Earlier this year while General Motors (s GM) was submitting its restructuring plans and set to hear the first recommendations from President Barack Obama’s auto task force, the company’s much-hyped plug-in car, the Chevy Volt, was bound up in a waiting game that threatened to take down the billion-plus-dollar Volt development initiative right along with the company.
Now, two months later, the automaker has filed for bankruptcy, and the so-called New GM is reiterating its plans (in several releases today) to put fuel sippers and alternative propulsion vehicles like the Volt at the center of its future lineups. But can a bankrupt company in which the U.S. government now holds a majority (60 percent) stake really afford to push a pricey model that it doesn’t expect to be profitable until after second-generation models roll off the assembly line?
GM insists that it can — and that it remains on track for a 2010 launch. On Saturday, Gary Cowger, VP of GM’s Global Manufacturing and Labor Relations group, wrote in a post on the company’s FastLane blog that the Volt, along with the upcoming Chevy Cruze and a new, small car to be built in the U.S., represent a “significant piece” of GM’s effort “to be the greenest automaker in the world.”
For a company that’s now worth less than 3-year-old niche electric car startup Tesla Motors (at least based on Friday’s closing stock price for GM and the valuation for Daimler’s recent investment in Tesla), the road to world domination in the cleaner vehicle space will likely be a long one.
But this morning, GM CEO Fritz Henderson (pictured) said in a release that he envisions the company launching the innovative, cleaner car effort as soon as it emerges from bankruptcy — a process that GM hopes will take only 60 to 90 days. (Obama administration officials say GM could return to public trading in 6 to 18 months):
From day one, the New GM will be well-positioned to capitalize on the award-winning vehicles we have developed and launched during the past few years, and on our investments in exciting new technologies like the Chevy Volt…The New GM will play a critical role in the future of the automobile, and assure that the U.S. has a strong stake in this rapidly changing global manufacturing industry.
GM has a delicate balance to strike here — trying to show its intent and ability to meet government demands for more innovation and a more fuel-efficient fleet, while also demonstrating frugality with taxpayers’ dollars. GM has time and again leaned on the Volt to bolster its credentials for its green innovation claims, but swift competitive salvation is a tall order for a car and technology that remain years away from securing a significant share of the mass market.
In March, Henderson — new to the chief executive job after the Obama administration asked CEO Rick Wagoner to step down — said GM would have to improve profit margins across the entire GM fleet in order to have the resources to invest in advanced technologies, such as the Volt. This morning, Henderson emphasized in a press conference that the New GM, made up of company’s strongest brands, will be able to “increase our investment in new technology.” The days in which GM would launch 15 new vehicles and hope five or six of them would succeed, he said, are over. The New GM will launch fewer models per year and focus on making every one earn its keep.
Once the dust of bankruptcy and bailout settles and GM gets down to the business of remaking itself with decreasing government influence, it will be interesting to see what role it ends up assigning to the Volt, and how much the car can actually carry.
Chevy Volt production show car image courtesy General Motors