Blogmocracy in Action!
Guest post by: Huckfunn!
Take 1 poorly run, bureaucracy-bloated, bankrupt auto company
Add 1 large government takeover
Blend in $50 billion bailout
Add $250 million in Federal Energy Department grants
Add $150 million in Federal grants to the Volt’s Korean battery supplier
Add $1.5 billion in consumer incentives
Shake, bake and voila… the Chevy Volt.
The Volt is supposed to be Government Motors’ wiz-bang automotive transport of the future. Economic to own and spewing a minimal amount of the dangerous pollutant, (insert eyeroll) CO2. So let’s look at the facts as reported by Consumer Reports in their April 1, 2011 issue:
• Cost as tested: $43,700 plus $5,000 dealer markup for a whopping $48,700.
• Electric range: Chevy claims 25 to 50 miles on one full charge but CR only got between 23 and 28 miles due to cold weather. Anyone see a problem here?
• Recharge time: Chevy claims a full charge takes 4 hours on a 240 volt supply and 10-20 hours on a 120 volt supply. CR says that it took them 5 hours to get a full charge.
“When you are looking at purely dollars and cents, it doesn’t really make a lot of sense. The Volt isn’t particularly efficient as an electric vehicle, and it’s not particularly good as a gas vehicle either in terms of fuel economy,” David Champion, senior director of Consumer Reports auto testing center, told the Detroit News.
For all of the hype by GM and the government, Volt sales are as follows:
December – 326; January – 321; February – 281. That’s bound to be a troubling sales trend for the big shots at GM.
In his article “Time to Short GM”, Jonathan Hoenig of the WSJ cites the Volt as one of many reasons to short GM.
“Late last week I traded General Motors ( GM: 31.93, +0.51, +1.62% ) stock one penny off the lowest price in its history. But I wasn’t buying hoping for a rebound. I was selling it short, looking for a collapse, and I’m holding that position today.”
It might seem somewhat counterintuitive. Not only was the stock at an all-time low, but the company recently announced a $4.7 billion profit, its biggest in a decade. Some 45,000 union workers will receive profit-sharing payments averaging $4,300 – a record.
And on that very same day, shares of the company slid below their IPO price of $33 for the first time, a vitally important fact overlooked by most of the enthusiastic media reports. The New York Times didn’t mention it in their story until paragraph 15. But because we trade the stock, not the story, its weakness and corresponding low remain the only relevant plot points in my book.
And not all of GM’s headlines have been as rosy as its recent profit announcement. The company sold just 281 Chevy Volt hybrids in February. Can you imagine Apple introducing a new iPhone, then selling only 500 units? To my knowledge, nobody’s lining up to purchase a $41,000 Volt the way they are for an iPad 2 .”
Peter Flaherty, co-founder of the National Legal and Policy center, recently wrote a series of articles about GM for Breitbart’s Big Government.
In the latest article, Mr. Flaherty says:
“GM and the Feds are betting the farm — and their credibility — on the Volt. As Truth About Cars editor Edward Niedermeyer wrote last year in the New York Times, the history of the Volt was never about making a “best in class” green vehicle, it was always about making the bailout look palatable – whatever the cost. And according to Niedermeyer, it’s quite a cost:
“Start with the $50 billion bailout…add $240 million in Energy Department grants doled out to G.M. last summer, $150 million in federal money to the Volt’s Korean battery supplier, up to $1.5 billion in tax breaks for purchasers and other consumer incentives, and some significant portion of the $14 billion loan G.M. got in 2008 for ‘retooling’ its plants, and you’ve got some idea of how much taxpayer cash is built into every Volt.”
More troubling still is that the average American taxpayer who foot the bill for GM’s massive bailout, isn’t even getting a car they can afford. In 2009, Obama’s Presidential Task Force on the Auto Industry reported that the Volt “will likely be too expensive to be commercially successful in the short term.”
The Chevy Volt, much like Obamacare, is what we get when government attempts to force its socialist agenda on capital markets. Less choice and an expensive, unworkable clunker that nobody wants. The sign should read “The Volt: Over $51 billion spent; under 1,000 sold.” Think they’ll hear from McDonald’s?
-Huckfunn
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