At Witz' End: GM EV1 - The Real Story, Q&A
People are most critical of the things they least understand. – Paul W. Spoor, Bits & Pieces, September 2008.Why is it so important to some to cast GM as a villain? To believe that the only reason we don't have affordable, practical pure-electric vehicles today is that GM doesn't want us to?
Why is it so difficult to believe that General Motors is not the same sadly mismanaged company it was in the 1970s and '80s? That it's a completely different enterprise run by completely different leaders with completely different values and priorities?
Why so difficult to accept that if GM – or anyone else – could make a buck building and selling the EVs of your dreams, they would be thrilled to do so? And will the minute they can?
As GM (and others) have learned from past, very expensive failed attempts, volume road-worthy EVs require a huge financial investment, and risk. But whoever gets there first with practical, affordable ones will make a killing. Why would any automaker not want to?
And why accuse me of lying or spinning, as some will, for explaining and defending – based on my knowledge and experience – GM, Ford, Chrysler, anyone else who deserves it?
I worked for GM two different times, the first (1965-'73) when it led the global industry and was as proud and arrogant as the day was long. The second (1987-'02) when it teetered on the brink of bankruptcy, learned humility and appointed different kinds of leaders to fix it. In between, as a widely published auto writer, I was as harsh a critic as anyone. I hammered GM's leadership and its products relentlessly, because both were shamefully bad.
But that began to change when Bob Stempel replaced Roger Smith as CEO in 1989 and gained momentum in 1992 when new CEO Jack Smith (no relation to Roger) effectively started to right the still-sinking ship. It's been rough and rocky sailing since, but – contrary to what many believe – GM leadership under current CEO Rick Wagoner has been outstanding.
Like other U.S. makers, they still can't make a living in North America due to high costs, our business-unfriendly government and other conditions beyond their control. But there have been no bad new GM products this decade, and most are world-class competitive, or better. As an employee, I had no great love for GM. As a journalist (again), I'm professionally neutral and objective. But as a former insider, I gained perspective on GM and the industry as a whole that no one who hasn't been there could understand. Also enormous appreciation for the smart, talented, dedicated, hard-working individuals who toil there 10-14 hours every day.
That said, I've responded to some of your questions about my previous columns after the jump.
Note: questions have been edited for space. To read the full questions and see the discussion threads they were a part of, click on the questioner's name.
What I cannot fathom is how all three auto manufacturers fell into the big-car trap. This happened before in the 1970s - fuel prices went up and U.S. automakers were left with obsolete product lines. – Steve.
So in 2003, U.S. automakers should have seen $4.00 gas coming in exactly five years and shifted their powertrain and vehicle production, and the entire supply chain that feeds it, from highly profitable large vehicles that most Americans wanted to smaller, more fuel-efficient vehicles that at the time almost no one wanted and could not be built and sold at a profit?
Come on, Steve, they're not making sandwiches. They can't shift production overnight to match fluctuating demand. The costs are in billions and the lead times measured in years. How many U.S. car owners saw it coming and downsized their vehicles just before it did? Everyone knew this would happen, but no one knew exactly when. U.S. makers have been planning and working for years toward migrating their production from larger to smaller vehicles, due to both changing customer demand and accelerating CAFE requirements. But $4 gas has arrived at least a couple years too soon for them. The new, more fuel-efficient smaller vehicles and engines that Americans suddenly want have been designed, developed, planned and programmed to arrive in volume beginning in 2010. No matter how much we want them, they can't suddenly be moved ahead by more than a few months, at best.
So this year and the next will be very tough for our domestic industry. And the challenge to make a living on U.S.-built small cars will be huge. They don't cost less to engineer and build than larger ones, but Americans have never been willing to pay much for them.
Do I need to point out that off-shore makers enjoy much lower business and production costs, undying support of their governments (and ours) and fleets of products that are already small and fuel efficient due to decades of high fuel taxes and prices in their home markets?
You insist that everything possible was done to reduce costs to make EV1 a financial success. Then why did it share almost nothing in common with any other GM vehicles? To make a new, low volume vehicle is to essentially guarantee that it won't be profitable. And then GM used that lack of profitability as its main argument to kill the EV1. - meme
Ah, yes, it's so easy to criticize from the outside. And, by the way, within our weight and cost requirements, we did use as many off-the shelf components as we could, mostly minor things like the door handles, the premium radio and the steering column control stalks. But, as I stated, the vehicle had to be, and was, the most efficient ever built to get even 50-70 miles of range out of the ½-gallon of gas-equivalent energy in our 1,175-lb. PbA battery pack. EV conversions of conventional vehicles at the time were good for maybe half that. Do you really think a cheaper, heavier 30-40-mile EV would have sold better? No one else's has.
Yes, the car was expensive, and the battery pack even more so...about $25,000 initially. But that's all the energy we had, so every ounce of weight, every count of drag, was critically important. The plan was for the program (not that first car) to earn profitability over time as battery capability increased to where we could deliver reasonable range from more conventional, practical and affordable vehicles, and as other automakers purchased our EV system. As you know, none of that happened because the necessary battery technology didn't arrive.The issue wasn't profitability but lack of consumer acceptance and lack of progress on battery invention and development. When you can move only 800 (200 fewer than you have already built) at a heavily subsidized lease price of $299/month in five EV-friendly western cities over a three-year period, you know it's just not ready. BTW, the Volt is based on GM's next-generation compact platform and does not need hyper-efficiency due to its range extender.
Don't worry, there will be more Q&A next time.
Note: Award-winning automotive writer Gary Witzenburg has been writing about automobiles, auto people and the auto industry for 20 years. A former auto engineer, race driver and advanced technology vehicle development manager, he has been a regular contributor to a wide variety of national magazines including Playboy, The Robb Report, Popular Mechanics, Car and Driver, Road & Track, Motor Trend, Autoweek and Automobile Quarterly and has authored eight automotive books. He is currently a Contributing Editor or Contributing Writer for AutoMedia.com, Kelley Blue Book, Automobilemag.com and TheCarConnection.com, Design Editor for Automotive Traveler and a North American Car and Truck of the Year Juror.
Reader Comments (Page 1 of 2)
jeffzekas 1:50PM (9/30/2008)
Hi Gary, part of the problem is this: many of us grew up during Vietnam (remember the secret bombing of Cambodia?) and Watergate (our president spied on his rival party) and the Contra Scandal (CIA selling drugs for guns in Central America).
Also, most large corporations are suspect... after all, unlike a large company, most individual citizens don't receive golden parachutes for LOSING money! (i.e. the current scandal with Fanny Mae and Freddie Mac).
Guilt by association... is sucks, but what can you do? And also, many consumers have long memories (remember the Chevy Vega with the self-destructing aluminum engine? And the early diesel Buicks, with the water-in-the-motor defect?). So, you can't blame the consumers, when they are suspicious of a company which built defective products, and then tried to weasel out of responsibility for those defects ("The paint peeling off your year-old Chevy Celebrity? That's normal!").
But, hey, thanks for presenting the "other side". I agree with you: GM didn't purposely sabotage the electric car. However, they DID shoot themselves in the foot, by attempting to destroy all evidence of their experiment! regards, jeff
Reply
jeffzekas 6:49PM (10/02/2008)
As for the argument, "We had to crush them, because of the liability"... According to my lawyer, "All GM had to do was have the owners sign a Release of Liability Waiver." Those cars weren't crushed because of legal fears... but rather, for another, less acceptable reason (which we can only guess at, because we can't get inside the CEO's heads).
gorr 2:12PM (9/30/2008)
Gm is not a car maker like ferrari or porsche is or ford was when they invented, assembled and retailled the ford t in 1908. It's a high financial corporation related to goverment laws and subsidies that started when banks and politicians were afraids that some private citizens not related to them might have some power and prestige toward womens by having a succesful and prestigious car compagny. they bouth many car compagnies with bank money and special laws from the beginning. It's the same thing now in washington and new york that is done everyday, trying to control everything to impede me to order my car specifications via internet that i expect to see at a car derlership or at wal-mart since the beginning of year 2000. I know it sound weird but im not satisfied of the offerings in the car market of today, so it's normal to voice what kind of car specifications you want and it's not gm that will stop me to make appear my futur buy.
Reply
John Hollenberg 2:16PM (9/30/2008)
I am underwhelmed by the Q&A, as all of Witz columns. He basically admits that "we knew it was coming", but that the U.S. companies waited too long to do anything about it. Toyota started on their path 11 years ago with the Prius. They had the vision and foresight, the American car companies didn't.
Reply
oldraven 3:05PM (9/30/2008)
When was the last time you took a look at Toyota's current range of offerings?
I'm not seeing a lot of compacts in there. They're just as guilty of 'building the boats' as GM. And if GM had been building cars for the Japanese market all these years, they'd probably be more prepared for the latest gas 'crisis'. The closest they could get to that was the Toyota Cavalier. No, the truth is trashing GM became what the cool kids did, ever since 'WKTEC' came out.
http://smg.photobucket.com/albums/v613/oldraven/junk/?action=view¤t=toyolineup08.jpg
Chris 8:48PM (10/03/2008)
What is really funny about your comment is that if you look model for model GM has an entry to every Toyota entry except the hybrids. And then if you look at the competition no one sells any hybrids in volume. Honda is now just coming out with a competitor to the Prius. I guess everybody missed the boat. Or Toyota is smart, or perhaps lucky? They came out with the Prius 11 years ago and only now is it really selling in any volume.
Gary 11:23AM (10/01/2008)
Oh yeah, Toyota was SO SMART to come out with the Prius 11 years ago. It barely sold for 9 of those years except to enviro"mental"ists. Recently visiting Japan, I've noticed that they have a habit of makings things more complicated than they have to be
A kettle as you and I know it? Well, in Japan, they have about 6 buttons on it to do stuff like set the temperature, provide child lockout, and to operate the pump because the Japanese are too weak to pick up a kettle and pour the water out?
kert 2:19PM (9/30/2008)
Why are the EV1 powertrain prototypes never covered in the EV1 stories, particularly the turbine-powered four-seat series hybrid ?
Reply
Joey 2:55PM (9/30/2008)
"People are most critical of the things they least understand."
Is that why you're so critical of the scientific community and their stance on global warming?
Reply
Julius 2:58PM (9/30/2008)
@ jeffzekas - you do realize that in this lawsuit-happy environment called the United States of America, GM would have been liable for any issues in the remaining EV1's left out "in the wild" after the leases expired, for at least the next seven years. In the end, it was probably easier to reclaim and crush the cars, rather than worry about maintaining a replacement-part catalog (of expensive, non-off-the-shelf components, as noted above) for that time.
@ John Hollenberg - FYI - this is the same company that spent a billion dollars designing and building a brand-new factory to build the brand-new Tundra/Sequoia, only to give the employees a "four-month vacation" when full size BOF vehicle sales tanked.
So I'd argue that the foresight lost was the American government's, not just the auto companies. If we really wanted to focus on smaller cars, we should have invested in a higher gasoline tax (like in Europe) rather than the pointless CAFE. Even Alex Taylor (Fortune Magazine) said as much in today's article: http://money.cnn.com/2008/09/30/news/companies/taylor_bailout.fortune/index.htm?postversion=2008093012.
Reply
Julie 3:35PM (9/30/2008)
Gary,
As always, it's a pleasure reading your comments. Having been a former big-three employee in their EV sector, I couldn't agree more with you. Everyone I worked with was as dedicated and committed to bringing alt fueled vehicles to market. Not one person ever even thought of trying to destroy the market and I never once saw or heard of any conspiracy - and I worked behind the tightest doors there were. As usual, you are right on the mark with your observations.
All the best,
Julie
Reply
Woodenbee 3:49PM (9/30/2008)
I never understood that EV1 liability thing, you sell a car, the warranty expires, end of story, its bull&(^, and trying to blame it on peoples right to sue is just a right wing red herring, one of those blanket statements that's never true and rarely even applicable, as in this case. Anyway we all know that, the real question is why GM tried to make it go away, what happened to make them do such an about face on it? it looks like a severe case of cold feet, it boils down to math, we have fifty years or so of petroleum to burn, so lets stall until that really becomes an issue then worry about, the oil boys got with their GM buddies and said "hey hold your horses there, you mavericks you, we've got a whole bunch of petroleum to sell and we'd like to see demand go up, not down! so go ahead and crush that EV1 thing before people take notice, and we don't want them popping up on the news all the time saying how great they are, so crush 'em, every last one" doesn't that make more sense then all the nonsensical gibberish that they announce as the facts.
Reply
meme 3:53PM (9/30/2008)
"The plan was for the program (not that first car) to earn profitability over time as battery capability increased to where we could deliver reasonable range from more conventional, practical and affordable vehicles."
Then aren't you confirming the criticism? If the plan was that you *wouldn't* be profitable without moving to "more conventional, practical and affordable vehicles", then how was arguing that the EV1 didn't turn a profit and using that as a justification to kill the program a fair argument? By your own statements, *GM never planned to turn a profit on the EV1*. GM was famous for standing up and arguing that they were losing tens of thousands on every EV1, so that's the reason that had to "pull the plug", so to speak. But from what you just said, they never expected to earn a dime on the EV1. They wanted the EV1 to be a technology development testbed for future vehicles.
GM talked about how it cost them $80k for each EV1 they built. According to you, the battery pack cost $25k. Where's that other $65k coming from? That's the price you paid by *deliberately* choosing to make a testbed that shared little with anything else GM made. Yeah, door handles and steering columns are great, but that's nothing like sharing a chassis production line. Again, by your own words, GM never intended to turn a profit on the EV1. Yet they used the lack of profitability to kill the program in its entirity.
The "battery advancements failed to materialize" argument is clearly nonsense, as batteries *were* advancing by leaps and bounds at the time. You went from a 50-70 mile Delco PbA, short-lifespan pack to a 70-100 mile PbA pack to a 75-150 mile long-lifespan NiMH pack. In what way is doubling the range and tripling (or more) the lifespan "lack of progress on battery invention and development"? And li-ion had just started to emerge, so you had the next gen technology to advance into right at your fingertips. How is this not major advancement? Please explain this one to me. Seriously, what would it have had to take for you to have decided that they tech had advanced enough -- a tenfold increase in range?
The amount of power in that NiMH pack could have given a conventional car, something like a Saturn SL1, a 50-90 mile range. Combine that with the 50kW MagneCharge or the even more powerful level 3 Avcon, all available at the time, or range extenders, which GM had already been testing, and you had a perfectly viable transportation system on your hands. And if your issue was pack price, combine it with long loans and/or battery leases, and why *wouldn't* that have been markettable? Even in the era of $1.30 gasoline, electricity was still cheaper.
I should add that I don't believe in any of the conspiracies. I just see a decisions made by a company that was more willing to become a dinosaur than to take any sort of marketplace risk. A company that sold out its future for the easy allure of the high profit margin on SUVs with no thought to the sustainability of that market, and now wants us to bail them out for their mistakes.
Reply
MIke!!ekiM 4:57PM (9/30/2008)
I see it the same way.
- Witz again claims there weren't sufficient buyers.
But:
- GM built these cars as Kit Cars, with no plan to ACTUALLY build say 50,000 a year, you'd Never get Economies of Scale, to bring the battery price down.
- The Truth is the EV1 was only built to meet CA's emission plans.
- GM Sold these cars with Restrictions, unlike any other car they sold.
- Witz again claims Range was a problem. And yet it STILL isn't a problem. As a second, commuter car it's Perfect.
- GM could build 50,000 of these today and sell every one, and it would be cheaper then the VOLT.
Then there's Management's Commitment. When you have a Vice President of GM spouting the Oil Industry's Propaganda "hook, line and sinker", ( 30,000 unverifiable Scientist skeptics' of global warming ) it calls into question just how "independent" GM is from Exxon-Shell-Chevron-BP... It calls into question Management's Judgement and the Boards Competence.
It calls for an SEC investigation of Oil-Auto Industry Collusion.
Bill 9:56PM (10/01/2008)
But at what price NiMH?
If the lead-acid pack in the EV1 cost $25K, how much more did NiMH packs cost at the time?
Today Tesla can build a cheaper lithium-based battery pack with essentially double the capacity of the NiMH pack used in the RAV EV.
Mike!!ekiM 5:00PM (9/30/2008)
GM's management has kissed the oil industry a**, and this is what the consequences are:
The Methane Bomb is now going off:
http://www.independent.co.uk/environment/climate-change/exclusive-the-methane-time-bomb-938932.html
YOU will be remembered as the Dumb A**'s who let this happen.
Reply
Perry 10:16AM (10/01/2008)
Gary you are absolutely right.
The EV1 was simply ten years ahead of it's time. Cheap gas spurred a demand for trucks and SUVs which eliminated the market for the EV1. The volt is the best decision GM ever made.
Reply
Stan-O 7:55PM (9/30/2008)
Well, you're talking about lack of consumer acceptance but maybe GM should have spent more on the consumer awareness campaign for an innovative product. From one of your earlier articles when you mentioned costs it was pretty evident GM didn't invest much into ads.
The EVs were going strong until they were taken back to GM, so it was a viable car back then and would have been now.
With all the "lessons learned" howcome it's Tesla making this wonderful electric roadster, not the GM?
Reply
Holden Miecranc 9:49AM (10/01/2008)
"When you can move only 800 (200 fewer than you have already built) at a heavily subsidized lease price of $299/month in five EV-friendly western cities over a three-year period, you know it's just not ready."
So let's see, GM could only find leasees for 80% of the units of the 1,000 available, but yet people claim the demand was staggering for these cars. People, please name one product of any kind, let alone one with the production costs of the EV-1, that stays in production when demand falls far short of production, not to mention how a mass, not niche, market corporation is supposed to justify the expense of keeping 800 people happy.
Once again, reality destroys the myth that EV-1 conspiracy theorists base their arguments on.
Reply
Gary 11:26AM (10/01/2008)
A lot of domestic-bashing is based on ignorance. My girlfriend recently commented about how on a long trip, one friend with an Chevy Impala paid $50 for gas, whereas another friend with a Toyota Echo paid only $25.
Hello? It's not the manufacturer, it's the size of car! A Ford Escort will get better fuel economy over a Toyota Sequioa...
Reply