The president of GM's North American operations, Tony Clarke, recently kicked up a bit of a dust story when he expanded on New GM CEO Fritz Henderson's statement that the Chevy Volt can stay even if it's "can't pay the rent." Henderson went back to Automotive News (subs req'd) to try and explain why the Volt as a loss leader is a good thing and how he thinks a vehicle scrappage program (i.e., cash for clunkers) should work.
On the rent payers, Henderson said that the North American profit model "was so focused on basically pickup trucks, full-size SUVs, and, when they were strong, mid-SUVs." The tide is turning and he wants to maximize as much profit as possible out of cars like the Chevy Aveo. The new GM mindset: "I'm not going to let anybody off the hook on the Aveo profitability. I want to make sure that we get the maximum profitability on the Aveo, too. And so, if the Aveo is less, that's fine, but I'm not going spend all my time on the Silverado."
The Volt is the "case study," Henderson said, for big investments that will, hopefully, pay off when Gen-3 comes around. "[The Volt] doesn't necessarily pay the rent. It actually consumes rent when it's launched," he said, adding that GM "need(s) money to pay for it. Not from the taxpayer."
Henderson also praised Congress and Obama's Auto Task Force and said that a U.S. scrappage program could find good ideas in the German model.
[Source: Automotive News (subs req'd)]