Chevy Volt’s Loss is GM’s Gain?
I’ve talked about General Motor’s CEO Dan Akerson before, but for those who don’t remember, he was appointed to the board of directors by President Obama to represent the administration. He’s also been a big proponent of the gas tax which he believes will increase the cost of car ownership just enough to get America off of foreign oil by forcing us to choose crappy cars that use less fuel.
As though the fates are trying to prove to Akerson that a gas tax is the only way Americans will ever buy into their green dreams, the Chevy Volt has crossed over into the realm of abysmal failure (one step above abject failure).
Sales of the much-hyped Chevy Volt fell to new lows as did GM share price as July auto sales figures came in. Only 125 Volts were sold during the month of July. Recent reports attributed the slump to supply constraints as GM spokeswoman, Michelle Bunker, was quoted as saying that the Volt was “virtually sold out” and only a “few” were available nationwide. I have confirmed that this statement is not entirely truthful and have gotten clarification from GM through Director of Communications, Greg Martin.
So the “inventory constraints” excuse is bogus since as it turns out, there are actually 116 new Chevy Volts that could be purchased from lots right now. However, that is 116 more Chevy Volts than them market can bear.
Worse yet, everyone who could ever know anything about cars (which by the way does NOT include Akerson, who I may have mentioned was appointed to his role by the Obama administration) is saying that these increased fuel efficiency standards that are supposed to be great for the sale of Volts, are going to be terrible for the safety, pocketbooks and consumer choice:
Stringent fuel economy requirements like those set for 2025 will be impossible to meet without sacrificing the safety of the vehicles we’ll drive in the future.
That’s the prevailing opinion of most automotive engineers surveyed by the industry publication Wards Automotive.
About 75% of auto engineers who responded to the survey felt that a 2025 fuel economy requirement of 56.2 mpg — slightly higher than the final proposal announced last week — would jeopardize the safety of future cars and trucks.
Most also felt cars will have to be smaller, more expensive and less varied than they are today with about 90% doubting the goals can be met without sacrifices in vehicle cost, size, safety and choice.
Of course all of this “success” with the Chevy Volt is fueled (pun intended) by the American taxpayer. As Akerson was quick to point out when he appeared on Fareed Zakaria over the weekend, he thinks that’s a good thing:
“We’ve hired 115,000 automotive workers across the nation. So, it saved an industry that is profitable today, healthy today, it’s creating jobs and it saved jobs. We’ve paid back roughly $30 billion plus of the $50 billion that was put into the company.” (emphasis mine)
Some aren’t as convinced about the numbers as GM has used smoke and mirrors in the past to brighten the picture surrounding their bailout. Currently, the treasury department is planning on selling the tax payer owned shares in September which should work out great considering how fantastic the market is doing.
Meanwhile, because of failures like the Volt, GM is spending massive amounts of money to lobby the government in the hopes of scoring even more tax payer dollars:
GM lobbied Congress on distracted driving legislation, tax credits for electric vehicles, research funding for advanced vehicles, taxes on energy, funding for ethanol and renewable fuel research, free trade deals with Korea, Panama and Colombia, and funding for the federal Pension Benefit Guarantee Corp. (emphasis mine)
That’s right, since they are losing money (our money) on the Volt, they need another “helping hand.” Not only that, but while they’re at it, they could really use some more scratch to cover all of those pesky pensions. So they’re back on Washington, at the behest of beltway insider Dan Akerson, to try and score even more dough from the American people. I suspect their wishes will be granted.
Make no mistake, we have not yet begun to calculate the losses that will be associated with allowing the government to pick and choose the winners in industry.
My eyes are moving to September of this year. It will be quite interesting to see how the sale of the US taxpayer ownership goes and whether or not the media will continue to carry the torch and keep quiet about all the reasons the American people should feel scorned about this cronyism.