Say Hello to the New GM

Once the ink is dry on some final legal documents, the General Motors (GMGMQ) that dominated the American and world industrial landscape for 100 years will be done, replaced post-bankruptcy by a "New GM" that the taxpayer largely owns.

Obvious questions now emerge, given that the government will hold 60 percent of the new GM: How long will this quasi-nationalization endure? And when the government decides to get out of the auto industry, what will the taxpayers get in return for their investment?

There’s been talk of an IPO as early as next year, with the government fully divesting itself by 2018. The goal is to see GM return to profitability, and presumably for the government to break even (at least) on the bailout billions and bankruptcy financing it poured into GM this year.

But this is arguably short-sighted. Sure, it would be great to get the money back and even witness the Treasury make a profit on the deal. But there’s also a historic opportunity here for the New GM to provide the kind of industrial leadership it specialized in during the 20^th century. The post-Chapter 11 company will sell Cadillacs and Buicks, as it has always done, but no longer will it sell Pontiacs and Hummers.

But the real focus may fall on a single vehicle: the Chevy Volt. What was being referred to a year ago as a hybrid—just with a different type of technology from the Toyota Prius—is now being called an “extended-range electric vehicle.” It could be a subtle signal that GM really does want to turn itself into an EV company, on a major scale.

Given that the competitive environment in the auto industry over the next 10 years is likely to be ferocious, this could be the best move GM has made since creating the EV1. It got leapfrogged on mass-produced hybrids. On mass-produced EVs, the New GM may write a different story.