Friday, November 10, 2006

GM technology going 'green' to challenge Toyota

Saturday, October 28, 2006
GM technology going 'green' to challenge Toyota
Automaker will make hydrogen-powered fuel cell and hybrid-electric vehicles in near future.
Jeff Green / Bloomberg News

DETROIT -- General Motors Corp., losing sales to Toyota Motor Corp., will use some of the $9 billion in savings from cost cuts this year to make vehicles that match the Japanese automaker in technology and fuel efficiency, according to people familiar with the strategy.

GM's plans include a hybrid-electric vehicle with a battery that recharges at any outlet, improved gasoline engines, hybrid versions of its Silverado pickup trucks and hydrogen-powered fuel cell models that emit only water vapor, according to sources, who didn't want to be identified because the plan isn't public.

Chief Executive Officer Rick Wagoner will outline the strategy in a speech before year's end, one of the sources said.

"GM has to change the rules of the game through new technologies because they are simply fighting to not lose share now," said Pete Hastings, a fixed-income analyst at Morgan Keegan & Co. in Memphis, Tenn. "The first and best to market will be critical for future share dominance."

Wagoner, 53, is under pressure to return the world's largest automaker to profitability after he shunned an alliance with Renault SA and Nissan Motor Co.

GM reported a third-quarter loss of $115 million this week and said it was spending more cash on its automobile business than it was generating through vehicle sales. GM lost $1.66 billion in the year-earlier quarter.

The Detroit automaker has assigned a team of engineers to help develop plug-in hybrids, according to one of the sources. The project -- known internally as I-car, for Icon car -- is meant to be the centerpiece of the new strategy, the sources said. Plug-in hybrids recharge when the vehicle isn't in use and switch to the gasoline engine when the batteries are drained.

GM is playing catch-up in "green car" technology. Toyota sold 235,000 hybrids worldwide last year. GM's first true hybrid, the Saturn Vue Green Line, went on sale this month.

Demand for Toyota's hybrids has helped the Toyota City, Japan-based company boost U.S. sales 12.5 percent this year through September.

GM sales have dropped 11 percent.

© Copyright 2006 The Detroit News. All rights reserved.


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