Following the address from President Barack Obama on the future of General Motors and Chrysler, the White House posted summaries of the Presidential Auto Task Force’s assessment of the business plans provided by the automakers.
Among the highlights in the brief summaries was the conclusion that the eagerly anticipated Chevrolet Volt extended range vehicle will “likely be too expensive to be commercially successful in the short-term”.
The Task Force outlines that despite GM’s viability determination in which it has made material progress in areas such as purchasing, design and manufacturing, “a great deal more progress needs to be made”. It states that the GM plan is “based on assumptions that will be very challenging to meet” and that progress has been “far too slow”.
Among the comments referencing the product side of GM were that it earns a disproportionate share of its profits from high margin trucks and SUVs; that it is at least one generation behind Toyota in terms of green powertrain development; and that absent is the successful introduction of a number of new generation nameplates.
There were similar question marks raised over Chrysler. It highlighted that its limited scale and “the inferior quality of its existing product portfolio” along with its heavy truck mix leave it “poorly positioned”. It describes Chrysler’s assumptions as “overly optimistic” and concludes that the company’s stand-alone plan does not provide a substantial entrance into the small car segments, an area of increased importance for profitability.
As a consequence, Chrysler must find a partnership with another automotive company, such as Fiat, to make its plans more viable.
