children and i want them to inherit a better earth than we did. i think, quite frankly, our generation, in 1970, the epa was put in the water. the air and water is cleaner than i was growing up in the '60s. it should be cleaner than the next year. we will not get there for free. i don't think a huge manufacturer such as general motors or any other company cannot be part of the solution and that's what our goal is to be. so, we were active participants. we weren't dragged to it. >> not because the government owns 27% of gm? you could not sue your boss so you had to go along? >> what he said. [ laughter ] >> so, cafe mileage standards

were basically flat for 25 years. from 2010 to 2025, they will double from about 28 miles a gallon to 55 miles a gallon. here in california, there is a law to decrease the carbon intensity fuels. lawyers are fighting that tooth and nail in court. i would like in our juxtaposition. auto companies increase 100%. the oil companies are fighting 10%. your response? >> i'm in a car company. you know, i respect they have to serve their owners as their owners want them to behave in the marketplace. you know, what i'm proud of is

in our company, if you look back 25 or 30 years, we have taken almost 99% of pollutants out of the emission of the car. it is still a lot. i don't know if it is a lot or too much, but we want it to be better. we are producing cars like the volt. we are producing cars like the b.e.l. the battery electric vehicle. this week, we came out with a new engine that will burn liquid gasoline as you see it at exxon or chevron or anybody else today. the same engine, not two engine, the same engine will burn compressed natural gas. we had to spend a little bit more on lifters and sealants and piston. i will not give you a number. it is not prohibitive. it allows us to migrate away to a cleaner form of energy over time. we want to be part of the solution. that comes in different levels.

when we looked at cafe, you probably did not know this. if your mercedes, as long as you produce 99,999, you were not subject to the gas tax. i don't get that break in germany. why in the hell did someone agree to that back in the old days? i said we're at the table and ready to talk turkey. why give an advantage to a foreign competitor. we are not getting it in germany. guess who did not show up at the announcements of the new cafe standards which i thought was a mistake? >> some of those european companies exceed the rules, they get a slap on the wrist and go on. >> we are pushing everything on cleaner energy, more fuel

efficient. we have many cars now that are epa rated at 40 and above. the eco cruze which is coming out. the collateral impact and positive impact of our work on volt, we are putting in what we call e-assist on trucks. we are putting them on mid sized sedans and small cars. the next generation, if you really want a good car that will get good mileage is the new malibu that is coming out. this car has gotten rave reviews. we put a battery string in the back in a congested city like san francisco or any big city in america. we estimate one in five minutes, you are sitting still or traffic or a stop light. you have the 12-volt battery that runs the radio and everything else.

we go to a string of lithium batteries in the trunk and your mileage jumps from 25 to 33%. it is cleaner and you are in the city in that mode. you are seeing the evolution here and you can see where it's going over time. the more creative we are and the greater energy density that we can get into a cell battery, the better off we're going to be. we are investing. this is the new gm. we put $100 million into gm ventures. it sounds like a private equity firm.

we don't have all of the answers. you have the entrepreneurs with their life and soul and their grandmother's inheritance. they invest everything and they live and die with that. i like that intensity. we get the opportunity to kind of walk around the technology and see if it has an auto application. the corporation was picked up in your papers here. that is a promising technology. we don't know if it is industrialized yet. >> it is a company that claims to have made a break through in energy density in car batteries. >> yes. lithium-ion. it is a lot of weight and gives 16 kilowatts of energy. what does that do? the battery can run a lot further. instead of 40 miles, maybe 140 miles. so, i believe in my lifetime and technology, there is an ever escalating improvement. you have to be optimistic about it that battery technology will improve in the next 20 to 25 years. >> a mix of fuels as opposed to one. >> yes. i think the crowning, the holy grail, if you will, is the fuel cells. we have a fleet. the technology works, it is just

very expensive. the chemistry is very complicated and quite frankly, it takes about two ounces of platinum. now we have it down to argue quarter ounce of platinum. when i was with general instrument, as you mentioned, we invented high definition television. the first copy cost us $450,000. now you are buying them wherever you are buying televisions for $200. it took a while. you will see costs of hydrogen fuel cells. we put 3 million miles on hydrogen fuel cells today. the cars cost $400,000. now we are down to 350.

hopefully in the next ten years, we get it down to 35 or 40. >> dan akerson is ceo of general motors. i'm greg dalton. the chevy volt is the centerpiece a lot of gm strategy right now. it has brought something of a halo effect to the company. recently the company announced it was suspending production. you sold less than you wanted to last year. are you disappointed with the volt or is this natural with new technology in the marketplace? >> i hope the audience understands what i'm about to say. you never have perfect knowledge of what the market is going to do and how well it will receive your product. the cruze, we closed the plant for two weeks last november. you didn't even know that. there was so much intensity around the volt because although it was designed probably when president obama was in the

senate, it is now his car. >> he said he would buy one. >> you know, i'm happy to hear that. i wish he would buy one this year. he's not. not this year, i don't think. it's become somewhat politicized. the volt is always in the background. we are going to match production to inventory. that is what -- if you were owners of this business and it was your company, that is what you would do. whether it is the cruze or the truck. you know, the average guy on wall street says look at the building inventory. we will shut the plants down for 26 years this year. you have to accept some intelligence behind our decisions. the volt we shutdown and we wanted to get it in demand with the marketplace. >> we want to show a brief ad about the chevy volt.

this is an ad that chevy volt that has been running. we can certainly hear it. >> for our town, for our country, for our future. this isn't just the car we wanted to build, it's the car america had to build. the extended range electric chevy volt from the heart of detroit to the health of the country. chevy runs deep. >> from the heart of detroit to the health of the country.

why is this good for america? what are you trying to say? >> the great thing about the volt is that it represents american innovation, american ingenuity and clean technology. it is a statement about what the company represents. the best that america can produce. it is clean and reduces our dependence on oil, especially foreign oil. >> okay. dan akerson is chairman and ceo of general motors. our guest today at climate one. last year, toyota downscaled its profit expectations for the year because of supply chain disruption in thailand. intel did the same thing. >> we did it, too. >> you had something related to japan. >> we had it in thailand.

>> the floods that struck thailand are precisely the extreme weather events that climate scientists said earlier say it happened with increased intensity and frequency. my question is if you run a global business, how do you plan for the supply chain disruption that hit you from the other side of the world? >> we have operational risk management function within the company. when i came in, i said give me the 25 biggest things that could happen to you. and you want to lay awake at night worrying about all of them. i said what the hell. i can't do that. it is tragic what happened in japan.

an earthquake, tsunami and nuclear disaster. what it tells you is you have to diversify your supply chain. we are actively doing that and, you know, to be honest with you, depending on how far your supply chain went around the globe, some manufacturers were impacted with what happened in thailand than what happened in japan. so, we have taken a hard look at that, as i'm sure all of our competitors have. it has been a lesson learned and i will tell you we were very concerned in both instances. we marshaled our resources as best we could. we shut our shreveport down for four or five days to ensure we had supply to a different set of issues we had. we were lucky that is all the impact we had with the two natural disasters. >> so climate-driven weather can be a business risk? >> oh, yeah. in the case of the climate wasn't the issue. >> thailand. >> thailand was probably more likely. i would like to think it was

more likely than what happened in japan. >> you mentioned gm ventures. gm ventures invested in car sharing, i believe, with relay ride. i would like to talk about the future of car sharing and automobiles as a service and mobility as a service. >> you don't know what shape or form that mobility will take place. we are looking at autonomous cars. you know what i mean? we are trying to look at everything now. we can't afford to run around with blinders saying we are going to build just trucks. we are going to build every segment of the market and be efficient as we can in every segment of the market. if it evolves to a zip-car type or a peer-to-peer type that relay cars are involved, we want to be part of it.

we have an onstar that enables that. if you want a car and you can rent it to me for $250 a day. you can rent. we wanted to be an enabler. nothing you do in the world satisfies everybody. i was criticized for being stupid on that one. what if this takes off? what if urban mobility takes that vent? we don't want to be late to the game. we decided to be pro-active rather than reactive. i think, if it works out, we will be -- it is always if you are right, you are a genius and if you are wrong, of course, you are stupid. >> there must be some people inside gm, you sell cars. if people rent a car, that is bad for production. >> there are people like that. [ laughter ] >> i'm sure they are sitting around saying there are guys like dan that got us into this thing. you know -- >> bill ford was here recently.

he said it will happen whether we like it or not. we might as well be part of it. companies are always interested in young consumers. they may pick their iphone over a car. you have to think about that. bringing the cloud into the car. >> yes, we are very interested in that. >> i have seen advertisements that are more about the entertainment and console than the car itself. it is more about the entertainment experience than the car itself. that seems like an interesting approach to sell the entertainment value of the car. >> i don't know what you are getting at, but we put it in a brand band of entertainment. we don't want to jeopardize the safety on the road. i will tell you, i have been going down the road and i see people come over. they say it is distracting and provides as much distraction as a drunk driver would.

i am much more alert to oncoming traffic than i would have been a couple of years ago. when i was ceo of nextel, we talked about short message service. not like the keys you have on the iphones. that being said, we want to have a hands-free, eyes-free application in our cars. that is the thrust we are trying to make. if someone texts you, there will be applications. yes, no, i can't talk right now. i'll call you back. your husband or wife calls. while you're downtown, can you pick up the dry cleaning. yes, no. i'll call you back, or whatever. eventually, we are interested in the work that apple is doing with siri because you get voice recognition technology which will continually improve. let's get in on the ground floor.

we have hired more people from that space than would probably surprise you. it will surprise you so we can be up on that. the new system cadillac is using has millions of lines of code written into the info-tainment system. the guiding line is hands-free, eyes-free. my wife talks to me when i'm driving and we're still here. >> we will put our audience microphone out here and invite your participation. i invite you to come with one brief question for mr. akerson. the line will form back there with our producer jane. if you are on this side of the room, we ask that you go through that door over there rather than crossing the cameras. please go through that room and

the line will form over there. while we get that going, our guest today is dan akerson, chairman and ceo of general motors. we have not talked about china yet. china is a big part of the industry. shanghai company owns 1% of general motors. let's talk about shanghai. will that 1% share could be increased so there is more cross ownership with china? >> well, they bought -- to be clear, they bought $500 million. i'm in the sure that is 1%. we own -- we are in a joint venture with shanghai auto. we are proud of that. we have been gaining market share. >> and record sales in china. >> yup. just like here. everything's not great at

general motors. we have our issues. and what not. it is a complicated business. in asia and china and specifically, we are doing well. we are the largest marketshare. we're putting the same press on there and their government is hand in glove with their manufacturers just like here to try to get us to be cleaner and more efficient and we're working diligently to do it in china as well as here. >> let's have the first audience question. >> hi. great conversation. as founder of a gas roots organization called don't be fueled, i get a lot of questions about earlier the hybrid car and now the electric car from a lot of intelligent people. as you might imagine, i'm a big advocate for cleaner vehicles. what i'm getting more questions about and i'm not sure how to answer. what about the safety and environmental hazards of the batteries? there's two concerns,

ems and disposal of the batteries. that is my first question. >> we have a big line. just one question. the safety of the batteries and recycling. >> one of the reasons we chose the path we went down with batteries is we give an eight-year guarantee. because we cool it with liquid. it is called dexacool. it is not dissimilar to what you would see in an ordinary car. combustion engine car. we never allow the charging go above 85% or below 15%. we can guarantee this battery for eight years. an air-cooled battery based on our testing to date, will last two or three years. a, we think it will go longer. that is what we are guaranteeing it for. we have an open dialogue with utilities in terms of storing for various applications.

coming from the cell phone industry, i can tell you, you need to have batteries on the cell phone towers. you will lose commercial power at times. this is a work in progress. i don't have a clear cut no questions asked. we are in dialogue with a number of people in how we use these things. >> the other part of the question is ems. the electric magnetic. recycling of the batteries after the useful life? >> like i say, we will try to use them in some sort of application for the storage of electrical energy. we have not sorted that out yet. >> let's have the next audience question. >> mr. akerson, many consumers would like to be able to buy e-100 flex fuel vehicles, not e-85, but mileage that is optimized for ethanol, not gasoline.

what do we have to do to get gm to offer these vehicles in the united states? >> we will build cars or trucks -- people say why are you building these big cars? because that's what the market wants. we will meet the market. that is what you would expect to do with a profit-oriented organization. ethanol is not in high demand now. if there was a demand for not 10,000 or 20,000, but 100,000, all of a sudden, we would get more interested in it. we don't see that demand in the marketplace today. so, if the market is there, we will be there. if the market is not there, we will not be there. >> let's have the next audience question for dan akerson. >> hi. i was intrigued by your

statement that fuel cell cars are where you want to be. i'm curious why that is the final goal for technology development. there is a practical implication. we need the distribution center for not only natural gas but hydrogen. why am i intrigued with it? because literally you can take a 2-month-old baby and put a baby underneath that exhaust just as long as the dripping water doesn't impact on the child's ability to breathe. you're in as good a shape sitting where you are as that child is. and i think at the turn of the century there were 6 billion people on this planet. there will be 9 billion people and we're going to really have to be good stewards of our environment. and i think ultimately you want zero emissions. >> one of the challenges for hydrogen is where does the hydrogen come from? how much energy does it take to create that hydrogen?

>> do you know how hydrogen is produced today? refineries. >> there are infrastructure issues. >> they largely don't great it today. they can -- that's the business. we're not going to get into that business. we're not that smart. that's a tough business. >> but governor schwarzenegger has tried a lot of -- pushed hard on hydrogen. hasn't taken off in california. >> you know, leadership is a tough thing. you have to make tough decisions and sometimes you'll be wrong. of course, everybody will remember when you're wrong and not when you're right. but at some point in time, this is i think the future. and it may not materialize, the market may not be there. if it's not, that's why volt and, you know, the first -- this

is the first chapter written on the book called alternative forms of propulsion. alternative propulsion. and it will evolve over time. the chapters are yet to be written. maybe i'm wrong. i have to allow for that possibility as my wife tells me i have been wrong and if it isn't hydrogen, well, then we better figure out a way to produce a lot of electricity. let's face it, electricity produced in a coal fired plant doesn't have pure emissions either and there are strong points of view around that. whether it's nuclear, gas or coal. modern societies, competitive societies, have to figure out how to get the cleanest, most efficient form of energy to the marketplace and i think as the world evolves and energy evolves, you may see this evolve into hydrogen fuel cells.

>> let's have the next question. >> dan, my name is john thomas. i'm from the mad hedge fund trader. i have a personal question for you. when you were offered the post of running gm, what initially came to your mind? are you crazy, are you out of your mind? what was it in this job that lured you to accept that offer and who specifically made that offer? >> well, i think gm is the most -- one of the most complex, most interesting and most challenging business opportunities of my generation of management. and where i was in private equity and thought i would just finish my career there, it was genuinely intriguing. i thought i could make a difference. i had been overseas for two weeks, came to the board meeting --

>> we should clarify you were on the gm board first. >> yeah, i was part of the new board that was brought on post bankruptcy, and then ceo said, well, he was leaving. he was 68, going to be 69. and he had -- he was an interim because we had lost our ceo from the old gm, the prior management. and candidly i had this vacation, and my daughter was pregnant. so she couldn't go anywhere. so we took her and my other granddaughter and i almost turned the job down because when my wife and i kind of wanted a couple days to think about it and i told my granddaughter i wasn't going to be around so much, she started crying. i had already accepted by then and figured a man is as good as his word. i'm glad i did it. there are some personal aspects of it that are not all that attractive.

you know, i will be back with my granddaughter in some period in the future. that will settle that concern. >> good. >> again, you touched briefly on business conditions that you are seeing right now. >> yes. >> way too much capacity over here. >> yes. >> i wonder what we are doing to address that. are you closing plants there and why are -- could you quantify how much money we are losing in europe at the moment? >> well, what's going on in europe is not similar to what happened in the united states prior to the great recession. to give you an idea, we shut 14 plants in the country. the average plant utilization in the united states prior to the recession was at about 70%. we overproduced to cover our fixed cost.