General Motors is going green (really!), according to CEO Wagoner

Posted by Christie

June 4, 2008

2010 is not only a big year for global sports (South Africa hosts the Soccer World Cup), but also for the automotive world. Big changes are planned for the US motor industry, with planned launches of small cars – the Ford Fiesta and a string of Fiats (mist likely the 500) – on the cards. The most significant, however, will likely be the sale of the first GM Volt – a plug-in hybrid with a small internal combustion engine in tow.

After many year of losses, attributed to many factors ranging from high workers benefits bills to changing consumer buying patterns, the US Big Three (GM, Chrysler, Ford) are moving away from big pick-ups and looking towards smaller vehicles as their future. (About time, has Europe not done this for a decade or two already?)

General Motors CEO Rick Wagoner yesterday (03/06/08) announced a new strategic direction for GM. Of immediate importance to US households is the planned closure of four truck plants in the US, Mexico and Canada as it refocuses its product line away from “trucks and SUVs” to “compacts and crossovers.” (Incidentally, GM is looking for trouble from several labour unions calling this move illegal.). Annual production will eventually be cut from 4.2 million units to 3.7 million units. With Business Week saying “Small is the new Big”, GM is even looking at revising its ownership and/or management of the Hummer brand – not really the best asset for a greening company. However, despite several SA news media jumping on the “Will GM sell Hummer?” campaign, no decision has been made yet. In all, changes are aimed at saving around $1 billion by 2010.

What has been approved for production is the Chevrolet Volt, saying that company management is confident that it will be able to reach technical goals within the desired financial framework by end of 2010. The Volt is seen critical in helping GM develop its focus on being an advanced powertrain producer. The Chevy Volt is powered entirely by an electric motor that can be charged from an ordinary power socket or from an onboard engine (that charges the battery, and does not power the wheels) – called E-Flex. This, where Toyota Prius is primarily powered by fossil fuels and supported by electric drive. The Volt is seen as one step closer in realising viable all-electric propulsion.

So, is GM finally realising that the pick-up is not its future? Imagine saying that to them a decade ago… The General is planning a new compact car powered by a 1.4 litre turbocharged petrol engine – which South Africa could likely see in the new Opel Astra and Chevrolet Aveo, and possibly also in the new compact that will be developed completely in-house. Wagoner also promised that 18 out of GM’s next 19 launches will by within the car and crossover categories. Manufacturing plants will see added worker shifts (in Ohio and Michigan) to produce these additions.

GM believes that higher fuel prices and a shift in consumer buying towards smaller vehicles is a long-term change, hence the big shift in its plans.

Relevance for South Africa: Well, GM is back in South Africa for good. And, while it has poached some Daewoo and other miscellaneous Asian products and rebadged them as Chevrolets locally, more truly-Chevy models should follow soon. Especially if a focus on less fuel guzzling is implemented – as announced by Wagoner yesterday. This will inevitably see GM look at offering more products to European and Asian markets, with more offerings to the United Kingdom and Japan indicating more model choices for South Africa. Add to that some fuel saving and the potential of some nice green cars – no guarantee the Volt will come here – and this latest move from GM can be seen as very positive for South African consumers.

By Christie Viljoen

Sources: Automotive News Europe, The Canadian Press, Reuters, Wired

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