In recent months, CEO Rick Wagoner has signalled that change was in the offing and that the company's future depended upon more fuel-efficient vehicles. With the company's stock price approaching a 26-year low, there's more than the usual urgency to shake things up.
So it was that GM announced yesterday a reversal of its decade-old strategy of relying on truck and SUV sales. This is no doubt a reaction to slumping truck sales, which are the result of American petrol prices that are now between US$3.70 and US$4.40 per gallon (roughly AU$1.02 and AU$1.22 per litre). May's US sales figures make depressing reading for Detroit: perennial bestseller, Ford's F-150 pick-up truck, has handily outsold the Honda Accord, Toyota Camry and Corolla, with the Honda Civic taking the sales crown.
The highlights from GM's stockholder meeting include:
- A possible sale — sorry, "strategic review" — of GM's Hummer brand.
- The closing of four truck plants.
- Board approval to fund the Volt, GM's extended-range electric vehicle.
- Confirmation of a new generation Chevy Aveo/Holden Barina.
- News of an Astra-sized small car with an efficient 1.4-litre turbo engine.
"The Chevy Volt is a go," said Wagoner. GM expects to have a production version of the Volt ready "in the very near future" with the vehicle being ready for sale by the end of 2010. "We believe this is the biggest step yet in our industry's move away from our historic, virtually complete reliance on petroleum to power vehicles," he added.
If GM is to hit its 2010 deadline, it means a lot of pressure on the design and engineering teams working on the Volt. When we spoke with Wagoner earlier in the year, he said that the technology challenges getting a vehicle from concept car to market usually take about four years to resolve. Here's a snippet of what he said:
| You'll say, "Why can't you do it in two years?" and that's vehicle development. In this case we're basically doing kind of three things simultaneously: the vehicle side, which I have a high degree of confidence we can do; the battery side, which is progressing very well, but this is — we're basically pushing the technology needle to do everything that we want out of a battery technology. I would categorise that as emerging as opposed to highly developed; then just the electronic interface of all that is different, it's doable but it's different. We learned a lot back when we did the EV1 [electric car], but there's a whole lot more electronics on a vehicle today than it was then. Going for 2010 was a stretch. It's still a stretch, but we're putting resources like crazy on it and we haven't seen anything to date which says that we've hit a glitch on it. |
In interviews over the last year, Wagoner has often pointed to the increased importance of electronics in delivering vehicles that consumers will want. That's no longer an academic observation. What with the skyrocketing cost of fuel, GM's ability to prove it has the necessary tech chops could very well be the margin of difference between success and failure.
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