Bailout automakers to save the Chevy Volt? No.
The Volt is not the reason to bailout GMToday, Toyota makes a profit on all of its hybrid cars, thanks to the Prius. Yet, not one US automaker has developed a Prius-contender.
Rather than challenge the Toyota Prius directly, GM conceptualized a product to leapfrog Toyota - a perfect marketing coupe. Essentially, GM could claim that they didn't need to develop a car like the Prius because the Chevy Volt would be so much better than the Prius. This then gave GM time to keep rolling out gas-guzzlers as the technology caught up to the Volt concept.
Some have forgiven all of GM's past wrongs because of the Volt, and even believe that the entire US auto industry should be bailed out to protect the Volt. Yet, when will the Volt be profitable? When will GM be able to produce even 100,000 Volts per year? 5 years? 10 years?
More important, within 5 years, there is every reason to believe that numerous automakers might have products just as exciting as the Volt, even better than the Volt. Recently, even lowly Chrysler showed that they aren't that far behind the Volt.
Bailing out automakers solely for the Chevy Volt would the same kind of ignorance and denial that has put GM and the rest of the Big 3 in need of a bailout. A bailout MUST be about far, far more than the Volt.
Labels: bailout, Chevy Volt electric vehicle concept, Hybrid Vehicles, toyota prius
posted by Dahcredyns at
8:46 AM
17 Comments:
This is so true! I wish we could get the message to Washington, who will surely bail them out. We are powerless it seems...
Oh, I think Washington knows. But votes are more important than financial sense, and the auto industry represents a key voting bloc for Democrats. They have to bailout the US industry. Otherwise, the midterm elections would already put the Democratic majority in question. Most Dem voters will forgive Congress for the bailout out the Big 3, but those Dem voters in Michigan, Ohio, Indiana, etc. won't forgive the Democrats if the bailout isn't done.
All that can be hoped for is as smart a bailout as possible. Otherwise, we'll need another bailout next year, the year after, etc.
And, if this recession lasts a few years, there might not be a bailout imaginable that can save any of the Big 3.
Let GM fail, the Volt is pathetic. GM had the technology for and produced an all electric car in the early 90's that got 200+ mp-charge. The Volt only gets 40, and then after the battery runs out the car goes strait to the gas engine. I own a '09 Prius, and I can outlast a Volt in battery life and fuel efficiency any day of the week. Let GM tank, they had the tech and they did nothing with it.
Joe -
I hear what you are saying, although I think the Volt is a much better product than you
Nonetheless, let's say there is no doubt that GM needs to fail, therefore, they don't deserve the bailout. This will lead to massive job losses, which could have a devastating impact on the economy and on all Americans.
Is that a risk that you are fully willing to accept?
Do you believe that, ultimately, bankruptcy would lead to something better?
The Volt isn't the reason for the bailout push Dahc...
We talked about this already... the Volt is an excuse for the automakers to continue to sell their garbage overseas to places like China, Korea, etc.
While truck/SUV sales have sunk to all time lows here, GM is still using the back door to sell Escalades and garbage like that to others elsewhere.
This is what they want the bailout for.
dahcredyns, I agree completely, and ultimately the bailout will probably have nothing to do with the Volt -- it's about jobs, and about a flagging economy that is threatening to drag the country into an economic quagmire.
BUT I think for some people the Volt is a symbol. One thing Obama kept saying again and again in his campaign was that he wanted to start making fuel efficient cars here, in the US, where US workers and consumers could benefit from the production. We seriously need to catch up to the global hybrid and EV market in a big way, and some might see the bailout as an opportunity. "Ok, you guys screwed up, and we'll help you but now you're gonna do this our way."
And I think a more diverse hybrid and EV market would be great for everybody, not only the US. We'd have more, hopefully better choices. Ranking sites like www.carfunfootprint.com suggest that some people who drive even the Prius are less than thrilled with the car's aesthetics. Now, GM might not be the company to make a sexy hybrid or EV, but who knows? The Volt has some potential, although it's hardly the answer to all our problems.
So, basically, I don't think the Volt should be The Reason, but if the bailout turns it into a symbol for a new American car era, I'm comfortable with that.
America is a land that is supposedly based on capitalism. If a company can not outperform competition, and can not function as it should it dies. Some industries such as farming, airlines, and railroads need government subsidies to keep themselves afloat, car companies do not.
The amount of jobs that would be lost by GM closing is truly minimal if you think about it. Companies that are oversea successes such as Toyota and Honda can use those same plants (and the same people with retraining) to create the better, more fuel efficent cars.
This country is based off of innovation that comes from new ideas people have when the old crap just doesn't work any longer.
Capitalism will always succeed because Socialism is behind it picking up the mess.
That's a good point JoeR.
My problem with the Volt is not the Volt itself, it's the fact that that the Volt has almost been an excuse not to take more action. GM has been bleeding money almost this entire decade. Yet, after 9/ll and Katrina- which exposed the margin and oil refinery problems of oil - GM still did nothing for several years.
As the Prius was gaining steam, GM's Bob Lutz stated that the Prius was just a PR gimmick and that GM could use a fraction of its yearly $2 billion marketing budget to develop a Prius-like vehicle - they chose gas-guzzler ads instead.
However, Prius success coupled with the negative PR from Who Killed the Electric Car forced GM to act, or at least make a promise they were going to act.
Even when GM debuted the Volt, they knew full well that it would take another 5 years to simply launch the Volt, and probably another 5 years to get production up to any number that even matters. They also knew there was a chance the Volt might never live up to the hype - but they knew it would be a great PR tool (or gimmick) in the short term.
And it has been. It has been the symbol of how GM has changed, or is changing. Yet, in terms of product, what change has there really been?
Almost nothing has really changed in terms of new product, and little will change for a few more years.
I'm a big fan of the Volt, and the Volt might be a symbol of the potential of GM, but it is also a symbol of how long it takes for GM to react to an ever changing world.
In my opinion, the Volt has not been, and still is not ,an excuse to not make a cheap hybrid that will challenge the Prius and the Honda Insight.
Not everyone will be able to afford or want a plug-in vehicle for many years after the Volt launches. Yet, GM is just going to give up this space to Toyota and Honda, as it gave up smaller more fuel efficient cars in decades past?
noz-
i hear your point. but this is a sentiment out in the blogosphere so I'm readdressing it.
If the " Big 3 " dont get bailed out and a few million americans lose there jobs I am sure that honda and toyota are going to need new works for there plants that are up and coming. Honda just opened a new plant today and i am sure about 3500 new jobs opened up there so it cant be that bad cause also toyota and honda can buy some of there plants and retool them.
I really don't know what the big whigs at GM were thinking by planning to market the Volt at $40k when we can currently pick up a new Prius for a little over $20k.
For a company that's betting the farm on this product it seems to me that they will have a dead horse at the gate. Given a choice between saving your mortgage or buying a new car the answer is obvious so GM is doomed.
What irritates me more is way GM is asking for the bailout in what amounts to economic blackmail. They should begging not demanding or hold the country hostage. I think the current administration is right in letting the company declar chapter 11 so that they can reorganize themselves. Besides the government has enough problems with the failed bailout to the banks in which they must answer to
well, I think the Volt is a good product, but it's a mid-term product. it's not a product that helps GM much in the near term outside of PR.
in terms of GM blackmailing congress - that's just how bad it is. GM's cash burn is so bad right now that they won't have enough money to survive until the inauguration without government money.
this is a shotgun wedding between US automakers and congress.
Let them file chapter 11. Then they can get out from under the union contracts that have killed them in the first place. If they can't make it with re-organization then when the Toyotas and Hondas buy what ever is worth having of their plants and re-hire the workers the unions will be out any way. Problem solved, either way.
It's obvious that US automakers need to make some serious cuts. How much of that requires Union help I don't know. Still, i found it interesting today that when GM suggested it might need to open up its UAW contracts to successfully move forward, the UAW quickly responded NO.
Just giving these guys the money seems scary if they can't do anything to reduce their cash burn for at least another year. We'll just be throwing money at inefficiency. And, in a few months, more money will be needed.
How much money can we throw at this industry without first seeing real change?
Just saw Carlos Ghosn on CNBC and he claimed that US auto sales will be lucky to come in at 11 million units next year. That means there is a lot of excess capacity in the US. Just throwing money at that excess capacity is a waste of money.
Why don't we bailout Kmart while we're at it?
For the U.S. automakers to compete successfully with the Japanese, they would have needed to have produced an hybrid AND all-electric version of each and every auto in their lineups by 2007. That would have been highly visionary, but the U.S. auto industry is the opposite of visionary.
To just barely tread water, they would have needed a hybird version of at least half their lineup.
To fail, they would have to produce a couple or no hybrids in their lineups.
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