UAW chief says GM's Volt to be sold at loss

CANTON, Mich., April 2 Wed Apr 2, 2008 4:05pm EDT

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CANTON, Mich., April 2 (Reuters) - General Motors Corp (GM.N) will have to sell the much-anticipated Chevrolet Volt plug-in hybrid at a loss initially, underscoring the challenge of rolling out alternatives to traditional cars, the president of the United Auto Workers union said on Wednesday.

"When GM brings out that electric car, they're going to be taking a huge loss on that for a number of years," UAW President Ron Gettelfinger said in a speech to a business group.

Gettelfinger made the comment in the context of arguing that environmental regulations and calls for the auto industry to move faster in rolling out rechargeable hybrid and fuel-cell vehicles needed to be realistic.

"It's pretty clear to me that, if it's not technically feasible and economically feasible, then you're not going to get there from here," Gettelfinger said.

Gettelfinger, who lead the UAW through a historic contract round with the U.S. automakers last year, said the Detroit Three deserve more credit for the more than $20 billion they invest annually in research and development.

He also said critics of the industry needed to recognize that far more could be done to make traditional gas-burning engines more fuel efficient.

"There's nothing like the internal combustion engine," he said. "We've got 100 years with that baby."

Gettelfinger said automakers were going to have to charge more for still-emerging alternatives, such as the plug-in hybrid Volt and GM's fuel-cell Equinox, now in real-world testing.

"Everybody is racing to get there, but there are some tough issues and cost is definitely going to be an issue for the consumer," Gettelfinger said.

The Volt represents GM's bid to beat rival Toyota Motor Co (7203.T) to the market with a hybrid vehicle that can be recharged at a standard outlet and to win back consumers who have abandoned the Detroit-based automaker's brands because of concern about fuel economy and the environment.

GM has targeted a 2010 release for the Volt, but indicated that could be delayed. The company is designing the Volt to run 40 miles on battery power alone using lithium-ion batteries now widely used in laptop computers and electronic devices such as cameras.

GM has not detailed its pricing plans for the Volt, which it is already featuring in its advertisements.

Gettelfinger told Reuters after his speech that GM was still planning to build the Volt in a Detroit assembly plant. GM executives had said the automaker could review that decision, which was announced last year in conjunction with the new UAW contract. (Reporting by Kevin Krolicki and Soyoung Kim; Editing by Andre Grenon)

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