GM CEO Rick Wagoner and the company’s board have apparently noted the frustration and anger of consumers over gas prices in recent months. General Motors has announced several changes to its business practices including the potential sale of the Hummer name and the closing of several truck plants this week. These steps show that General Motors is concerned with its image and cognizant of changes in the auto industry.
Wagoner made a more impressive announcement that should please drivers looking for domestic hybrid vehicles. The board of General Motors has approved funding to produce the flex-fuel Chevy Volt in the company’s Hamtramck, MI factory. This move is meant to quell skepticism by competitors and industry observers that the Volt would reach showrooms by 2010.
General Motors is hoping that the Chevy Volt can meet and exceed expectations set during its introduction at the 2007 Detroit Auto Show. The Volt uses the E-flex propulsion system with the potential to run on gasoline, electrical power, ethanol and diesel. The lithium ion battery used in Volt prototypes can function up to 40 miles continuously without charging. This range does not sound that impressive without noting the innovative way that the Volt’s gas engine is used. General Motors claims that the Volt can achieve 640 miles before refueling because the gas engine is used to power a generator which recharges the battery.
The 2010 goal set by Rick Wagoner is limited by several factors. General Motors is still in the process of choosing a primary battery supplier between LG Chem LTD in Seoul and Continental AG in Hannover, Germany. The company’s officials may get requests for local and state tax breaks fast-tracked by officials but the initial costs may strain GM as it sees sales figure decline.
The larger problem for General Motors is the corporation’s hope that the Volt will become the next Toyota Prius. Toyota introduced the Prius in 1997 to Japanese consumers and 2001 in the United States. It has taken nearly a decade for the Prius to develop into an affordable, reliable and comfortable vehicle for the average driver. Rick Wagoner needs to know that the Volt must grow slowly in the next decade to achieve the same credibility as the Prius. This realistic outlook on the Chevy Volt may cause board members, investors and consumers to blanch at GM’s fast-track efforts when Honda, Nissan and Toyota are already ahead of the curve.
