GM Will Design for Gas-Price Volatility

Via The New York Times’ DealBook, here’s what General Motors (GM) CEO Fritz Henderson had to say about the perhaps possibly soon-to-be-exiting Chapter 11 automaker:

“In addition to being a leaner, more productive company going forward, G.M. is planning future vehicle designs around higher oil prices. In a summit discussion on energy, Mr. Henderson said G.M. is betting crude oil prices could eventually revisit the $100 to $130 per barrel cost reached last year.”

This is extremely worrisome. GM has never been any good at building small cars, which is what the above implies. Furthermore, because a lot of the next cycle of new car models was already being designed at GM before bankruptcy, Henderson may be implying that the studios are going to tear up what they were working on and pursue a smaller vehicle strategy.

GM can probably do it. It’s a huge company, and it can’t turn on a dime, but it can adapt. However, small cars aren’t going to be profitable, and with the government taking a 60 percent stake in New GM, that could be problem. This also highlights a difference between GM’s bankruptcy and Chrysler’s. Because Chrysler has access to small-car platform through Fiat, the Pentastar stands a better chance of getting to market quickly with those cars. They’ll probably do it anyway.

Let’s just hope that GM also has some design plans for an economy in which oil-price volatility means lower prices, too.