Oh no! GM cancels Cadillac’s new V-8

It wasn’t that long ago that we were talking about a new V-12 for Cadillac and the announced $300-million investment in GM’s Tonawanda, New York engine plant that was to build the replacement for the Northstar V-8 (which is slated to be retired at the end of this decade).

Today, GM announced that development of this new V-8 has been canceled and that the investment in the engine plant is off.

This is due to multiple factors, the most important is the new CAFE regulation that requires automaker’s fleets to reach a combined 35mpg standard by 2020. Since fuel economy is most directly related to engine displacement – this will likely result in future luxury models being equipped with high-technology V-6 engines (some with forced induction) rather than the traditional, loafing V-8’s that naturally consume more fuel.

Supporting this move is the latest 3.6l direct injection V-6 in the STS and CTS that very nearly matches the power output of the current 4.6l Northstar with significantly better fuel economy.

Before you go running for the hills and crying that BMW and Mercedes will eat Cadillac’s lunch if V-8s are phased out – realize that they will have an even harder time meeting the new standard since they don’t have the wide range of small-cars (though they do have Mini and Smart, respectively) to take the sting out of the mileage that their luxury brands will need to hit under the new standards. This is one area where GM’s sheer size will help keep Cadillac pure (by offsetting the more powerful engines the Cadillac buyer expects).

It will also be interesting to see if this pushes Cadillac to more quickly take a version of the Volt series-hybrid in order to help offset the Escalades and large sedans that make up the core of their fleet.

It will be an interesting decade or so – starting now.