The Green Piece: September 8, 2009
The beleaguered automotive industry in the United States has taken its fair share of knocks over the last 12 months but none were more shocking than when one of the oldest and most well-respected brands in motoring – General Motors (GM) – slipped into bankruptcy earlier this year.
Its dive into the financial doldrums was short-lived however, and on July 10, 2009, the company bounced back with the formation of a new, downsized GM (see article). The company was created from the old GM's strongest operations and was reborn with a clear focus on building better and more environmentally friendly vehicles.
However, with Japanese rivals such as Toyota and Honda having burst into an early lead in the green car race and Chinese manufacturers challenging the dominance of the traditional 'big name' manufacturers, is there room for the new GM to succeed?
How GM hopes to recover
As part of its re-emergence, GM has established just four core brands – its global leader Chevrolet; Buick, which focuses on North America and China; GMC, one of its most profitable brands which will focus on North America and the Middle East; and Cadillac.
According to Fritz Henderson, the company's CEO, the only way to put GM on top again is to win the market with the "best product". The company already has several successful vehicles including the Chevy Malibu, Buick Enclave and Cadillac CTS/CTS-V which have received critical acclaim. However, there is a clear need for the company to drive forward with vehicles that are more environmentally responsible.
With CAFE emphasising fuel economy and increasing the target from 26mpg in 2010 to 35.5mpg in 2016, GM is focusing on getting greater mileage out of existing petrol engine technologies. Starting from 2010 its 2.4l Ecotec VVT I-4 will include E85 engines and the number of flex fuel models will increase from 17 in 2010 to 28 in 2012. It is also expected that the number of vehicles sold with direct injection will increase to 1.2million from 2010 to 2012. Additional new technologies include active fuel management which shuts off half the cylinders during low load conditions to improve fuel economy by as much as 12 per cent; and variable valve timing that can improve fuel economy by two per cent.
Embracing new technologies
As a more long term solution, GM is introducing homogenous charge compression ignition (HCCI) which can offer a 12-15 per cent improvement in fuel economy while remaining more affordable than diesel or hybrid technologies. It is expected that the technology will reach the market within 10 years.
The company has also worked on a two-mode plug-in hybrid electric vehicle and its range extended Chevrolet Volt (to be known in Europe as the Opel/Vauxhall Ampera), which offers an electric range of 40 miles, is seen as the key to its future prosperity. GM is also investing in hydrogen vehicle development with a 116 strong fleet spread throughout the world for testing and the company is working on a fifth generation system for 2015 that is expected to offer a longer range and a much smaller fuel cell stack than the existing system.
However, the new GM has chosen to turn its back on diesel technology and has tabled plans for a 4.5l diesel engine for light trucks. According to Bob Lutz, the company's vice-chairman, the problem with diesel is the added expense of the car. Though diesels are popular in Europe, the company is placing its bets in the US on electrics and hybrids and hoping that electricity diversifies the industry away from petroleum.
So can GM be a success again?
With its restructure complete, there is little doubt that GM has the potential to be successful again.
The company has already shown its ability to produce segment leading vehicles and in the Chevrolet Volt it may offer the car that is most likely to bridge the public from traditional petrol/diesel powered powertrains to electric cars.
Critics will point to the fact that GM missed the boat with the ill-fated EV1, which was produced from 1996 to 1999. It was the first mass produced electric car from a major automaker and despite a positive reaction from its customer base, GM viewed the programme as an unprofitable niche and discontinued the EV programme in 2002 with all cars on the road repossessed.
In retrospect, the failure of the EV project appears to personify the original company's collapse. However, in the Chevrolet Volt it appears GM has learned its lesson and with continued investment in hydrogen technology it is continuing to plan ahead. Now its success will hinge on how well designers and engineers can produce vehicles that resonate with the public.
It may never recapture its market share, but if its early success in China is anything to go by (see article), the new GM will have a firm role to play in a new automotive era.
Faye Sunderland
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