Rick, Rick, Rick

A group of us bloggers had a chance to sit down with GM CEO Rick Wagoner for a short Q&A session. What I hope to give you with this article is a brief overview of some of the highlights from the interview.

With the recent Coskata announcement, GM put the word out that government legislation may be needed to require gasoline stations to install E85 pumps: something on the order of for every x number a gallons pumped per day, a station would be required to have x number of E85 pumps. Many automakers have also called for an increase in the gasoline tax to encourage car buyers to choose more efficient vehicles. The government has also used tax credits to help subsidize the extra cost of hybrid vehicles. On the flip side, automaker's have opposed corporate average fuel economy standards and California's initiatives to impose stricter requirements than the federal government. My question stemmed around the love/hate relationship automakers' have with government regulation.

It's Wagoner's belief that with an entrenched oil industry, it may be very difficult to get E85 ramped up in the marketplace. It would therefore be neccesary for the government to step in and require that pumps be installed. As for CAFE, Wagoner sites the original intent of the law was to conserve gasoline, but in the intervening years even though MPG increased gasoline consumption skyrocketed. Looking at the law's intent and its failure to curb the nation's appetite for oil, Wagoner concludes that CAFE has not delivered on its promise and with the revised regulation will only create more expensive, albeit more efficient, vehicles. Also of concern to GM is how a vehicle like the Chevy Volt would be factored into CAFE. When it comes to raising the gasoline tax, Wagoner defers to politicians but points to the fact that other countries have used gasoline taxes to direct customers towards more efficient vehicles. Very few politicians would willing step up and raise the gasoline tax as voters would undoubtedly turn on them when it came time for re-election and therefore the gasoline tax will remain an "underused opportunity."

The question about the increasing number of long term auto loans, such as 72 month terms, and many owner's being upside down on the equity they have in their vehicles verses the amount owed was raised. Wagoner's response was that GM is continuously evaluating the number of lengthy term loans and will be careful to not become over weighted in that area.

When asked about the number of GM brands in the U.S. marketplace, Wagoner showed no inclination towards the phasing out of any makes. Rather, GM will continue to sharpen the focus of each division so that GM's entire lineup is complimentary rather than competitive. Molding Buick, Pontiac and GMC into one channel where each division takes on a specialized role is key to this strategy. The Hummer brand was brought up as it would now seem to be more of a drag on GM's reputation that a boost. The phrase "There's a little bit of Prius in every Toyota and a little bit of Hummer in every GM car" comes to mind. Wagoner responded that Hummer vehicles do not have to be large and that the HX Concept is a more environmentally responsible model. GM still feels there is still a lot of strength in the Hummer brand and that it can adapt and survive to the reshaping automotive marketplace.

Asked about Tata's $2,500 Nano car and GM's response to the very low end in the marketplace, Wagoner responded that GM does have some lower priced entries in markets such as China, but as for a $2,500 model, GM will take a wait and see approach. Wagoner quipped that in the past when GM attempted to create a very low priced car, the vehicle exceeded its cost targets, was ugly and was never brought to the marketplace.