard (and cheaper) truck. For '09, GM will put its sophisticated dual-mode hybrid system in the Silverado, for a claimed 25 percent overall fuel economy improvement. But it's still a gas guzzler.

Guess what? GM trotted out its $50,000 dual-mode Yukon and Tahoe hybrids (21 city/22 highway, comparable to a standard four-cylinder Toyota Camry), and sales have been, well, slow. Instead of the projected 10,000 to 15,000 per year, GM has been selling more like 500 a month.

Here's the problem: They're too big! People don't want big cars and trucks anymore! GM argues that it can have more impact on the environment by improving the performance of the big vehicles that "people want to buy" than it can making small, fuel-efficient cars. But that argument is threadbare today.

Signs of life at GM include the car I'm driving this week, a Chevy Cobalt XFE. With nary a hybrid battery in sight, this stripper (manual transmission, roll-up windows, manual locks) gets 25 mpg in the city and a glorious 36 on the highway.

The 2.2-liter, four-cylinder Cobalt XFE, in coupe and sedan models, achieves its magic with engine tweaks, low rolling-resistance tires and weight loss. I enjoyed driving it just fine, and even got some exercise vigorously rolling down those windows.

Maybe GM's next XFE should be based on the 24/34 Chevy Aveo -- maybe then we'd zoom past 40 mpg.