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Last Updated: Monday, 8 January 2007, 10:29 GMT
GM betting on a greener future
By Steve Schifferes
Economics reporter, BBC News, Detroit motor show

Chevrolet Volt
The Chevrolet Volt runs entirely on electricity

The biggest splash at this year's Detroit motor show has been the Damascene conversion of General Motors (GM), the world's biggest car company, to green alternative fuels.

Green is very much the theme of this year's show, with every carmaker now keen to show that they care about the environment, even as they launch their latest 300 horsepower truck or SUV.

Journalists were handed out bottles of green-labelled mineral water made of recyclable materials as they picked up their press kits.

Even Ford chairman Bill Ford admits that something has changed in Middle America, the traditional home of the gas guzzler.

But it is GM who seems to have moved the furthest.

Electric motor

Only three years ago, the company abandoned work on its electric vehicle EV1 saying there was no demand for such a product.

This year everything changed.

GM boss Rick Wagoner
GM boss Rick Wagoner says green cars are now the future

In a snazzy presentation that managed to mention everything from the Renaissance to Thomas Edison, GM opened the car show by launching its Chevrolet Volt concept car, the first mass market prototype designed to operate purely using an electric motor.

The stylish car will be powered by new-style lithium batteries which will plug into your garage electricity socket, and could feature a range of supplementary power sources including hydrogen fuel cells and an ethanol-based petrol engine.

The head of GM, Rick Wagoner, says there is "now an irrefutable business case" for producing green cars.

Mr Wagoner told the BBC that in future, all cars would have to be flexible enough to run on biofuels, hydrogen derived from electric power, or batteries which plugged into the electricity power grid.

He warned that with the growth of demand for cars soaring in developing countries, it would not be long before the world ran out of petrol - at least at a price that car drivers could afford.

And this time GM seems to be putting its money where its mouth is, investing up to $100m (52m) in the new technology.

But Mr Wagoner admitted to the BBC that they did not have a definite launch date.

Red-hot technology

Volt's chief engineer Nick Zielinksi told the BBC that the main stumbling block was the development of large enough batteries which would hold their charge and not overheat.

Interior of the Chevrolet Volt
The Volt aims to show that electric cars need not be boring

GM is putting out tenders for the development of a new lithium battery with the aim of developing enough power to allow drivers to go 40 miles (the average commute to work is 20 miles) without recharging or having to use a petrol engine.

But the technology is not quite there, and issues of "maintaining charge and temperature" - that is, avoiding bursting in flames - still remain.

Mr Zielinksi sounded remarkably bullish about the prospect of fuel cell technology as well, saying that his design teams were running neck and neck on lithium batteries and fuel cells.

And he held out the hope that China might become the first country to go straight to hydrogen technology instead of building more petrol stations.

Flexing muscles

Still, GM has not abandoned big cars altogether. Right opposite the Chevrolet stand and its Volt is the massive Hummer stand with its oversize vehicles - also owned by GM.

Toyota Tundra
Toyota's Tundra is a typical US muscle vehicle

GM's bold move to put electric technology front and centre of its product offering, at least in theory, contrasts with the approach of the other Big Three US automakers.

Chrysler, the smallest and the inventor of the minivan, is betting its future on relaunching its Chrysler Voyager people carrier with more amenities and a bigger engine.

Ford, although introducing new versions of the smaller cars like the Focus, is mainly focusing on trucks, where it is the market leader, and rebranded "muscle cars" like a new four-door Mustang.

Even Toyota, the pioneer of green technology, decided to launch the show with a new Tundra truck with a 5.7 litre engine - directly challenging Ford in the heartlands.

Restructuring work

GM is taking its bold green move at a time when the company is in the midst of a massive restructuring designed to restore profitability to its North American operations.

Ford presentation
Ford has a number of new vehicles on display

The company has already shed 34,000 jobs and closed 14 plants, and faces a tough round of negotiations with the unions this year over its next contract.

Mr Wagoner says that its moves have already increased productivity and reduced its losses substantially, although he admits it may be a while before it returns to profitability.

The company has already sold its Delphi parts subsidiary and is considering a sale of its highly profitable GMAC finance subsidiary.

But as it cuts back production to stem its losses, GM is likely to be overtaken this year by Toyota - who is still expanding - as the world's largest car company.

GM has held that role for half a century, and perhaps it is the shock to the system that has precipitated its fundamental rethink of its business.

But whatever its intentions, whether it can implement its new green initiative well as Toyota - which is converting its entire range to offer a hybrid version - remains to be seen.


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