Chevy Volt: The
Jolt GM Needs?

Launching a new vehicle while the American auto industry is asking Congress for a $25 billion bailout might seem like illogical timing, but for General Motors and the people behind the Chevy Volt, it's essential. The Chevy Volt is the first plug-in electric vehicle from the domestic automaker, and GM is betting the bank on this one. The success of this vehicle is "vital" to the future of GM and to establish a "leadership position" in electric propulsion vehicles, says Volt vehicle line producer Tony Posawatz. The Chevy Volt is without question an amazing and innovative product, but are the hopes pinned on its success too high to obtain?

With projected production at about 10,000 the first year and a retail cost of almost $40,000, no one is expecting the Volt to turn the company around financially. Executives do hope, however, that it will bring in people to purchase one of the many new and fuel-efficient vehicles that GM now has to offer. GM currently has nine hybrid models available and over 3 million FlexFuel (able to run on E85 ethanol) vehicles on the road. The Volt is a public-relations darling used to get people into Chevy showrooms, says Posawatz, but it's also a promise to the public that "this is happening and not just a shell game" -- a la the EV1, General Motors attempt in the '90s to launch an electric vehicle, which it killed when public interest proved lukewarm.

GM has been working hard for the past decade to try and change public perception of its products after a long period of producing substandard cars and trucks with abysmal fuel economy and lackluster build quality. It was a company mandate, says Rob Peterson, manager of electric vehicle technology communications -- not only to get the Chevy Volt to the consumer as quickly as possible, but to emerge "as a leader in alternative propulsion vehicles."

In order to stir interest and to show the public that it is serious about electric vehicles, alternative propulsion sources, and environmentally responsible products, GM has had to change the way it approaches the customer.

"We have specifically targeted people who are early adopters of new technology and those concerned about environmentally conscious products," says Peterson.

Targeting LGBT consumers is one way they are getting the word out.

Travis Parman, LGBT media relations manager for General Motors, says that "reintroducing members of the LGBT community to GM brands and building brand loyalty" are paramount to future success. According to data General Motors used to brand marketing campaigns, the LGBT community has a buying power of almost $700 billion dollars. On average, LGBT people have higher disposable incomes and spend more on their automobiles. And most important, 82% of LGBT consumers purchase products or services primarily from companies that have shown support for them. With estimates ranging from 7% to 10% of all Americans identifying as lesbian, gay, bisexual, or transgender, that's a large loyal fan base -- one GM is determined to keep.

The Chevy Volt itself won't hit the market until late 2010, so GM is counting on the continued hype and specifically targeted PR to keep interest afloat. Peterson says the way companies advertise to people is changing.

"You have to talk to the people who talk to the people," he says. "Monthly publications and print media can't keep up with the Internet. People don't want to hear what some corporate press kit says, they want to know from people like them what they think."

One branch of GM's public-relations department deals specifically with diversity outreach -- and gays are the only minority being actively targeted.

"Members of the LGBT community tend to be early adopters of new technology," Peterson says, "[and] they seem to be more open to change and ingenuity in general."

Saab, Saturn, and Cadillac have advertised in gay publications starting as early as 1993. Over the last 24 months, Parman says, GM has been aggressively and actively pursuing LGBT consumers. Special events like Gay Day at the L.A. Auto Show are designed to bring members of the community together as well as showcase GM products. General Motors is also a big supporter of Motor City Pride in Detroit as well as Affirmations, a Detroit LGBT group. Parman, who is gay, understands the brand recognition and loyalty that comes from placing a rainbow flag next to your product. The idea is that by showing support for LGBT people, we will in turn show support for GM and the Volt.

The Chevy Volt is mainly targeted toward urban and affluent areas where the thought of spending $40,000 on a four-seat hatchback isn't such a bizarre idea, especially if it meets consumer needs for environmental friendliness and boasts the latest in cool technology. The interior is designed to look like the sleek and modern iPod, with a not-so-subtle nod to the people who can afford to buy such things. It is a tougher sale in Middle America, however, where some still think global warming is a hoax and that they might strike oil in their own back yard.

"Trends begin in the West and move inward," Peterson says. He, a Midwestern farmboy, understands the skepticism and aversion to newness that plague his fellow neighbors, but hopes that with education and targeted advertising they will eventually come around.

With a range of 40 miles on just a single charge of the lithium ion battery -- 75% of the U.S. population commutes 40 miles or less in urban and suburban areas, according to GM -- there are some drivers who wouldn't have to put gasoline in their Chevy Volts at all. After the battery's charge has been spent, it can go another 100 miles using the onboard gasoline engine. But unlike hybrid cars, the gasoline engine never directly powers the vehicle. Instead, the engine is used to recharge the battery, which is the only means of driving the car.

Peterson admits that perceptions have to change fast in order for GM to remain viable. That's why they have been "wide open" about the Volt and its ongoing development.

As for what lies ahead for the U.S. auto industry, many of the folks at GM try to avoid the question, or have been trained to voice the corporate rhetoric that their future, with the help of the government, can be bright and that products such as the Volt are going to be America's saving grace. Some seem less convinced. For now, GM is hoping the Chevy Volt will be a "game changer" and a goodwill gesture that will indicate to the buying public that GM is serious about the changing needs of the automotive consumer and is prepared to be a leader in fuel-efficient, environmentally responsible products.

GM CEO Rick Wagoner said at the Senate hearings about the requested $25 billion bailout that the money would be used to further develop products that consumers want -- such as the Volt -- as well as pay off debts to suppliers and take care of employee retirement and heath care obligations. All the CEOs from the big-three automakers admitted in the Senate hearings that they did indulge out-of-control American spending and irresponsible lending. They took advantage of the good times and didn't plan for or envision a time less buoyant. Those weighing in on the proceedings aren't so sure that companies who couldn't make a profit in good times will turn their luck around now that their backs are against the wall.

With seven different brands and 56 models, some say that the largest auto manufacturer in America has gotten too big. Many vehicles overlap one another in price, function, and target audience. GM has dumped billions of dollars into several different types of alternative propulsion technologies such as electric, gas-electric hybrids, cellulose, and bio fuels, all in the hopes of being at the forefront when one of them really takes off.

"We're kind of hedging our bets on the next big thing," says Peterson, so that when one or more gets the green light from government or the public, "we're ready."

-- The Chevy Volt will be on display at the Los Angeles Auto Show, which opens Friday, November 21. For more information visitwww.LAAutoShow.com.