At GM, Burns is tasked with taking the long view: envisioning and strategizing for an automobile market that's often decades away. He was the driving force behind the Chevrolet Volt, an electric plug-in concept car showcased at the auto show, and he holds advanced degrees in public policy, mechanical engineering and transportation systems.
Worldchanging: Last night I was speaking with John [Larson] from Pontiac about how GM is more than willing to respond to what the market wants. They’re willing to give people what they want, whether that's hybrids or electric cars. How, in that case, could you lead the market versus responding to the market?
Larry Burns: Let me give you just a little bit of background because I think it’s relevant to my answer, and I think it’s relevant to what you’re trying to do. Today there’s over 6 billion people in world, and there’s 850 million cars and trucks, so that means only 12 percent of the world’s population own a car or truck. When you look at automobiles in emerging markets – China, India, Brazil, Russia, you name it – there seems to be this universal aspiration on the part of people for the freedom that they get from having personal transportation.
So if you think we’ve got issues on sustainability today with just 12 percent of the world’s population owning a car, given the emergence of those markets and the speed at which they’re growing, we’re going to have it much more severely unless we can come up with solutions. Ninety-eight percent of the energy used to automobile transportation comes from petroleum, and what we have to do is find ways to diversify that energy. That’s not a good business position to be in. So my answer to you is very much a business-driven answer, because we want to grow our business, but we have to grow it sustainably. Because the issues of energy or environment or safety or congestion could cap the growth of the auto industry, we believe technology truly can step up to this challenge. Look at the iPod phenomenon, for example.
Worldchanging: That’s a good one.
Larry Burns: Here’s someone that led the market and absolutely disrupted conventional entertainment systems. Take a home entertainment system, for example: speakers in each room and an amplifier. That’s pretty expensive stuff, and now you can just buy an iPod and a little iPod speaker system and put one in each room and you’re off and running. They led the market. We tend to think about this in terms of the strategy of “do unto to yourself before others do unto you.”
The only way you can really do that is to get out in front – but you’ve got to get out in front with a high-volume solution. With 850 million cars and trucks in the world today, going on 1.1 billion by the year 2020, if you park those cars end to end and wrap that traffic line around the planet, it would go around 125 times, to give you a visual sense of that. So we need to get to a high-volume solution. Something that’s nice technology but too costly for the masses isn’t going to solve this problem. So getting out in front of the market has to be getting out in front of the market with affordable technology. That really sells it. That’s why we’re so interested in hydrogen fuel cells and why we’re so interested in the E-flex concept and the potential of advanced batteries. It lets us diversify the energy for our product, because hydrogen can be made from so many different pathways, like renewable and biological sources, so everything we’re doing to get ethanol infrastructure in the US, put a couple more steps in the refining process and you’ve got hydrogen. It’s a very simple vehicle, that’s why it promises to be affordable. It has 1/10th as many moving parts in the propulsion system as an internal combustion engine.
Worldchanging: I saw that in the Volt upstairs.
Larry Burns: When you look at that, [simple] usually means lower cost, lower costs means more people can afford it. The electric drive is very exciting; it gives you your torque. You get your highest torque at 1 RPM. Things that excite people about cars are what they look like, their driving performance, their affordability and their safety, and very importantly now their environmental and energy efficiency aspects. So yeah: we’ve got to get out in front. We have to get out in front with technology solutions that are meaningful in terms of the ability to get the high-volume solutions to really fix these problems. We didn’t just do the Volt concept, we didn’t just think of E-flex, we’re also doing the production engineering on E-flex.
Worldchanging: Is the Volt a stepping stone to something that will be high-volume and affordable?
Absolutely, and here’s why. The electric motor that’s in [the Volt] is the same one that’s one our fuel cell vehicles. The controls and power electronics are the same. The physical package, the metal parts that make the chassis and the body will all be taken from a very high volume GM platform that we sell all over the world to one of the largest segments in the world. I’m not at liberty to tell you exactly what that is right now, but because that’s being sold in the millions worldwide, we’ve got the scale economy in all these parts, and we’ve engineered it so that battery and that electric drive and that engine generator can fit into that, and we’ve also engineered it so the fuel cell and the hydrogen storage can fit into it. So you can put both of these technology paths in the same physical set of parts. And depending on where you are in the world, you can get the scale economy going.
Worldchanging: Yeah, of course.
Larry Burns: In the Volt, those liquid fuel tanks can have biodiesel or ethanol in them. So now you really get the green, and that’s the real key. And so yeah, we started production engineering on it, so I think that tells you how serious we are about getting on with this. Now: is the battery ready? Not yet. Does the battery cell have chemistry that looks encouraging? Absolutely. But you’ve got to work from that individual cell to an entire battery pack in the automobile and finish that engineering work. And we’re working with a lot of suppliers to get that to work. Governments can’t subsidize high volumes sales; they just don’t have the money. And business can’t do it or they’ll go out of business. So the only way you’re going to really solve these problems is to use technology to find an answer that people love they can afford to buy. And they’re buying it for reasons beyond just environmental reasons.
Worldchanging: What about increasing awareness like putting a miles-per-gallon gauge in every GM vehicle? I can’t imagine it would cost a whole lot more to do that.
Larry Burns: You raise a real important point there. If you need to do something right now – which I believe we do – there’s enormous opportunity in how people are driving, to make their vehicle much more efficient. Let me give you an example. We took a sample of exactly the same vehicle and then took about a hundred drivers – they happened to be GM employees – driving exactly the same vehicle: same engine, same everything. And then we measured their actual fuel economy. And in this particular vehicle is ranged from like 11 to 26 miles per gallon.
Worldchanging: What a spread!
Larry Burns: How can that be? The speed at which people travel, the roads that they’re traveling on, the load that they’re carrying, the heaviness of their feet, the stopping and starting and how aggressively they drive – all of those variables enter in to the actual efficiency of a vehicle in actual use. Are there things we can do to improve the efficiency of all of those 230 million cars and trucks in the US right now, today? Definitely. Maintain your tire pressure, drive the speed limit, improve the traffic flow – and we can do some of that with our OnStar technology. I think there’s enormous opportunity to have immediate impact on existing car performance. If you were going to do something on your blog [like] 10 recommendations to tease another mile per gallon out of your car in terms of how you drive it, I think that would be very helpful.
Worldchanging: You touched a little bit on hydrogen. It seems like on a federal level, as far as funding, a lot of money is going toward ethanol right now. That seems to be the buzzword, the cash cow. How has it been trying to develop hydrogen as an alternative fuel?
Larry Burns: We’re pretty encouraged by the budget support for hydrogen. President Bush has pledged $1.2 billion, and it looks like the ’07 budget is going to deliver the remaining part of that commitment. The reason I know that is because I’m part of USCAR, which is a consortium between the US auto companies and the government, and we try to do collaborative work together, so I look at that funding pretty carefully. So the hydrogen hasn’t been cut back at all after we’ve gone after ethanol, nor has the battery work, as we’ve gone after better batteries, impacted the hydrogen.
The ethanol is less an invention issue. People know how to make ethanol, they know how to grow crops; it’s an economics issue to get the stations out there. And part of the risk is if suddenly petroleum dropped to twenty bucks a barrel, and all those people who have invested their capital in ethanol plants could be left holding the bag. So we’ve got to get an energy policy that allows the alternative fuels to play on a level playing field long enough so that they can get past the tipping point and let actual market dynamics sustain them. For us, it’s a relatively small added cost to make a vehicle E-85 compatible. Compared to a hybrid, it’s just a drop in the bucket, so we’ve commited to doubling our E-85 production, along with Ford and Chrysler, and we’ll even go further than that if we see evidence that the infrastructure is evolving more quickly.
One thought I really want to reinforce: if you really want to make a difference you need to get to high volume. That’s the only way you can shift this situation. And you’re starting out with over 800 million cars and trucks in the world that all have internal combustion engines and all rely on petroleum, so the expectation on how quickly you can shift that whole thing over…that’s just a reality we have to deal with.
If we can get an affordable vehicle that could be a market dynamic for an alternative fuel, venture capitalists are going to go after it. They’re spending a lot of money on ethanol right now because they think there’s going to be money to be made. They’re not doing it out of the goodness of their heart; they’re doing it because they know how to make money. That’s what got us excited about ethanol. When you see those kinds of people put their money in investment in infrastructure, they must believe a tipping point is around the corner.
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