How Will the 'New GM' Affect Plans for the Volt?

How Will the 'New GM' Affect Plans for the Volt?

With the announcement on June 1 that General Motors will file for Chapter 11 bankruptcy protection, hybrid car enthusiast blogs are a-buzz with the fate of the Chevy Volt, a gasoline-electric plug-in hybrid, slated to roll off the assembly line in November of 2010.

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Auto industry consultant William Holstein answered questions about the bankruptcy on the Washington Post's website and believes that the filing could affect GM's ability to continue production plans for the Volt.

However, according to Rob Peterson, manager of Electric Vehicle Communications at the company, "There is no impact." While it may have been a hectic day externally for the company, Peterson said internally the Volt team remains focused on meeting next year's deadline.

Offering "proof" to the doubters and skeptics, the spokesman pointed to a test drive last week in Detroit, in which reporters from The Detroit Free Press and The Detroit News drove so-called "development vehicles." These prototypes have the Volt's "Tech Propulsion System, akin to the power train system in an internal combustion engine vehicle, housed in the body of the new Chevy Cruze. After the test drive, Detroit News columnist Scott Burgess wrote, "After seeing and driving the Volt for the first time, there's no reason not to think that the Volt is a go."

The Volt is slated to be assembled at the Detroit-Hamtramck assembly facility in Detroit, with a first production run of about 10,000 vehicles, although the company would not name an exact figure. In addition, the cars will retail at approximately $40,000, as a ballpark estimate. Different than traditional hybrid or plug-in hybrid vehicles, the Volt can go 40 miles on a single charge on the electric engine and then a smaller, gasoline-powered combustion engine generates electricity for the motor, acting as a range extender.

Despite the reassurances in a press release that stated GM will continue to invest in the electric vehicle technology like the Volt, critics are not so sure about the Volt -- or GM -- will survive bankruptcy. The MIT Technology Review cites the Auto Taskforce's spring report, noting the Volt might not be commercially viable, due to high manufacturing costs. "If the Obama administration's goal is to return the automaker to profitability as soon as possible, it might not want to continue pouring money into a project that it doesn't think can succeed," wrote Technology Review's Kevin Bullis. The bankruptcy plan itself could tarnish GM's brand beyond viability, Robert Weismann suggested in a post on The Huffington Post. If that weren't enough, Eric Etheridge of The New York Times compiled the not-so-positive reviews in a blog post entitled, "Eulogies for General Motors."

The criticism does not faze Peterson, who has been with the company for 12 years and with Volt team since 2006, and has seen plans for the Volt evolve. Like most new "transformational technologies," the costs of producing the vehicle are high, and not likely to be profitable "in the early stages," Peterson said. Another factor that could determine the Volt's success is the price of gasoline. Peterson admits that highly fuel-efficient vehicles like the Volt seem more attractive when consumers are feeling the pain at the pump. Another thing that could sweeten the deal are the incentives, like the $7,500 federal tax credit for vehicles with extended range batteries.

Peterson believes that GM is leading the way in providing affordable electric vehicles, compared to the $100,000 Tesla, which he considers a niche market. "That is GM's strength: mass producing (affordable) vehicles." And the author of the official Volt fan site, neurosurgeon Lyle Dennis wrote, "I still believe greenlighting the Chevy Volt was the best decision GM ever made."

While many factors could affect the potential viability of both GM and the Volt, author Michael Moore, long known for his adversarial stance toward GM, has a suggestion: "Just as President Roosevelt did after the attack on Pearl Harbor, the President must tell the nation that we are at war and we must immediately convert our auto factories to factories that build mass transit vehicles and alternative energy devices."