This is a rush transcript from "On the Record," August 11, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: And our next guest is your employee, sort of. He is Robert Lutz, vice chairman of General Motors, a company you own 60 percent of. Moments ago he went "On the Record" from G.M. headquarters in Detroit.


VAN SUSTEREN: Mr. Lutz, nice to see you, sir.


VAN SUSTEREN: The Chevy Volt behind you, when are we going to see those on the market?

LUTZ: We are producing 10 a week now, which by the standards of many manufacturers making electric vehicles would be pretty good production. But for us it's just preproduction for our own test fleet.

And actual production for the consumer will start in November of 2010. Then we will hit full scale mass production in 2011, and then we'll ramp that even more in 2012.

VAN SUSTEREN: All right, why should I want one? I saw the unbelievable numbers flash across the screen today, 233 miles per gallon. Is that right? Really, that kind of mileage.

LUTZ: That's the way the EPA, we believe and the EPA is going to be calculated, because they are assuming that on your city driving they you will be electric a lot of the time, but they sort of say notionally you will also be using the gasoline engine a little bit.

And this is when you ask why would anybody want this vehicle? This is the unique part about the Volt that no pure electric vehicle does and no hybrid vehicle does in that once you do a full charge it will do 40 miles purely electrically, which covers the commuting needs if needs of 80 percent of Americans.

But the once the 40 miles is gone, you don't need to plug it in. You just keep going, because the small gasoline engine or flex fuel engine -- it can be ethanol fuel -- kicks in, and it will constantly recharge the battery. So you can use it like a regular car and go for 300 miles.

So it's the only vehicle in the world right now that combines the fuel-saving feature of the pure electric vehicle but with the range of a conventional gasoline vehicle. And that's why people will want it, because it does everything.

VAN SUSTEREN: How much? And how does it do in the safety crash tests?

LUTZ: Outstanding. I think we are going to get five star ratings on everything.

And that was one of the big engineer challenges, because you've got this large lithium ion battery with several hundred volts coupled with, obviously, a gasoline container in the form of a fuel tank.

And we have conducted extensive crash tests. We have rolled them over and smashed them with other vehicles and done all of the conventional G.M. crash testing. And the integrity of both the battery and fuel system is impeccable, and the occupants are well protected.

So from a safety standpoint. no concerns whatsoever.


LUTZ: How much is it going to cost?


LUTZ: We haven't decided. But, frankly, this is first generation technology, and we're probably going to have to charge a little more than we would like to.

So, it's going to be somewhere in the vicinity of $40,000, hopefully a little less. But there is a government grant or a government tax credit for buyers of this vehicle of $7,500. So, on the assumption we charge $40,000, minus the $7,500 from the federal government means the car would cost around $32,500 which is not much more than a normal medium-sized car.

VAN SUSTEREN: You mentioned the government. That's another interesting topic for G.M. How is the government doing? Do you feel their presence in the day-to-day operation? Now you and I are almost partners.

LUTZ: Yes, I know.

VAN SUSTEREN: I'm an owner. You work for me. Wait a second. I'm the owner and you work for me.


LUTZ: It's a privilege, believe me.

Actually the government is only a shareholder. And they have helped select some board members. And it's actually the board that supervises the company and runs it.

And in terms of the running of the company and what we do, there is no difference from before. We try to do everything smarter and a lot faster and for a lot less money than before. But in terms of corporate governance, there really isn't any difference.

And I know the right wing talk show hosts with whom I am usually in totally in agreement, but I depart from their view a little bit when they say it's "Government Motors" and G.M. is going to be run by the government and they are going to have to do nothing but environmentally friendly cars.

Not so. One of the key members on the government task force was, in fact, a free market Republican, and he helped a lot.

And I will tell you, the only agenda of this task force was to create a healthy General Motors. And they want to see us succeed and pay the government back as quickly as possible. And your taxpayer ownership will be replaced by shares that you will be able to buy on the open market.

That's our vision, that was their vision. And they want us to keep building all the cars that the American public wants, from the Volt at one end --

VAN SUSTEREN: Then tell me, sir, why did you need us? When I say "us," I mean the taxpayer. Why couldn't have you done this all yourself because you are an expensive hobby of ours right now?


LUTZ: Well, it was a long series of, you could say 30 years of mistakes by General Motors, 30 years of failed automotive policies by various governments, the availability of cheap gasoline at the same time that we fuel economy regulations, an exchange rate that favored Japanese competition, a health care system where we had to fund about $7 billion worth of health care for active and retirees are per year.

So it was finally -- it was sooner or later this was going to happen. And I'm sorry that we had to go through Chapter 11, but I think we're going to be the better company for it.

And I am very grateful to the administration frankly. They did something that wasn't going to win them any popularity contest short-term. But I think they did the right thing in saving the American automobile industry.

The automobile industry is key industry for any country. And the indirect unemployment effect is like one in ten people in the United States are in some way dependent on a healthy automobile industry. So they did the right thing.

VAN SUSTEREN: Well, we look forward to seeing the Volt hit the streets and roll off to --

LUTZ: Wait, one final thing. You have got to come out to Milford and drive this thing, and you will have seen the future of the automobile. So I would like to extend that invitation to you to come out here and drive.

VAN SUSTEREN: All right, well, if you're there and you will be a passenger, I will come out and do it.

LUTZ: I will do that.

VAN SUSTEREN: Thank you, sir.

LUTZ: Thank you.


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