Making an Impact at General Motors

Robert N McGrath

Abstract


On January 23, 1995, an article in Business Week [1] read:

The Impact, General Motors Corp?s on-again, off-again electric car, seems to be on again... Until now, auto manufacturers have vigorously fought tough new environmental laws, such as California?s standards for pollution-free cars. Their gripe: consumers won?t pay the extra cost the technology will require.

These new developments could undermine Detroit?s claims that it can?t meet California?s tough emissions standards ... Carmakers may have to start selling [ultra-
low emissions vehicles] in California as early as 1997, while Zero Emission vehicles, which currently means electrics, will be required starting in 1998...

The Impact?s price tag will be ... as much as $40,000 for early versions. But GM decided to go ahead with the car, sources say, because consumers in three cities who test-drove Impact prototypes were entranced with it... ?The biggest problem we?ve had is getting people to give back the car,? says Kenneth R. Baker, [recently-promoted] vice-president of GM?s Research and Development Center. GM officials are cagey about their plans for producing the Impact. ?We have not made a final decision on production?, says Robert Purcell, the car?s program manager [and successor to Baker]. But, he adds, ?We are very serious about making a business out of this technology...

Still, even if the automaker sells thousands of Impacts at premium prices, the company probably won?t make any money. GM spent in excess of $250 million developing the vehicle. ?I?ll be in my grave before they recover all those costs,? says one former GM executive.

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JSTEM. ISSN: 1557-5284