Two of Congress’ biggest sticking points for the Big Three bailout are cutting costs and developing greener technologies, but could the two be at odds with each other? A recent report shows that that could be just the case for General Motors.
GM’s Chevrolet Volt range-extending electric vehicle is seen as the company’s savior, but the revolutionary EV doesn’t exactly fit within the framework of the government’s restructuring plan. According to CNN, the Volt will cost GM $750 million in development costs by the time it hits the road in 2010 – not exactly the kind of cost cuts Congress is looking for.
Moreover, the Volt isn’t expected to be profitable for GM until the second-generation car hits the market sometime around 2016, making for a poor short-term business plan.
But, despite its high costs, the Volt is a crucial model for GM, just as the Prius was for Toyota . The Volt is an image changer, regardless of how it will impact GM’s balance sheet for the short-term. However, it remains to be seen how a government car czar will view these expenses. Will they simply view new green technologies in dollars and cents or take a more long-term view of things? Only time will tell but we sure hope for the Big Three’s sake both can carry on harmoniously – like in the case of the Volt – otherwise bankruptcy might be inevitable.
