White House: "Chevy Volt Not Viable." GM: "So?"

It's a little disquieting that each time GM gets bad news about the Volt, they react like followers of a doomsday cult when their leader's prophecy of Armageddon fails to come true: In accord with Leon Festinger’s Cognitive Dissonance Theory, instead of having second thoughts, they dig in their heels and become even more committed.

After reviewing General Motors' restructuring plan, the White House said in no uncertain terms that the Chevy Volt was not economically viable and that it held little promise in doing much for GM in the short-term, adding that the Volt is "projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable."

GM's reaction to the White House response is the same as their reaction to the recent report by Carnegie Melon that said the Volt was not cost-effective in any scenario, and the same as their reaction to Rob Kleinbaum's letter to GM urging a change in company culture: 'Can't hear you, sorry, our fingers are in our ears'.

According to a piece in the Detroit News the main problem is the cost of the Volt's powertrain, especially bad news considering GM aims to parlay that powertrain across other vehicles in its stable.

The piece contains copious quotes from GM spokesman Rob Peterson, including this particularly telling one, that GM has "one of the largest hydrogen fuel cell fleets on the road today."

Leave it to GM to make such good use of a non-existent infrastructure.

There is still a real possibility that GM will go under. As long as that threat looms over the company, it will deter some people from making a long-term investment in GM by purchasing one of their new cars. After all, let's say GM files Chapter 7; unless another car company buys the Chevrolet brand, the warranties held by Volt owners would become worthless, and even if the brand was bought, there's no guarantee—and no built-in legal requirement—that the new owners would uphold those warranties.

What's clear is that the White House is trying to deal with sustaining GM in the short-term, while GM has its sights set on the long-term. It would be nice if they were on the same page, since both terms are of major importance in keeping GM afloat, now and in the future.

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