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New Line of GM Small RWDs
This is exciting news! It makes sense that GM wants to exploit this premium car niche, since the 3-Series is BMW's biggest seller around the world, by a wide margin.
The soon-to-be introduced '08 Cadillac CTS is getting excellent reviews in the automotive press. While the CTS competes with the 3-Series in price, its dimensions are very close to those of the 5-Series.
I'm thinking that since it will be positioned as a premium car, the margins on a RWD small car are wider than for a similar size FWDer, so a business case for this type of car makes sense too.