Detroit automakers see green at end of rainbow

By Peter Bohan

DETROIT (Reuters) - Detroit's auto industry, which has given the world the "muscle car" and "gas guzzler," may finally be seeing "green."

Top auto executives, investors and industry analysts sang the same tune at this week's Reuters Auto Summit: newfound hope for competing in the market for fuel-efficient, environmentally friendly cars and trucks.

Green, it seems, is good.

"I think whether global warming is science fact or not no longer matters," said billionaire investor Wilbur Ross.

"It's going to be treated as if it were science fact, and it's clear there will be lots of pressure and lots of encouragement toward green activity," said Ross, who has bought several big auto supply companies in recent years.

General Motors Corp (GM.N), at risk of being displaced by Toyota Motor Corp as the world's top seller of vehicles, has earned much scorn -- and suffered a steady erosion of its once-dominant market share -- due to gas-guzzling creations like the Hummer, jumbo sport utility vehicles and giant trucks.

"We somehow ... let Toyota get ahead of us in terms of environmental technology because they did the Prius hybrid, and we elected not to do that kind of hybrid," GM's vice chairman and product development chief Robert Lutz told the Reuters Summit.

"We have since realized that letting Toyota gain that mantle of green respectability and technology leadership has really cost us dearly in the marketplace."

Lutz, a 40-year veteran of Detroit and an outspoken champion of American technology, bristled at the thought. He said GM will introduce 12 new hybrids over the next 3 years.

"It has gotten to the point where people buy Toyota because it is seen as the sane and responsible thing to do because, after all, Toyota is the company that brought you the Prius."

GM plans to launch its mass-market, plug-in electric car, the Chevrolet Volt, by the end of 2010, despite skepticism within GM about meeting that deadline. Revolutionary lithium ion battery technology is only one daunting challenge.

"People are biting their nails, but those of us in a leadership position have said it has to be done," said Lutz.

"We have to re-establish GM's leadership, and the Volt is, frankly, an effort to leapfrog anything that is done by any other competitor," Lutz said.

If federal regulators will count the Volt's 40-mile battery-only range in calculating its fuel-efficiency, Lutz said the car would achieve "off-the-chart fuel economy ratings" that could be "way over 100 miles-per-gallon."

That, in turn, could help GM meet tough new fleetwide fuel economy ratings expected to clear Congress, he said. The Volt could represent "the only financially feasible way to achieve these numbers that Congress is talking about," he said.