"I believe we will see higher energy prices driven by economic growth," said Henderson, noting all recessions come to any end, which leads to an expansion and rising demand.
“Gas prices will remain volatile,” GM CEO Fritz Henderson said during a panel discussion on energy sponsored by the Detroit Economic Club, which hosted The National Summit on the economy this year.
Microsoft Chief executive officer Steve Ballmer also told the Summit that in general more “innovation” is required to get the auto industry out of it rut.
“Success in the automobile business will depend on sustained commitment to innovation,” said Ballmer, adding auto companies also may have to forego short-term profits in favor of long-term success.
Henderson also noted the higher prices for fuel are simply inevitable.
“We’re planning for oil in the $100 per barrel to $130 per barrel range,” Henderson said. “This is a structural change,” he said, adding it was driven by rising demand around the world. Prices beyond $100 per barrel would probably translate in $4 per gallon gasoline in some parts of the country.
“I believe we will see higher energy prices driven by economic growth,” said Henderson, noting all recessions come to any end, which leads to an expansion and rising demand.
Car sales in China, in fact, will surpass those in the U.S. this year for he first time ever. “We used to think that might happen in 2015 or 2020,” he said.
Thus, GM is comfortable with its decision to bring production of a new subcompact to the United States, Henderson said.
For GM it is also imperative to diversify the propulsion system used in its vehicles. Vehicle electrification is one answer and second and third generation biofuels are another possibility.
“In the end, it’s the consumer that will drive us to make more efficient automobiles,” Henderson said. “We need multiple paths that don’t foreclose any options,” he said.
Henderson also said he is “in touch daily” with the Obama Administration’s auto task force and he is now preparing for a hearing at the end of June on whether GM should be “sold” to a consortium of investors that will include the U.S. Treasury, the Canadian government, the company’s blue-collar retirees and creditors.
The new GM is still expected to exit bankruptcy at the end of the summer, he said.