GM-VOLT : Chevy Volt Electric Car Site

Close observation of recent developments in the automotive sector leads to a certain conclusion; financial collapse is necessary to bring about needed change.

We are bearing witness to a catastrophic rupture of the car industry as we know it.  Not only in terms of the economic machinery upon which it is run, but more so upon the fuel its creations will use.  The near death of the auto industry is bringing with it the slow death of the combustion engine.

When GM first introduced the Chevrolet Volt electric car concept, car sales were brisk, oil prices reasonable and the economy appeared healthy.  Now that the car is nearing mass production and that most other automakers have subsequently unveiled electric car programs of their own, the economy, the industry, and the company is steeped in disaster.

I do not propose it is the case that the birth of the electric car caused this chaos, but rather it is this chaos that will allow the electric car industry to rise.

Whenever in the history of humankind and industrial progress a new transformational technology has arisen, its ascent has brought with it the demise of that which was before it.

Simple examples are how the typewriter was eradicated by the PC, the Polaroid by the digital camera, or how the horse and cart were replaced by the car.  These destructive transformational events take place on many levels, such as the collapse of societies or ecosystems, the extinction of dinosaurs, or even as the big bang gave rise to the universe.

Fundamental market forces of their own right would not have led to a rapid production and adoption of electric cars.  Rather, the status quo would have persisted, car companies would have continued to make profitable gas guzzling trucks and people would have kept buy them on credit.  Indeed when GM introduced the Volt is was more public relations than an engineering.  They didn’t decide to bring it to production until they saw the intense public response.  Now it is their last hope.

The collapse of the economy combined with the current administration’s interest in energy independence, alternative energy and electric vehicles will make the rapid rise of the electric car possible.

People have not been buying new cars out of fear of their future economic status, lack of available credit, and a general dearth of financial confidence.  They are driving their old cars and are doing so for as long as they can.

The government has chosen to support and recreate the auto industry as one that will grow the already inadvertently kindled electric car enterprise.

And then when the bottom has finally come and gone, and the lean restructured auto companies are mass producing electric cars including the Chevy Volt, the tide will change.

Confidence having begun to rise, and old cars having begun to fail, the people will come.  And then our dream will arrive.  A country and a world less dependent on oil.  The rise of the electric car.

Saturday at 5PM was the deadline by which the majority of GM’s debtholders had to either agree or disagree with a new “sweetened” deal.

Originally, the plan had called for GM’s bondholders, who are collectively owed $27 billion by the automaker, to receive a 10% stake in the new company. Less than 10% agreed to accept those terms, increasing the likelihood of a protracted bankruptcy process.

The new deal offered the bondholders warrants to purchase an additional 15% stake, making it possible for them to own 25% of the new company. The UAW through its retiree health fund has been offered 17.5% with warrants to purchase an additional 2.5% stake. The US Treasury would own the rest, up to 70% of the new company.

According to the New York Times, inside sources have said that “slightly more” than 50% of the bondholders, including a committee of large investors who posses 20% of GM’s outstanding debt, have agreed to the new offering.

This then sets the stage for GM to be able to pass through an orderly bankruptcy process and prevent drawn-out and difficult litigation. A chapter 11 bankruptcy filing appears appear all but certain.

GM’s CEO Fritz Henderson is scheduled to have a midday conference tomorrow from the GM building in New York City where the filing is expected to take place. Barack Obama will also be holding a press conference in Washington.

Sources have advised me none of this will impact the Volt development or delivery, more on that soon.

Source (New York Times)

On Friday, GM stock traded for less than a dollar a share, and the day also brought some announcements from GM.

In the first announcement, the company stated it intends to bring the production of a new small car to a currently shuttered US assembly plant.

GM would not say what car they intend to build there but have already discussed plans to introduce the Chevy Spark in 2011.  The diminutive high-efficiency compact was supposed to be built in Asia and imported to the US, but the new plan to bring its production to the US is a concession to the UAW for agreeing exchange debt for equity.

It is possible GM will build another yet unseen subcompact at the unnamed US facility as well for a goal of 160,000 units total per year.

“Small cars represent one of the fastest growing segments in both the U.S. and around the world,” said GM’s CEO Fritz Henderson. “We believe this car will be a winner with our current and future customers in the U.S.”

There are also reports that the Korea Development Bank that financially supports GM’s Korean arm GM Daewoo, is requesting that GM develop a hybrid and electric car production and research base in Korea.  It is unclear whether this is a reaction to the move of small cars to the states.

“Liquidity support cannot be provided to GM Daewoo unless GM provides guarantees that it will develop GM Daewoo into a core production base for small, hybrid and electric vehicles,” said a high level KDB official. “And I think it’s very unlikely that GM will task GM Daewoo to produce the electric car Volt.” GM is not expected cede to these conditions in exchange for aid to GM Daewoo.

Finally, GM also announced that CEO Fritz Henderson will be holding a press conference at the GM building in New York City around midday Monday.  President Obama will also be holding a press conference on Monday at a separate time.  We brace for their announcements.

Source (GM)

Frank Weber is GM’s Volt vehilce line executive, an extremely bright mild-mannered and humble German engineer with laser beam precision accuracy and vision. After visiting the EVS24 symposium in Norway he was so inspired to pen a piece about the relevance of the Volt.

Frank had the feeling many of the world’s brightest minds think electric cars development should be in the pervue of the start-up not a large industrial company like GM.

He has set out to prove them wrong.

Weber says electric cars aren’t about a “green niche” but a necessary tool to end oil dependence.

“Hand-built vehicles may capture the imagination of some, but we need millions of cars to truly address this global issue,” writes Weber.

Not only does GM have the assets to develop millions of electric cars but has the experience and expertise to make them “relevant.”

He explains that the E-REV design allows GM to limit battery size and thereby cost, making the technology affordable to more people. It also allows flexibility for people to recharge if they can or need to, but to run on gas if necessary without any fear of range anxiety.

Weber believes electrically-driven vehicles are “the way of the future” and that GM is better equipped than any start-ups to deliver large volume of electric cars globally. He continues to keep his promise of a November 2010 launch.

Source (FastLane) and (Gas2)

The title may be frightening but it shouldn’t come as too much of a surprise. GM’s financial position has been declining for years and despite all efforts to avoid it, a court-mediated process appears to have nearly no alternative.

According to Bloomberg, citing persons familiar with the matter, the 77 year old company plans to file for bankruptcy protection on Monday June 1. That same day will bring with it a press conference by President Obama.  If it occurs, this would be the fourth largest bankruptcy in US history and the largest for an industrial company.

GM has been aggressively trying to restructure its massive debt to the UAW and bondholders. They received an agreement from the UAW, but less than 10% of bondholders agreed to swap $27 billion of debt for a 10% stake in the company. It was that failure that triggered the inevitability of bankruptcy.

The bondholders have accepted a “sweetened” deal of warrants to purchase an additional 15% share of the new GM in exchange for not stonewalling the bankruptcy process.

The plan, which has been long known, is to sell off GM’s best assets to a new GM which will be 72.5% owned by the governemnt and 17.5% owned by the UAW. That company will be stripped of its old debt and be sent off with $30 billion in fresh new government funds and hopefully a bright future.

“We intend to get in and out very soon,” said GM vice chairman Bob Lutz to reporters. “The U.S. government wants its money back, and our plan is to pay it back as quickly as possible. The U.S. government doesn’t want to own auto companies.” Lutz also said he would like to see a continued presence of the auto task force in the future, giving GM the same type of continued government support Japanese automakers have long enjoyed.  Lutz has not specifically confirmed bankruptcy will occur.

Experts think the GM bankruptcy process may take 60 to 90 days.

Sources have told GM-Volt.com that the Chevy Volt program will not be affected in any way by this process should it occur, and the company as a whole would continue to operate.

Source (Bloomberg)

General Motors has allowed the Cruze-bodied Chevy Volt mules to be test driven by more than a dozen journalists and various others including myself.

They have strictly restricted those driving experiences to the vehicle’s charge depleting mode. Outsiders thus only have the experience of driving the car in pure electric mode without the gas generator running.

And lets face it, that is the main idea. We after all want to drive it only in that mode to limit use of gasoline.  The range extender is there for less than 20% of the public’s driving needs and many people will never use it at all except perhaps in cases of emergency.

However, GM’s insistence on not allowing observation of the generator mode has raised the usual suspicions of the blogosphere.

EV enthusiast Chelsea Sexton, who appeared in the film Who Killed the Electric Car, spent a day recently test driving the Volt in EV mode, and highly praised it. However, because she was on the track all day doing interviews for a new film, she actually accidentally witnessed test Volts passing by while in generator mode.

She writes “in range extended mode- the thing is already Prius quiet.”

“And because the generator operates within certain distinct ‘power bands’ depending on the driver’s right foot,” she writes. “Any detectable sound should directly correlate with attendant ambient and road noise.”

She pressed Volt exec Frank Weber as to why GM wont let anyone outside experience driving the generator mode, and he replied sheepishly “well, when the engine comes on, you can hear it.”

So it is the fear of hearing the engine, not its feeling or performance that GM PR wants to avoid.

However, the reality is the Cruze-mules are not Volt. They may have 80% of the final car’s parts but the lack the refinement, component location, and engine noise shielding the final Volts will have. As such they are likely to be considerably noisier.

GM wants the series hybrid mode to feel as butter smooth and maximally silent as possible.

Since the true Volts are currently being built, it wont be long before myself and the automotive journalism universe get to experience them, likely in the fall, and I sure believe it will be quite quite and quite awesome.

Source (EVChels)