The Fate of Empires and Search For Survival (Part Four)

Daniel O’Callaghan continues his digest of Bob Lutz’s 2011 book, ‘Car Guys vs Bean Counters’, examining GM’s latterday approach to alternative propulsion.

1996 GM EV1. Image: oldcarbrochures

GM’s expansion to become a global company had largely been built on acquisitions: Opel and Vauxhall in Europe, Holden in Australia and Daewoo’s automotive business in South Korea. These companies continued to operate with a high degree of autonomy in product design and engineering. It was argued that this enabled the companies to remain close to their local markets and deliver products tailored to each’s needs.

However, as the automobile market became ever more globalised and the cost of development increased rapidly, GM realised that it was expending an enormous amount of duplicated effort and associated costs to produce increasingly similar vehicles.

Efforts to globalise product development were already well underway when Lutz arrived in 2001. The first fruit of this effort was the 2002 Epsilon I platform, which was used globally as the basis for Chevrolet, Opel/Vauxhall and Holden models, the second-generation Saab 9-3 and even the Cadillac BLS, supposedly named in Lutz’s honour!

Lutz lobbied hard for a further centralisation of global design and development, as well as the purchase of parts from outside suppliers, to maximise the opportunity to negotiate volume discounts. He faced strong resistance from the regional business heads who feared the loss of autonomy and authority this would entail. Supported by Wagoner, Lutz won the argument and GM’s second global vehicle architecture was the 2008 Epsilon II platform, on which was based the US and Chinese market fifth generation Buick Regal, the Chevrolet Vectra and the first generation European and Australasian Opel/Vauxhall and Holden Insignia.

However, behind the scenes, there remained interminable arguments about how the development costs should be shared, as the regional businesses remained in control of their own budgets. This remained the case when Lutz left GM in 2010. Lutz was frustrated by all the negative press directed towards GM, particularly in light of its continual praise of Toyota. The Japanese company had gained hugely positive publicity for its launch of the first hybrid Prius in 1997, a car that was adopted by Hollywood stars as emblematic of their environmental consciousness.

Meanwhile GM had launched its first electric vehicle, the EV1, available in small numbers and only on lease. These relatively primitive vehicles were extraordinarily expensive to maintain and, with losses on the programme approaching $1Bn, Wagoner decided in 2003 not to renew the leases and call in the vehicles, which caused outrage amongst users. To avoid liability if the vehicles ever returned to the road, Wagoner ordered the majority to be crushed. The only ones spared were to be museum exhibits. This was a PR disaster for GM. Worse, it coincided with the launch of the Hummer H2, a vehicle that was immediately demonised by the press and environmental campaigners for its apparent profligacy.

GM did produce a hybrid system, jointly developed with Daimler-Chrysler and BMW, for its full-size trucks and SUVs. The company argued that this is where the greatest fuel savings were to be made, but the market and press reaction was lukewarm: the fuel consumption the hybridised full-size vehicles was reduced by 25% but was still pretty heavy in absolute terms. Behind the scenes, GM had an active fuel cell development programme, but the date for bringing this technology to market was a (rolling) decade in the future and the press regarded it as a smokescreen for the company’s lack of activity on Hybrids and EVs.

It was against this hostile background the Lutz pushed for the development of what would become the Chevrolet Volt and Opel/Vauxhall Ampera. The fuel cell development team were antipathetic, fearing that it would create doubts as to the viability of their work. Wagoner, burnt by the EV1 fiasco, was also sceptical.

The dam broke with Tesla’s Launch of its EV roadster in 2008. Here was an EV, powered by 6,835 lithium-Ion laptop batteries, that proved the viability of the power source. Lutz secured Wagoner’s agreement to investigate the concept further. However, he was persuaded that a wholly electric car would still have too short a range and the battery pack too expensive for it to be viable.

The compromise was a ‘sequential’ hybrid, a car that would run solely on battery power for up to 40 miles. The Prius is a ‘parallel’ hybrid, where both power sources run together for optimal performance and range. Sequential hybrids are less efficient, but Lutz was convinced that the Volt’s USP would be its near silent electric-only running for all shorter journeys. The car would be marketed, not as a hybrid, but as an ‘extended range EV’.



A concept was presented at the Detroit Motor Show in 2007 where it was greeted with great enthusiasm. Toyota, apparently wrong-footed, publicly questioned the safety of lithium-ion batteries in this application, pointing to evidence that, under certain circumstances these batteries were a fire risk. The Japanese company even intimated that GM would never build the Volt, that it was merely a publicity stunt.

GM moved ahead with the project. The production Volt was, of necessity, based on an existing GM platform, that of the Chevrolet Cruze. The production model was far less dramatic than the concept and this caused a rather muted, anticlimactic reception when it was launched in 2011. Sceptics highlighted its limited 40-mile electric-only range while ignoring its ICE-powered capabilities.

GM, having been through Chapter 11 bankruptcy and a government rescue, was an object of hate for those on the political right, who branded the Volt a ‘socialist government folly’. Notwithstanding all of this, Lutz was convinced the car would be successful and a pathfinder for future GM vehicles.

In the fifth and final part of this series, we’ll examine the causes and impact of bankruptcy and a US government rescue on GM.

Author: Daniel O'Callaghan

Shut-line obsessive...Hates rudeness, loves biscuits.

14 thoughts on “The Fate of Empires and Search For Survival (Part Four)”

  1. I always thought the name Cadillac BLS was supposed to be an abbreviation of BulLShit. Though the biggest sin in the Saab/GM fiasco was the 9-2X, built on the Subaru Impreza platform and presented in 2004. And that generation of Impreza was already 12 years old at the time, being presented in 1992. Deadly sin indeed….

    1. The 9-2X was not the biggest sin. It was an Impreza WRX with a different nose and a nice two tone cloth in the cabin… what’s not to like?! It was only ever going to be a minor model in the range.

      Much, much worse were the attempts to pass off Chevrolet SUVs as Saabs, as these were supposed to be higher volume propositions, and imposing substandard GM platforms onto Saab to replace their core models.

  2. Honda scrapped their EVs as well but did not make such a big deal about it. Wagoner´s approach to that was cloth-eared. EV1 owners loved their cars. They needed to be nurtured. Instead they were alienated. All GM had to do was sell the cars to the owners with an agreement to transfer liability. It was not as if the cars were going to explode. After five years there´d be almost none left and that would have been that.
    I get to remind everyne that I once drove an EV-1, back in the day. And the Honda EV as well.

    1. I went to a dealer somewhere in Los Angeles. It was 1995 – what stands out was the really low driving position, like a close-coupled British sportscar of the 1960s. The pursuit of weight reduction meant a spartan interior and some dreadful ergonomics (unreadable buttons on the centre console). The performance was pretty good as in it really moved off the line; 90 miles of range was enough for commuting and I imagine that with today´s battery technology the range would be up to 350 miles. The most important thing was that GM got it wrong with the EV by making it a sportcar. The ideal EV is just like any normal car and Honda´s vehicle was just precisely that.

  3. Will someone move the EV-1 in the “Cars that could have been Citroen” folder ? Thanks.

  4. Forgive me if this nuance is meant to be captured already by the author’s use of “sequential” rather than “series” hybrid but, from my jaded perspective, the most illustrative anecdote about the Volt/Ampera is that it wasn’t ultimately a series hybrid at all! The production model was a parallel hybrid, with a drivetrain very much like Toyota’s in its use of a planetary gearset as a sort of CVT (differing only in terms of what element of the gearset was attached which other drivetrain elements). As such, GM’s marketing of the car was entirely dishonest (which, to me, speaks volumes about GM’s flaws as an organization)!

    1. Hi Joe. The use of the word ‘sequential’ rather than ‘series’ in reference to the Volt’s hybrid powertrain was Bob Lutz’s choice, not mine and I paraphrased his comments in good faith. I am interested to hear you say that the Volt was neither, but ‘parallel’ just like the Prius. Perhaps nobody told Lutz that the engineers changed their minds!

    2. Joe, I’ve just copied the following from (the not always reliable) Wikipedia on the Volt:

      “While driving, after the Volt battery has dropped to a predetermined threshold from full charge, a small naturally aspirated 1.4 L 4-cylinder gasoline fueled internal combustion engine (Opel’s Family 0[70]) with approximately 80 hp (60 kW), powers a 55 kW generator to extend the Volt’s range.”

      If the petrol engine doesn’t fire up until the battery has discharged by a predetermined amount, isn’t that a ‘series’ hybrid or am I misunderstanding this? I confess that I’m no expert in hybrid systems.

    3. The Bolt/Ampera’s official type description is EREV = extended range electric vehicle.
      It is able to run on electric energy alone and when the battery gets empty it switches into a serial hybrid mode because then the combustion engine drives a generator which in turn charges the battery. In case of high power requirements the combustion engine is coupled into the drive train directly, making it a parallel hybrid like the Prius.

    4. Good morning Dave and thanks for that explanation, much appreciated.

    5. Now that I’ve actually returned to my computer, it looks like Wikipedia and other commenters have already said most of what there is to be said on this topic, but I would encourage everyone to look at the illustration which (clumsily) linked to my name with my earlier comment.

      Maybe I should give GM some credit for the “series mode” described by Wikipedia as quoted above (because the Volt can if I’m not mistaken, de-clutch the engine+generator from the rest of the drivetrain), but keep in mind that a Prius (unlike the less sophisticated Honda Insight hybrid that debuted the same year) is also entirely capable of running on battery alone (with performance limitations) until the battery voltage has dropped to a certain threshold–that’s part of the genius of its clever planetary transmission–and no one tries to call it a series hybrid or “extended range electric vehicle.” If the industry had wanted to carve out a new definition (“sequential hybrid?”) for such vehicles, separating them from the simplest of parallel hybrids (which merely have a motor/generator bolted on the end of the crankshaft), the Prius’s 1998 debut would have been the time to make that distinction. Allowing GM’s marketing department to get away with drawing such a distinction a decade+ later, in a way that dishonestly makes the Bolt drivetrain seem unique (despite borrowing very, very heavily from Toyota–see again the illustration linked from my earlier comment) always seemed to me like a dereliction of duty by the world’s journalists.

      For what it’s worth, I don’t like characterizing the Bolt as an “extended range electric vehicle” because, in strict engineering terms, that implies a straightforward series hybrid, like what you get when you order a BMW i3 with the optional petrol engine. Maybe they can get away with calling it an “extended range electric vehicle” to get some tax benefits from the US government but, in my view, that’s just as fundamentally dishonest as when, in the ’90s, they certified their MPVs with the US gov’t as “light trucks” so they could avoid installing 3-point seatbelts in the rear seats (while marketing those vehicles to motorists with the express purpose of putting their children in those seats).

      Bottom line: In my professional opinion (no, I design airplanes for a living, not cars, but I like to think that maintaining a mechanical engineer’s license in my state of residence allows me to say that), anything that’s capable of simultaneously coupling two disparate motors (i.e. different energy sources), mechanically, to the driven wheels, is, by definition a parallel hybrid, regardless of what else it can do in various modes of operation.

  5. Joe in the interest of correctness I assume your mention of Bolt on two occasions should really be a reference to the Volt.
    Having owned all four types it’s been an interesting progression from the emphasis on ice with electric assist for fuel efficiency ( Gen 1 Insight,Prius ) to an Ampera then an i3 with extender promoting full electric with a “crutch” which in the BMW I never seem to use.
    Now that we have 300 mile electrics one of these will eventually replace the i3 however thinking logically as at present I rarely use the back up the extra range will be overkill.
    This quest began by trying to make petrol cars more efficient yet has progressed to full electric in less than a decade. While I have great respect for Toyota’s gen 2 Prius and it’s elegant solutions in the drive train to achieve fuel efficiency I think they have been left behind by not emphasising full electric.

    1. Well, that’s embarrassing. You’re quite right; all such references above should have read “Volt.” I must have been multitasking or hadn’t had my coffee yet!

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