Can the Volt Save The General?
This topic nearly word for word has been scrutiny of automotive journalists and other transportation stock analyst and pundits ever since it was announced that GM would once again do an electric car.
GM, Ford and Chrysler arrayed a huge number of lawyers and much cherished Washington lobbyists to go after California after it decided to introduce a zero emissions rule on part of all car fleets. While GM was fighting California, it was also building an electric car, 10 years ago called the EV1. The state lost, GM breathed a sigh of relief and promptly destroyed all EV1's and sold the patents.
Yep, sold the patents to a MIT. Just kidding. If the patents had been sold to MIT, the car would have been rebuilt and the Toyota Prius hybrid would never have been created. Whoever bought the patents wasn't interested in building an electric car. There is enough anecdotal evidence to suggest the battery patents were purchased by Texaco who has done tremendous work with them since ( NOT ).
Some might say, that was a wise business move to recoup costs, but most of the public would in acute dismay exclaim "Why would oil companies be interested in automotive patents that would/could eventually diminish their own returns ?"
So much for the history lesson, this week, we are back at square one watching a video interview with GM's Chief Designer as he discusses the new GM Chevy Volt.
GM has almost entirely "bet the boat" on the new technologies going to market in the electric Chevy Volt. We are sure that GM Detroit Management exactly didn't plan it this way, but their European operations must have seen the writing on the wall many years ago as gas hit 3+ dollars per gallon in europe and continued on through the equivalent $4 dollar mark. With the global credit crunch, increased gas prices and declining sales of the big cash SUV's GM is feeling the pinch like never before. The Volt must become iconic.
GM's response to public outcry shortly after co-jointly winning the lawsuit against California on the grounds that only the federal government had the right to determine zero emission, was to go on a publicity campaign extolling the virtues of their own version of Zero emissions - Hydrogen gas by 2010. Which probably prompted BMW to wake up and create a wonderful Hydrogen Gas vehicle which is already 4-5 years old and in its fourth or fifth refinement. So zip forward to 2008 and GM has backtracked on its Hydrogen promises and is now attempting to leap frog the Toyota Prius with technology that will get a commuter 40 miles of gas free driving on a nightly electrical charge.
According to GM research, many drivers will not need to switch to the gas engine because simply recharging the vehicle via a regular outlet at home overnight will satisfy most of their driving needs. When I first heard this, I thought - What a useless car. Who wants a car that does only 40 miles per charge, but in truth, the car simply switches to the small gas engine at that point and continues its merry way.
Despite the GM bashing that many of us might engage in, on occasion, we all truly want a Volt or something like it. Traveling and seeing new places isn't just a wish for the elite. But with gas prices threatening to go higher and the slightest threat of war poised to carry them beyond even the previous high of $147 per barrel, having a vehicle with the potential of the Volt is simply everyone's dream.
So will or can the dream car Volt save the General?
I suppose it might be presumptuous but perhaps we should first ask - Does the General really need saving?
BusinessWeek estimated GM's Liquidity position to be 45 Billion in May of 2005 with a burn rate this year of over a Billion a month here in 2008 ( Boston Herald ). Estimated reserves now stand at about 25 Billion and analysts say that even with the 10 Billion in future cost cutting, GM may need another 10-12 Billion in cash to see their way through to 2010.
According to an article in Detroit News Oct 14th 2008
GM had access to about $21 billion cash, $5 billion in available credit lines and is raising $5 billion through asset sales and borrowing.
Cost-cutting associated with the aforementioned 10 Billion in cuts, intensified when GM announced it was closing plants in Grand Rapids and Janesville, Wis. 2500 workers are affected by these measures in plants that produce sport-utility vehicles and parts for pickups/SUVs.
Since 2005, the General's cash reserves have been reduced from 45 Billion to a mere 25 Billion and with the tightening credit crunch and federal government moving slowly on aiding the BIG3, the rumour doing the rounds is that GM is eyeing the cash reserves of Chrysler ( estimated 11 Billion ) to help it through 2009 when the arrival of the Chevy Volt and Cruz, the following quarter are expected to help turn things around.
So, what are our expectations for the Volt? GM says its expecting to sell about 10,000 Chevy Volts at between 30-40,000 USD each in 2010. So, that's about 3-4 Billion dollars in gross sales with a net of about a 800 Million dollars annually at an estimated 20% profit per car.
So, is this innovative car of the 2010 year - Volt just a little, just too late?
I leave that answer up to you, but if I had to make a serious bet with odds, I know which way I would be betting. - 23204
GM, Ford and Chrysler arrayed a huge number of lawyers and much cherished Washington lobbyists to go after California after it decided to introduce a zero emissions rule on part of all car fleets. While GM was fighting California, it was also building an electric car, 10 years ago called the EV1. The state lost, GM breathed a sigh of relief and promptly destroyed all EV1's and sold the patents.
Yep, sold the patents to a MIT. Just kidding. If the patents had been sold to MIT, the car would have been rebuilt and the Toyota Prius hybrid would never have been created. Whoever bought the patents wasn't interested in building an electric car. There is enough anecdotal evidence to suggest the battery patents were purchased by Texaco who has done tremendous work with them since ( NOT ).
Some might say, that was a wise business move to recoup costs, but most of the public would in acute dismay exclaim "Why would oil companies be interested in automotive patents that would/could eventually diminish their own returns ?"
So much for the history lesson, this week, we are back at square one watching a video interview with GM's Chief Designer as he discusses the new GM Chevy Volt.
GM has almost entirely "bet the boat" on the new technologies going to market in the electric Chevy Volt. We are sure that GM Detroit Management exactly didn't plan it this way, but their European operations must have seen the writing on the wall many years ago as gas hit 3+ dollars per gallon in europe and continued on through the equivalent $4 dollar mark. With the global credit crunch, increased gas prices and declining sales of the big cash SUV's GM is feeling the pinch like never before. The Volt must become iconic.
GM's response to public outcry shortly after co-jointly winning the lawsuit against California on the grounds that only the federal government had the right to determine zero emission, was to go on a publicity campaign extolling the virtues of their own version of Zero emissions - Hydrogen gas by 2010. Which probably prompted BMW to wake up and create a wonderful Hydrogen Gas vehicle which is already 4-5 years old and in its fourth or fifth refinement. So zip forward to 2008 and GM has backtracked on its Hydrogen promises and is now attempting to leap frog the Toyota Prius with technology that will get a commuter 40 miles of gas free driving on a nightly electrical charge.
According to GM research, many drivers will not need to switch to the gas engine because simply recharging the vehicle via a regular outlet at home overnight will satisfy most of their driving needs. When I first heard this, I thought - What a useless car. Who wants a car that does only 40 miles per charge, but in truth, the car simply switches to the small gas engine at that point and continues its merry way.
Despite the GM bashing that many of us might engage in, on occasion, we all truly want a Volt or something like it. Traveling and seeing new places isn't just a wish for the elite. But with gas prices threatening to go higher and the slightest threat of war poised to carry them beyond even the previous high of $147 per barrel, having a vehicle with the potential of the Volt is simply everyone's dream.
So will or can the dream car Volt save the General?
I suppose it might be presumptuous but perhaps we should first ask - Does the General really need saving?
BusinessWeek estimated GM's Liquidity position to be 45 Billion in May of 2005 with a burn rate this year of over a Billion a month here in 2008 ( Boston Herald ). Estimated reserves now stand at about 25 Billion and analysts say that even with the 10 Billion in future cost cutting, GM may need another 10-12 Billion in cash to see their way through to 2010.
According to an article in Detroit News Oct 14th 2008
GM had access to about $21 billion cash, $5 billion in available credit lines and is raising $5 billion through asset sales and borrowing.
Cost-cutting associated with the aforementioned 10 Billion in cuts, intensified when GM announced it was closing plants in Grand Rapids and Janesville, Wis. 2500 workers are affected by these measures in plants that produce sport-utility vehicles and parts for pickups/SUVs.
Since 2005, the General's cash reserves have been reduced from 45 Billion to a mere 25 Billion and with the tightening credit crunch and federal government moving slowly on aiding the BIG3, the rumour doing the rounds is that GM is eyeing the cash reserves of Chrysler ( estimated 11 Billion ) to help it through 2009 when the arrival of the Chevy Volt and Cruz, the following quarter are expected to help turn things around.
So, what are our expectations for the Volt? GM says its expecting to sell about 10,000 Chevy Volts at between 30-40,000 USD each in 2010. So, that's about 3-4 Billion dollars in gross sales with a net of about a 800 Million dollars annually at an estimated 20% profit per car.
So, is this innovative car of the 2010 year - Volt just a little, just too late?
I leave that answer up to you, but if I had to make a serious bet with odds, I know which way I would be betting. - 23204
About the Author:
Dino Delellis writes on a number of interesting topics. To see more of the Dino personal journals hop on over to Dino P. Delellis comments and catch his odd views on the world at large.
posted by X - Men @ 3:44 PM
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