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Corvette's Challenge

Can the sleek and powerful reincarnation of the archetypal American sports car drive Chevrolet towards its bygone glory?
By Paul A. Eisenstein | From Liev Schreiber, November/December 2013
Corvette's Challenge

The fields are the color of late summer straw, the dry grass and weeds thrashing wildly as we blow down the empty, two-lane blacktop winding through the back hills of Monterey County. A shadow shoots across the road, a small helicopter cutting in front of us almost at eye level—which is low enough considering we’re seated inside the new 2014 Chevrolet Corvette. Again and again, the pilot comes close enough to strafe. But the warning sign on the side of the road assures us the police chopper is only there to check our speed.

He’s just a minute too late. A mile back we were nudging triple-digits before hitting the oversized Brembo brakes. As he comes by for a final pass we’re crawling along at barely the speed limit. But the pilot can be excused for wanting a last look as he hovers above. It seems like everyone wants to check out the new Stingray.

The end of the 2013 model-year marked several significant occasions for Chevrolet, notably the 60th anniversary of the Corvette. Originally conceived as a concept vehicle, chief designer Harley Earl’s two-seater was such a hit at General Motors’ annual one-company car show, Motorama, that the company rushed it into production late in the 1953 model-year. The original ’Vette was more show than go, however, cobbled together from off-the-shelf parts, including a chassis and suspension borrowed from the far more plebian ’52 Chevy sedan. It didn’t matter. The striking design, complete with its long hood and low, swept-back windshield—and the first-ever use of a fiberglass body—created a sensation. The cars flew off showroom lots faster than the underpowered 265-cubic-inch V-6 could launch the Corvette from 0 to 60.

It didn’t take long for GM to correct the power train problem with the first-generation Corvette—or C1, in fanspeak—and, over the years, each new model came stuffed with bigger engines, shod with fatter tires. By the time the last C6, or sixth-generation, Corvette rolled off the assembly line some months back, it could boast of being one of the fastest and most powerful vehicles on the road, certainly a challenge to anything costing nearly twice the price. But as GM put together a development team for the Gen-7 Corvette it was increasingly clear that raw horsepower and 0 to 60 times wouldn’t be good enough. Despite its enviable performance, the Corvette had been relegated to the gold-chain crowd. “It hasn’t been able to compete for the (affluent import buyers), but rather for the guys down at the local McDonald’s who’ve saved up some money,” contends George Peterson, chief analyst with the consulting firm AutoPacific, Inc.

As the car that would become known as the C7 went into production, Chevrolet promised it would no longer settle for good enough. It was out to top the best-in-class, targeting the likes of the Porsche 911. But could it deliver? It didn’t help that the project was launched just as GM was about to fall into the financial abyss. And so, as it began drawing up the paperwork to file for Chapter 11, the Corvette project was repeatedly put on hold. At the time, it seemed like the end of the world, recalls product marketing manager Harlan Charles. “Ironically,” he adds, “it may have been the best thing that could have happened.”

Even when the Gen-7 program was shelved, the development team quietly continued working away, hoping that GM would pull through bankruptcy and eventually find the cash to put the project back on track. In mid-2009, a nearly $50 billion federal bailout in hand, GM gave the go-ahead. But now the Corvette team had an arsenal of new gear that might not have been ready had the C7 held to its original, aggressive timetable. That included an all-new, 6.2-liter V-8 featuring direct-injection, variable-valve timing, even displacement on demand, allowing half the engine’s eight cylinders to shut down when power demands are low, sharply reducing highway fuel consumption. The results? A 455-horsepower tire-spinner, (460 with the optional Z51 Performance Package), that can go from 0 to 60 in just 3.8 seconds while still delivering as many as 29 miles per gallon. Put another way, that’s 6 percent better mileage than the outgoing Corvette C6 despite an 11 percent jump in horsepower.

Power alone won’t win back buyers, so the new Stingray—the first Corvette to carry that badge since 1976—also features an enviable array of chassis, suspension and safety technologies. There’s an all-new hydroformed aluminum frame that shaves significant mass while delivering the stiffest Corvette chassis ever, about 60 percent stiffer than the old C6. And notably for its roof and hood, the new car makes extensive use of ultralight carbon fiber, a material traditionally found only in ultra-exotic supercars from Lamborghini, Ferrari or McLaren. Then there’s the latest-generation MagneRide system which replaces conventional shock damping oil with a magnetorheological fluid. Apply a varying amount of magnetic force and it instantly changes viscosity—a fancy way of saying the shocks can instantly shift from soft to stiff or anywhere in-between. On the street, it gives the new Stingray the soft and cozy ride of a luxury sedan. On track or in the winding roads of Monterey County, the new C7 rides, as the phrase goes, like it’s on rails.

The 2014 Corvette isn’t without controversy. Though now almost identical in size to the Porsche 911, the new car’s styling is decidedly edgier yet remains comfortably familiar—to some anyway. Others wish its designers had taken a more dramatic turn. There were also those who had hoped for a more European-style approach with a smaller, turbocharged engine mounted amidships, like a Ferrari, rather than the classic front-engine/rear-drive layout. And those hoping for a more state-of-the-art eight-speed automatic will have to settle for the otherwise competent six-speed gearbox—or the seven-speed manual—until the 2015 model-year.

For most, though, the package delivers, both on the performance and styling front, and at a starting price of $51,000. “The interior is probably the single most upgraded part of the car,” notes Tadge Juechter, the C7 program’s chief engineer. No surprise considering critics and owners almost universally lambasted the old cockpit. Ed Welburn, the global chief of product development personally oversaw the interior redesign, much to the initial frustration of team members who watched him repeatedly reject one alternative after another, finally giving the nod barely 18 months before the new Corvette was first unveiled at the 2013 Detroit Auto Show—a mere heartbeat in automotive terms. This “high-stress working environment” now features a number of high-tech touches designed to improve the driving experience, such as the eight-inch reconfigurable instrument panel and a second LCD display for infotainment and other vehicle controls. The latter display, incidentally, is being billed as the brightest of any vehicle on the road. For the first time ever, Chevy will offer both a standard seat and a more supportive option for serious performance drivers.

“The car feels completely different” from Corvettes of the past, proclaimed a first review from AutoWeek magazine, which dubbed the 2014 Stingray “a new archetype.” Meanwhile, Car & Driver magazine gave it, “A+ for effort, straight As for execution.”

But will that matter? Imports today control a record share of the overall U.S. automotive market—and they dominate in the luxury and sports car segments. Corvette sales barely topped 14,000 last year, well off from the record 54,000 of 1979, and a third as many as were sold in 2007. By raw numbers, that’s still an impressive figure. Porsche set its all-time U.S. record in 2012 with sales of only 8,528 911s. But it also moved 3,356 Boxsters and Caymans. And Porsche also set sales records around the globe. Chevy, by comparison, delivered a mere handful of Corvettes outside North America.

The Detroit maker is determined to both rebuild demand in the U.S. with the new C7 Stingray, and gain traction outside the traditional home market. But it won’t be easy. “It’s going to take work to reach people who’ve never been in a Corvette before,” admits Charles, noting that Chevy will be staging a series of drives across the country—with an emphasis on such
import-oriented markets as New York, Miami and Southern California. The goal will be reaching those “influencers” who might normally buy vehicles like a 911 or the new and widely hailed Jaguar F-Type, but who could be motivated to consider something different, and whose choice could impact family, friends and coworkers. For his part, analyst Peterson says the stars could be in alignment this time. “The new car checks all the boxes and should compete against the imports.”

In the golden era of American muscle, the Corvette served as a “halo car,” helping draw buyers into Chevrolet showrooms for the rest of the maker’s lineup, more mundane models. But, in a curious flip-flop, the mainstream products may this time give a boost to Corvette.

Four years after its bankruptcy, General Motors is a very different company than the one that entered the Chapter 11 process. It has been pared back from eight to four North American brands. Chevy, Cadillac, Buick and GMC survived the cut, while Pontiac, Saab, Saturn and Hummer didn’t. The maker once known as “Generous Motors” also closed scores of parts and assembly plants across North America and slashed tens of thousands of manufacturing and white-collar jobs.

Plenty of companies have been subject to the surgeon’s knife in recent years. Just ask Kodak, which recently emerged from its own run through bankruptcy with just 8,500 employees, about 5 percent of its one-time peak. Like the former camera and film giant, GM has to reinvent itself, especially in the eyes of those who continue to dismiss it as Government Motors for taking the bailout necessary to its survival. CEO Dan Akerson, a one-time Navy officer who spent his career in the telecom and financial industries, has set out ambitious financial targets that have so far generated enthusiasm among analysts—if a bit more skepticism among investors. But the best laid plans won’t mean a thing if consumers don’t agree.

So, perhaps it was especially good news when the highly influential Consumer Reports magazine recently named the new 2014 Chevrolet Impala the best mainstream sedan on the market, a blow to archrival Toyota’s new Avalon. Chevy, meanwhile, was the only mainstream brand in the top five on J.D. Power and Associates’ closely watched 2013 Initial Quality Survey, a measure of off-the-line quality, with GM as a whole the number one manufacturer. Chevy and several of the other surviving GM brands have fared equally well in other recent surveys.

That’s not to say it’s all upside for the Detroit maker, which is vying for the global sales lead with rival and Japanese king-of-the-hill Toyota. GM had big aspirations for the 2013 Chevrolet Malibu, its entry into the midsize market, a segment it once dominated. But the redesigned four-door has been a second-tier player in the past year, a reminder of the long-running mistakes made by a product development system that had grown bloated and out of touch with consumers. Admitting the vehicle’s redesign “was not aggressive enough,” Mark Reuss, GM’s president of North American operations, tried to downplay the setback by noting the Malibu “was done before we went through bankruptcy.” Whatever the reason, Chevy was forced to rush out an “emergency refresh” for 2014 with a more aggressive face, upgraded interior and a number of power train improvements.

The Malibu mess provides a cautionary note that GM still hasn’t gotten everything under control, warns analyst Joe Phíllippi, of AutoTrends Consulting. Complicating matters, the maker has undergone a series of management shake-ups over the course of 2013, including the departure of three well-regarded senior executives at the Cadillac division. The once self-styled “Standard to the World” has slipped behind such imports as Lexus, BMW and Mercedes-Benz. And it is a nearly invisible also-ran outside North America. The division recently launched production of its new XTS sedan in China, which is expected to become the world’s largest luxury car market before the end of the decade. And it is looking to gain momentum overseas with such models as the ground-up 2014 redesign of the CTS sedan. Cadillac also got a big boost when its compact ATS was named North American Car of the Year by a jury of 50 U.S. and Canadian automotive journalists last January. It was also billed by many critics as Detroit’s first truly credible competitor to the BMW 3-Series.

Taking Cadillac abroad has been a long-standing goal—and a long-running failure. But GM has other challenges overseas. It has lost more than $16 billion in Europe with 13 consecutive years of red ink. A series of turnaround plans have failed to deliver. The most serious economic crisis on the Continent in decades brought another $1.8 billion loss in 2012 rather than the break-even results earlier forecast. GM now plans to close a key German plant and make other major cost reductions as part of the latest revival plan personally authored by vice chairman Steve Girsky, a former Wall Street automotive analyst. Its failure likely wouldn’t sit well with investors and could lead to a wholesale shake-up in GM’s top ranks.

Despite the challenges, things are generally heading in the right direction. GM has posted a string of quarterly profits since emerging from bankruptcy, and while its stock price hasn’t lived up to initially strong expectations, it’s still running ahead of the $33 figure set during a November 2011 IPO. It’s helping to have the federal treasury sell off its holdings. The White House plans to sever its ties no later than April.

Analysts like Phíllippi contend that some improvements in Europe could send the share price soaring. He also notes that GM has been gaining ground in key emerging markets, notably China where it is vying with German rival Volkswagen AG for dominance. That’s one reason the Chevrolet division expects to have sold more than 5 million vehicles worldwide for the first time when the books are closed on 2013. Almost two-thirds of those sales are coming from offshore, a significant development for a brand that once proclaimed, “See the USA in your Chevrolet,” and billed itself as being as American as baseball, hot dogs and apple pie.

Despite that shift, the U.S. will remain critical to Chevy and to GM, on the whole. And the real challenge will be to win back buyers who have largely abandoned the maker during the decades when it produced mostly mediocre products of questionable quality. The Boomers will be a tough challenge, GM officials admit, even as they look for ways to win over the next generation, the skeptical Millennials.

Despite mistakes like the 2013 Chevy Malibu, the GM lineup going into 2014 is perhaps the strongest it has been since the 1960s, when the maker controlled more than 60 percent of the American market and the Justice Department was pushing to break the carmaker up on antitrust grounds. Today, GM holds barely a third of that market share with a fraction of the brands. It is facing tough competition from players most Americans hadn’t even heard of a half-century ago.

But the restructured company needn’t control the American market anymore, just hold onto a firm share of it. That’s far from guaranteed, concedes Chris Perry, the general marketing manager for Chevrolet. But as the media drive of the new Corvette winds down, the former Hyundai exec can’t help but smile as his smartphone lights up with the positive tweets and rave reviews coming in. “It will take time” to win over import sports car loyalists, he concedes, but Perry says he’s confident that the 2014 Stingray has the best chance to deliver on its promise in the market since the original ’Vette screeched into showrooms six decades ago. And that, GM is betting, will put a high-speed halo over the entire company.

Paul A. Eisenstein is publisher of the website The DetroitBureau.com.