|GM Shows Off Volt and Stumps for a Loan |
September 16, 2008
On its 100th anniversary, General Motors workers cheered as the
company revealed the electric-powered car intended to make GM a vehicle
technology leader. But after all the hoopla surrounding the Chevrolet Volt,
executives also say a government loan package and access to credit are important
parts of GM’s next century.
Chairman and CEO Rick Wagoner, speaking to reporters at Tuesday’s centennial
celebration inside GM’s world headquarters, said the recent turmoil in the
financial markets should not affect the loan package now before Congress.
The $25 billion in loans were approved last year as part of an energy bill and
should now be funded to help the industry build next-generation automobiles and
meet government fuel economy standards, Wagoner said.
“Really a relatively small fraction of the investment the industry will have to
make to achieve these improvements was to be provided for by direct loans,”
Wagoner said. “We’re just asking that those loans now be funded and that the
rules and procedures to be able to draw against those loans be finalized
General Motors Corp., Ford Motor Co. and Chrysler LLC have been working to get
Congress to fund the loans after months of tight credit markets, tepid sales and
high gasoline prices.
Fritz Henderson, GM’s chief operating officer, later told reporters the company
may have to make further cuts if the loans don’t come through and the U.S. auto
market doesn’t recover.
“We could have to do some more things for sure,” he said. “Do I have my game
plan laid out today? No.”
GM, which has lost $57.5 billion in the past year and a half, has a liquidity
plan that calls for $10 billion in internal cuts and raising another $5 billion
through asset sales and borrowing over the next 15 months.
The company may have to cut more costs if the credit markets remain tight,
Henderson said. While he expected GM to meet its liquidity targets, Henderson
said he could not predict what will happen in the credit markets, which affect
consumer as well as corporate borrowing.
At the celebration, Wagoner showed off the production version of the Volt, which
will be able to go 40 miles on a single charge from a home outlet.
“General Motors’ second century starts right now,” he said as Vice Chairman Bob
Lutz drove the four-passenger sedan onto a stage.
Lutz told reporters that GM will be able to develop products like the Volt even
if it doesn’t get the government loans, but the company would prefer to have the
financing as it faces a difficult balancing act between spending to meet
government regulations and developing new products.
“Obviously it’s clear that government loans would take a lot of the stress off,” he said.
Wagoner said GM has been testing the Volt’s lithium-ion battery packs and is
confident in their performance. GM said it will cost about 80 cents to fully
charge the Volt at 10 cents per kilowatt-hour, which is about the national
average rate. After that, the batteries will be recharged by a small gasoline
engine that allows the car to travel hundreds more miles.
“It’s proof that the century-old General Motors is alive and well and that it
intends to lead in reinventing the automobile,” Wagoner said.
GM hasn’t announced the Volt’s pricing, but it’s expected to cost between
$30,000 and $40,000.
The Volt is due in U.S. showrooms by November 2010. The director of GM’s Adam
Opel AG unit said Tuesday in Germany that Opel wants to sell a car based on Volt
technology in Europe in 2011.
The Volt even converted one of GM’s biggest critics, director Chris Paine, whose
2006 documentary film “Who Killed the Electric Car?” accused GM of conspiring
with the oil industry and the U.S. government to cancel its 1990s EV1 electric vehicle.
Paine, invited by GM to attend the centennial, took part in a panel discussion
about the future of transportation. GM paid his expenses, he told reporters.
“My film wasn’t supposed to be a grudge match with GM,” he said. “It was about
why we weren’t able to begin to transition to a new automotive generation 10
years ago when we could have.”
Paine said he still believes GM was wrong in killing the EV1, and he concedes
that taking part in the centennial could give the appearance that he’s part of
the GM public relations machine.
But he was intrigued by the Volt and a resurgence in electric car interest.
“The corporation isn’t always wrong. If they’re doing this and it’s more than
press, then I want to be here to cover it,” said Paine, who is making a new
documentary about the “revenge” of the electric car.
“The fact that they invited me says a lot,” he said. “Maybe we’re mending fences
if we’re doing this now.”