By Jim Meachen and Ted Biederman

The timing of the January launch of an all-new Chevrolet Tahoe couldn’t be worse said industry analysts in September 2005 following the devastation of Hurricane Katrina.

Katrina had just ravished a wide area of the Gulf Coast and the impact on gas prices highlighted a worst-case scenario for Detroit’s largest automaker: As gasoline prices rise, the product mix shifts away from big SUVs and profits evaporate.

“Stick another fork in GM — they’re almost done,” said some.

Even before the storms of ’05, the experts were questioning GM’s decision to abandon some car initiatives in favor of putting its new lineup of SUVs on a fast track. GM’s thinking, perhaps, was that the full-sized sport utilities are where big profits are made. And new full-sized SUVs would help the company regain lost sales — and lost profits.

Now GM officials are saying they don’t expect the full-sized segment — about 750,000 units a year — to grow in calendar 2006 or 2007, but they are confident their new vehicles will steal sales away from competitors. General Motors owns more than a 60 percent share of the big SUV market and it wants to keep it that way.

Officials still maintain that getting the all-new best-selling Tahoe ready for a January launch, followed closely by the introductions of the GMC Yukon and Cadillac Escalade, were the correct course of action. Close on the heels came the second quarter launch of the larger Chevy Suburban, GMC Yukon XL and the Cadillac Escalade ESV. Now all in the face of $3+ per gallon gasoline.

Before we got our hands on a 2007 Tahoe, we wondered if the new sport utility would be business as usual for the General. Would the new truck simply be a continuation of the old truck wrapped in some new clothes?

The answer to that question is a resounding NO.

The Tahoe represents a giant leap forward and from early sales results the public has discovered this fact. Tahoe sales in January and February were 50 percent higher than for the same period in 2005 and even though May sales were off a scant 1.5 percent from May a year ago Tahoe year to date is up 26.7 percent over the same period last year.

In all – through May – 71,460 Tahoe’s helped off-set in part a dramatic downturn in the overall Chevy truck business – off 16.1 percent as compared to last year and GM trucks totally are off 13.6 percent vs. the same period last year.

The Tahoe easily won over at least one hard-to-sell person during our test week. “I’m really sorry to see the Tahoe go,” she said. “I really enjoyed it.” That’s high praise from a rather severe auto critic. It came on the last day of our week-long test drive as we moved another load of clothes, curtains and kitchenware to Goodwill from a storage unit we have been desperately trying to abandon.

On-road response is improved with new rack-and-pinion steering, the 5.3-liter pushrod V-8 has been upgraded with variable valve timing for better performance and cylinder deactivation for better gas mileage, fit and finish are excellent with tight gap tolerances, the interior is vastly upgraded with soft-touch materials, and the exterior styling is clean with a modern but rugged look.

The styling is just Chevy enough to create a Tahoe appearance, but in a more chiseled, slab-sided rendition. The unmistakable Chevy grille with the center bar adorned by a large Chevy bowtie has been restyled. It no longer extends through the headlights from one end of the truck to the other, but is neatly tucked between two elegant-looking triangular headlight enclosures. The clean, unadorned rear is highlighted by tall taillights that wrap around into the side of the vehicle.

Our top-end LTZ test model came with 20-inch polished aluminum wheels, which give the Tahoe a decidedly more aggressive stance. Seventeen-inch wheels are standard equipment and they look it.

The new Tahoe pulls smartly from a standstill and has a solid reserve of power for merging and passing with the 320-horsepower V-8. Despite the fact the engine is asked to pull nearly three tons, we found the performance satisfying.

The engine is capable of running on E85 ethanol fuel. E85 is a mixture of ethanol and gasoline – comprised of 85 percent ethanol, which is a renewable resource fuel produced in the United States mostly from corn and soy and 15 percent gasoline. E85 infrastructure is poor at best and is found mostly in mid-America. Unfortunately there are millions of E85 cars and trucks that rarely if ever see the ethanol-gasoline blend, all operating solely on gasoline.

While the initial run of Tahoe’s all come with 320 horsepower, a base 4.8-liter V-8 with 290 horsepower will start showing up on 4X2 models later this year.

One downside to the drivetrain is General Motors’ continued use of a four-speed automatic transmission when most of the competitor’s vehicles now come with five- and six-speed shifters. Extra gears usually yield better performance and improved gas mileage. To get six speeds you will have to move up to the GMC Yukon Denali or the Cadillac Escalade.

For those who pull big boats or travel trailers, towing capacity is a healthy 7,700 pounds.

The body-on-frame truck remains a solid off-road workhorse. It’s the real thing, not just a bad-weather station wagon for helping mom get the kids to school on winter roads. At the same time it offers a compliant ride without the truck-like feel of old.

When you drive big trucks you will pay at the pump. Even though gas mileage has been slightly improved in the 2007 Tahoe, it is still anemic rated at 15 city and 21 highway in the 4X4 model and 16/22 in the 4X2 version. The cylinder deactivation system, in which four of the engine’s eight cylinders cut off when not needed, may yield improved mileage on long interstate jaunts.

Maximum cargo volume is up slightly to 109 cubic feet and there’s a healthy 60.3 cubic feet behind the second-row seats, up four cubic feet from the 2006 model. Space behind the optional third row of seats has gone up 2.3 cubic feet to a useable 16.9.

Note that the third row does not fold flat into the floor as in some trucks including the Ford Expedition, but it does fold down and can be removed in two sections each weighing about 65 pounds.

Our test truck had second row captain’s chairs that could be powered down and then up against the front seats with the push of a button.

The dashboard is stylish with good use of quality plastics and excellent faux wood trim. Gauges are easy to read and the wide range of read-outs and settings is easily assessable.

A huge center bin will hold a purse, small laptop or a camera bag.

The Tahoe comes is three trim levels — LS, LT and sporty LTZ — starting at $33,115 in base two-wheel drive. The LT starts at $37,665 and jumps to $45,940 with the LTZ package. Our test truck came with navigation, rearview backup camera, rear DVD entertainment and a power sliding sunroof bringing the bottom line with destination charge to $51,935.

If you need a full-sized sport utility for towing, hauling or just because that’s what you want parked in your driveway, the new Tahoe is about as good as it gets. Isn’t that what disposable income is all about?

Essentials:

Base price: $37,665; as driven: $51,935
Engine: 5.3-liter V-8
Horsepower: 320 @ 5,300 rpm
Torque: 340 pound-feet @ 4,200 rpm
Transmission: 4-speed automatic
Drive: all-wheel
Seating: 2/3/3
Turning circle: 39 feet
Towing capacity: 7,700 pounds
Maximum payload: 1,776 pounds
Curb weight: 5,840 pounds
Fuel capacity: 26 gallons (regular)
EPA mileage: 21 highway, 15 city
0-60 mph: 8.6 seconds (Motor Trend)
Also consider: GMC Yukon, Ford Expedition, Toyota Sequoia

The Good:

• Clean exterior styling with a modern but rugged look.
• Interior fit and finish is exemplary with vastly upgraded materials.
• V-8 engine features cylinder deactivation for better gas mileage.

The Bad:

• The third-row seat does not fold flat into the floor as in some trucks such as the Ford Expedition.
• Gas mileage is still anemic despite cylinder deactivation.

The Ugly:

• When will General Motors finally say good-bye to the four-speed automatic transmission?