Wagoner: GM didn't build hybrids because nobody wanted them
"We have to build cars and trucks that people want to buy." So said Rick Wagoner, head of General Motors, at a recent conference in Dallas, Texas in response to why GM didn't begin offering hybrid cars earlier. Yeah, Rick, that's entirely true. But, your company also has to have at least a modicum of foresight in order to be successful in the tough American market these days. For instance, Toyota is just now reaping the benefits of its hybrid electric vehicles, despite the fact that the automaker has been building them since 1997. Did Toyota know something that GM didn't? Not really, as the entire world has been watching oil prices climb for the last few decades. It was bound to happen in the United States -- GM's own backyard -- as well, and now that it has indeed taken place, the three remaining American automakers have been caught with the wrong product at the wrong time sitting on dealer lots.
[Source: MSN Money Central]
Reader Comments (Page 1 of 3)
Ignatius 8:50PM (7/11/2008)
Because those people standing outside for weeks, begging for GM to release the several dozen EV1s and even offering them over a million dollars to do so didn't want hybrid/electric cars from GM...
Yeah, that makes sense. Hurrrrr....
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Lad 2:27PM (7/12/2008)
There are those who say GM and the oil lobby working together stalled BEV development.
Until recently, the oil companies, working with the Washington politicians, controlled the energy policy and were able to control auto fuel prices by adjusting the supply.
That's no longer the case because of the new players in the energy market, i.g., China and India. And, the world-wide commodities exchanges are setting the price of oil and have taken price control away from the oil companies.
In the long run, this will force us to become less dependent on foreign oil; but, during this short run of time the pain will be great until we can bring plug in electric cars and fast electric trains to market and start creating power using solar based energy.
Randy C. 8:57PM (7/11/2008)
Is it 1973? Sounds like 1973 to me. The oil embargo did the same thing caused a big jump in fuel prices causing Americans to shop for the cars that American car makers weren't making. In an attempt to stay in business the auto makers convinced congress to raise tariffs on imports. This made the foreign cars more expensive so that the US car makers could stay competitive.
But guess what really happened. The price of the foreign cars went up and the US car makers discovered they could raise their prices too and make more money for the same product. In the end it cost America in the neighborhood of $200,000 for every auto worker job saved.
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Nick 9:41PM (7/11/2008)
Can't build what nobody wants? That is idiotic....how can we not want something that doesn't exist?
Can't buy what they don't make !
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Luke 9:44PM (7/11/2008)
Makes me sad. However, you have to give credit to GM for investing in the lithium battery technology when everyone (including Toyota) said it was too dangerous. Now all the manufacturers have some form of lithium battery technology planned for future cars. In addition, GM invested in ethanol technology for years. If the ethonal producers are correct, and ethanol can be produced for $1 in the future, will anyone give GM a pat on the back for its years of investment? Not a chance.
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tom 10:35PM (7/11/2008)
What is the ethanol technology you speak of? The process to produce ethanol has changed very little over the years. And in terms of a car's ability to use ethanol, only some computer tweaks and some corrosion resistant parts are needed.
BlackbirdHighway 6:28AM (7/12/2008)
Toyota may have been talking down lithium, but at the same time they were investing billions in it.
You can thank Tesla for getting GM going on the Volt with its lithium batteries. Maximum Bob said so himself.
EVan 1:04PM (7/12/2008)
Tom,
He's talking about cellulosic ethanol. GM has made major investments in some early players. (Coskata, Mascoma)
Hybrid technology is still a pretty crummy technology, it's not a big deal that GM didn't get too excited about it. Consider this...
1. Todays hybrids only use gasoline... just like every other car. They are a stop-gap technology.
2. The fuel efficiency gains aren't great enough to justify the price premuim over similiar non-hybrid vehicles.
3. When it comes to technologies that really offset the use of gasoline, GM is at the forefront with plug ins, fuel cells, and ethanol.
Rich 9:12AM (7/16/2008)
Hi Luke,
I was reading that CHEVRON actually purchased the rights to the lithium battery technology. Of course you got watch out for the dirty oil companies and their proclivity to purchase new patents on emerging energy technologies.
I suggest you go to the patent's office website and do a search for energy technologies and see how many are owned by big oil even though they have nothing to do with oil and the removal of crude oil. They have been protecting there market. Fair competition doesn't exist!
fnc 9:50PM (7/11/2008)
Translation :
"DURRR..... The pretty suvz selled so good we just wanted the shiny moneyz. Long term planning no fun!"
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tom cesarz 1:01AM (7/12/2008)
GM to the world - "Yes, we are a Global Car Company, but who knew the price of oil was going up? We're shocked I tell you, shocked that the price of a gallon of gas is so expensive, quick - somebody call Toyota and ask if we can borrow their Fortune Teller they obviously are using..."
Step One, GM shareholders - fire this dunce.
Step Two, Diesel Hybrid Pick-up Trucks, you know, just like the Diesel Locomotives made by that GM division called EMD. Oh wait, GM sold off the only division that had Diesel-Hybrid knowledge, since 1938. How fortunate that the shareholders benefitted from this units sale to an outside investment group.
Pity you couldn't continue to profit in the longterm off of their institutional knowledge. Time to sell and buy GE stocks.
Step Three, unleaded gasoline hybrid in a four door with a hatchback class of car.
In short, the serial hybrid is the answer. A motor spins a generator, the generator feeds electricity to hub motors in either 2 or four wheels. The second generation of these vehicles can have battery packs added at a later date.
This type of platform design, eliminates the transmission and the front and rear axles of a 2 or 4-wheel drive vehicle, allowing the vehicles to shed a lot of weight, and 3 specific components where alot of energy is lost during the conversion from engine rotation to actual tire spinning.
Having a system in a pickup truck allows ranchers/farmers or consumers who need to tow heavy loads, the ability to have near 100% torque where you need it the most, spinning traction wheels under a heavy load...
Shareholders should demand to see a hybrid system across all vehicle platforms - the Volt and it's Opel version are a fine place to start, but if Robert Lutz isn't seen driving in a Serial-Hybrid Pickup (locomotive Junior) in 6 months out on the GM Michigan Proving Grounds, the time to dump GM stock or it's top people will be your best options.
Farmers and Ranchers, the breadbasket of this nation, are getting dragged down to their knee's due to high diesel fuel costs. We don't need high ticket luxury vehicles with high profit-margins, we need high-mileage alternatives in all vehicle classes. Make a product and sell a product. If the solution doesn't come from GM, buyers will get it from another company that does, and 5 years from now, retirees will tell stories about the path not taken by the now extinct GM...
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tom 10:34PM (7/11/2008)
I completely understand what the guy is saying. It's far more important to spend large sums of money engineering cars that people want...like the Saturn Ion with that fancy contrasting exterior trim and the blue leopard center stack trim.
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Louis 10:23PM (7/11/2008)
GM didn't bother building any hybrids because they were making too much money on their trucks. What did they care about the future? Tommorrow would never come.
Now, it's time to pay the piper. GM is still not doing well because it can't build a quality car like the Japanese can.
So, Toyota will probably wind up buying GM. GM can build their trucks and Toyota will build the cars.
Case closed, it's still the quality, stupid!
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dale 10:38PM (7/11/2008)
I should have sold all of my stock in this company years ago. Totally clueless and destined for failure.
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Andy 10:48PM (7/11/2008)
Give the man a break. His company is flushing down the toilet. He's under pressure and it's showing.
Having said that .....Get over it.....Toyota had better vision and judgement than you. That's all.
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a.brien 11:06PM (7/11/2008)
G.M should begin to build the volt with an altair nano battery good for 30-40 miles( not too weighty and bulky) in one or two of the numerous factories they intend to close due to suv and light trucks decrease in sales now because if they intend to close then re-open the factories later with new or re-called workers, it's going to be easier on the wallet and maintain parts of the market that is now half of what it was in the fifties-sixties before the japanese explosions of sales. In decades 2000-2010 we will see the china and india and russia and europe explosions of sales
with this kind of car.
http://www.youtube.com/watch?v=eb9urNUFzAM
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smartone 12:35AM (7/12/2008)
You are missing the most ironic part of this statement - Japanese Auto makers only started producing hybrids because they were scared by a 1993 high profile event at Clinton White House where GM and other American Car companies showed off Hybrid Vehicles
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john metcalf 3:38PM (7/13/2008)
If this is true, then the excuse is only more lame.
Steve 12:50AM (7/12/2008)
The market defines the products offered.
And honestly, with the majority of drivers still gunning it from stoplight to stoplight, and passing me at 70+ in a 55, I'm doubting to what degree people are willing to trade their SUVs, Mustangs, 3-Series, or any other ICE car for an EV-1, Prius, or Insight.
Why are we discussing the dilemma as limited to scope to "American Big Three"? I realize Jeremy's comments stem from Wagoner's conference, but why expand the commentary from GM (who currently offers several hybrid models) and limit critique to the Big Three? Where is VW's hybrid offering? Peugot's? Fiat's? Hyundai's? Daimler's? BMW's? Why did Honda axe their hybrid?
Oh. BECAUSE NOBODY WANTED TO BUY THEM.
Golly, as loathe as some of us may be to admit it, Wagoner is obviously on to something there.
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Chris M 2:49AM (7/12/2008)
Then how do you explain that GM is now offering 2 different hybrid types in 5 models and developing more? Also, VW, Peugot, Fiat, Daimler, and BMW are all developing hybrids, with Daimler and BMW working with GM on their dualmode hybrid transmission. Hyundai has started production on their hybrid for the Korean market, with an international rollout in a few years.
Honda did drop the 2 seat Insight and Accord hybrid due to poor sales, but is still selling lots of Civic hybrids, and is developing two new hybrid models.