Texaco Press Release - Texaco to Acquire General Motors' Share of GM Ovonic Battery Joint Venture
Deal Reflects Technology's Potential for Broad Energy Applications
FOR IMMEDIATE RELEASE: TUESDAY, OCTOBER 10, 2000.
DETROIT, Mich., October 10 Texaco (NYSE: TX) and General Motors (NYSE: GM) today announced Texaco's intent to acquire GM's share of a joint venture that has developed an advanced battery technology for the automotive market.
Under the terms of the memorandum of understanding, Texaco will acquire GM's 60 percent share of an existing joint venture with Energy Conversion Devices - ECD - (NASDAQ: ENER), a firm in which Texaco already holds a 20 percent interest. GM and Ovonic Battery Company, a subsidiary of ECD, formed the joint venture, GM Ovonic, in 1994 to manufacture and commercialize high-efficiency, nickel metal hydride (NiMH) automobile batteries. The joint venture, which will be re-named Texaco Ovonic, plans to fully commercialize and expand its applications to a broad range of energy markets.
"ECD and Ovonic developed breakthrough advanced NiMH battery technology and General Motors has brought it to the production stage," said Texaco Senior Vice President William M. Wicker. "With the demand for all-electric and hybrid vehicles projected to grow significantly over the next few years, the time is right to extend this technology to the entire automotive market and take it to the next level of commercial development.
"This technology is already being used as a source of power in items such as cellular telephones and personal computers and we believe it holds the potential to meet a wide range of non-automotive uses. As a company committed to developing a significant presence in the energy technology field, we are excited to be part of this joint venture."
General Motors Vice Chairman Harry J. Pearce said that the future of the battery-powered electric vehicle relies on addressing the critical issue of cost. Successfully addressing this issue requires both high-volume applications and further technical development.
"General Motors, ECD and Ovonic led the industry in the initial commercialization and technology development for advanced vehicle batteries," said Pearce. "Together, we improved the range of our world-class GM EV1 to more than 150 miles with the GM Ovonic nickel metal hydride technology and opened the door to more efficient hybrid vehicles in the future. GM Ovonic's Kettering, Ohio, plant is the first and only facility in the United States dedicated exclusively to the production of NiMH batteries for electric vehicles. We are very proud of these successes and extremely pleased that Texaco will now join with Ovonic and ECD to take the next step in commercialization to reduce costs by spreading this technology to many other automotive customers and applications as well as to non-automotive uses. And, we anticipate that Texaco Ovonic will be our supplier for NiMH batteries."
In a joint statement, Stanford R. Ovshinsky, ECD President and CEO, and Robert C. Stempel, ECD Chairman, said, "This is a great transition for Ovonic Battery. We started out with the support and manufacturing development expertise of automotive leader, GM, and now we will have the broad reach and marketing expertise of global energy leader, Texaco. This is the right move at the right time for the right reasons - it's a win-win for our current and future customers, the companies, and consumers."
The Ovonic battery offers several significant advantages over conventional batteries:
- More energy. The Ovonic battery has more than twice the energy of conventional lead-acid batteries of the same weight. This translates directly to extended driving range between recharges.
- More power. Ovonic's NiMH technology is especially adaptable for hybrid-electric applications that require very high power levels.
- Long life. The Ovonic battery life cycle is four times longer than conventional batteries, meaning that one Ovonic battery can last the projected 150,000 mile lifetime of electric or gas-electric hybrid vehicles.
- Less environmental impact. The Ovonic battery is environmentally preferable, since it uses no lead. The base material, Nickel, is highly reclaimable as are the other metal alloys used in the battery.
- Versatility. The Ovonic battery can be used in all types of automobiles - conventional, gas-electric hybrids, all-electric vehicles, and fuel cell vehicles.
The joint venture expects to manufacture batteries for use in model year 2003 vehicles.
This press release contains a number of forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In particular, statements made concerning Texaco's and ECD's expected performance and financial results in future periods are based upon Texaco's and ECD's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors known to Texaco and ECD, among others, could cause Texaco's and ECD's actual results to differ materially from those described in the forward-looking statements: inaccurate scientific data; mechanical, chemical and technological failures; decreased demand for alternative fuels and other products; above or below-average product and technology demands; worldwide and industry economic conditions; higher costs, expenses and interest rates; the outcome of pending and future litigation and governmental proceedings; continued availability of financing; and strikes and other industrial disputes. In addition, you are encouraged to review Texaco's and ECD's latest reports filed with the SEC, including, but not limited to, Texaco's Annual Report on Form 10-K filed with the SEC on March 24, 2000, which describes a number of additional risks and uncertainties that could cause actual results to vary materially from those listed in the forward-looking statements made in this press release.
For additional information, visit www.gm.com, www.ovonics.com or www.texaco.com.
Updated: October 2000