GM cancels luxury hybrid: sources

While two of the sources said the plans could still be revived on a future platform, they and two others familiar with the matter said engineers involved had been reassigned to other projects.

The Cadillac plug-in shared much of the same technology that GM developed for its battery-powered Chevrolet Volt, which has been the centerpiece of the automaker's effort to convince consumers of its turnaround after its bankruptcy and government bailout in 2009.

Reuters spoke with six people about the GM decision. They could not be named because the project was never made public by the company. GM officials declined to discuss the company's plans.

“I'm not going to comment on specific products or timing for applications, but we still see promise in the technology,” GM spokesman Kevin Kelly said.

Reuters reported in December that GM was working on the Cadillac hybrid crossover, citing people with direct knowledge of the work. In January, GM Chief Executive Dan Akerson said the introduction of the plug-in hybrid was “likely.”

But over the past two to three weeks, engineers and others working on the program were told the program was on hold. As recently as this week, GM sent participants cancellation e-mails and thank-you notes, two sources said.

Since becoming CEO in September, Akerson has driven GM more aggressively toward electric vehicles, a strategic area where he has left a mark, executives have said.

The push has centered on rolling out the plug-in hybrid technology GM developed for the Volt in a broader range of vehicles to recoup the company's investment more quickly.

GM's push into electric vehicles also is aimed at seizing the green mantle Toyota Motor Corp earned with the roll-out of its popular Prius hybrid vehicle. In the United States alone last year, Toyota sold almost 141,000 Prius hybrids. GM recently boosted its 2012 production plans for the Volt by a third to 60,000 vehicles.

The Cadillac plug-in was drawn from an abandoned project to launch a rechargeable crossover vehicle that GM considered in 2008 and 2009 under the Buick and since-scrapped Saturn brands, three people familiar with the project said.

GM had developed prototypes of the luxury hybrid that were being tested on the company's proving grounds, three sources said.

The plug-in would have been based on the current SRX platform, which is two years old. In the auto industry, the life cycle of a platform, which dictates the size and body construction of a vehicle, is typically about five years.

By the time the Cadillac plug-in was ready for production, the platform would have been nearing the end of its life, adding to the costs of developing the vehicle, two sources said.

The costs of the program were already high, and the vehicle was expected to lose money, two people with direct knowledge of the program said.

GM has made engineering advances since the program was initiated, so it made more sense to focus on the next platform with the improved, more cost-efficient technologies, one source said.

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