Well no kidding

GM CEO admits killing electric car was a blunder

Posted by John McGrath (Guest Contributor) at 8:28 PM on 28 Jun 2006

Read more about: electric vehicles | cars

So Rick Wagoner, CEO of General Motors, is asked in the June issue of Motor Trend magazine (not online) which decision he most regrets as CEO. His answer is appropriate, what with a certain documentary coming out soon, and it's under the fold.

Rick Wagoner's most-regretted decision:

Axing the EV1 electric-car program and not putting the right resources into hybrids. It didn't affect profitability, but it did affect image.

Gee, if only someone had warned Wagoner that fuel efficiency was going to be an important factor for consumers in the future. If only someone had asked -- begged, even -- to preserve the EV1. Certainly Wagoner wouldn't have ignored a public outcry like that!

What's truly upsetting is that by Wagoner's own admission here, cutting the EV1 didn't affect profitability. If Wagoner is to be believed, GM would have been no worse off today (admittedly, no great shakes there) if they'd kept the EV1 going.

So why cut it? Honda has kept the barely-produced Insight along as a branding exercise. Why wouldn't GM want the same with the EV1, considering the number of lovable celebs who were out hawking it?

People tend to call us paranoid when we suggest that GM killed its own revolutionary design in a gross act of corporate malfeasance -- collusion with oil companies and a fear of obsolescence. It may be just a slip of the tongue, but if Wagoner means what he says, then the conventional explanation -- the EV1 was a money loser -- just became inoperative.

What does that leave?

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2 Comments | Post a Comment

hindsight

Just because he believes now that the EV1 wouldn't have hurt profitability doesn't mean that it was clear to him then that it wouldn't. Businessmen are no great shakes at predicting the future and thinking outside the box.

And I wonder how much he actually believes even now that it wouldn't have hurt profitability, and how much of it is him trying to make it out as a forgivable dumb mistake, so as not to reinforce the idea -- dangerous to the status of traditional businessmen -- that the profit motive leads to socially sub-optimal decisions.

by Stentor at 8:46 PM on 28 Jun 2006

Wagoner

has said many times, explicitly, that the electric car was a huge investment that didn't even come close to paying off (though of course many people question whether GM ever wanted it to work). So it's a little odd for him to be saying this now.

grist.org

by David Roberts at 8:57 PM on 28 Jun 2006

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