Restructuring Deadline Looms: What's Next for the Chevy Volt?


Updated: A critical week lies ahead for the U.S. auto industry and GM’s Chevy Volt: On Monday, President Barack Obama is scheduled to reveal the next chapter in the government’s bailout plan, announcing the first recommendations from his auto task force, which test drove GM’s plug-in hybrid Chevy Volt earlier this month as part of an onsite scrutiny meant to help determine whether or not to swoop in with another round of rescue funds.

Swoop or no swoop, General Motors (s GMC) is in for a serious shakeup: Late yesterday, the Obama administration asked GM’s CEO Rick Wagoner to step down as a condition of more bailout money. Wagoner agreed, and COO Frederick Henderson will take the reins, for now.

This week was also supposed to mark the final deadline for GM and Chrysler to submit restructuring plans, but by Friday afternoon the task force had all but settled on giving GM a 30-day extension because of an impasse in negotiations with bondholders. The automakers are now set to submit “assessments of where their restructuring efforts are heading” by Tuesday, according to the Wall Street Journal. UPDATE: The task force has concluded that while GM can become a competitive automaker with a major overhaul, the company’s restructuring plan “is not viable.” The government will give GM 60 days of working capital to develop a more aggressive plan. Chrysler, meanwhile, has 30 days to complete a tie-up with Fiat SpA, as Reuters reports. Otherwise, Obama’s administration will cut off all government aid to the automaker.

At previous bailout benchmarks — the hybrid parade to Capitol Hill in a bid for aid last December and the turnaround plan submitted last month — GM has trotted out the Volt as proof of its commitment to innovation and fuel efficiency. At this stage, GM is hoping to snag another $16.6 billion in bailout money to pay its bills and avoid bankruptcy. It has already received $13.4 billion.

While the Volt won’t be in the hot seat this time around (Obama’s auto task force will focus on GM’s efforts to shrink debt and cut costs amid slumping demand, Reuters reports), the company has made a point of trumpeting progress on the vehicle. Delays in finalizing its restructuring plan and the uncertainty surrounding its finances would seem to put big “ifs” in a plan to debut a product that won’t generate profit for some time. But last week, GM insisted it remains on track for the first fully integrated Volts to come off assembly lines by June 1 and models to hit showrooms in late 2010. So, what’s next for fans of the Chevy Volt? Hoping the rest of the company doesn’t crumble around it.


Russ Finley

There’s a fine line between pessimism and reality. There are a lot of unknowns. Can GM sell enough Volts at the price they will be asking to make a dent? The public thinks it is an electric car but it isn’t. It is a plug-in hybrid with a huge battery. The public thinks the on-board generator will keep those batteries charged, but it won’t. When in hybrid mode it will likely get lackluster mileage. I discuss why in detail here:

Will people bother to plug them in knowing they don’t have to? How will they react to the poor gas mileage while in hybrid mode? Will it be reliable?

Concepts like the Bluecar with its capacitor/battery design may eclipse the Volt design within a year or so of its release:

Call me a pessimist, but this could be another EV1 debacle in the making.


I think GM will be forced to produce the Volt in masses, at least I hope so. I think right now when we are sort of starting from the bottom up again with the car companies there is a great opportunity to rebuild them in ways that make them competitive now and in the future. One of GM’s major problems has been that they have no future outlook, they only focus on what is popular at the time and think it will continue that way indefinitely. It looks like right now Chrysler will fail or do a deal with the Italian car maker which really has no real push towards hybrids but I think Chevy will be forced to produce hybrids. I still really don’t get the firing of Wagoner. He did do a terrible job but the guy they are replacing him with is basically the same as him as far as ideology. I hope they can use this as an opportunity to look towards the future as we all know they cannot continue doing the same thing they are now.

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