Lutz: Hybrids & Electrics are Future, U.S. to Profit on GM’s Loan Pay Back
DETROIT - General Motors Vice President Bob Lutz, scheduled to retire his position on May 1, recently said GM will keep making big trucks and SUVs because U.S. buyers demand them, but a major portion of them will be gasoline-electric hybrids. He also said that the Detroit automaker will pay back its bailout loan at a profit for U.S. taxpayers without lowering the quality in vehicle development.
Speaking to Detroit News, Lutz said that GM will apply hybrid technology to more vehicles in order to satisfy the fuel-economy standards that will rise 40 percent to an average 35 mpg by 2020. He said that the cost of going hybrid will increase cost for GM, since charging the customer for a hybrid system would make the vehicles too expensive. GM currently has seven hybrids in its lineup.
In a separate interview with Reuters, Lutz said that GM was on track for a turnaround that will enable it to pay $8 billion of government debt and sell stock, allowing the government to get rid of its 61 percent stake in GM.
He said that he expects the government to make money on the $50 billion loan given to GM. GM will then offer stock once it can show positive cash flow.
"Once we have that story together, I'm convinced that we will be able to sell equity to private investors and take the government out of the ownership business," Lutz said.
GM's Chairman and CEO Ed Whitacre recently said that GM will pay back $8 billion of government loans before June, when it had originally scheduled to start paying back the U.S. Treasury.