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GM Rolls Out Volt To Financial Doubts

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The Associated Press

Published: September 17, 2008

DETROIT - General Motors Corp. Chairman and CEO Rick Wagoner unveiled the automaker's long-awaited electric car Tuesday and said the turmoil in U.S. financial markets should not affect government loan guarantees that would help the auto industry develop high-tech vehicles.

Speaking to reporters at GM's 100th anniversary celebration, Wagoner said the $25 billion in loans were approved last year as part of an energy bill and should now be funded to help the industry build next-generation automobiles and meet government fuel economy standards.

"Really a relatively small fraction of the investment the industry will have to make to achieve these improvements was to be provided for by direct loans," Wagoner said. "We're just asking that those loans now be funded and that the rules and procedures to be able to draw against those loans be finalized promptly."

GM, Ford Motor Co. and Chrysler LLC have been working to get Congress to fund the loans after months of tight credit markets, tepid sales and high gasoline prices.

If the government loans don't come through and the U.S. auto market doesn't recover, GM may have to make further cuts, Chief Operating Officer Fritz Henderson told reporters.

"We could have to do some more things for sure," he said. "Do I have my game plan laid out today? No."

The company may also have to cut more costs if the credit markets remain tight, Henderson said. GM's liquidity plan calls for $10 billion in internal cuts and another $5 billion through asset sales and borrowing.

Henderson said he is confident that GM will be able to hit those numbers, but said he could not predict what will happen in the credit markets, which affect consumer as well as corporate borrowing.

"We'll have to see what the lasting impact is," Henderson said.

Wagoner showed off the production version of the Chevrolet Volt, which will be able to go 40 miles on a single charge from a home outlet. He said GM has been testing the car's new lithium-ion battery packs and is confident in their performance.

"General Motors' second century starts right now," he said as Vice Chairman Bob Lutz drove the four-passenger sedan onto a stage at the automaker's world headquarters.

Lutz told reporters that GM will be able to develop products even if it doesn't get the loans, but the company would prefer to have the financing as it faces a difficult balancing act between spending to meet government regulations and developing new products.

"Obviously it's clear that government loans would take a lot of the stress off," he said.

GM said the Volt will cost about 80 cents to fully charge at a rate of 10 cents a kilowatt-hour, which is about the national average. After that, the batteries will be recharged by a small gasoline engine that allows the car to travel hundreds more miles. GM said the engine will be able to run on E85 ethanol, a blend of 85 percent ethanol and 15 percent gasoline.

"It's proof that the century-old General Motors is alive and well and that it intends to lead in reinventing the automobile," Wagoner said.

The Volt will have a driver-configurable liquid-crystal instrument display and touch-screen-style climate, information and entertainment controls, GM said. It will also include wireless connectivity for a cellular phone and music streaming.

GM hasn't announced the Volt's pricing, but it's expected to cost between $30,000 and $40,000.

The Volt is due in U.S. showrooms by November 2010.

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