GM-VOLT : Chevy Volt Electric Car Site

The other day I was in my office when my cell phone rang. I picked it up and on the other end heard a strong voice with a slight Texas drawl, “Dr. Dennis? Hi , Ed Whitacre here.”

You could imagine how taken aback I was, caught by surprise, but quite thrilled and honored.

You see I had been trying to reach out to Mr. Whitacre for a while to learn about his perspective on electric cars, and thanks to GM communications leadership it very suddenly became a reality.

I joked with him that we shared something in common, neither he or I knew much about cars before we started these roles, and he agreed. “I don’t know anything about cars, ” he admitted.

But clearly he knows how to run a business.

I asked why he took the job at GM.

“The government called me in the summer, the Treasury Department, and asked me if I would consider being Chairman,” he said. “I had been at AT&T many years and was happily retired and so I said no I won’t, and they called back the next day and the next day and my conscience finally got to me and I agreed to be Chairman of the Board. I did that for about four months.”

Since it wasn’t much publicized I asked about why Fritz Henderson was fired.

“The board had the feeling GM wasn’t moving quickly enough or the right way, so Fritz left,” he said. “He’s a great guy and he left. I’m pretty old but there wasn’t any other candidate at the time. I had been chairman of AT&T for 17 years so I said yes I could be the CEO.”

“I don’t expect to stay in the position long,” he said. “There’s a search committee doing a search.”

As you might know, Mr. Whitacre also sits on the Board of Directors of ExxonMobil, one of the world’s largest petroleum producers, and it is of interest to see how he might reconcile that with the mission of GM’s Chevy Volt, to help wean our country off of oil.

“ExxonMobil is very concerned about the environment and the future also,” Whitacre said. The company works towards “finding different sources (of energy) and converting to natural gas.”

“We provide the fuel to a lot of powerplants that generate electricity, and there’s a lot of scientific work as well like growing algae (for biofuels),” he added.

He described ExxonMobil as being “responsible citizens,” and noted there is opportunity for the company in a world of electric cars.

“They’re tuned into the electric car,” he said. “As good as (our electric cars) are, the electricity has to be generated by some fossil fuel.”

That the CEO of GM reached out to me and us, and was genuinely thankful for our work here on GM-Volt.com is a very, very wonderful thing. Stay tuned for some more of our conversation.

Lobbyists
During the bankruptcy process last year, GM internalized its lobbying activities, or rather more specifically, they canned a significant portion their $10 million+ external lobby operation. It was unclear at the time if this was just part of the streamlining of the whole company, or simply a move to avoid a public black eye over a potential conflict.

Since then however, we have received news that GM has rehired the firms of Greenberg Traurig and the Duberstein Group, while also bringing onboard GrayLoeffler, and is continuing its relationship with the Washington Tax Group. Between these four noted firms, they have 18 lobbyists registered to represent GM.

The main job of these lobby groups is to win favors for GM in the form of tax breaks, special allowances and subsidies/grants over and above the $50-odd billion GM has already received.

Executive Reshuffle
The news on the external lobbying came to light at a time when GM itself was reshuffling its executive…again. This time in the form of its internal lobbying division. It would seem that Ed Whitacre’s message of a ‘calming of the storm’ at the executive level at GM after the ousting of then CEO Fritz Henderson, is not becoming a reality, as the purge continues.

Last week, GM announced the replacement of its head lobbyist/vice president of government relations, Ken Cole for two of Ed Whitacre’s poker playing buddies ex-employees at AT&T, namely John T. Montford, who is now senior advisor to the GM Chairman and CEO (of which, Mr. Whitacre seems to currently have a whole legion of ‘advisors’ at his disposal), and Robert E. Ferguson, who takes over the role of vice president of Government Relations.

On a personal note, I am all for a good shakeup. I met the news of the dismissal of Brent Dewar from the head of Chevrolet with a smile, and I confess to uttering a ‘huzzah’ or two when GM’s glorious disaster in charge of marketing that was Mark LaNeve left the building.

However, firing Ken Cole, who oversaw (and some say was the architect) of the whole ‘lets go to the government and get some ‘interm’ money, then go back again and get more ‘interm’ money, then tell them to look at all the money they foolishly gave us and get them to protect that money with more money…and then have them rinse us through bankruptcy, while telling them to forget all that ‘interm’ money they just gave us…and also throw us a whole bunch more ‘new’ money as we come out of bankruptcy so we are ‘viable’ for years to come’ plan seems like firing Michael Jordan off your team because you know a couple guys that used to play ball with you back in the day that were pretty good.

/just saying

CEO Rumor Du Jour
Not sure how this rumor got started (Okay, actually I do) but how it got picked up around the interwebs as legitimate is beyond me.

Basically, the story goes like this; GM wants to get a high profile, competent CEO installed at some point to not only lead the company into the future, but sell ‘the tar’ out of the upcoming (at some point) IPO. Enter current COO of Apple, Tim Cook. /tada, mission accomplished

Where it all breaks down is when you look at accountability…and reason. For starters, the source is some random ‘tipster’ that has indicated that he has a ‘inside’ source at a third party head hunter firm that says Cook is a top candidate for GM…and that he would be willing to leave Apple now that Steve Jobs is back running the show.

Beside the obvious ‘dubious’ source of a know a guy, who knows a guy. Why would Tim Cook leave his role as COO at Apple? He has been running the day to day operations there since Jobs when down with a rare form of pancreatic cancer in 2004, and even temporarily took over as the interm CEO roll while the rest of the world was under a ‘Steve Jobs/Apple Deathwatch.’ Needless to say, neither happened, and he led the company out from a multi-year low around $80 right back up to $140, well on its way to a all-time high this past December. At this point I am unsure that Tim Cook is not more Apple than Steve Jobs is.

And for his trouble keeping Jobs seat warm, Mr. Cook has gotten paid…and with a capital ‘P’.  He has raked in tens of millions the last couple years, and just looking at his disclosures over his tenure, he has earned/sold over $100 million in Apple stock since his arrival. Not to mention he looks to have a lock on someday owning the ‘official’ CEO title. How long can/will Steve jobs really keep that seat filled?

Is GM willing to pay Cook $30 million a year, with a Nardelli-esque severance package? Would Cook even take that? Would Apple match any exorbitant price to keep him in house? Does Cook, who has only ever worked in the tech sector, even have the skill set to make a troubled automaker fly?

If somehow lightning did strike the Renaissance Center (like a dozen times) and Cook came onboard, GM certainly could boast having a who’s who of powerhouse executives, with Microsoft’s ex-CFO (Liddell), Apple’s ex-COO as CEO, and AT&T’s ex-chief Whitacre serving as President.

/but those three in the same room would surely cause the universe to implode.

A group of industry leaders have formed a new coalition and released an ambitious roadmap to deploy electric vehicles and infrastructure in the United States. The Electrification Coalition states “Our primary mission is to promote government action to facilitate deployment of electric vehicles on a mass scale.”

Their goal is to have electric and plugin hybrid vehicles account for 75% of all light duty miles by 2040.

To achieve that objective, two shorter term milestones are proposed:

1. by 2020 plug in cars should account for 25% of all car and light duty truck sales.  Meeting this objective would mean having 14 million plugin cars on US roads by that year

2. by 2030 plugin vehicles should;d account for 90% of all car and light duty truck sales.  This would require 120 million plugin cars on US roads by that year.

To reach those benchmarks the group recommends rolling out electric cars and infrastructure in selected markets and expanding those markets incrementally through learning about consumer behavior.  This approach is preferred to a blanket national rollout.

The group also recommends government funding to help achieve the goals which would come at a cost of $124 billion. They would like more than $7500 in tax credits to go to each buyer of electric cars, and for the government to provide 50% tax credits for utility company upgrades and 50 to 75% credits for the cost of installing public infrastructure.

“The first electric vehicles will be delivered in 12 months,” said member Carols Ghosn, Nissan CEO. “The widespread acceptance of zero emission cars will require more than the efforts automakers can provide on their own. Public and private collaboration will be the key to mainstream acceptance.”

If the 2040 target were achieved it would mean US petroleum consumption would be reduced from its current rate of 8.6 million barrels per day to 2 million barrels per day.

Members of the group are as follows (absent anyone from GM):

Timothy E. Conver, Chairman, President & CEO, AeroVironment, Inc.
Peter L. Corsell, CEO, GridPoint, Inc.
David W. Crane, President & CEO, NRG Energy, Inc.
Kevin Czinger, President & CEO, Coda Automotive
Peter A. Darbee, Chairman, CEO & President, PG&E Corporation
Seifi Ghasemi, Chairman & CEO, Rockwood Holdings, Inc.
Carlos Ghosn, President & CEO, Nissan Motor Company, Ltd.
Ray Lane, Managing Partner, Kleiner Perkins Caufield & Byers
Richard Lowenthal, Founder & CEO, Coulomb Technologies, Inc.
Alex A. Molinaroli, Chairman, Johnson Controls-Saft and President, Johnson Controls Power Solutions
Reuben Munger, Chairman, Bright Automotive, Inc.
Frederick W. Smith, Chairman, President & CEO, FedEx Corporation
David P. Vieau, President & CEO, A123 Systems, Inc.

Source (Electrification Coalition)

The Electric Drive Transportation Association (EDTA) is according to their website:

The preeminent industry association dedicated to advancing electric drive as a core technology on the road to sustainable mobility. As an advocate for the adoption of electric drive technologies, EDTA serves as the unified voice for the industry and is the primary source of information and education related to electric drive. Our membership includes a diverse representation of vehicle and equipment manufacturers, energy providers, component suppliers and end users.

It sounds like the organization shares our common goals and is in a position to help make them happen.

The EDTA was first formed in 1989 when EVs were little more than a dream, and like us they are thrilled to see the radical transformation underway in the US (and global) auto industry.

Brian Wynne is the President of the EDTA and will be participating in a live chat in the box below at 2PM Eastern time. This will be simulcast on many EV-ralted websites. He will be taking our questions about the progression and future of electrification of the automobile and proving some answers.

Brian has written the following introduction on GM’s website:

Does it seem that suddenly everyone is talking about electric vehicles? Well, that’s because they are. But it’s not a sudden development in the automotive world. At the Electric Drive Transportation Association (EDTA), our members have been pushing technology boundaries, building business models and busting myths for a long time. Electric drive is not a fad; in fact, we’ve been at this for 20 years. And, of course, some of the earliest successful automobiles were electric!

But there is good reason why this is suddenly getting lots more attention. Not only has there been a wave of exciting vehicle announcements from manufacturers (check out a list of electric vehicle announcements on our website), the federal government just invested $2.4 billion in electric drive vehicle and component manufacturers, battery suppliers, infrastructure providers, and training facilities. This reflects a national recognition that electrification of transportation can help us achieve our energy, environment and economic goals. It also reflects how far the industry has already come. We are prepared to leverage the investment and take electric drive into the mainstream.

When hybrid technology breakthroughs made commercially viable grid-connected vehicles a possibility, EDTA hosted the first plug-in hybrid vehicle workshop in 2003–for an overflow crowd. In the short time since then, electric drive has come a long way, with the major automakers (and many start ups) developing and testing electric drive vehicles. Companies are going about the challenge in different ways: some are focusing on battery electric vehicles, several are moving on plug-in hybrids, and others are working on battery electrics with range extenders. Many manufacturers continue to work diligently on fuel cell vehicles. This demonstrates the flexibility of electric drive technology, and the innovative spirit which is needed to address the myriad of consumer tastes, and the variety of commercial vehicles in the fleet.

We all know that it has been a roller coaster of a year for the automotive industry, with the recession hurting every aspect of the value chain, from parts suppliers to consumers. But the industry has weathered economic and technology setbacks before and we are positioned to come out on top of this one. Vehicle electrification is not just a national policy goal; it is the foundation of our members’ business strategies. It is not just vehicle manufacturers that are bringing innovation to this game. Electric utility companies and component manufacturers are also investing time and treasure toward a common objective.

EDTA has been a steady voice for 20 years. Today’s unprecedented attention and investment might seem like an overnight success story, but this industry’s success has been years in the making. More to the point, we will be at this well into the future.

So for now feel free to browse the EDTA website, and get your questions ready. Who are they , why are they there, and how can they help us and we help them? Come back at 2:00 and join in the discussion and see how together we can help get this country off of oil.

CAFE stands for Corporate Average Fleet Economy and applies to the federal fuel efficiency requirement automakers are mandated to adhere to.

Currently the CAFE standard is 27.5 mpg for cars and 24 mpg for light trucks.

For many years California has pushed for automakers to adhere to its own state standards which are much stricter. The major automakers including GM have fought against this, arguing that the cost of creating cars specifically for individual states is not justified and that there should only be one national standard.

It turns out President Obama has decided to take up the automakers on this issue. Indeed, there couldn’t be a better time for the government to make such mandates as the automakers very survival is dependent on it.

On Tuesday President Obama will announce a proposal to make California’s emission requirements the federal standard and cut automotive emissions by 30% by the year 2016.

To achieve that goal the CAFE standards will have to be significantly more stringent as the primary determinant of vehicular CO2 emissions is miles per gallon.

The new requirements will be total fleet average of 35.5 mpg breaking down to 39 mpg for cars and 30 mpg for light trucks by 2016.

Although meeting these standards will be costly, those companies with electric car programs could be at a significant advantage. After all the Chevy Volt is likely to get an official EPA efficiency rating significantly greater than 100 mpg, although the exact rating methods and how they may affect the CAFE are still being worked out.

GM CEO Fritz Henderson has issued the following response to the Goverment’s announcement:

General Motors commends President Obama’s leadership to establish a harmonized National Program to improve vehicle fuel economy and lower greenhouse gas emissions.

GM is fully committed to this new approach. As the President has previously said, all stakeholders must come together and act with a common purpose and sense of urgency to address the nation’s energy and environmental priorities. We agree and this collaborative spirit is reflected in our viability plan. Delivering innovation and solutions that will strengthen America’s energy security, economy and competitiveness are a central part of GM’s reinvention.

The New York Times has published an interesting article outlining how the government may use the Chrysler bankruptcy process as a learning tool for how to reshape GM.

It is pointed out that the two companies are rather different. GM has three times the employees and twice the number of plants. According to Rahm Emanuel, Mr. Obama’s chief of staff, “G.M. is very different than Chrysler, but I suppose the one lesson for G.M., and all the other players, is that this is a moment when a Democratic president said, ‘I am really willing to let a company dissolve, and there’s not going to be an open checkbook.’ There’s got to be real viability.”

If the ongoing Chrysler bankruptcy works out well, it is likely that option may also be applied to GM. It is already a given that GM will not be liquidated and will survive.

GM’s most recent plan to cut 47,000 jobs, 12 plants, 4 brands, and 2600 dealerships has not yet been approved by the government and some fear may still not be enough to allow profitability in the current automotive market.

Chrysler’s secured bonds are expected to be covered by $2 billion in cash through bankruptcy which will be paid out to a total of 46 lenders. GM on the other hand has about 10,000 unsecured bondholders. The plan is for those debts to be traded not for cash, but for pure stock, 225 shares for each $1000 in debt. Beyond that, 55% of GM would then be owned by the government and 40% by the UAW.

The government now has all the leverage against bondholders who would otherwise be paid very little in bankruptcy court. Indeed, the fear of bankruptcy now hangs heavy over those bondholders heads as the government has already revealed its willingness to let Chrysler go that route.

Though Obama has stated he has no interest or skill in running car companies, he will have no choice as a 55% owner, though he hopes the government’s stake could eventually be sold for a profit.

However, Obama’s expectation for GM to produce low emission high-efficiency cars like the Chevy Volt may conflict with those profitability expectations. It is already well-known the Volt may not lead to profits for two or three generations and potentially hundreds of thousands of vehilce sales.

How the government will handle that dilemma remains unclear.

Source (New York Times)