GM Exec: Personal Transportation “At the Crossroads”

February 6, 2008
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Auto shows are supposed to be about sheet metal, or so they’ve been for much of the last century, but opening day at the 2008 Chicago Auto Show began with a blunt warning.

“When it comes to personal transportation, our way of life is at a crossroads,” declared Troy Clarke, President of General Motors North America, during a speech to several 100 journalists and industry executives.

Rising fuel prices and worries about global warming are just two of the factors that contribute to Clarke’s concerns. But the GM executive made it clear that the industry has got to change – just not too much to drive away its customer base. Citing a recent consumer focus group, Clark said that what customers told the company they want most of all is “a Chevrolet Tahoe that got 45 miles per gallon.”

On the other hand, he warned, tough new mileage standards threaten the large vehicles that American motorists have long loved. Yet “small vehicles wouldn’t satisfy some consumers, even if they got 100 miles per gallon.”

There’s little question that the industry has to respond to changing times – to new regulations, as well as consumer demands – but the question is how, said Clarke. One way is by offering a mix of new, alternative powertrains, including hybrids, electric vehicles, fuel-cell vehicles and flex-fuel engines.

General Motors has been a big proponent of E85, a blend of 85 percent ethanol and 15 percent gasoline. During this year’s Chicago show, the company announced it will switch to a flex-fuel version of its Ecotec in-line-four cylinder engine for the Chevrolet HHR. Going forward, Clarke later told, all of its I-4 models, in the U.S., will eventually be able to run on E85.

Living up to the federal government’s new energy bill, E85 could replace the need for 39 billion gallons of gasoline annually by 2020, said Clarke, or more than 20 percent of estimated energy needs for automotive transportation.

Critics have faulted ethanol because it has diverted food stocks, like corn, for energy usage. Earlier this year, however, GM announced it will back a new company, Coskata, which has developed an alternative method to produce ethanol. Dubbed cellulosic, the process can turn wood and other agricultural scraps into the alcohol fuel, noted Clarke, “ending the food-or-fuel debate.” The process would also lower ethanol production costs to about $1-a-gallon, making it competitive with regular gasoline.

What’s clear is that the industry needs to step up its research, said Clarke, but he also suggested that federal assistance, perhaps in the form of tax subsidies, would help increase the pace of new powertrain developments.

“It’s time,” he concluded, “for the U.S. government to address this matter.”

2008 Chicago Auto Show. Big news from the City by the Lake. (2/6/2008)

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