When former General Motors CEO Rick Wagoner arrived in Washington for the second time to plead for federal aid in December, he drove to Congressional hearings in a prototype of the car he argued showed the bright future of GM: the 2010 Chevy Volt. Able to travel up to 40 miles on nothing but battery power before its gasoline engine ignites to recharge its batteries, the Volt is supposed to revolutionize the American relationship with gasoline.
Now, Rick Wagoner is gone, forced from his position by the Obama administration as part of a plan giving GM 60 days to restructure. With Wagoner gone, with the Volt survive?
The White House auto industry task force is skeptical. The Detroit News reports, "The Chevrolet Volt may wow the media when it arrives in dealerships next year, but the Obama administration believes the plug-in electric car will cost too much and won't attract enough buyers." In a fact sheet explaining its evaluation of GM's prospects, the task force wrote, "While the Volt holds promise, it will likely be too expensive to be commercially successful in the short-term. The Volt is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable."
That evaluation, the News writes, is "a significant blow to GM." The task force report suggested, "Instead of focusing on a car that will not produce a commercial winner out of the gates, GM should focus on producing better smaller cars." However, "Despite the administration's assessment, GM remains committed to the Volt and will begin production next year."
GM spokesperson Greg Martin told the enthusiast site GM-Volt.com, "As the White House has said, they do not intend to run a car company, much less make product decisions. They recognize the Volt for the game changer it is. And yes, no kidding, that costs money up front. But, this is a long term play for us." Outgoing GM Vice Chairman Bob Lutz said the same, arguing "We know the numbers better than the Government...we furnished them! First-generation technology is expensive, but you can't have a second generation without a first generation."
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