The Editorial: GM Looks to the Future
December 23, 2009
A funny thing happened at the Los Angeles Auto Show last month. Like a striking ingenue who steals the show from a big-time Hollywood actress, a pair of small cars from General Motors caught the attention of the press and the public.
You read that right. I said small cars, not sport utility vehicles. And I said GM, the government-owned, taxpayer-funded behemoth that months earlier filed for bankruptcy and seemed destined for the dustbin of history. Specifically, GM debuted the Chevrolet Cruze and the Chevrolet Volt. The former will hit showrooms in July, while the latter is expected in November.
By most accounts, folks were impressed. Jake Fisher, senior auto engineer for Consumer Reports, called the Cruze “the most significant car of the show.” Autoguide.com judged the vehicle’s interior as having “more style than pretty much any other compact car.” Car & Driver says the Cruze “contains some of GM’s best thinking.”
The Cruze has a six-speed automatic transmission, and two of the three trim lines will have a turbocharged engine. With a five-star safety rating and an anticipated fuel efficiency of 40 mpg on the highway, the Cruze comes standard with 10 air bags. The Cruze will be assembled at GM’s Lordstown, OH, plant, and should be priced at a competitive $16,000.
Powered by lithium-ion batteries, the Volt will be able to run up to 40 miles on a single charge, and a small gas engine will provide additional range. The vehicle can be plugged into a standard household socket to recharge the batteries. GM is spending $336 million to upgrade its Detroit-Hamtramck plant to assemble the Volt. Those outlays brings GM’s investment in the Volt project to a whopping $700 million. After test-driving the vehicle around Dodger Stadium, the staff of Popular Mechanics called the Volt “impressive.”
GM’s timing could not have been better. On Dec. 1, GM’s board fired CEO Fritz Henderson after just nine months on the job. His replacement, former AT&T CEO Edward E. Whitacre Jr., has acknowledged that he’s not a “car guy.”
Steven Rattner, who led the U.S. task force on saving Chrysler and GM, described his experience in a devastating article in the November issue of Fortune. “Everyone knew Detroit’s reputation for insular, slow-moving cultures,” he wrote. “Even by that standard, I was shocked by the stunningly poor management that we found, particularly at GM, [which had] the weakest finance operation any of us had ever seen in a major company.”
If the Cruze and Volt live up to their promise-and enough Americans have money in their pockets to buy them-GM could be well on its way to reclaiming the title of world’s largest assembler and paying back the millions of dollars it owes the taxpayers. We can’t think of a better way to open the new decade.