GM boosting efforts in hybrid vehicles
Thu Sep 29, 2005 1:57 PM ET

MILFORD, Michigan (Reuters) - General Motors Corp. sees value in unprofitable hybrid vehicles and is boosting efforts in their development, the automaker's vice chairman said on Thursday. Robert Lutz acknowledged the world's largest automaker has lagged in the development of hybrids, which twin a gasoline engine to an electric motor and batteries to boost fuel economy.

"That will change very quickly as we roll out our various categories of hybrids, but right now we're not where we ought to be," he told reporters at a GM event here.

Chief Executive Rick Wagoner has said in the past GM will not make unprofitable vehicles. However, Lutz said there is now an appreciation at GM for hybrids as a form of corporate advertising to show a company is technologically and environmentally advanced.

"If you have to do some and lose money on them, we have to consider it as another form of communications expense and I think Rick accepts that and the board of directors accepts it," Lutz said.

Ford said last week it was planning to boost global production of hybrid vehicles tenfold to 250,000 annually by 2010. Japan's Toyota Motor Corp., seen as a leader in hybrid technology along with Honda Motor Co. Ltd., plans to boost hybrid sales to 1 million units by the early part of next decade.

Lutz declined to address GM's U.S. auto sales in September, but said the automaker will no longer offer employee pricing plans and instead shift to value pricing as a way to emphasize a vehicle and its attributes as opposed to the deal itself.