General Motors Exits Bankruptcy, What Does This Mean To You

General Motors exited federal bankruptcy 7/10/09 and many have questioned what does this all mean to me. While there are many promises by the new company and our federal government about the so called "New" GM, it will remain to be seen how this new company resonates with consumers and how it can position itself to repay the $50 million dollars in Government backed loans.

GM CEO Fritz Henderson said, "Business as usual is over at General Motors", I ask, really? with a just announced re-badging of the Pontiac G8 as the new Chevrolet Caprice, you certainly fooled me, isn't this more of the same, isn't this what the old GM did? We have seen this story before, not saying that the Pontiac G8 is not a mighty fine vehicle, which it is, but the public is demanding fresh and bold, new and exciting, Pontiac G8, been there, done that.

Bob Lutz is stating that he is staying on after after being scheduled to retire (he is 77 years old) will end up being GM's Vice Chairman in charge of creative design, brands, marketing and communications. Haven't we been her before, I like Bob Lutz and i think he brought alot to the "Old" GM that they sorely lacked, boldness, some outside collaboration and other attributes. However, I honestly believe that when things get comfortable again, people fall into there old ways and it is high time to bring in outside direction, much like Ford Motor Company did with Alan Mullaly, who was hired from Boeing.

GM needs alot more cash and market capitalization to be in a position to repay the taxpayers much more than they had when GM's market capitalization peaked at about $56 Billion dollars, it needs a minimum market capitalization of $67-$68 Billion dollars to even think about repaying the debt that it is carrying now according to many industry experts. It's market share needs to increase from an expected 16% as it exits bankruptcy to 22-27% a number it has nit reached in quite some time.

With a proposed 2010 IPO, the company could raise some cash to assist in paying down the debt it now has, including the remnants of the pension plans that the "New" Gm is still responsible for.

This may be well and good but the company will have to perform well in the coming year or so to get the confidence of the investment markets to pull off a windfall in a new round of share offerings.

It remains to be seen, what the "New" GM will shape up to be, but they must look towards truly re-inventing itself an d not provide lip service as the current changes to me feel awfully familiar, a road we have been down before.

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Kevin Kimbrough

That Car Guy

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Volt battery pack will be built in Michigan by LG Chem...

General Motors and Chevrolet announced that the Chevrolet Volt battery pack will be manufactured in Michigan at an as yet named location at what will be the largest automotive battery lab in the United States, according to GM's Press Release.

This will be the first lithium-ion battery pack manufacturing facility operated by a major automotive manufacturer in association with LG Chem the battery pack's developer.

The facility is expected to start producing batteries in 2010 as announced by Rick Wagoner at The North American International Auto Show in Detroit, Michigan.

"The design, development and production of advanced batteries must be a core competency for GM, and we've been rapidly building our capability and resources to support this direction." Wagoner said. "This is a further demonstration of our commitment to the electrification of the automobile and to the Chevrolet Volt - a commitment that now totals more than $1 Billion."

"The Volt's lithium-ion battery cells will be supplied by LG Chem's subsidiary Compact Power, Inc. based in Troy, MI." This subsidiary will build the batteries for the VOLT until GM's battery facility is fully operational. "A joint engineering contract with Compact Power and LG Chem also has been signed to further expedite the development of the Volt's lithium-ion battery technology."

A specific sit has not been selected as GM is working with the State of Michigan and local authorities on incentive packages and other tax incentives.

GM will be building the complete battery packs and will take on all of the responsibility on the battery management system and power electronics, Compact Power will continue to provide GM support with the development, integration and provide other consultative support.

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That Car Guy

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Chevrolet Volt may get a 100mpg rating if the EPA approves of proposed testing formula...

The Chevrolet Volt may get a 100 mpg. rating, which would be a first in the world of mass produced vehicles. General Motors is requesting from the EPA, for regulatory purposes, to declare the Volt an electric vehicle. The California Air Resources Board has given the Volt preliminary certification as an electric vehicle, according to Rob Peterson, a GM spokesperson.

If given the 100 mpg rating, it would provide a strong and valuable marketing benefit for GM and be a boost for compliance and fuel economy standards.

Typically, a vehicle would be tested on a EPA test loop, that would consist of city and highway driving, to measure tailpipe emissions and pollutants and provide necessary data for calculating fuel economy. However for electric vehicles that have not emissions, the government uses a Department of Energy mathematical formula to translate energy use into an equivalent of miles per gallon of gasoline.

Using the above described formula, the all-electric Tesla Roadster, as an example gets a 244 mpg rating for the government's corporate average fuel economy program.

The Chevrolet Volt is a plug in electric hybrid, which GM describes as a "range-extended" electric. The vehicle due out in 2010 is designed to go 40 miles on all-electric power. Then a small internal combustion engine would engage to extend the range. It does not appear as reported that the test loop would provide an accurate measure of the Volt emissions and fuel economy.

A government official who wanted anonymity said that declaring the Volt an electric would not paint a true picture of the vehicle.

Rob Peterson, a GM spokesperson said that if the Volt would be certified as an electric, the GM engineers could fully utilize the powertrain's calibration for testing against that classification.

The Society of Automotive Engineers would not classify the Volt as a electric vehicle. The Society of Automotive Engineers classifies and defines a hybrid as having two sources of of energy, like gasoline and electric, of which the Volt has.

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That Car Guy

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