GM Created A Hybrid In 1969 And Shelved It

ErikBrown

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General Motors XP-883 — FredAParks Via Wikimedia Creative Commons

“Wouldn’t it be great to have a car that changed from electric drive for use around town to gasoline power for highway driving? Impossible? Impractical? No-GM has built one, and it makes so much sense that we feel they’re missing a bet if they don’t put it into production.”
Jan P. Norbye and Jim Dunne, Popular Science, July 1969

Go through the history reel in your mind of all the things that happened in 1969.

  • The Beatles had their last performance on a rooftop at Apple Records.
  • Woodstock attracted over 300,000 people to a mud pit in New York.
  • Neil Armstrong walked on the moon.
  • Boeing’s iconic 747 was introduced.
  • GM made a functional hybrid car.·

Wait, what? Something in that group doesn’t seem to fit. GM made a hybrid car in 1969?

That’s modern technology, which was first released by Toyota in the late 90’s.

You’d be wrong on that one.

Technically, if you’re a history nerd, the first hybrid car was created by Ferdinand Porsche and called the Elektromobil in the early 1900s. But these faded from history relatively quickly in favor of the standard cars we’re more familiar with today.

However, GM’s hybrid looked much like the standard one you know today. The Pontiac XP-883 would run on the electric motor alone for speeds up to 10 M.P.H., after which the gas engine would be started and take over. As the gas engine pushed the car, it would also recharge the batteries with a flywheel-driven alternator.

You were also able to hook the car to an external 110V outlet to charge the batteries if necessary. Talking about the batteries, 6 of them were placed low under the rear floor. Due to the independent rear suspension, they could sit where the rear axle usually did.

The car was about as quick as a golf cart, having a top speed of only 60 M.P.H. and reaching it at a calendar speed of 28 seconds. However, it wasn’t designed to be a race car. Its purpose was a city commuter vehicle. The small frame also contained a surprising 84" of cargo space if you folded down all the seats except the driver’s.

Obviously, this wasn’t the dream machine we drive today, but the idea was there, and it was functional. GM had a prototype of a vehicle that could up end the entire automobile industry and change the way transportation worked.

So what happened? Even in the Popular Science article, the GM top brass said they weren’t totally sure about the project.

So, you know what happened. The GM executives took the easy path and kept doing what they knew would work — creating big, gas-guzzling cars just like everyone else did. Eventually this would allow Toyota a space to attack them, and the rest is history.

The Sacred Cash Cow

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Photo by Rob Hampson on Unsplash

“With respect to mobile technology, we can all remember a world before cell phones, but most of us likely do not remember that the basic idea for the cell phone was first introduced to the public in 1945 in an article in the Saturday Evening Post. As former FCC Chief Economist Thomas Hazlett tells the story in his book The Political Spectrum, then-FCC Chairman J.K. Jett predicted that millions of Americans would soon be using ‘handie-talkies,’ and that the process for issuing licenses to deploy this new technology ‘won’t be difficult.’”
Speech by FCC General Council Thomas M. Johnson, Jr. at economic club of Florida, Nov. 2018

GM’s thinking isn’t unique in this instance. Many firms tend to worship their sacred cash cows at the expense of new technology. It only makes sense to do so. Why wouldn’t you do more of what makes you money today? It does pad the income statement presently; however it can often kill you tomorrow.

For instance, AT&T actually invented cellular technology in the mid to late 1940’s. Although they developed this technology and applied to the FCC for permission to use part of the available bandwidth, they’d be shot down in 1947. The complete story isn’t exactly one of government stonewalling.

AT&T never really pushed the issue. They had a monopoly on landline communications. What was the point of developing cellular, it would only eat away at their cash cow? The thinking was much the same at GM.

One could also see the phenomenon at Kodak as well. They developed digital photography in 1975. The idea got shelved to keep their cash cow of film fed and happy.

I’m sure you can probably name many other companies that missed innovative technology by hugging the cash cows generated by their current business models. Off the top of my head, I could think of Blockbuster Video passing up the chance to buy Netflix. Yahoo also passed on purchasing Google and Facebook.

The pull and profits of today shaded the possibility of success in the future through new methods and profit streams.

Growing Tomorrow While Profiting From Today

Now, it’s easy for us all to point out this disastrous thinking today. We have the benefit of foresight. We can see the innovation they missed back then and know what it’ll do today. At the same time GM made a hybrid, they also developed a car that ran on steam — it was in the same issue of Popular Science for 1969.

As ridiculous as it sounds, the executives at GM may have looked at the hybrid the same way as the steam car — a strange curiosity that likely wouldn’t go anywhere. So how should we view these misses? I believe we should see them as a warning shot to us in the present.

We may very well be part of the company that ignores the next breakthrough technology. It might be us who may be part of a negative lesson in business textbooks of the future. So, what do we do?

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Amazon might be a positive lesson we can learn from. No matter how you feel about Jeff Bezos, he has made some excellent moves as the captain of Amazon.

  • When digital books started to appear, he didn’t ignore them or try to bury them like AT&T or GM. Amazon developed the Kindle to profit from them.
  • Amazon was originally a book seller but expanded into an online marketplace which sold everything.
  • Amazon has also shoved its way into the audiobook category as well, stepping beyond digital and print media.
  • When delivery services couldn’t keep up with their volume, they developed their own shipping arm.

Perhaps the best thing that’s wrapped up in all their innovation is thinking ahead instead of being overly focused on today. Bezos gave this comment in a call with investors.

“If you invent frequently and are willing to fail, then you never get to that point where you really need to bet the whole company.”

Likewise, Google created their “X Company” where they “create radical new technologies to solve some of the world’s hardest problems”. The most successful of these ideas are turned into their own companies.

Now, creative divisions are nothing new. AT&T famously had their Bell Labs, which created the cellular technology they later ignored.

What Google and Amazon are doing though is not ignoring technology that may kill their chief cash cow, instead developing it. This should be the biggest lesson we take from GM’s miss. You can still grow the products for tomorrow while profiting from today.

Imagine A Different World

“You have to have a willingness to be misunderstood for long periods of time. If you do something in a new way, and I don’t care what it is, people are initially going to misunderstand it relative to the traditional way. And there will be well-meaning critics who generally want the best outcome but they’re worried about this new way. And there will also of course be self-interested critics who have a vested interest in the traditional [way]. They have some profit stream tied to the traditional way.”
— Jeff Bezos, 2012 re: Invent conference via Neil Patel

I want you to think for a solid minute about this. Imagine if GM had pushed ahead and created a mass-produced hybrid by 1970 or by the mid 70's. How much would today’s world have changed? How much would GM’s global position have changed?

Imagine if AT&T had pushed hard on cellular technology in the early 1950s. What would telecommunications be like today? What would their company look like?

All of these are now “what ifs” confined to history. However, our future doesn’t have to be a miss. We can learn from these missed opportunities and grow the future while profiting from today.

We must learn to sacrifice our cash cows when a killer technology is on the horizon. Otherwise we may become known as the executive who passed up on cellular technology or ignored the hybrid.

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Work out fanatic, martial artist, student, MBA, and connoisseur of useless information. I try and work a combination of history and philosophy into modern day life. I can be interesting and awful at the same, but you'll generally learn something worthwhile when you donate some of your time to read my work.

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