November 22nd, 2008
Can savior-elect resurrect General Motors?
This General Motors saga has it all: pathos and bathos, tragedy and comeuppance, hubris and ignorance, innocence and foolhardiness. Oh, and it could be the trigger to an even nastier American economy than the one we already expect for next year. Even back in January some GM execs were saying the Volt would do from Detroit what landing on the moon did for the American space program. They didn’t mention that the space program was NOT trying to turn a profit. But maybe it was just a subtle hint from GM that the only way the Volt will launch is with taxpayers’ dollars, like any good moon shot. Meanwhile, Volt is being touted as savior-elect as GM lobbies Washington for money.
Chevy Volt. Courtesy: CBS Interactive.
GM insiders are saying they see the company’s future riding on the bumper of the little electric Volt. Yes, the car that is not even going to be on the street until late in 2010. Boy, the intervening two years seem like a long run up a steep hill for decrepit GM right now. And when the Volt is up and running, it won’t be without competition.
Toyota, Mitsubishi, Nissan, Renault and BMW have plug-ins planned. It’s not clear if any of them can beat the Volt to market with a plug-in car. It is clear that if GM implodes, there’ll be some plug-in cars sold in America before the next presidential election. And plug-ins have an active lobbying voice already.
VOLT UNPLUGGED?
General Motors’ CEO told Congress this past week his corporation would not seek bankruptcy. Now, word comes that his bosses, the GM directors would consider bankruptcy...and probably jettison the current CEO. If GM does seek Chapter 11 protection all kinds of issues are handled by the bankruptcy court. For us at GreenPastures it means the Volt project at Chevy would be looked at for its viability. Presumably the court would rather have GM trying for fuel-efficient and green cars than more SUVs and Hummers. But it may be the Volt would be spun off or even shutdown if it looks like too little and too late.
Want to read about how Chapter 11 works? Here’s the federal court website. And here’s one observer who lists some of the GM costs that could be cut by a bankruptcy court, including pensions and benefits for workers and retirees.
As for Detroit’s Big Three seeking money in Washington? Wait until December 2 when the plan is supposed to be in the hands of Congress. Meanwhile it’s clear there’s some built-in resistance to rescuing American automakers, and it’s right here in America. States that have non-union, foreign-owned assembly plants.
A newsman since 1969, Harry Fuller has worked for CBS, ABC, CNBC Europe, CNET and was founding news director at TechTV. See his full profile and disclosure of his industry affiliations.
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