L.A. Auto Show Thinks Green

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General Motors (GM) Chairman and Chief Executive G. Richard Wagoner Jr. had just finished a half-hour speech explaining his company's environmentally friendly initiatives when two activists jumped on stage.



From the podium, Matthew Leonard, a campaigner with the Rainforest Action Network, urged the Detroit honcho to sign a pledge agreeing to make GM "the most fuel-efficient company in the auto industry by 2010." Wagoner, who stands an impressive 6 feet 5 inches, quickly shoved Leonard aside. "I think my speech spoke for itself," he said. "I'm sorry, you have to go now."



That's how it went at the Los Angeles Auto Show, which opened to the public Dec. 1. Automakers unveiled a string of new green initiatives, so much so that a feeling of confusion hung in the air, as attendees were left to ponder a slew of new technologies and fuel sources, and whether it was even enough. "We've seen too many concept cars and prototypes," Leonard told BusinessWeek.com shortly after storming the stage. "We want commitments."



Still, all the green announcements from the automakers impressed some. "Everybody decided to move into fuel-efficient vehicles as quickly as they could," says Thomas Libby, senior director of industry analysis at the automotive research firm J.D. Power & Associates. "Now we're seeing the fruits of that."



Like BusinessWeek.com, J.D. Power is a division of The McGraw-Hill Cos. (MHP).



Slew of Green Debuts

Wagoner put the era in historical context during his speech. When the first L.A. Auto Show debuted 100 years ago, he noted, there were three competing engine technologies -- electricity, steam, and gasoline. "Going forward, it is highly unlikely that oil alone is going to supply all of the world's rapidly growing automotive energy requirements," he said. "The key is energy diversity."



For GM, that meant talk of flexible-fuel vehicles, ones that run on gasoline or an ethanol blend called E85. It also meant unveiling a new hybrid gas/electric GMC Yukon sport-utility vehicle and plans for a "plug-in" version of the popular Saturn Vue Green Line SUV. Unlike the first generation of hybrid vehicles that use a gasoline engine to recharge electric batteries, plug-ins charge themselves through a home electrical socket, something that can reduce fuel consumption even further. It's still an experimental technology, however. Wagoner said in his speech that he cannot predict when such a car might go into production. "I can tell you it's a top-priority program at GM," he said.



Other manufacturers chose environmentally conscious California as the place to unveil their new green vehicles. Nissan Motors (NSANY) showed off its newly designed Altima sedan with a hybrid engine borrowed from Toyota Motor (TM). Funny that, because Nissan chief Carlos Ghosn famously said he didn't think hybrid cars were a profitable business. DaimlerChrysler's (DCX) Mercedes-Benz division touted its new Bluetec diesel engine technology, billed as the cleanest diesel engine in the world. BMW unveiled its experimental Hydrogen 7 car [see BusinessWeek.com, 9/12/06, "BMW's H-Bomb"], a version of its 7 Series sedan that will run on liquid hydrogen. The company, which also plans a big rollout of cleaner diesel cars, is only making 100 of the hydrogen models.

Environmentalists Demand More

Elsewhere at the show, Kermit the Frog, a Ford Motor (F) spokescreature, sat on top of the company's newly redesigned Escape SUV Hybrid and gave a press conference. He said frogs were barometers of the environment, sort of like canaries in a coal mine. Oddly, the only manufacturer not overtly flaunting its environmental consciousness was Toyota, which kicked off the whole movement with its phenomenally successful Prius hybrid. It chose to feature two new trucks at the show, including its four-wheel-drive Tacoma Double Cab pickup. Toyota's Lexus division did show its new 600h L Hybrid sedan, a step up from the $55,000 450h hybrid luxury sedan that went on sale in August.



Jason Mark, the vehicles program director at the Union of Concerned Scientists, said he'd like to see carmakers use their existing fuel-saving technologies across a wider array of vehicles. Some of the ones he cited include six-speed transmissions and variable valve timers that better match a car's power needs with fuel consumption. "We have a lot of technologies delivering small gains," he said. "You put them together and you get large gains."



L.A.'s Bigger Buzz

Honda Motor (HMC) unveiled a string of new concept cars at the show, all of them highly stylized compacts designed to appeal to younger, fuel- and price-conscious buyers. The Step Bus, for example, looks like a stubbier version of Toyota's popular Scion xB van. It had some innovative design features such as sliding front doors that allowed passengers to access the back seats, and a customizable, "bulletin board" dashboard where owners could attach notes, photo or maps.



Though celebrating its centennial this year, the L.A. Auto Show has always played second fiddle to the better-attended Detroit show that usually takes place just a few weeks later in January. This year L.A. Show organizers were able to move their event up a month, and the result was double the media attendance and a record 35 new vehicle debuts. The L.A. Show is open to the public from Dec. 1 through Dec. 10.



A higher degree of theatricality also seemed present at this year's show. Chrysler unveiled its newly designed Sebring convertible with comments from actress Jennifer Love Hewitt and a performance by four acrobats who were lifted from the vehicle along with two sets of golf clubs. The night before, Volkswagen showed off its new Tiguan crossover SUV with a star-studded party and performance by rapper Ludacris. Although still a concept, the snazzy and fuel-efficient vehicle is one Volkswagen officials say is likely to be introduced in mid-2008.



Click here to see highlights of the 2006 L.A. Auto Show.