GM: Live Green or Die

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The first order of business was reorganizing GM to ensure that good ideas hatched in the lab make it to the dealer quickly. It may be hard to believe, but GM didn't have one group dedicated to hybrids and electric cars. (Toyota set one up in the mid 1990s.) The team working on hybrid SUVs that hit the market in January had to get approval from people in different departments.

Now they talk to Robert A. Kruse, GM's recently named chief of hybrids and electric cars. An electrical engineer who has worked on such high-performance cars as the Pontiac Solstice, Kruse, 48, has the friendly but intense demeanor of a high school coach. The framed Hot Rod article touting a souped-up version of the Solstice in his office shows where Kruse's passions lie. But he says GM gets way too little credit for its green engineering. The company began developing hybrid buses in 2001, and he notes that they save more fuel carting people around cities like Seattle than a slew of Priuses.

NERVE-SHATTERING SCHEDULE

Kruse has real power and a decent budget. To free up resources, GM has canceled several vehicles, including a new minivan and sedan. And even though the carmaker is burning through $1 billion in cash a month, the R&D budget is the biggest in a decade: $8.1 billion in 2007, up from $6.6 billion the previous year. (On May 13, however, GM said if the economy doesn't improve, it could be forced to borrow or cut spending.)

The next step is vaulting the technological hurdles. One of Kruse's first moves was throwing a few million dollars at the battery lab. Located at GM's sprawling tech center in the working-class Detroit suburb of Warren, the lab is ground zero for GM's efforts to turn itself into a green carmaker. Douglas Drauch and his team must figure out how to fit batteries into a range of hybrid vehicles and create ones that will propel the Volt 40 miles before a small gasoline engine fires up and recharges the battery, extending the range to 600 miles. Remember the laptops that caught fire because their batteries overheated? Imagine if something like that happened while driving down the highway. And because GM is racing to catch up, Drauch must cram 10 years' worth of testing into two.

Fear of setbacks is a constant. This past Valentine's Day, Drauch got a call at 1:58 a.m. His cherished lithium ion battery was running a temperature. Heat had spiked in the stainless steel chamber where computers run tests 24-7 on the 6-ft. tall, 400-lb. test battery. The temperature spike prompted an automated call to Drauch's house. He pulled on his clothes and raced to work. False alarm. Someone had left on a 150-watt light bulb, heating the vault enough to trip the system.

Despite the tight schedule, Kruse says the batteries will be ready by 2010. "We're making history," he says. "Fifty years from now, people will remember [the] Volt—like they remember a '53 Corvette." There are plenty of doubters, however. Toyota engineers wonder privately whether the battery industry, which currently isn't producing many lithium ion batteries for cars, will be able to make enough by 2010 for GM to sell the Volt in any real volume. One executive at Tesla, a California upstart working on an electric sports car, also questions whether the technology will be able to pass a 100,000-mile warranty test.

Even as the engineers toil to get the science right, Wagoner and Lutz are pushing to change GM's culture. That's a daunting prospect. Had Dr. Seuss depicted the company, he might have drawn a skyscraper in which the CEO hands out an edict from the top floor and a pastel-colored arm reaches out each window, passing the note 40 floors below to the rank and file. Wagoner is not given to cheerleading or, as one executive puts it, "Vince Lombardi-like speeches." But he has been making the rounds to show he means business. In mid-April, the CEO dropped by GM's test track, where the Volt team is putting the prototype through its paces. Wagoner didn't issue a fiery proclamation; he just asked if the engineers had what they needed. One likened the encounter to "the Pope visiting."