GM Tries Again: Seeks Gov. Loans for Electric Volt Spin-Offs

April 2, 2009

(ChattahBox)—Beleaguered U.S. car maker, General Motors, is trying yet again to obtain low interest loans from the U.S. Energy Department program, which was included in President Obama’s stimulus bill, to support development of fuel-efficient and low emission vehicles. Perhaps the third time is a charm, as this is GM’s third request for the government-backed loans for hybrid vehicles.

GM indicated in its new business plan, released on Wednesday, that it intends to use the government loans to develop variants of its electric Chevrolet Volt vehicle. The Volt, scheduled to go into production in 2010, is a battery-powered vehicle designed with a 1.4-liter engine, which will be used as a generator.

GM said in its new business plan, it intends to manufacturer several new vehicles using the Volt technology, including the Converj, an all-electric Cadillac. The Volt and its spin-offs however, are not designed at a price point that will generate mass sales. The price estimates for the Volt range from $30,000 to $47,000. Government tax credits for fuel-efficient vehicles will slightly reduce the final cost for a Volt.

President Obama, not too impressed with GM’s efforts so far, gave the automaker a deadline of 60 days, to find a way to stop the bleeding and cuts costs and debt levels. If this new loan is granted, that will bring GM’s total bailout amount to $10.3 billion.

Bankruptcy is a real possibility for GM if this new business plan doesn’t meet with White House approval. GM will have to obtain concessions from the United Auto Workers union and bondholders, to avoid a structured bankruptcy.

GM still has not made a definitive decision on the future of its gas guzzling Hummer, a poster child for excess and fuel inefficiency, in a time when the United States desperately needs new, fuel-efficient vehicles, less dependant on fossil fuels.

President Obama recently canned GM CEO Rick Wagoner. Under Wagoner’s leadership, GM’s stock lost a whopping 95 percent of its value and posted $30 billion in losses. With its insistence on producing gas-guzzling vehicles from the Stone Age, like the Hummer it’s no wonder.

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One Response to “GM Tries Again: Seeks Gov. Loans for Electric Volt Spin-Offs”

  1. GM Tries Again: Seeks Gov. Loans for Electric Volt Spin-Offs … on April 2nd, 2009 5:11 pm

    […] GM Tries Again: Seeks Gov. Loans for Electric Volt Spin-Offs … […]

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