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GM: A Reassuring Charge Of Confidence

08/11/2009

It was not just another Tuesday. Something revolutionary took place in the afternoon of August 11, 2009. The American consumer got justifiably and genuinely excited about a product from Detroit. The Chevrolet Volt, we are told, will perform at 230 miles to the gallon, city driving. Finally…great and inspiring news from the Motor City in an era of extreme economic turmoil, declining industrial innovation, rapidly reducing oil supplies and global warming. 

General Motors has, with this one stunning announcement, finally started down clear road to recovery, which previously looked bleak. The Volt may someday be considered “Phase II” of GM’s new life. 

Clearly, cutting costs, laying off workers and surviving as a leaner company in the aftermath of 40 days of bankruptcy were not the clear earmarks we needed to instill the confidence consumers were waiting for. Just because U.S. taxpayers took bailout control of 60 percent of the enterprise was not the sign we needed for reassurance that the American car industry was going to actually get traction and move forward in the coming decades.

Would GM make it? Was it doomed to failure? Now we know. The company has a bright future, if it continues to be bold.

We have waited for, and doubted we would ever see, truly exciting news from GM. Sure, Chevrolet is earning the reputation of being the most “green” of GM’s remaining divisions, and the cars it produces are looking better and taking on a semblance and reputation of higher quality. But that is not enough. No one on Main Street believes that corporate reorganization and slick styling of the same old product with yesterday’s technology was the quick fix or magic cure for General Motors. Yes, there had been early reports about what the Volt might achieve, but we still doubted it was real or that we would ever actually get to drive such a mirage. No one really thought a car could get 230 mpg, except perhaps the nascent Tesla.

Everyone who cares about the domestic vehicle manufacturers wanted a stunning moment. If the expectations about the 2011 Chevy Volt prove to be real, that defining point has arrived. It’s like we just landed on the moon in energy efficient automotive terms. According to GM Chief Executive Officer Fritz Henderson, “From the data we’ve seen, many Chevy Volt drivers may be able to be in pure electric mode on a daily basis without having to use any gas.” This is ground breaking, and it means so much more, because it is a Detroit product that is no longer a distant “concept car” for dreamers. Belive it, innovation is back at GM. We may finally escape antiquated 10-30 mpg city/highway technology with a practical answer that we can plug into ordinary electrical sockets and recharge for next day travel.

Needless to say, there are steep challenges to overcome. With the Volt efficiency announcement, the automaker had better actually deliver on the high fuel efficiency standard it proclaims for the vehicle, with quality. What’s more, it must find a way to reduce the cost of the Volt from the anticipated $40,000 per unit to a more affordable price point so the Little Guy, you and me, can afford this desperately needed technology. Ways must be found to charge cars not garaged with power outlets nearby. Continued emphasis on generating clean electrical power to keep the new cars moving is no small task either and will take much more than one company to figure out.

GM must also fend off the competition (Japan’s Nissan has announced the “Leaf” which will cost less and get even greater mileage at approximately 367 mpg, and will beat the Volt to the market with an introduction in late 2010 as opposed to the anticipated 2011 sale dates for the Chevy). Other car makers are on the trail…Honda, Toyota, and Ford. The competition will be in overdrive, but the barrier to better mileage appears to have been broken.

The reassurance, however, is that America is back in the game with GM’s announcement. Suddenly, taxpayers can feel a bit more comfortable being the collective micro-owners of GM, when just yesterday, it was no big deal and perceived as more of a burden on the budget deficit. The Volt may be the answer to the question…”What does the taxpayer get for his or her money?”

As the post “Great Recession” economy takes early form, the Volt has a chance to be the symbol of re-emergence for the most troubled of mega corporations. Our hopes are high that this “game-changer” proclaimed by Mr. Henderson is an indication of a cleaner, more efficient, and thrilling automotive future and a re-birth of GM as a leader in transportation technology.

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One Comment leave one →
  1. 08/11/2009 10:32 pm

    “As the post great recession economy takes form” – I think that we are far from getting past the recession/depression. The economy is still teetering on the edge and commercial real estate is the next big thing to take a hit. Plus I do not think you will see a go/go consumer economy again as Americans are learning how to save again. The Volt has promise, but GM does not seem to be able to get it to the market fast enough. Instead of bailouts and cash for clunkers we needed a real bankruptcy and a real restructure instead of pandering to the unions.

    Always enjoy the blog.

    Jim

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