Electro-Shock Therapy

With the Chevy Volt, General Motors—battered, struggling for profitability, fed up with being eclipsed by Toyota and the Prius—is out to reinvent the automobile, and itself.
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(Photo credit: Alex Wong/Getty Images)

Last year, while he was working in Germany as an engineer for General Motors, Andrew Farah got a call from a senior engineer in Detroit asking him to come home.

Why?

A car. A special car.

Farah had heard about it, of course. The Chevrolet Volt was the automotive sensation of 2007, a new kind of electric hybrid that GM was proposing to have in showrooms in late 2010. Farah had advocated a similar design years earlier, so he didn’t need to be sold on the idea.

Still, he hesitated. GM had called him because of his deep experience with battery-driven electric cars. In the 1990s, he had worked on GM’s EV1, an all-electric technological masterpiece that had done so poorly commercially that GM wound up crushing the cars amid a hail of public condemnation. Farah had been fiercely committed to the EV1, and he was not about to relive the disappointment.

“Hell, no,” he said. “I’ve been on programs like this before. They’re not real.”

“No,” came the reply. “This one is real.” Farah asked to talk to other senior executives, and they concurred. So, in the spring of last year, he took one of the hardest jobs at GM, and became the Volt’s chief engineer.

And how, I ask over coffee early one February morning in Detroit, is it going? It is 6 a.m., and Farah, who is 47 and has angular features and prominent black glasses, is rushing to make a 7 a.m. meeting. The car, he says, is 10 weeks behind the original schedule. Any more slippage, and the 2010 deadline will be history. Even if no more time is lost, he will have only eight weeks to test the underbody, the car’s structural base.

Is that enough time? He answers indirectly. In some cars, he says, testing the underbody can take a year.

GM, he tells me, is taking an industrial organization designed to grind out incremental improvements and repurposing it for a technological leap. “I spend 20 percent of my time being a psychologist and counselor,” he says. “I tell people, ‘Yes, there’s a lot of risk. And, yes, that’s OK.’

“It’s not a program for the faint of heart.”

‘They’re Making a Huge Mistake’

When one of the world’s mightiest corporations throws everything it’s got at a project, and when it shreds its rule book in the process, the results are likely to be impressive. Still, even for General Motors, the Volt is a reach. If it meets specifications, it will charge up overnight from any standard electrical socket. It will go 40 miles on a charge. Then a small gasoline engine will ignite. The engine’s sole job will be to drive a generator, whose sole job will be to maintain the battery’s charge—not to drive the wheels, which will never see anything but electricity. In generator mode, the car will drive hundreds of miles on a tank of gas, at about 50 miles per gallon. But about three-fourths of Americans commute less than 40 miles a day, so on most days most Volt drivers would use no gas at all.

Because it will have both an electric and a gasoline motor on board, the Volt will be a hybrid. But it will be like no hybrid on the road today. Existing hybrids are gasoline-powered cars, with an electric assist to improve the gas mileage. The Volt will be an electric-powered car, with a gasoline assist to increase the battery’s range.

Electric drive is as old as the automobile itself. Anyone who has ridden in a golf cart has experienced it. Compared with the fire-breathing internal combustion engine, an electric motor is simple, quiet, and clean, and it provides marvelous acceleration and torque. For a century, though, the deal-breaker has been the battery. Any battery with nearly enough power to drive a full-size car was prohibitively large and heavy, prohibitively expensive, unable to go more than a few miles on a charge, or (usually) all of the above. Only recently has the advent of lithium-ion batteries brought a full-range electric car into the realm of the practical. Even so, the battery for the Volt doesn’t yet exist, at least not at a mass-market price, and building it poses formidable challenges. Loading enough energy into a sufficiently small, lightweight package is hard (the battery isn’t much good unless it fits in the car); keeping it cool lest it burst into flames is harder; making it durable enough to last 10 years on bumpy roads is harder yet; manufacturing it in high volumes and at mass-market prices may be hardest of all.

Given the challenges, standard procedure dictates first building and testing the battery, and only then designing a car around it. That process, however, would take until 2012 or 2013—time GM does not have if it wants to beat Toyota. The only hope of meeting the 2010 deadline is to invent the battery while simultaneously designing the car. Just-in-time inventory is common now in the car business, but just-in-time invention on the Volt’s scale is new to GM and probably to the modern automotive industry.

Many in the industry will tell you there’s a good reason car companies don’t do things this way. Toyota, which is proceeding much more cautiously with its own plug-in car, has made no secret of its belief that neither GM nor anyone else can keep the Volt’s promises. When I called Menahem Anderman, a prominent battery consultant in California, he said the lithium-ion battery will be expensive—far too expensive to make sense as a business proposition as long as gas is $3 or $4 a gallon. (“At $10 a gallon we can have a different discussion.”) Its life is unproven, and unprovable in the short time GM has allotted. To deliver tens of thousands of vehicles in 2010, Anderman said, “they should have had hundreds of them already driving around for two or three years. Hundreds. Not everybody can say it publicly, but everybody in the high-volume industry is saying, ‘What are they thinking about?’” An executive with a GM competitor, after making some of the same points, offered forthrightness in exchange for anonymity: “They’re making a huge mistake.”

The people at GM understand very well the reasons they’re not supposed to do what they’re doing. They offer a variety of retorts. Batteries will improve and get cheaper. Gas prices will rise. They have two decades’ worth of experience with electric drive. They have smart algorithms to test the battery. Strict new fuel-economy standards will vindicate the business case. But, at bottom, what they say is that the challenge is part of the point. They have something to prove.

In conversations with everyone from staff engineers to Rick Wagoner, the chairman and CEO, I heard references to the Apollo program. “John Kennedy didn’t say, ‘Let’s go to the moon and, you know, we’ll get there as soon as we can,’” Wagoner said in a recent interview in his office, atop a high-rise in Detroit. “I asked our experts, ‘Guys, do we have a reasonable chance of making it or not?’ Yes. ‘Well, then, let’s go for what we want rather than go for what we know we can do.’” With the Volt, GM—battered, beleaguered, struggling for profitability—hopes to re-engineer not just the car but the way the public thinks about cars, the way the public thinks about GM, and the way GM thinks about itself.

‘That Could Have Been Us’

The company turns 100 this year, but amid the birthday celebrations it can expect a slap in the face: in 2008 GM is likely to be demoted to No. 2 among the world’s carmakers. Memories of past glory make being overtaken by Toyota all the more galling. In the 1950s and 1960s, GM poured forth a stream of innovations in design and technology. In the 1960s, it manufactured nearly 60 percent of the cars sold in America. Then, of course, the Japanese arrived, the energy crisis hit, and GM began to look like the company that never missed an opportunity to miss an opportunity. In the 1970s, when gas prices rose, GM proved incapable of building a decent small car. In the 1980s, when the Japanese redefined quality, GM failed to respond, because its brands were competing against each other instead of the imports. In the 1990s, when minivans and SUVs took off, GM was caught unprepared. In the early part of this decade, it decided hybrids were too unprofitable to pursue, leaving a gap in the market that Toyota, with its Prius, brilliantly and mercilessly exploited. By the time GM recognized its blunder and launched its own hybrids, Toyota dominated the field.

GM also had problems with high health-care and manufacturing costs, expensive union contracts, excess capacity, poor quality, lackluster designs. Its public image got so bad that focus groups liked the company’s cars better when the logo was removed. In 2005, GM lost $8.6 billion and saw its bonds downgraded to junk rating. Analysts were speculating about bankruptcy.

Adding insult to injury, the prominent acquisition of Hummer in 1999 had made GM a poster child for environmental irresponsibility, even as Toyota and the Prius piled up accolades for eco-friendliness. “We looked at the Prius and the masterful job of positioning and public relations Toyota did with that,” Steve Harris, GM’s top PR executive, says, “and we thought, That could have been us.”

The combination of bad news and worse publicity created a sense of emergency. “Everyone’s thinking the same thing: We’ve got to turn this thing around,” one executive told me. “We’ve got to get our mojo back on advanced technology. The PR guys want something more sexy and dramatic, a singular point for our message. This issue of the environmental image was hurting the company substantially.” Playing it safe looked paradoxically more dangerous than taking a gamble. The company was conductive to a high-voltage jolt, and Bob Lutz provided the spark.

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Jonathan Rauch is a contributing editor of The Atlantic and National Journal and a senior fellow at the Brookings Institution.

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