Detroit Auto Show : GM “Hybrids” Press Conference

Rick Wagoner, President and Chief Executive Officer Tom Stephens, Group Vice President, GM Powertrain

North American International Auto Show Cobo Hall Detroit, Michigan January 6, 2003

Good afternoon.

For the past several years, GM has taken the occasion of the North American International Auto show to detail our most promising new technologies to advance the automobile. We’re going to build on that tradition today.

When we step back and take a look at the big picture surrounding fuel economy, vehicle emissions, and the environment, we see that there are dozens of interest groups that take a view on how we should address these important topics. Frankly, not all these groups see things the same way. Some groups are primarily concerned with U.S. energy policy, some with national security, some with vehicle emissions, some with broad environmental impact, and some even have broader social issues in mind.

But, as a representative of the industry that actually has to do something about this, I can tell you that there is no single integrated solution that fully satisfies all of these sometimes competing interests. So, at GM, our approach to this dilemma has been to focus on three simple and direct principles:

First, we have to offer products that customers really want to buy, not have to buy. If no one buys your products, your technology has no real impact. Second, we need to meet some basic business objectives – like selling at prices that customers are willing to pay, and for us to be able to produce at costs in line with those prices. In today’s highly competitive, low-profit-margin environment, our experience clearly tells us that heavy manufacturer subsidies can’t last very long. And third, we, as an industry, have a responsibility to continue improving vehicle emissions and fuel economy. In line with these principles, we at GM have adopted a three-pronged approach to advanced technology.

First, today, we are producing, or shortly will be producing, several exciting technologies that will continue to improve the efficiency of the internal combustion engine. I’m talking about things like continuously variable transmissions, Displacement-on-Demand cylinder deactivation, electro-hydraulic power steering, more efficient alternators. Not only do these technologies provide significant benefits, they are being applied to our most affordable and popular powertrains and vehicles.

Along with the continued pursuit of clean-diesel technology, these efforts will allow us to continue doing what we’ve done for a long time – improve our model-by-model efficiency, year after year.

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Looking at the long-term picture, we believe the hydrogen fuel cell is the big answer.

Last year at this show, we introduced the GM AUTOnomy concept vehicle. By combining fuel cell and by-wire technology, AUTOnomy offered a vision of the future, and the incredible potential of fuel-cell propulsion.

At that time, we said that our next major benchmark in fuel-cell development would be to build a drivable version of the AUTOnomy by the end of 2002. And we delivered on that promise in September, at the Paris Motor Show, when we unveiled the GM Hy-wire.

And this year, our commitment to fuel-cell technology continues unabated, with our primary focus being on major cost reduction, to hasten the day when fuel cell vehicles will be available to the public.

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Today, I’d like to fill in what, at GM, we call the mid-term picture, with news of GM’s approach to bridging the gap between improved internal combustion engines and fuel cells, with a major commitment to hybrid vehicles.

Two years ago at this event, our vice chairman, Harry Pearce, outlined our approach to hybrids, and last year, we announced our plans to produce a parallel hybrid pickup truck. Today, I’m pleased to announce our next step in hybrid vehicle development.

Starting with our hybrid full-size pickups, which will be available in the fall of this year, GM will offer consumers three different hybrid propulsion systems, on three vehicle architectures, representing more than a dozen of our most popular models. If consumers were to select the hybrid option on all of the models included in our multi-year plan, we would be capable of providing more than one million hybrid vehicles per year.

And, these hybrid systems will be geared specifically toward typical American driving patterns and vehicle preferences – that is, relatively more highway driving and relatively larger vehicles.

In today’s market, demand for hybrid vehicles is low. At GM, we’ll be well positioned to meet future demand as it develops.

Now, because hybrids can cost up to several thousand dollars more than conventional powertrains, we believe offering different hybrid approaches, in a range of popular vehicles, is the best way to fully explore the market potential for this technology.

As I stated at the outset, heavy manufacturer subsidies cannot be sustained in the marketplace. So, it’s clear that government policy will have to play a big role in the development of the hybrid market – whether that is mandatory use of hybrid vehicles in government fleets, or extensive consumer tax credits to encourage retail sales. In our view, both of these will be required; and maybe more.

With that, I’d like to ask Tom Stephens, Group Vice President of GM’s Global Powertrain activities, to explain the hybrid technologies that we’ll be offering.

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[Tom Stephens Remarks]

Thanks, Rick.

GM's hybrid strategy has been developing over the last several years.

It represents what I believe is the best approach to reduce fuel consumption without trading-off customer requirements.

Two years ago, our Vice Chairman, Harry Pearce, detailed what he called a "portfolio of options."

He described a highly flexible hybrid system targeted for small- to mid-sized SUVs.

He also explained that when GM was ready to make known its production plans, it would be at the right time with the right products.

Today is the right time...

We're going to give specific shape to our hybrid story.

We've focused our efforts on developing a range of hybrid systems that addresses the American market in two key areas.

The first is the preference of Americans for larger and more powerful vehicles and the second is that these vehicles travel more on the open road than in tight urban environments.

With that, we have the opportunity to share with you today our plan for providing an entire range of high-volume vehicles.

In fact, General Motors will be the only manufacturer to cover the entire range of vehicles with hybrid technology, from midsize FWD cars to pick-up trucks to SUVs to commercial vehicles & buses...

AND cover the full spectrum of hybrid system design.

We've done this with a portfolio of resources and options that only GM could provide.

And as I mentioned... these hybrid systems are the first to be designed specifically for the North American market and driving cycles, which are typically 60 % highway and 40 % city driving. That means highway mileage also gets a boost. And, performance doesn't take a hit.

We believe these hybrid solutions don't require any compromises.

Let me get into some specifics regarding our new family of hybrid systems.

First, as we announced about a year ago, GM will offer a hybrid system combined with a 5.3-liter V8 on our full-size Chevrolet Silverado and GMC Sierra pick-ups.

This system will initially be offered as a commercial fleet option later this year, and then for retail sale in early 2004.

Then, in calendar year 2007, the models will be expanded to include our popular, high-volume Sport Utility Vehicles: the Chevrolet Tahoe and GMC Yukon.

At the same time, the hybrid system will be combined with our Displacement on Demand technology, resulting in even greater fuel savings for these pick-ups and SUVs

Here's how the truck hybrid system works:

Instead of a conventional starter motor and alternator, the hybrid system truck features a compact electric motor that is integrated in a patented, space-efficient way between the engine and transmission.

The electric motor provides fast, quiet starting power and the ability to generate up to 14,000 watts of continuous electric power.

The electricity generated by the system has plenty of uses.

It may be stored in a 42-volt lead-acid battery pack for future use.

It may also be used to support on-board electric accessories.

Finally, it may be employed to operate power tools or other appliances off a pair of 110-volt, 20-amp outlets in the cab and bed.

As more 42-volt accessories become available, the electrical architecture of the hybrid system can accommodate them.

The truck gets more miles out of each gallon of gas mainly because the system starts and stops the engine at idle.

In addition, regenerative braking turns the motor into a generator as the truck decelerates.

Extra fuel savings come from quickly shutting off fuel any time the truck is coasting or braking.

In addition, we save fuel by early second gear apply of the transmission torque converter clutch... while using the electric motor to smooth out any resulting vibrations.

Trucks equipped with the VORTEC 5300 hybrid system will be no compromises trucks.

They will make 285 horsepower and 325 ft.-lbs. of torque and provide V-8 power for hauling heavy loads, towing, and hill climbing.

At the same time, this hybrid system will create a 10 to 12 % savings in fuel economy.

In 2007, Displacement on Demand will add an additional 5 to 8 percent in fuel economy.

Today we are also announcing two completely new systems, in addition to full-size SUVs and pickups.

GM will introduce a Saturn VUE with an Advance Hybrid System in the latter half of the 2005 calendar year.

This system combines the power of our all-aluminum, dual-overhead- cam four-cylinder engine with the excellent torque and efficiency of twin electric motors.

With this advanced hybrid system and other vehicle system improvements, drivers can expect fuel economy gains of up to 50 percent.

At the same time, we will improve 0-60 and 50-70 mph performance, thanks to GM's advanced components and control electronics.

In addition, emissions from the system will carry a super low emissions vehicle certification.

The system, when linked with a 2.0-liter ECOTEC engine, produces 125 horsepower from the gasoline engine and another 50 horsepower from the two 20Kw electric motors.

It is designed for transverse, front-wheel-drive vehicle applications.

The Saturn VUE advance hybrid can run fully on electricity, using the two electric motors to propel the vehicle at low speeds and light loads, when the efficiency of the gasoline engine is lowest.

However, when driving at higher speeds, or when carrying heavy loads, power comes from the proven internal combustion engine.

The versatility of GM's advanced hybrid system... including the ability to package it in a variety of engine displacements ... makes it ideal for a wide range of future front-wheel-drive passenger cars and SUVs.

The next new hybrid combines a belt-alternator- starter system, or BAS, with a VTi continuously variable transmission.

In calendar year 2006... this hybrid system will debut first on the all-new Chevrolet Equinox, which is covered here, but will be revealed tomorrow.

Then in '07, the system will be offered on the Chevrolet Malibu.

After that, look for the hybrid system on other models derived from the Epsilon or Theta-based high volume platform architectures.

GM developed the belt alternator starter system to provide improved fuel economy in stop-and-go driving by shutting the engine off at idle... and by enabling early fuel cutoff to the engine during decelerations.

Regenerative braking and efficient charging are also part of this system.

Estimated EPA composite fuel economy savings for this propulsion system range from 12 to 15 percent.

The BAS system also has the versatility to be used on four and six-cylinder engines, with minimal impact on engine and transmission components.

All vehicle accessories and passenger comfort systems, such as air conditioning, remain functional during the periods when the engine is automatically stopped.

We will mate our 2.4-liter ECOTEC engine and continuously variable transmission with this hybrid system.

The engine will make more than 170 horsepower and 170 ft.-lbs. of torque.

The battery is a 42-volt system, and the motor generator develops 5,000 watts.

As you can see, our advanced hybrid systems take a number of innovative technologies and apply them to our most popular vehicles.

As Rick said, it's an approach that offers us the best chance of exploring the full market potential for hybrid vehicles... and the benefits they provide.

GM is recognized as a leader in powertrain technology, and we would welcome the opportunity to share our technology in collaboration with other OEMs.

We think our hybrid system benefits are substantial, and today's announcements are a clear reflection of that belief.

Not only will hybrids deliver direct and measurable benefits by themselves, but they'll also help us achieve our long-term goal of mass-market fuel cell vehicles.

On that note, let me turn it back to Rick Wagoner for a quick wrap up.

Rick…

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[Rick Wagoner Closing Remarks]

Thanks, Tom.

Consistent with GM’s three guiding principles which I outlined earlier – offering products that customers want to buy, solving the price/cost equation, and addressing our industry responsibility to the environment – we see our major commitment to hybrids as a matter of both competitive positioning and technology leadership.

Given current fuel prices in the U.S., it’s uncertain how rapidly the hybrid market will develop… but we’re going to find out.

We, at GM, think the technology has real potential to become a factor in the marketplace; and, as Tom said, hybrids are a bridge to fuel cells. So, to summarize:

For the near-term, GM will continue to introduce new technologies that will improve the internal combustion engine. In the mid-term, we are putting big resources into hybrid technologies – three different systems, in fact, as we’ve discussed in detail today. And for the long-term, we see fuel cells as the ultimate answer, and we’re continuing to invest heavily in their development. With that, Tom; Larry Burns, our Vice President of R&D and Planning; and Beth Lowery, our Vice President of Environment and Energy, are available to answer your questions. Thank you.