Reviewing General Motors on Hybrids
General Motors has been bludgeoned into supporting hybrid technology. The company has suffered blows—not from environmentalists or pro-hybrid techno-geeks—but from the marketplace. Almost every article discussing G.M.’s poor financial performance makes mention of their missteps regarding hybrid cars. For example, CBS News referred to G.M. as “road kill on the hybrid highway.” Much to their credit, G.M. has taken their lumps, admitted their miscalculations, and finally jumped on the hybrid bandwagon.
The transition from hybrid naysayer to hybrid cheerleader has taken a couple of years. In 2003, Robert Lutz, G.M.’s vice-chairman of product development, said, “It just doesn’t make environmental or economic sense to try to put an expensive dual-power train system into less expensive cars which already get good mileage.” He argued that the focus should be placed only upon the biggest vehicles, such as buses, full-size pickups, and large SUVs.
By the end of 2004, a year in which the Toyota Prius racked up award after award, General Motors announced a partnership with DaimlerChrysler to make “advanced hybrid propulsion systems.” At the 2005 Detroit Auto Show in January, Lutz reluctantly admitted that the nation’s top automaker made a mistake in underplaying hybrids. He said that even if there isn’t an immediate business case to be made for alternative fuel vehicles and hybrids, it’s not something automakers can afford to ignore. “From a strict business proposition, this is not where we would make an investment,” said Lutz. “It’s not clear that you’ll ever be able to recapture the cost of a hybrid in the pricing. But what we forgot in the equation was the emotional aspect of it.”
In early 2005, as gas prices and hybrid sales continued to grow, Lutz was still holding firm to his belief that hybrids didn’t make business sense—and still taking his licks for it. In March, he said, “rich people don’t care” about rising prices at the pump. A month later, he stepped down as G.M.’s North American chairman as part of a shakeup that accompanied the announcement of first quarter losses of $850 million. He retained his position as the company’s product guru.
By summertime 2005, the Lutz hybrid conversion was nearly complete. He said, “It would be foolish at a time like this not to be focusing heavily on all kinds of hybrids: mild hybrids, intermediate hybrids, full-massive hybrids.” The mention of “all kind of hybrids” refers to G.M.’s portfolio approach to hybrid technology. G.M. is the only car company passionately pursuing ultra-mild hybrid systems, such as Belt Alternator Starters (BAS), which are less costly but which produce very modest gains in fuel economy. The 2007 Saturn VUE hybrid was the first vehicle to use the BAS.
G.M. is also pursuing a full hybrid system, which they claim will be a major breakthrough in hybrid technology. Bradley Berman, editor of HybridCars.com, wrote about the full hybrid system, dubbed “two-mode hybrid” by G.M., in the New York Times:
The design, according to G.M., is part of a strategy to develop hybrids that improve fuel economy at highway speeds as well as in the city, using two separate modes of operation. The electric motors deliver their power through variable-ratio gear sets, which allows them to be smaller and lighter while drawing less electricity. Smaller batteries and power controls than those required by single-mode systems can also be used.
G.M. says that the ability to package the electric motors directly within the transmission housing also offers a competitive advantage, making it easier to adapt hybrid technology to the wide range of vehicle sizes, engine types and drive systems in its global model portfolio.
Rather than develop hybrid systems first for small vehicles and then scale it up for trucks – as other carmakers have done – G.M. borrowed the two-mode design from a system pioneered by its Allison division that is currently used in 350 city buses. G.M.’s position is that incremental economy gains on popular large vehicles – full-size pickups are best-sellers in the United States – will have a greater effect than big improvements on smaller, less popular cars.
Now that G.M. is apparently a believer in hybrids, their job will be to make a believer out of the American public. A change in rhetoric won’t get that job done. The company will need to deliver superior hybrid vehicles, with impressive gains in fuel efficiency and performance, and deliver them before their competitors completely dominate the hybrid market. G.M. will have an opportunity to show their stuff; their production production schedule includes the release of the Chevrolet Malibu Hybrid, Saturn Aura Greenline, and the two-mode Tahoe and Yukon—all in 2007.
Will G.M. drop the hybrid ball again? Maybe, considering they have their eyes on fuel cells. In March 2005, General Motors research and development boss Larry Burns boldly stated, “In 2010, we will have in place a fuel-cell system that’s production validated and ready to go head-to-head with internal combustion engines.”
Lee Iacocca, called back into service as a television spokesman for Chrysler in 2005—G.M.’s technology partner for the two-mode hybrids—warned, “I don’t see anything on the horizon short term that can improve fuel economy faster than a hybrid.” He added, “If it delivers on half the promise, do it. Because you can’t let Toyota rule the roost here continually.”