Where There's Smoke There's Nickel-Metal Hydride
June 06, 2008
By Bill Visnic
For months, somebody on Wall Street has been convinced something's going on at Rochester Hills, Michigan's, Energy Conversion Devices, parent company of the Cobasys LLC joint venture that develops and produces nickel-metal hydride batteries for all manner of consumer devices, including some of General Motors Corp.'s hybrid-electric vehicles.
Despite the fact ECD stock has no earnings, pays no dividend and the company's operations have not had positive cash flow for the past five years, the stock price has tripled since January and gained almost another 10 percent yesterday with reported news GM may be trying to acquire Cobasys.
Perhaps ECD's stock continues to blaze into uncharted new highs because of a ragingly bullish outlook for the primary portion of its business, manufacture of thin-film photovoltaic material for solar panels. But the stock-price escalation comes in the face of reported squabbling between ECD and oil refiner Chevron, partners in the Cobasys joint venture, making it appear likely inside word that GM intends to somehow acquire Cobasys is boosting ECD's fortunes.
Although GM had to recall thousands of Cobasys-made nickel-metal hydride batteries fitted in its Saturn Vue Green Line and Saturn Aura hybrids, an acquisition of the operation would converge with a longer-term goal to produce high volumes of hybrid-vehicle batteries in the U.S., including the new-technology lithium-ion battery formula that is crucial in bringing to making a production reality of GM's highly publicized Chevrolet Volt "extended-range" electric vehicle.
GM Vice Chairman Bob Lutz, the company's product-development czar and chief drum-beater for the Volt, told AutoObserver earlier this year that the automaker is insistent that the Volt's lithium-ion batteries be manufactured in North America. Cobasys currently makes
its nickel-metal hydride batteries in a nearly new facility in Springboro, Ohio, which could conveniently fulfill the patriotic corporate promise to keep Volt battery production on home turf.
There has been considerable skepticism the still-nascent lithium-ion technology can deliver
the Volt's performance objectives in time for the car's proposed 2010 launch. But Lutz told AutoObserver
last month the lithium-ion batteries GM currently is testing for the Volt have achieved performance objectives. After his signature, Lutz wrote "We are making history today." In fact, on Thursday, GM released a photo of Lutz all smiles after test-driving the first 
Chevrolet Volt engineering development vehicle at the automaker's Milford, Michigan, proving grounds. GM said Lutz reached speeds of nearly 60 miles per hour in the Volt, which officially received corporate funding from GM's board of directors this week. After the test-drive, Lutz and the Volt team signed the development car.
GM likely is anxious to secure a closely held operation for battery production as interest accelerates daily for hybrid vehicles and higher-capacity plug-in hybrids -- as well as extended-range electric vehicles such as the Volt that will require high-performance lithium-ion technology to deliver better fuel economy than the volume-production hybrids on the road today, all of which use nickel-metal hydride batteries.
Energy Conversion Devices has longtime ties to GM. From 1995 until last year, Robert C. Stempel -- who was GM chairman and CEO from 1990 to 1992 -- was chairman of ECD's board of directors and served as the company's CEO for 12 years before retiring at the end of 2007. While at GM, Stempel was responsible for green-lighting the company's famous EV1 electric car.
Photos by John F. Martin for GM
1 - GM Vice Chairman Bob Lutz is all smiles after test-driving the first Chevrolet Volt engineering development vehicle.
2 - Lutz puts his stamp of approval on the hood of the first Chevrolet Volt engineering development vehicle.
3 - Lutz wrote on the hood of the Volt development car: "We are making history today."
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