Topic: Let them fail!

[Thucydides]

Well, the taxpayers should be relieved their money was well spent for them:

http://pjmedia.com/tatler/2012/01/05/congratulations-to-general-motors-worst-car-stock-of-2011-chevy-volt-a-worst-product-flop-of-2011-winner/?print=1

Congratulations to General Motors: Worst Car Stock of 2011; Chevy Volt a ‘Worst Product Flop of 2011′ Winner
Posted By Seton Motley On January 5, 2012 @ 5:52 am In Economy | 11 Comments

General Motors stock (NYSE: GM) finished 2011 down 46.1% - the absolute worst car or car-related product stock on the board.  Besting (so to speak) the second worst by 4.5%.

And GM’s unprofitable, unpopular, combustible electric Chevy Volt was a ‘Worst Product Flop of 2011’ winner.  Oh, and GM is moving electric vehicle development (and production?) to China – which sort of undermines the jobs “created or saved” reason for the $50 billion GM bailout.

All of which is even more terrible GM news for We the Taxpayers.

Per the titanic GM stock price drop-off: As a result of President Barack Obama’s $30 billion in additional bailout coin, we own more than 500 million shares of GM stock.  To break even on our “investment,” these shares must be sold at $53 per.  GM closed yesterday at $21.15.  Which if sold today would mean for us about a $16 billion loss – just on the stock portion of the GM bailout (we’ve suffered additional huge losses on other portions thereof).

Less Government tracks the looming stock loss – and offers the solution for how we can extricate ourselves from GM – at www.BailoutCost.com.

Less Government President Seton Motley:

“From the moment the bailouts began – and General Motors became Government Motors – we have seen GM stack failure upon failure.

“There’s the unprofitable, unpopular, combustible electric Chevy Volt – a ‘Worst Product Flop of 2011’ winner.  That costs We the Taxpayers $250,000 per unit sold.  GM sold in 2011 25% fewer Volts than they had planned – but is in 2012 bizarrely increasing production by 500%.  And despite all of this failure – including the inability to determine what is causing Volts to burst into flames - GM will next year begin producing an electric Cadillac and an electric Cruze.

“GM in 2010 received more clean (non-energy) energy patents than any other entity - of the Solyndra, Tesla, Fisker, uber-failure variety.

“And on, and on, and….

“And GM and its Obama Administration-Democrat backers ludicrously tell We the Shareholders that all of this failure is a ‘success.’

“Well, GM was last year the worst car stock of all – and the Chevy Volt was an award-winning flop.  So the market ain’t buying it.  And neither are We the People.”

Note: This post originally reported the American public’s stake in GM to be 500,000 shares. It is actually 500 million.

Article printed from The PJ Tatler: http://pjmedia.com/tatler

URL to article: http://pjmedia.com/tatler/2012/01/05/congratulations-to-general-motors-worst-car-stock-of-2011-chevy-volt-a-worst-product-flop-of-2011-winner/

[Thucydides]

Maybe GM could do better by buying and rebadging the Prius?

http://pjmedia.com/blog/the-follies-and-foibles-of-the-chevy-volt/?print=1

The Follies and Foibles of the Chevy Volt

Posted By Mike McDaniel On February 3, 2011 @ 12:00 am In "Green" tech,Cars,Environment,Lifestyle,Politics,Science & Technology,US News | 16 Comments

I first wrote [1] about the fast-failing fortunes of the Chevy Volt for PJ Media on April 21. Since then, despite bizarrely optimistic GM and Obama administration spin, the Volt appears destined to go the way of the Edsel and other epic automotive failures, despite Mr. Obama’s recent claim [2] to have saved the auto industry. If the Volt is a harbinger of salvation, the industry might be wishing Mr. Obama didn’t bother.

The Volt is a very heavy, needlessly complex compact hybrid with a battery range of  25-50 miles. Many misconceptions about its drive mechanisms are still floating about — apparently abetted by GM — but the fact remains that when the Volt’s battery-only range is exhausted, its weak onboard gasoline engine, which requires premium fuel, directly drives the vehicle. A full battery recharge takes up to 12 hours on 110 volt house current, but about five hours with a special, high voltage charger, an option available at only $2000, not including installation. All this for around $41,000 minus a federal tax credit of $7,500.

Having sold only about 6,000 Volts, GM has been trotting out some rather confusing public relations blurbs:

    [Volt] Production was only ramped up to full speed in early September and now stands at a rate of 150 vehicles per day. Many of the 2,367 cars produced during the month are still in transit to dealers and buyers and, as of today, there are only 884 cars in the pipeline that are available for retail sale.

    [GM] Spokesman Chris Lee says GM still will add 300 workers at the Detroit-Hamtramck plant — but not a second shift — by the end of this year to make more Volts.

A production rate of 150 Volts per day equals 54,750 Volts per year, yet GM is selling only a fraction of that. It seems that the demographic of buyers ready to snap up a Volt at any price to enhance their green street cred, or simply to add the latest technological toy to their collections, has been exhausted.

Sales are stalled far below GM’s optimistic projection of 10,000 U.S. and 60,000 European sales in the Volt’s first year. The 12,000 Volts General Electric promised to buy [3], as well as a non-specific number of Volts Mr. Obama promised to buy, have apparently not, as yet, materialized, despite rare sightings of Volts with government plates. Volt sales have essentially stalled, a fact even GM has been forced to admit because of the unfortunate tendency of the Volt’s $10,000 (GM has suggested replacement costs as low as $8,000) battery pack to more or less spontaneously combust.

The fun began in June when the National Highway Traffic Safety Administration (NHTSA) conducted Volt crash testing [4]. Three weeks later, a damaged Volt’s battery spontaneously combusted, touching off several nearby fires. Several congressmen, including Rep. Darrell Issa (R-CA), recently sent a letter to NHTSA Administrator David Strickland demanding to know why the NHTSA kept this under wraps until a second test in November produced the same results. Only then did the NHTSA make public the problem and launch a “formal safety defect investigation.” The NHTSA has conducted at least three more tests on Volt battery packs, each with pyrotechnic results [5] that set GM spinmeisters rotating at warp speed, so fast they’ve had difficulty keeping their stories straight.

On November 28, GM North American President Mark Reuss announced [6] that Chevrolet would provide conventionally powered loaner vehicles for Volt customers. But on December 1, GM CEO Dan Akerson upped the ante [7]and announced that GM would buy back any Volt whose owner was concerned about spontaneously combusting. Ackerson also said:

    We want to assure the safety of our customers, of our buyers, and so we’re just going to take a time out, if you will, in terms of redesigning the battery possibly.

Unsurprisingly, the European introduction of the Volt has been “delayed,” which reasonable, flammable people might expect of a vehicle that can spontaneously combust without warning.

Like so much of the “product” output of the Obama administration, the Volt is full of features that any rational being — or rational manufacturer — would consider fatal bugs. Consider:

(1) Even with a $7,500 government (taxpayer) tax subsidy, the average Volt still costs about $33,500, not including fast charger ($2,000). It’s easily possible to buy two well-equipped compact cars for that price that get mileage equal to the Volt

(2) At about the time initial owners would be trading in their Volts, they’d have virtually no resale value. Who would buy a used Volt knowing they’d have to spend around $10,000 any day to replace the battery pack? This factor alone would certainly obliterate Volt resale value and any dealer accepting a Volt on trade would be taking a major loss, which would almost certainly turn the Volt into the first “no deposit, no return” car.

(3) Mathematics is not on the Volt’s side. Even if one assumes the Volt manages 100 MPG, on initial purchase price alone it is impossible to break even on gas expenditures over the cost difference between a Volt and any other high mileage, conventionally powered subcompact/compact car. The Volt simply makes no fiscal sense whatever for most Americans.

(4) While GM is neither confirming nor denying, GM is probably not making a cent manufacturing the Volt. One of their spokesmen really did call the Volt a “loss leader, [8]” which is nearly as remarkable — and bizarre- — as Mr. Obama’s obvious pride in “leading from behind.” [9] Now that GM will at the least have to redesign, recall, and replace every Volt battery, it is more obvious than ever that the Volt is not an exercise in capitalism, but in green political wish making.

The Volt remains what it has been before the first one left the factory: an engineering exercise with not-ready-for-prime-time technology escaped from the lab, and yet another horribly costly epic failure propelled by taxpayer money into the Obama administration’s bottomless borrowed-money pit of green energy debacles.

(Also see Seaton Motley’s Tatler post, [10] “Chevy Volt Costs Taxpayers Up to $250,000 Per Sale”)

Article printed from PJ Media: http://pjmedia.com

URL to article: http://pjmedia.com/blog/the-follies-and-foibles-of-the-chevy-volt/

URLs in this post:

[1] I first wrote: http://pjmedia.com/blog/obamas-energy-lunacy/

[2] recent claim: http://www.cbsnews.com/8301-18560_162-57341024/interview-with-president-obama-the-full-transcript/

[3] promised to buy: http://pjmedia.com http://www.plugincars.com/ge-will-purchase-25000-plug-ins-12000-chevy-volts-106436.html

[4] crash testing: http://hotair.com/archives/2011/12/09/did-the-obama-administration-delay-report-on-volt-fires/

[5] pyrotechnic results: http://green.autoblog.com/2011/11/26/nhtsa-releases-chevy-volt-fire-investigation-details/

[6] Mark Reuss announced: http://www.foxnews.com/leisure/2011/11/28/chevy-offering-volt-owners-loaner-cars-until-fire-investigation-is-resolved/

[7] upped the ante : http://www.foxnews.com/leisure/2011/12/01/gm-may-buy-back-chevrolet-volts-redesign-battery-pack-due-to-fires/?test=faces

[8] “loss leader,: http://statelymcdanielmanor.wordpress.com/2011/10/26/the-chevy-volt-a-loss-leader-for-a-leading-from-behind-president/

[9] “leading from behind.”: http://www.washingtonpost.com/opinions/the-obama-doctrine-leading-from-behind/2011/04/28/AFBCy18E_story.html

[10] Tatler post, : http://pjmedia.com/tatler/2011/12/22/chevy-volt-costs-taxpayers-up-to-250000-per-sale/

[Thucydides]

If you can't sell the car to the public...

http://gas2.org/2012/02/20/ge-forcing-employees-into-chevy-volts/

GE “Forcing” Employees Into Chevy Volts
February 20, 2012 By Christopher DeMorro 386 Comments

General Motors and General Electric are two companies that have been in the political crosshairs lately. GM stands accused of “crony capitalism,” while GE is under fire for paying no Federal income taxes in 2010. The two companies share more than that though, with GE placing an order for 12,000 Chevy Volts and other hybrid vehicles.

A memo leaked to Green Car Reports lays out GE’s plans for their new fleet of Volts, and as expected, it has some people crying foul.

The memo, sent to employees of GE Healthcare Americas team explains that all sedan, crossover, and minivan purchases in 2012 will be replaced by the Chevy Volt. Only field engineers are exempt from having to drive a company Volt.

GE will offer estimates for installation Level 2 Charging Stations, though all-gas use will be allowed when there is no electric option. Any employees who opt out of the Volt program will not be compensated for their expenses. Those who do choose to drive the Volt will be reimbursed for public charging and home charging costs, in addition to gas uses.

While some people are probably put off by having to drive a Volt, GE claims to have crunched the numbers and believes that in the long term, this will save the multi-national company big bucks. More than that though, GE is positioning itself as a big player in the EV charging market. Getting employees into Volts also means getting charging stations into homes.

It’s a bold move to be sure, and it will hopefully prove to be a boon to the Volt’s flagging sales numbers. GM had hoped to sell as many as 60,000 Volts in 2012, before dropping that number to 45,000. Will they even make that number though? Hard to tell, though GE’s business will go a long way towards giving the Volt some sales momentum.

Source: Green Car Reports

[Thucydides]

Yup, the bailout created a lean, new, efficient GM....

http://www.thetruthaboutcars.com/2012/02/edmunds-spring-for-u-s-car-sales-winter-for-gm/#more-432676

Edmunds has handed in its predictions for February sales. Its bottom line is similar to the forecast made by Kelley Blue Book a few days ago: More than a million cars sold, GM the big loser of the month. Edmunds has better news for Ford. And much better news for Chrysler, if that is at all possible.

Sales Volume 12-Feb 11-Feb YOY YOY adj
GM 196,742 207,030 -5.0% -8.8%
Ford 184,812 156,238 18.3% 13.6%
Toyota 149,780 141,846 5.6% 1.4%
Chrysler 125,990 95,102 32.5% 27.2%
Honda 103,183 98,059 5.2% 1.0%
Nissan 97,971 92,370 6.1% 1.8%
Industry 1,095,059 993,009 10.3% 5.9%

Looking at a few more days of data than Kelley, Edmunds predicts that somewhere around 1,095,059 new cars will be sold in February, for a Seasonally Adjusted Annual Rate (SAAR) of 14.4 million units. This would be a 5.9 percent increase over February 2011. Edmunds.com figures that retail SAAR will come in at 11.3 million vehicles in February, with fleet transactions accounting for 21 percent of total sales. Edmunds Senior Analyst Jessica Caldwell sees a veritable spring for U.S. auto sales:

“There’s a rising tide of excellent buying conditions right now that is really driving auto sales momentum. Between surprisingly strong sales over Presidents Day weekend, optimistic economic news, and unseasonably mild weather conditions across the country, things seem to be breaking the right way for both car buyers and dealers.”

Edmunds agrees with Kelley that GM will get it on the chin, and predicts even more hurt: Unadjusted for sales days, Edmunds foresees a 5 percent decrease in GM sales. Ford (+18%) and Chrysler (+32.5%) are doing much better on the Edmunds spreadsheet than predicted by Kelley.

Market Share 12-Feb 11-Feb YOY
GM 18.0% 20.8% -2.9%
Ford 16.9% 15.7% 1.1%
Toyota 13.7% 14.3% -0.6%
Chrysler 11.5% 9.6% 1.9%
Honda 9.4% 9.9% -0.5%
Nissan 8.9% 9.3% -0.4%

If Edmunds’ predictions pan out, then GM will suffer a huge hit to their year-over-year market share, dropping almost three percentage points from February of last year. According to Edmunds, “GM’s year-over-year decline is a direct result of its aggressive incentives push that pumped up sales in early 2011.”

Pretty much all of that lost market share will be snapped-up by the cross-town rivals. Edmunds has Ford gaining 1.1 percent in share, and Chrysler a very respectable 1.9 percent.

[Thucydides]

It looks like the American public has caught on. Another economy question to throw at the Administration during the election campaign:

http://www.rasmussenreports.com/public_content/business/auto_industry/april_2012/59_view_money_losing_auto_bailouts_as_a_failure

Many Americans view the bailouts of General Motors and Chrysler more favorably these days, believing incorrectly that the government made money or broke even on them. But the view grows a lot more negative when the actual price tag is attached.

A new Rasmussen Reports national telephone survey finds that 20% of American Adults now believe the government made money on the billions in taxpayer dollars given to the two automakers to keep them afloat, while 19% more say the government broke even. However, a plurality (46%) recognizes that the government lost money on the auto bailouts. Fifteen percent (15%) are not sure. (To see survey question wording, click here.)

This survey of 1,000 Adults nationwide was conducted on April 23-24, 2012 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.

[Thucydides]

Best line in the report:  “Why would GM cut R&D so profits look good in the short term? Is something happening in November?”. Of course the more urgent matter should be the waste of billions of taxpayer money for the bailout and the continuing loss of taxpayer value ($30 billion loss). Don't forget the Government of Canada and the Government of Ontario also have this albatross tied to the necks of Canadian taxpayers; we will also partake of a proportionate loss as well:

http://pjmedia.com/vodkapundit/2012/05/01/hide-the-decline-chevy-volt-edition/?print=1

Hide the Decline, Chevy Volt Edition

Posted By Stephen Green On May 1, 2012 @ 12:58 pm In Uncategorized | 41 Comments

My auto industry insider has gotten back to me with another report. Here it is.

Seton [Motley]‘s piece looks at Chevy’s decision to kill the Avalanche for poor sales performance (but not the Volt), correctly pointing out how insane this is:

    A Volt which the American people don’t want to own. Made by General Motors, of which the American people are still forced to own 33%. As the result of the $83 billion auto bailout–on which we’re poised to lose more than $30 billion.

But he’s only on the tip of the iceberg, both in how bad the Volt sales reality is and in the company’s reasoning for propping up the Volt.

In his recent book, Car Guys vs. Bean Counters”, former GM Vice Chairman Bob Lutz claimed: “There were rumblings from prominent Democrats that “if they get our money, they’re going to produce the kind of vehicles we want them to produce.”" This is the same Bob Lutz, by the way, who has taken to the pages of Forbes in recent months to bash right-of-center criticisms of the Volt (see: “Chevy Volt and the Wrong-headed Right,” “The Chevy Volt, Bill O’Reilly, and the Postman’s Butt,” and “I Give Up on Correcting the Wrong-headed Right about the Volt“). Lutz is also currently a paid consultant for GM, but I digress. [I'll add that the Volt was Lutz's baby with GM. -Steve.]

It’s no secret that the Obama administration (including Obama himself, who reassured the UAW that he’d personally buy a Volt when his presidency ended) has been flacking for the Volt for a long time — but that’s kind of unfortunate for them (and for GM) because it helps set the stage for what an abysmal failure the car has been.

Volt sales were actually up in March. They “soared” up to about 2,000 that month, and lefty environmentalists, GM, and the administration are trying to call it a success. GM CEO Dan Akerson (the White House’s handpicked guy) said all the criticism would fade away if they sold about 3,000 Volts a month.

Basically, they’re trying to play the expectations game, hoping we forget that GM had expected to sell about 5,000 Volts per month — and the administration (according to a DOE report) was counting on them selling 10,000 Volts per month this year. It’s worth noting, too, that Akerson testified before a House Oversight panel that they “didn’t engineer the Volt to become a political punching bag.” Funny — I didn’t hear any outcry when the Obama administration hyped the Volt in official government documents….

Anyway, now GM is trying to pretend that 2-3k/month is “success,” so I drew up this handy chart — attached as a PNG as well — think you can use it? [Absolutely! -Steve.]

Click to embiggen — that’s one scary-*** chart.

UPDATE: Hat tip to Mickey Kaus, who found an interesting (related?) item from TTAC. A commenter there calls it “felony stupid.” See if you agree:

    If you want to pretty-up the P&L of a car company, there are two quick fixes: You cut marketing expenses, or you cut R&D. A cut of R&D expenses won’t show up negatively for three to five years, when you suddenly lack new cars to sell. In the meantime, you look like a hero. General Motors plans to cut about a quarter of the workers at its R&D facility at the Warren Technical Center in suburban Detroit.

Kaus asks, “Why would GM cut R&D so profits look good in the short term? Is something happening in November?”

And that’s the problem with crony capitalism. Let’s pretend for a moment GM is making the right move here. But it would still appear that GM has made a political decision for Obama’s political gain.

Article printed from Vodkapundit: http://pjmedia.com/vodkapundit

URL to article: http://pjmedia.com/vodkapundit/2012/05/01/hide-the-decline-chevy-volt-edition/