A Tale Of Two Autos....

[PoliticalChic]

1 "(Reuters) - General Motors Co sold a record number of Chevrolet Volt sedans in August — but that probably isn't a good thing for the automaker's bottom line.

2. Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.

3. ...There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.

4. GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others. GM's basic problem is that "the Volt is over-engineered and over-priced," said Dennis Virag, president of the Michigan-based Automotive Consulting Group.

5. But the Volt's steep $39,995 base price and its complex technology — the car uses expensive lithium-polymer batteries, sophisticated electronics and an electric motor combined with a gasoline engine — have kept many prospective buyers away from Chevy showrooms.

6. ...the technical challenges of ownership, mainly related to charging the battery. Plug-in hybrids such as the Volt still take hours to fully charge the batteries -...

7. The lack of interest in the car has prevented GM from coming close to its early, optimistic sales projections."
Insight: GM's Volt - The ugly math of low sales, high costs | Reuters


And....let's see what could have been learned from a study of history....


8. The Trabant is an automobile that was produced by former East German auto maker VEB Sachsenring Automobilwerke Zwickau in Zwickau, Sachsen. It was the most common vehicle in East Germany, and was also exported to countries both inside and outside the communist bloc. The main selling point was that it had room for four adults and luggage in a compact, light and durable shell. Despite its mediocre performance and smoky two-stroke engine, the car is regarded with derisive affection as a symbol of the failed former East Germany and of the fall of communism (in former West Germany, as many East Germans streamed into West Berlin and West Germany in their Trabants after the opening of the Berlin Wall in 1989). For advocates of capitalism it is often cited as an example of the disadvantages of centralized planning as even refueling the car required lifting the hood, filling the tank with gasoline (only 24 litres[1]), then adding two-stroke oil and shaking it back and forth to mix. It was in production without any significant changes for nearly 30 years with 3,096,099 Trabants produced in total.
Trabant - Wikipedia, the free encyclopedia



9. ....the man who goes to buy a car in Moscow, pays for it, and is told by the salesman that he can collect it on a particular date in 10 years' time. The buyer thinks for a moment and then asks: 'Morning or afternoon?' The salesman, astonished by the question, asks: 'What difference does it make?' And the buyer answers: 'Well, the plumber is coming in the morning.'


10. Stil think it's a good idea for the brilliant folks in government to be picking the winners and losers in the economy?

This is why this post belongs in politics rather than economy or technology.

This is what Obama supporters voted for.

 

[Old Rocks]

Now PC, you really are behind the times. Ford has a hybrid plugin set to go on sale. The C-Max Energi, 20 miles as an ev, 47/47 as a hybrid. Already exceeds the 54.5 mpg mandate for 2025.

 

[PoliticalChic]

Now PC, you really are behind the times. Ford has a hybrid plugin set to go on sale. The C-Max Energi, 20 miles as an ev, 47/47 as a hybrid. Already exceeds the 54.5 mpg mandate for 2025.

Ford took no bailouts.

 

[Mad Scientist]

Now PC, you really are behind the times. Ford has a hybrid plugin set to go on sale. The C-Max Energi, 20 miles as an ev, 47/47 as a hybrid. Already exceeds the 54.5 mpg mandate for 2025.

47 MPG isn't nearly enough to justify a new car when you consider just how expensive the new All Electric cars are. And as PC pointed out, government subsidies push the cost even higher because WE pay the taxes for that!

My wife and I just made a trip to Boston, about 880 miles round trip, in her 5 year old Toyota Yaris. Setting the cruise control to 65 we got an average of 42 miles to the gallon. 4 cylinder, fuel injected, nothing fancy. And this "technology" has been around for at least 30 years.

My 2004 Dodge Ram 1500 V-8 gets about 18 MPG on a good day. If I were to trade that truck in for a Prius you know how long it would take (in fuel savings) to pay off the Prius?

27 years.

Who the f*ck owns a car for that long? Almost no one.

 

[francoHFW]

Many thanks to Pubs for fear mongering and politicizing the Volt, stopped sales for many months.What happened to each car costing 278k? And all those fires.? What a pile of Pubcrappe, as always. Now selling MORE than hoped....Assume the position, a-hole Pubs and silly dupes...

 

[Bfgrn]

PC, you always like to crow about American exceptionalism. In reality, you are as anti-American as it gets. You folks on the right like to crow about the 'risk takers' Well PC meet a risk taker...General Motors.

And if you believe for a moment the governments of Japan, Korea and China don't pick winners and losers, you are naive. Those governments always pick their home manufacturers, and use strategies like huge subsidies to help their manufacturers capture markets and try to put American companies out of business. Japan's universal health care lowers the manufacturing costs of their car makers to around $200 per vehicle. American manufactures spend $1500 per vehicle on health care costs.

From your article...

Still, as the company wrestles with how to drive down costs and increase showroom traffic, Parks said the Volt is an important car for GM in other respects.

"It wasn't conceived as a way to make tons of money," he said. "It was a big dip in the technology pool for GM. We've learned a boatload of stuff that we're deploying on other models," Parks said. Those include the Cruze and such future cars as the 2014 Cadillac ELR hybrid.

The same risky strategy — gambling on relatively untested technology — drove massive investments by Toyota Motor Corp in the Prius hybrid and Nissan Motor Co in the Leaf electric car.

Toyota said it now makes a profit on the Prius, which was introduced in the United States in 2000 and is now in its third generation. Sales of the Prius hybrid, which comes in four different versions priced as low as $19,745, have almost doubled so far this year to 164,408.

Other such vehicles haven't done nearly as well. Nissan's pure-electric Leaf, which debuted at the same time as the Volt and retails for $36,050, has sold just 4,228 this year, while the Honda Insight, which has the lowest starting price of any hybrid in the U.S. at $19,290, has sales this year of only 4,801. The Mitsubishi i, an even smaller electric car priced from $29,975, is in even worse shape, with only 403 sales.

Toyota's unveiling of the original Prius caught U.S. automakers off guard. GM, then under the leadership of Rick Wagoner and Bob Lutz, decided it needed a "leapfrog" product to tackle Toyota and unveiled the Volt concept to considerable fanfare at the 2007 Detroit auto show.

The car entered production in the fall of 2010 as the first U.S. gasoline-electric hybrid that could be recharged by plugging the car into any electrical outlet. The Obama administration, which engineered a $50-billion taxpayer rescue of GM from bankruptcy in 2009 and has provided more than $5 billion in subsidies for green-car development, praised the Volt as an example of the country's commitment to building more fuel-efficient cars.

NEXT-GENERATION CAR

GM's investment in the Volt has so far been a fraction of the $5 billion that Nissan said it is spending to develop and tool global production of the Leaf and its associated technologies and the reported $10 billion or more that Toyota has plowed into the Prius and various derivatives over the past decade.

 

[Mad Scientist]

Many thanks to Pubs for fear mongering and politicizing the Volt, stopped sales for many months.What happened to each car costing 278k? And all those fires.? What a pile of Pubcrappe, as always. Now selling MORE than hoped....Assume the position, a-hole Pubs and silly dupes...

No it COULDN'T be the average family taking a look at it and realizing it's not worth it right? No way.

 

[Mad Scientist]

PC, you always like to crow about American exceptionalism. In reality, you are as anti-American as it gets. You folks on the right like to crow about the 'risk takers' Well PC meet a risk taker...General Motors.
GM's investment in the Volt has so far been a fraction of the $5 billion that Nissan said it is spending to develop and tool global production of the Leaf and its associated technologies and the reported $10 billion or more that Toyota has plowed into the Prius and various derivatives over the past decade.

Both the US and Japan love to take risks... with the Taxpayers money.

That's why the respective economies are stagnant and/or failing.

 

[Liberal]

Haha, the "evil" Volt!

The Volt was in planning/proto since about 2006, and was the base for Voltec drive system that GM was bent on using for all of their future electric vehicles...

Yeah, that was really Obama's policy shining though, long before he was ever POTUS.

 

[blastoff]

The Volt's problem is very simple.

Based on its cost and perceived benefits, people willing to spend that amount of money are buying something else instead.

Why GM didn't learn this from market research prior to investing countless millions of dollars in R&D and factory retooling for production tells you all you need to know about their inept management.

Had they reorganized under normal bankruptcy proceedings they'd be far better positioned today for the future.

 

[Bfgrn]

The Volt's problem is very simple.

Based on its cost and perceived benefits, people willing to spend that amount of money are buying something else instead.

Why GM didn't learn this from market research prior to investing countless millions of dollars in R&D and factory retooling for production tells you all you need to know about their inept management.

Had they reorganized under normal bankruptcy proceedings they'd be far better positioned today for the future.

Like Lehman Brothers?

Would Americans be better off if General Motors and Chrysler had simply gone bankrupt, without benefit of taxpayer assistance?

For the Republican presidential candidates Newt Gingrich, Mitt Romney and Rick Santorum, the answer is emphatically yes. They’ve outdone one another denouncing the auto bailout. Mr. Romney told The Detroit News that the government’s rescue of the American auto companies amounted to “crony capitalism on a grand scale” and has argued that G.M. should have gone through a Chapter 11 bankruptcy without taxpayer assistance. According to Mr. Santorum, “the government should not be involved in bailouts, period.” Mr. Gingrich called the auto industry rescue “a violation of 200 years of bankruptcy law.”

Unlike a science experiment, in which variables can be changed and the experiment repeated, we can’t turn back the clock, let the auto companies go bankrupt and compare the results with what we have today, which is an American auto industry that is, by nearly all measures, healthier than it’s been in many years. G.M. and Chrysler, not to mention Ford, which didn’t get taxpayer money but benefited indirectly, are profitable, hiring more workers, competing more effectively, gaining market share and building better cars and trucks. But we do have a contemporaneous case study by which to measure the auto bailout: Lehman Brothers, which remains the largest bankruptcy ever measured by assets.

This week the once venerable investment bank emerged from three and a half years in Chapter 11. Gone, along with the gleaming Midtown Manhattan tower now branded with the Barclays logo, are most of the more than 25,000 jobs once on the firm’s payroll and nearly all the over $600 billion in assets that once swelled its balance sheet. Lehman still owns a large portfolio of troubled real estate assets and derivative securities. Its only reason for existence is to manage those assets to pay off its remaining creditors, whose claims total more than $300 billion. It remains mired in contentious litigation.

Lehman’s bankruptcy was untainted by any taxpayer money or government rescue operation. After efforts to arrange a private rescue failed, the Treasury Department, Federal Reserve and White House decided not to rescue it, but instead to try to limit the consequences by putting “foam on the runway,” as the New York Federal Reserve chief at the time, Timothy F. Geithner, put it. We all know the results: a near-catastrophic collapse of investor confidence, plunging markets and the Great Recession.

 

[PoliticalChic]

The Volt's problem is very simple.

Based on its cost and perceived benefits, people willing to spend that amount of money are buying something else instead.

Why GM didn't learn this from market research prior to investing countless millions of dollars in R&D and factory retooling for production tells you all you need to know about their inept management.

Had they reorganized under normal bankruptcy proceedings they'd be far better positioned today for the future.

Like Lehman Brothers?

Would Americans be better off if General Motors and Chrysler had simply gone bankrupt, without benefit of taxpayer assistance?

For the Republican presidential candidates Newt Gingrich, Mitt Romney and Rick Santorum, the answer is emphatically yes. They’ve outdone one another denouncing the auto bailout. Mr. Romney told The Detroit News that the government’s rescue of the American auto companies amounted to “crony capitalism on a grand scale” and has argued that G.M. should have gone through a Chapter 11 bankruptcy without taxpayer assistance. According to Mr. Santorum, “the government should not be involved in bailouts, period.” Mr. Gingrich called the auto industry rescue “a violation of 200 years of bankruptcy law.”

Unlike a science experiment, in which variables can be changed and the experiment repeated, we can’t turn back the clock, let the auto companies go bankrupt and compare the results with what we have today, which is an American auto industry that is, by nearly all measures, healthier than it’s been in many years. G.M. and Chrysler, not to mention Ford, which didn’t get taxpayer money but benefited indirectly, are profitable, hiring more workers, competing more effectively, gaining market share and building better cars and trucks. But we do have a contemporaneous case study by which to measure the auto bailout: Lehman Brothers, which remains the largest bankruptcy ever measured by assets.

This week the once venerable investment bank emerged from three and a half years in Chapter 11. Gone, along with the gleaming Midtown Manhattan tower now branded with the Barclays logo, are most of the more than 25,000 jobs once on the firm’s payroll and nearly all the over $600 billion in assets that once swelled its balance sheet. Lehman still owns a large portfolio of troubled real estate assets and derivative securities. Its only reason for existence is to manage those assets to pay off its remaining creditors, whose claims total more than $300 billion. It remains mired in contentious litigation.

Lehman’s bankruptcy was untainted by any taxpayer money or government rescue operation. After efforts to arrange a private rescue failed, the Treasury Department, Federal Reserve and White House decided not to rescue it, but instead to try to limit the consequences by putting “foam on the runway,” as the New York Federal Reserve chief at the time, Timothy F. Geithner, put it. We all know the results: a near-catastrophic collapse of investor confidence, plunging markets and the Great Recession.

"Would Americans be better off if General Motors and Chrysler had simply gone bankrupt, without benefit of taxpayer assistance?"

Yup.
"...not to mention Ford,..." For obvious reasons...

1. The bankruptcy would have allowed the 'invisible hand' to determine enterprise.

2. The government would not have broken the contract clause of the Constitution, and assigned priority to unions rather than the (rightful) bondholders.

3. A bankruptcy would have allowed renegotiation of contracts and/or the sale of parts of the company to entities that might have been better equipped to manage same.


In short....only socialists and their supporters believe as you do.
I eschew the term 'think' when discussing such supporters.

 

[PoliticalChic]

Haha, the "evil" Volt!

The Volt was in planning/proto since about 2006, and was the base for Voltec drive system that GM was bent on using for all of their future electric vehicles...

Yeah, that was really Obama's policy shining though, long before he was ever POTUS.

I cannot begin to tell you how pleased I am that you chose the avi-title that you did!!

Your inane blather is more indicative of the mindless dolts that support Obama than I could ever post!

Keep up the good work!

 

[PoliticalChic]

PC, you always like to crow about American exceptionalism. In reality, you are as anti-American as it gets. You folks on the right like to crow about the 'risk takers' Well PC meet a risk taker...General Motors.

And if you believe for a moment the governments of Japan, Korea and China don't pick winners and losers, you are naive. Those governments always pick their home manufacturers, and use strategies like huge subsidies to help their manufacturers capture markets and try to put American companies out of business. Japan's universal health care lowers the manufacturing costs of their car makers to around $200 per vehicle. American manufactures spend $1500 per vehicle on health care costs.

From your article...

Still, as the company wrestles with how to drive down costs and increase showroom traffic, Parks said the Volt is an important car for GM in other respects.

"It wasn't conceived as a way to make tons of money," he said. "It was a big dip in the technology pool for GM. We've learned a boatload of stuff that we're deploying on other models," Parks said. Those include the Cruze and such future cars as the 2014 Cadillac ELR hybrid.

The same risky strategy — gambling on relatively untested technology — drove massive investments by Toyota Motor Corp in the Prius hybrid and Nissan Motor Co in the Leaf electric car.

Toyota said it now makes a profit on the Prius, which was introduced in the United States in 2000 and is now in its third generation. Sales of the Prius hybrid, which comes in four different versions priced as low as $19,745, have almost doubled so far this year to 164,408.

Other such vehicles haven't done nearly as well. Nissan's pure-electric Leaf, which debuted at the same time as the Volt and retails for $36,050, has sold just 4,228 this year, while the Honda Insight, which has the lowest starting price of any hybrid in the U.S. at $19,290, has sales this year of only 4,801. The Mitsubishi i, an even smaller electric car priced from $29,975, is in even worse shape, with only 403 sales.

Toyota's unveiling of the original Prius caught U.S. automakers off guard. GM, then under the leadership of Rick Wagoner and Bob Lutz, decided it needed a "leapfrog" product to tackle Toyota and unveiled the Volt concept to considerable fanfare at the 2007 Detroit auto show.

The car entered production in the fall of 2010 as the first U.S. gasoline-electric hybrid that could be recharged by plugging the car into any electrical outlet. The Obama administration, which engineered a $50-billion taxpayer rescue of GM from bankruptcy in 2009 and has provided more than $5 billion in subsidies for green-car development, praised the Volt as an example of the country's commitment to building more fuel-efficient cars.

NEXT-GENERATION CAR

GM's investment in the Volt has so far been a fraction of the $5 billion that Nissan said it is spending to develop and tool global production of the Leaf and its associated technologies and the reported $10 billion or more that Toyota has plowed into the Prius and various derivatives over the past decade.

1. "A basic tenet of American capitalism is that supply precedes demand, as can be see in the case of all airports being closed down: the long lines of people unable to get to their destinations is the demand that cannot be fulfilled. This is why entrepreneurs must be given a free hand to produce, to speculate, as the building of more and more airports will lower prices, increasing demand. This is especially true in the case of new technologies.

Both high taxation and over regulation place a damper on this freedom.
“The proceeds from these speculations? the capital paid for stocks and bonds ? may seem misspent. In the long run, the results are called infrastructure, and they are what economies are built on.”

“Many European postal systems, telegraph lines and railroads were built with government money, and sometimes with insufficient capacity. But in the United States, instead of burdening taxpayers, we sell investors the equivalent of high-priced lottery tickets each time one of these technologies arrives.”
In Technology, Supply Precedes Demand - NYTimes.com


2. "The fundamentals of economic prosperity: the rule of law, property rights, freedom of contract, low marginal tax rates, the minimum regulatory barriers and costs necessary, sound money, and a stable dollar. Needless to say, “too big to fail” is a policy of failure.
Peter Ferrara, “America’s Ticking Bankruptcy Bomb,” P. 240.



If I may broaden the topic.....the abject stupidity of the 'big government' crowd, raise your paw, BoringFriendlessGuy, is highlighted in this thread.

This is only superficially about cars....it is about the function of government.



The same problem is seen in taxation and for the same reasons:

a. conservatives see taxes as necessary to pay for legitimate government functions....as outlined in Article I, section 8, enumerated powers.

Any extra is given back in tax cuts.

b. Liberals, progressives, Democrats, socialists....see the purpose of taxation as a method of redistribution for purposes of material equality.



Rule #1: a nation can have prosperity or equality....not both.

 

[Zander]

Silly conservatives!!! The DOLT is a huge success!! GM has limited their losses to only $49,000 per car......

 

[Full-Auto]

Many thanks to Pubs for fear mongering and politicizing the Volt, stopped sales for many months.What happened to each car costing 278k? And all those fires.? What a pile of Pubcrappe, as always. Now selling MORE than hoped....Assume the position, a-hole Pubs and silly dupes...

Then Frankie, can we assume you are tickled pink with half priced cars and the solid push for continuing the sub primes to purchase those?

 

[PoliticalChic]

Many thanks to Pubs for fear mongering and politicizing the Volt, stopped sales for many months.What happened to each car costing 278k? And all those fires.? What a pile of Pubcrappe, as always. Now selling MORE than hoped....Assume the position, a-hole Pubs and silly dupes...

Then Frankie, can we assume you are tickled pink with half priced cars and the solid push for continuing the sub primes to purchase those?

Unfair of you to ask a question like that of blanko....or any who have signed on with the Pink Pied Piper....

When they subscribe, they promise never to think, or even be curious....

...questioning is out of the question.

 

[Full-Auto]

Many thanks to Pubs for fear mongering and politicizing the Volt, stopped sales for many months.What happened to each car costing 278k? And all those fires.? What a pile of Pubcrappe, as always. Now selling MORE than hoped....Assume the position, a-hole Pubs and silly dupes...

Then Frankie, can we assume you are tickled pink with half priced cars and the solid push for continuing the sub primes to purchase those?

Unfair of you to ask a question like that of blanko....or any who have signed on with the Pink Pied Piper....

When they subscribe, they promise never to think, or even be curious....

...questioning is out of the question.

................my bad................

 

[PoliticalChic]

Silly conservatives!!! The DOLT is a huge success!! GM has limited their losses to only $49,000 per car......

Ah, ah, ah.....not quite, Z!


Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy. Report: Chevy Volt Costing Taxpayers Up To $250K Per Vehicle

 

[Gadawg73]

Ask the preferred first line creditors if they believe the rule of law should have prevailed instead of the rule of Obama pimping to the unions.
Bankruptcy would have REORGANIZED Chrysler and GM and allowed them to dump some of the absurd Cadillac retired entitlements they are burdened with AND negotiate with each and every creditor.
And kept government AND the taxpayer out of the loop which should have happened FIRST and in most cases always.
Do not have a problem with the losses on the Volt. Many companies lose big time $$ on innovation for many years. I lost $$ the first few years of each of the 3 corporations I own now.
It is called RISK and reward.
Additionally, how else does one road test new technology without getting it on the road and not the test track?