Volkswagen and Porsche to Merge
QUEST: Good evening. I do apologize this evening if I'm wheezing away, a bit chesty tonight, with a bit of a cold. Now General Motors says reinventing the automobile is the best way to spend taxpayers' money. A day after the company unveiled its 230 miles per gallon Chevy Volt, CNN has been talking to chief -- the GM's chief executive, Fritz Henderson. The person who has been doing the talking to him, Poppy Harlow. Poppy is in New York and joins me now. He has had an enormous amount of government money, he has got a new company to run, and has got new cars. I mean, he has got all of the toys to play with.</s>POPPY HARLOW, CNN BUSINESS CORRESPONDENT: He does. And there also, they have $43 million in federal grants that they're putting to work today, announcing today at this plant in Michigan to make those batteries, to assemble them that are going to run the Chevy Volt. That's where we spoke to the CEO, Fritz Henderson, joining us from Michigan a little earlier today, talking about the future of the Volt. But I really pressed him on what does this mean for the future of General Motors? I mean, Richard, you and I know this is not a car that is going to be profitable for General Motors in the near term. It could even cost them. So take a listen to what he told me on that front.</s>FRITZ HENDERSON, PRESIDENT & CEO, GENERAL MOTORS: Our job is to learn from generation one technology to get to generation two and generation three. We haven't priced the product yet. But in terms of the cost, the cost is high, as it is with any sort of generation one technology.</s>HARLOW: Now let me tell you, I asked him, this is a company, $59 billion in the hole to the U.S. and Canadian taxpayer, is this really what a company that is so far in debt should be doing with their research and development money, with their energy? Should they be putting it, Richard, into a car that isn't going to turn a profit for a while? And here's how he responded to that one.</s>HENDERSON: I think taxpayers should be concerned if we didn't make investments like this in our future, because we need to be part of reinventing the automobile, not simply building what we have today. In order for us to be successful, to create value for shareholders in which the taxpayers -- the U.S. taxpayers are our largest shareholders, we need to reinvent this company and be part of the future. And I would say that if we didn't invest in these sorts of technologies, people should be deeply concerned.</s>HARLOW: And remember, of course, this is the company that put an electric car on the market, Richard, back in the '90s, only to pull it from the market. I did also ask GM's CEO if they will need more government aid. He said, no, definitively no at this point -- Richard.</s>QUEST: The fascinating part about this discussion, and you and I have had it before, and probably we'll have it again, is that you know that old journalistic cliche that we all learn never to use, "only time will tell," which is rapidly followed -- which is rapidly follow by "remains to be seen." But that really is the truth of General Motors at the moment.</s>HARLOW: It certainly is. The executives there have the confidence that this is going to turn the company around. You know, I've asked a lot of people, and some people say good for GM, they're doing this, they're pushing forward. Others say a little too little and a little too late. I mean, you're looking at other companies that have pushed forward with hybrids a long time before General Motors did. It is still to be seen -- I think we're still a few years out rather than months to see if this can do it for General Motors. And if this is their only bet, this electric-powered car, or if they will turn to other fuel cell technology or diesel technology, that's still to be seen -- Richard.</s>QUEST: Ah, but the key thing is -- and we haven't really got time to discuss it, is whether they can create a car that people fall in love with. That's a subject for you and I for another day. Poppy, thanks very much. Nice to see you. Poppy Harlow in New York. Now let me remind you of some news just coming in to us right now here at CNN. Volkwagen's supervisory board says it has approved that merger, to merge Volkswagen and Porsche. They will form an integrated company. The plan is to be completed by 2011. Volkswagen's chief, Martin Winterkorn has said: "Together we are on our way to becoming number one." The deal has been in the works since 2005, the result of some very protracted negotiations. In just a moment or two, we've been talking at length about the road of recovery on this program over many weeks, you'll want to know, are we there yet? We'll pick the brains of one of our favorites, Jeffrey Sachs -- Professor Jeffrey Sachs to me, of Columbia University in just a moment. What does he think about the road to recovery?