GM CEO says Volt on track for end of 2010

David Shepardson / Detroit News Washington Bureau

Washington -- General Motors Co. CEO Fritz Henderson told Michigan members of Congress that the automaker must increase market share and said the Chevrolet Volt is on track for production in late November or December 2010.

Henderson also said the company is willing to re-examine the decisions to close a limited number of profitable dealers because of poor scores on other criteria. That could form part of the basis to head off legislation pending before Congress seeking to reverse or prevent more than 2,000 GM and Chrysler Group LLC closings.

In a 40-minute conference call Thursday afternoon with Michigan's two senators and most House members, Henderson said the company is disappointed in its recent rankings by the influential magazine Consumer Reports and vowed to do better, according to congressional aides on the call

Henderson said the company's new launch products should do well in future Consumer Reports rankings. The magazine needs more sampling size to recommend them.

He also said GM, which currently has 19.7 percent market share, needs to boost that to succeed in the long-run. Job and cost cuts aren't enough to turn the company around, Henderson told the delegation.

GM's new chairman, Ed Whitacre, has made increasing market share a priority. The automaker has been losing market share for decades. But some have questioned the strategy, given that GM is in the process of eliminating four of its eight brands.

Sen. Carl Levin, D-Detroit, asked Henderson about the status of the extended-range electric Chevrolet Volt -- a vehicle that will be able to travel up to 40 miles on battery power and is critical to improving the company's reputation.

Henderson said the Volt would be released at the "very end" of November or December of next year.

He also said the company expected no more than 1 percent of GM vehicles would be returned under its "May the Best Car Win" 60-day return policy, which runs through Jan. 4.

Henderson also addressed the issue of GM's dealer closings after getting questions from Sen. Debbie Stabenow, D-Lansing, and Rep. Pete Hoekstra, R-Holland.

Hoekstra urged GM to be "transparent" in its handling of its dealers, he said in an interview. GM is paying its closing dealers $600 million and giving them more than a year to close. The automaker has reversed 70 of the closings.

Hoekstra called GM's dealer closings "an inherently poor strategy that makes no sense at all. They have never given us a good rationale." He said dealers can't win without pressure from Congress. "The little guy can't beat a GM that's being propped up by the government."

Hoekstra said that while Ford Motor Co.'s quality has improved, GM hasn't done enough to address quality concerns.

"How long have we been complaining about the quality of American cars? Ford has closed the gap, but if you haven't closed the gap how do you expect to improve market share?" Hoekstra said.

GM spokesman Greg Martin said it was "strange Mr. Hoekstra would want to perpetuate some of the misguided thinking that resides outside of Michigan."

"Consumer Reports and J.D. Powers both note the quality gains of Detroit automakers that have closed the quality gap. And, Edmunds anticipates GM increasing market share this year. Nonetheless, we're not satisfied with our results and we recognize we have to work hard to overcome a perception gap," Martin said. "All of us should be working together to get the word out that Michigan autoworkers build great cars."

On Wednesday, Henderson met with congressional leaders over the company's plans to wind down about 1,300 dealers by the end of next year. In July, the House passed a bill that seeks to prevent the GM closings and reverse Chrysler Group's June closing of 789 dealers. Nine of Michigan's 15 House members have signed on to a stand-alone bill that also seeks to reverse the closings.

Since then, both companies have held numerous meetings trying to resolve the issue with a "non-legislative solution.".

Dealers recently got a boost in their efforts from a long-time industry analyst.

On Oct. 12, David Cole, chairman of the Ann Arbor-based Center for Automotive Research, wrote a letter to Ron Bloom, the Obama administration's senior auto adviser, urging him to take a second look at the dealer closings. He also argued that the closings will further cut GM and Chrysler sales.

"The precipitous closure of such an inordinate number of GM and Chrysler dealerships will predictably continue to result in an erosion of market share," Cole wrote in the letter that also went to congressional leaders. "The shuttered locations will provide an opening for foreign manufacturers to get an immediate presence in areas currently dominated by domestic dealerships."

dshepardson@detnews.com (202) 662-8735