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GM to Build Hybrid System for SUVs

February 02, 2006|From Bloomberg News

General Motors Corp. will invest $118 million and add 87 jobs at a factory near Baltimore to build a fuel-saving gasoline-electric hybrid system that it will share with DaimlerChrysler and BMW, the automaker said Wednesday.

The system combines two electric motors, which operate when the gasoline engine isn't being used, in a transmission-like unit. Production will begin next year at a GM transmission plant in White Marsh, Md., the company said.

GM also said it would build its first hybrid version of the Chevrolet Tahoe sport utility vehicle at its factory in Arlington, Texas.

GM's announcement follows President Bush's call in his State of the Union address Tuesday for improving hybrid batteries and changing "how we power our automobiles."

GM, DaimlerChrysler and BMW are saving money by cooperating on the development of hybrid technology as they attempt to catch up to Toyota Motor Corp. Toyota delivered its first Prius hybrid car in 1997 and sold 107,897 of the models in the U.S. last year.

GM will introduce its hybrid Tahoe in 2007 and Chrysler will follow shortly after with a hybrid Durango SUV. Both will use the system being built in Maryland. The automakers will build the trucks at their own factories.

Hybrids combine a gasoline engine with an electric motor to reduce fuel use and pollutant emissions. Toyota, Honda Motor Co. and Ford Motor Co. sell gasoline-electric vehicles in the U.S. Hybrid sales increased after the average retail gasoline price in the U.S. rose to a record in September.

The hybrid Tahoe is 25% more fuel-efficient than its conventional counterpart.

Automakers sold 211,875 hybrid models in the U.S. last year, a 144% increase from 2004, with a majority coming from Toyota. Jim Press, president of Toyota's U.S. sales unit, has said the automaker expects its hybrid sales to nearly double this year.

Automotive forecaster J.D. Power & Associates in Westlake Village projects that U.S. hybrid sales in 2006 will increase to 277,642, up 31% from 2005.

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