Crucial weeks for General Motors

Executives in the Renaissance Center in Detroit, GM’s headquarters, are having lots of work right now. The once largest car maker in the world is losing about one billion dollars a month and the company is expected to change decisively over the next few weeks and years or disappear. On the one hand, GM is working with the equity fund Cerberus Capital to get a deal in order to merge with smaller competitor Chrysler. On the other hand, GM is betting on the success of the semi-electric Chevrolet Volt, which is planned to go on sale in 2010. The Chevrolet Volt is General Motor’s second attempt at producing an electric car, after the failed EV-1 project back in the 1990s. A couple of years later, GM destroyed all its EV-1s after California’s Zero Emission Mandate was eliminated (read This car is hot! – Tesla Motors’ electric sportscar), because they were economically unfeasible to produce. However, the documentary “Who killed the electric car” supports a conspiracy claiming that GM and the Big Oil Companies agreed to get rid of these cars in order to maintain their profits in SUV sales and gasoline. (see The electric car on the fast track )

Now, GM cannot afford a failure with the Chevy Volt. It is GM’s last chance to stay alive. Thus, it’s no surprise that the Volt will be produced in GM’s biggest factory in North America. The GM Volt is not an all-electric car, neither a hybrid. Unlike a hybrid, it can run solely on electricity for the first 40 miles. If necessary, a gas-driven generator kicks in and recharges the battery to extend the driving range. GM is expected to announce the supplier of the battery pack by the end of this year. Furthermore, GM still has to say how much the car will cost. To date, we just know that the car will be affordable with the prospect of government incentives and driving will be extraordinarily cheap in comparison with cars running on gasoline, especially for those who don’t drive more than 40 miles a day on average. According to some studies, this applies for most Americans and Europeans. The Chevy Volt will be perfect for daily suburb-downtown commuting.

GM expects financial aid from the government first, to stay operational and second, to merge with Chrysler. But merger talks are put on hold until Tuesday’s election. Meanwhile, the French-Japanese auto maker Renault-Nissan ended acquisition talks with Chrysler according to the Wall Street Journal.

http://money.cnn.com/2008/11/02/autos/chrysler_nissan.ap/

More on electric cars and the Chevrolet Volt:

“We’re reinventing the automobile” – Rick Wagoner, CEO and chairman of GM on the occasion of the grand old car maker’s 100th birthday

GMnext – past v.s. future

The Air Car could revolutionize transportation – an electric car without an electric motor

other top posts:

Our prosperity hangs by a thread as it is based on a limited resource – oil

OPEC’s plan to cut oil output to keep prices from falling emphasizes the urgency for the western world to get independent from the cartel

Advertisements

Leave a comment

Filed under Economy

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s