Recalled Toyota's 19 times safer than walking

A new Congressional logo?

I am not a Toyota apologist. Yes, I own and drive a Toyota hybrid, but that's only because they've provided the best choice in hybrid cars when I've hybrid shopped. Nevertheless, I'd dump Toyota as my brand of choice in a heartbeat if I found a more cost-effective hybrid that fulfilled my needs.

Ultimately, the only thing I really like about Toyota are their efforts into hybrid cars. As I stated earlier today, last year Toyota sold about a 1/2 million hybrid cars. Ford, the leading US manufacturer of hybrids, sold about 30,000 hybrids. That's what I like about Toyota. And that's partially while I've defended Toyota during this recall 'scandal'. Inevitably, a healthy Toyota puts pressure on US automakers to develop more fuel efficient vehicles.

Moreover, I've defended Toyota because Congress simply isn't making much sense. And, when someone exerts a lot of effort advancing illogical endeavors, especially on my dime, I take offense. Is Congress just illogical, inept? Is this related to the bailout? I don't know, but something stinks.

For instance, anyone looking at safety, crash and death statistics in the automotive sector - which I assume Congress has done - will find that the Toyotagate recall scandal isn't much of an issue, at least if the actual numbers of crashes and deaths matter. In fact, according to death statistics, it is 19 times safer to drive a recalled Toyota than it is to walk.

Besides, if Congress really wanted to save lives in the automotive sector, they'd simply outlaw SUVs. In one swift move 10,000+ lives per year would be saved, and we could probably stop importing OPEC oil.

Then again, in light of these scandalous walking statistics, I think Congress should form a panel on the benefits of outlawing walking.

Did Ford get burned in automaker bailout?

The Mercury Mariner hybrid

If you analyze the total automaker bailout, according to recent research, US taxpayers are contributing $12,200 for every vehicle GM sells, and $7,600 for every vehicle Chrysler sells.

So the study asks, are we punishing 'smarter' automakers while rewarding the bad decisions of other automakers?

Certainly, Ford gained market share thanks to the fact that it did not accept bailout money. So, was Ford's gain in market share enough reward, or were Ford's 'smart' moves relatively negated by the bailout?

If so, how about some additional hybrid tax credits for Ford's hybrid cars?

Bailout shock: "stunningly poor management"

The arrogant duo?

Over the years, I've been a pretty big GM critic. Sure, the Chevy Volt gave me some hope - and it still does - but GM's overall efforts towards fuel efficient products has been disappointing. Even after 9/11, GM didn't embrace hybrid cars or small, more fuel efficient vehicles. Instead, they launched a new line of their biggest, foreign-oil dependent guzzlers.

While I've always blamed poor management for GM's lack of visionary leadership, others have blamed the lack of national health care, yen-dollar exchange costs, sky high oil prices, etc.

Today, Steven Rattner, one time Obama Auto Task force leader, told Fortune he was alarmed by the "stunningly poor management" at the Detroit companies and said GM had "perhaps the weakest finance operation any of us had ever seen in a major company."

"We were shocked, even beyond our low expectations, by the poor state of both GM and Chrysler. Looking just at the condition of GM's finances and Chrysler's new-car pipeline, the case for a bailout was weak," claims Rattner.

Sure, America might have had no choice but to bail out most of the US auto industry, but it's time to close the book on the idea that management at GM couldn't have prevented this crisis.

Tax payer recovery "dim" on automaker bailout?

Still less than outright bankruptcy?

A Congressional Oversight Panel, according to early reports, is expected to offer "detailed analysis on the dim prospects of taxpayers recovering all of their investment into the US auto industry".

While not surprising, it is impossible not to ask, 'how much would tax payers have lost if GM and Chrysler went into bankruptcy?'

Regardless, I think a better question might be, are we making the correct investments into the Big 3? For instance, are there ways to hedge this investment, or to help increase the upside of this investment?

Why do you want bankruptcy for GM and Chrysler?

Will it make GM stronger, smarter?

The other day I read that 2 out of 3 Americans want GM and Chrysler to go into bankruptcy? Why?

To punish the UAW? Bondholders? Corporate boards and executives? All of the above?

Ultimately, do Americans believe that bankruptcy will make these automakers stronger? Or, do they hope they will simply just disappear?

Even if these companies successfully emerge from bankruptcy, does it change your opinion about their new vehicles, particularly autos like the Chevy Volt?

How the UAW helped kill hybrids, small cars and GM

Partners or enemies

My father spent his working years in a union. My wife is in a union. I don't hate unions, but over the years, I've always wondered how workers and companies could be expected to succeed when the workers and companies habitually acted as if they were in battle against each other.

In terms of the auto industry, I've long been interested in the principle of kaizen, which is so pervasive in Toyota's auto business. This philosophy of continuous improvement has enabled Toyota to develop more reliable automobiles more quickly than their US counterparts. And it has represented the antithesis of the UAW.

According to a fascinating Newsweek piece, this adversarial relationship killed GM's early '80's interest in developing a new kind of car company focused on small cars - even hybrid cars - that could compete with the Japanese, while creating a new relationship between the UAW and GM partially based on incentives and success. This was to be the future and the salvation of GM. It was called Saturn.

The original idea didn't survive, but the reasons for its failure were not just limited to corporate ineptitude, but the stubborn, refuse-to-adapt-to-the-future UAW mentality. However, had the original intent of Saturn succeeded, according to Newsweek, many analysts speculate the US auto industry wouldn't just be free from the tentacles of bankruptcy, but far more successful and fuel efficient.

Chrysler and A123: Great Green PR but......

A Chrysler EV at the LA auto show

I'm out of shape. Yet, yesterday I finished a concrete patio that required thousands of pounds of ready mix - hand mixed 90# bag by 90# bag.

So, if I'm more cynical that usual, it's only because I'm hurting.

Still, when I read about the Chrysler / A123 partnership on EV batteries, I couldn't help but think, GREENWASH.

Already, President Obama's task force has stated that the Chevy Volt really can't help GM's bottom line any time soon. In fact, the Volt might not be profitable for at least another decade or more.

On the other hand, the task force is less than 30 days from forcing Chrysler into bankruptcy if they don't merge with Fiat. So, can EVs really be expected to help Chrysler's bottomline sooner than GM's?

Who cares? Green press is good - even if it isn't realistic - and this announcement is especially good. It's two US companies. So, it isn't just Chrysler auto jobs, but also high tech battery jobs - perfect for Obama's green, high tech, clean energy plans.

Sounds great. It has grant and government loan written all over it, which is fine. I love A123Systems. Still, if gas prices aren't sustainably doubled, at least, in the next few years, the idea that lithium will make help make Chrysler viable in the next decade is pure fantasy.

GM seeks $2.6 billion for Volt, 2 Volt spin-offs

Don't pull the plug on the Volt yet

GM has requested $2.6 billion in low interest loans to help support further development of the Chevy Volt and two new Volt variants. In total, that would bring GM's Energy Department fuel efficient vehicle aid requests to $10.3 billion according to Reuters.

This request is separate from the Obama task force conclusion that the Chevy Volt would not help GM become viable in the short term.

Chevy Volt can't save GM

Henderson, Lutz and Wagoner next to the Volt

I'm a big fan of the Chevy Volt. I think it's an important step in the right direction, especially for a company like GM. Still, I've blogged over-and-over that the Volt was not an excuse not to build a direct Toyota Prius-contender.

Ultimately, the lack of small hybrid cars coming out of GM - there are none - has perpetually bothered me. Thus, when a web campaign emerged to 'bailout out GM to save the Volt'. I had to say no (Bailout GM to save the Volt: No).

GM's viability, I've believed, had to be about more than the Volt, especially in the short term, and President Obama's task force agrees.

"While the Volt holds promise, it will likely be too expensive to be commercially successful in the short-term," an Obama task report said. The electric car "is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable."

Playing tough with Detroit. Is a gas tax next?

Just a "sacrificial lamb"?

Last week I speculated that President Obama's task force would give GM and Chrysler the bailout money without any serious strings. Doing so, I argued, didn't make sense because GM and Chrysler just didn't seem very viable - especially not if the auto run rate in the US is only around 9 million vehicles per year, and much higher fuel requirements are in the mix.

Instead, Rick Wagoner, CEO of GM, is now gone, and the task force stated that neither plan was viable. And they aren't. While getting rid of Wagoner might not change much, some times real change requires a change in management. It just shakes things up. It happens all the time in professional sports.

Ultimately, I think this was the right move. However, if America is to challenge foreign oil dependency, while sustaining a viable auto industry, other moves need to be made. Somehow, everyday Americans need to be made part of this problem and they need to become part of the solution. While ideas like gas taxes are sure to enrage many, such ideas might be the only way forward.

Auto bailout: No strings attached?

Is Obama's task force being realistic?

Earlier this week, the EPA called CO2 a "health danger", setting the impetus to higher national fuel economy standards, probably similar to what California is seeking, in addition to a carbon trading cap-and-trade program. Both programs, many auto analysts have noted, could be detrimental to Big 3 viability.

At the same time, it appears a 9 1/2 million vehicle run rate per year could be around a couple of years - something which US automakers have called unsustainable. 11 1/2 million vehicles per year is closer to the Big 3's threshold.

Yet, here we are at the deadline for more automaker aid, which is coming with few strings. However, if the run rate sticks at 9 to 10 million autos per year, automakers will need more and more help, and that is without higher fuel economy standards or cap-and-trade. Add these programs, and the need for significantly more auto aid will be necessary.

Isn't it time for a more comprehensive conversation regarding these intricately intertwined issues from Washington? Is that too much to chew in a sound bite?

Hating GM, Obama and America: Why it's time to bail out the Big 3

Time to leave it all behind

I've loved hating GM over the years. Even the Chevy Volt is worth hating sometimes. We've been hearing about it for years and its still almost years away. Furthermore, most Americans need fuel efficient solutions that cost less than $20,000, but can still achieve 40 mpg in the city.

Where's that GM product?

Yet, whom do I really hate when I hate GM? Is not GM but a microcosm of America? Health care, social security and pensions are intricately intertwined between GM - and the larger auto industry - and America. In many ways, GM's failures are America's failures.

Finish: Hating GM, Obama and America: Why it's time to bail out the Big 3

Bailout busters: How could you support the Big 3?

More hybrids?

According to numerous polls, most Americans are not very supportive of further bailout money for the Big 3. Is there, however, certain bailout strings that could make more Americans supportive of the US auto industry?

For instance, a requirement that each of the Big 3 would produce at least 1/2 million hybrid cars and plug-in vehicles per year?

Or, perhaps even better, how about agreeing to new CAFE legislation that is as strong as what California's EPA waiver request would require? Such a requirement would inevitably lead to a serious ramp up of of hybrid and plug-in production.

What would it take to make you more supportive of the US auto industry?

Can the Volt save GM from bankruptcy?

Irrelevant or GM's Ace card?

CNBC's Phil Lebeau reiterated his belief that bankruptcy is not in the cards for GM. According to Lebeau the government made up its mind about saving GM some time ago. Check out this video of Lebeau on this issue, which includes a Chevy Volt test drive.

Yesterday, President Obama's task force drove the Volt and reviewed GM's EV plans. Since Congress built its plug-in tax credits around large battery plug-ins, such as the Volt, it does seem as if bankruptcy was probably never very likely.

Obama won't let GM go bankrupt, PERIOD?

A guaranteed, government-backed partnership?

Phil Lebeau, CNBC's auto analyst, told Larry Kudlow this morning that there is no way that GM is going into bankrupcty. According to Lebeau, Obama and Congress have already decided to save GM regardless of what GM's own auditors say about the company - namely that its viability plan probably won't work.

Could bankruptcy make GM 'green motors'

Only bankruptcy left?

"Recurring losses from operations, stockholders' deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern," reports independent auditors for General Motors. Thus, according to GM, liquidation may now be inevitable.

Could bankruptcy lead to a new lean and green GM? Is the General dead?

Voters strongly against any auto bailout

No more aid for the US auto industry?

65 percent of registered US voters, according to a Quinnipiac University poll, do not believe the government has the responsibility to help US automakers.

In recent weeks several other polls have indicated the same.

GM sales down 53 percent: Only bankrupcty left?

One of GM's hybrid trucks

Let's face it. GM is in serious trouble. Then again, so is the American economy in general, as well as most of the world's automakers.

Earlier this morning I argued that if GM was building as many hybrid cars today as Toyota, GM's finances would still be in shambles. Even if GM was making as many hybrids as Toyota, and as many small cars as Honda, I'm confident they'd still be bleeding billions per month.

Of course, I'd love it if GM were making as many hybrids as Toyota - I've been begging for it on this blog for several years. Still, neither small cars nor hybrids would have really helped GM's finances in today's environment. They just aren't very profitable, nor very coveted by most Americans, especially when gas is only a couple of bucks per gallon.

Anyway, is bankruptcy the only way to right this wayward ship? Not according to GM. Check it out.

Hybrid cars would have kept GM viable?

Cheap oil built this country

Over the weekend, White House Chief of Staff Rahm Emanuel claimed that America was facing a "day of reckoning" regarding health care and energy dependence while discussing GM's financial plight. Emanuel blamed GM for not investing in fuel efficient technology and for instituting an outdated health care plan (as if the UAW had no part in that).

So, am I to assume that if GM had started building hybrid cars at the same rate as Toyota, it wouldn't be in financial trouble?

That's just nonsense. Even when gas was $4.00 this summer most Americans still weren't sure that hybrids were worth the extra costs. Had GM invested in such technology, they'd be better positioned for the future, but their financial woes would be just as bad.

And, obviously, health care is an issue. It's true that GM gave too many benefits to the UAW. Still, how much of America's health care woes are simply related to our obese, lazy lifestyle?

While it's true that America is facing its day of reckoning, it's not all about GM's failures or national health care, it's about every day Americans getting off their asses and taking some personal responsibility.

Can it get any worse in Detroit? Bailouts and Startups

$30.9 billion lost in 2008

Can the numbers coming out of GM get any worse? $9.6 billion lost in Q4. $6.2 billion in cash burned (more). That's $84.7 million lost per day.

What else can you say?

Should Obama pull a Thomas Friedman and only give auto money to start ups and just let GM go under?

"Our motto should be, 'Startups, not bailouts: nurture the next Google, don't nurse the old G.M.'s.' "

Kill Detroit or give me a moonshot

Can't we all just drive Segways?

Of course not. We need automobiles. Yet, maybe automobiles aren't as important as they used to be, and that should be embraced. Still, automobiles are going to continue to be an important part of America's future.

Thus, a viable auto industry is essential to America's future. Even Japanese automakers want a strong US auto industry. Without those jobs, many more Americans won't be able to buy new Honda's and Toyota's.

Fortunately, I've been pretty impressed with how Obama and Congress have dealt with Detroit so far. Instead of just rushing tens of billions to them, viability plans have been required - plans that require serious negotiations with all vested parties. Similarly, some pretty strong statements have come out of the White House and Congress. (Then again, who knows what is going on behind closed doors. Perhaps Nancy Pelosi has already assured Ron Gettelfinger of the bottom line.)

Nonetheless, without everything going perfectly in the next few years, the Big 3 are not going to be viable, as I blogged yesterday. Even worse, if the future is going to be driven by efficiency, the Big 3 have a horrible record, especially in terms of profitability.

And, without a serious surge in gasoline prices - even greater than this past summer - I just don't see how the Big 3 can compete at efficiency if the nation moves towards a model that California, and many other states, are embracing. That's Honda's specialty, not GM or Chrysler.

Ironically, however, the kind of gas price surge that would make efficiency profitable would probably keep the annual run rate of vehicle sales below anything the Big 3 can survive without major re-organization.

So, why don't we accept this as reality? Change is inevitable. Can we really hope and subsidize our way out of such a conundrum?

America needs a bigger, transparent vision of the future when it comes to energy and automobiles. Inevitably, we need a moonshot or a far more serious, honest reorganization plan. Otherwise we're gambling a lot of money on terrible odds.

If taxpayers are going to have to subsidize the US auto industry for the next decade, let's be honest right now. And, let's make those subsidies dependent upon a real plan to end foreign oil dependency by 2020.

Automaker viability - Holy Sh#t

What will the White House do?

Wow. Another $22 billion. Tens of thousands of jobs on the chopping block. Yet, if the yearly run rate for auto sales doesn't climb above 11 million units per year in the next couple years, much more tax-payer money will be quickly needed.

Plus, the UAW healthcare fund is still not resolved. $27 billion in debt still needs to be secured. Thus, there is still no guarantee that either Chrysler or GM won't need even more money as part of this plan.

Add California's EPA waiver and, suddenly, the Big 3 are supposed to focus significantly more product development on products that the Big 3 can't seem to make a profit developing?

How viable does that sound?

An incomplete viability plan and a request for more bailout money

How much will it take to save GM?

GM is preparing to submit its viability plan, but it won't include the needed concessions from the UAW and bondholders, although those concessions are not absolutely required right now. Nonetheless, GM is already acknowledging that it will need more money.

Originally, GM had requested $18 billion when it first went before Congress. Thus far, Congress has approved about $13.4 billion for Congress already. So, it will be very interesting to see if GM needs only about another $4 billion, or if GM asks for much more.

Geithner to lead auto recovery plan

Obama's patsy?

President Obama has axed his plan for a car czar in favor of a presidential task force led by Treasury Secretary Timothy Geithner, a move sure to bristle many on Wall Street.

Last week Geithner was hammered by Wall Street, and the stock market, for the lack of details on how the Treasury Department is going to handle the financial crisis, including the mortgage mess. As Geithner has been deeply involved with this crisis for some 6 months now, and as Obama has talked at great lengths about the failures of the Paulson plan, many observers were shocked by the lack of any specific details of the Obama administration's plans.

Hopefully, the automaker bailout plan isn't going to follow the same lack of details when the showdown begins tomorrow, and Chrysler and GM turn in their plans for viability.

Another automaker bailout in works

Survival dependent upon Washington?

The Obama administration is in talks with Detroit's automakers about the need for more financial help for the struggling automakers, but no decisions will be made until after Chrysler and GM turn in their plans for future viability.

One can imagine, however, that if the EPA approves California's waiver to regulate tailpipe emissions - some time after April 6 - the Big 3 will need many more billions to quickly retool their factories.

Bailout over, for now. Any predictions?

How long will Chrysler survive?

So, the Big 2 have been given their bailout, although they were given an amount that was far less than they suggested they needed. Likewise, the bailout was for an amount far less than what many independent economists have claimed would be needed.

Thus, is this just the beginning? Will the Obama Administration and the new Congress erase some of the tougher requirements that Bush's bailout imposes, such as those on UAW wages? Will the bailout lead to a new, vibrant American auto industry? Will the bailout lead to a massive increase in hybrid cars and electric vehicles?

What are your predictions for the automakers bailout?

Majority still oppose auto bailout

Who does Congress represent?

According to a Washington Post poll, 55 percent of Americans still oppose a bailout for automakers, versus 42 percent that support a bailout. Those against the bailout believe that the US auto industry is nearing bankruptcy because of bad business practices, and that bankruptcy won't disrupt the economy too adversely.

I guess you can't blame the people. The auto industry and the UAW continue to accept little responsibility for the condition they are now in.

Yes, Toyota and Honda are now suffering, but they are still sitting on hordes of cash, and they have not been bleeding money for the last several years, unlike the Big 3. Likewise, if the UAW is so innocent, why did they accept major contract changes in recent years? Is that not proof that for decades UAW contracts were uncompetitive?

While I continue to support a bailout, begrudgingly, the Big 3 and the UAW continue to blame, rather than accept responsibility. That certainly isn't the way to appeal to Americans in fear of losing their jobs, pensions and health care funds - benefits which have never been as good as the UAW's for most.

Bailout downed in Congress

White House to the rescue

The Senate has rejected the automaker bailout 52 - 35. However, both the Treasury and the White House have indicated that TARP funds might now be used to save the Big 3 from bankruptcy.

Bailouts just the beginning if CAFE increased

Everything as efficient as the Prius under new Congress?

If you don't believe in an automaker bailout, you ain't seen nothing yet. Unless the economy quickly starts soaring, within the next few years, automakers could need as much as $120 billion according to recent Congressional testimony.

And, even if the economy warms, but car buying stays slow, the US auto industry isn't even "viable".

"At 10.8 or 10.5 million total market," for yearly auto sales, Bob Lutz told CNN, "we do not have a viable automobile industry in this country for anybody."

Yet, the push in Congress is to now raise fuel economy standards for the Big 3, under the direction of Congress. An aggressive increase in fuel economy means that US automakers won't be profitable for more than a decade, maybe decades. In fact, such a move will require significantly more money from the government beyond the $120 billion if the economy doesn't quickly and vastly improve.

Is socialization of the US auto industry now inevitable?

Bailout agreement today

There should be a short-term bailout agreement announced by the end of today according to many reports coming out of Congress that could be signed by the White House before the end of the week. Developing....

Green technology patents: The Big 3's trump card?

How do we get the technology out of the lab and into the real world

"General Motors, Ford and Chrysler are collectively one of the world's primary sources for the research and development of green and fuel-efficient technologies," notes a commentary in the DetroitNews. "As Washington decides on aid to the ailing auto industry, top consideration should be given to the significant potential of these Big 3 technologies for stimulating economic and job growth and creating a greener and more fuel-efficient world."

Interesting piece on the green technology patents owned by the US auto industry and how bankruptcy "would create a historically unique opportunity for their foreign competitors to acquire a vast amount of crown jewel technology for a fraction of their true value."

Bailout plan ready for Vote next week

"Jolted by the loss of thousands of jobs, congressional Democrats and the White House reached for agreement Friday on about $15 billion in bailout loans for the beleaguered auto industry. President George W. Bush warned that at least one of the Big Three carmakers might not survive the current economic crisis." (AP via Yahoo)

Not a lot of details yet available, other than that this is purely a stop-gap loan meant to get automakers into next year and the next administration.

Govt would have to fund Big 3 bankruptcy

No one has the money to fund a bankruptcy?

So, you want the Big 3 to go into bankruptcy to clean house? Alright. I was just watching some pre-coverage of the bailout testimony before Congress and analysts were discussing how there is no financial institution strong enough to finance the bankruptcy of the Big 3. Oddly enough, financing a bankruptcy would actually cost more than the bailout loans - and the bankruptcy wouldn't be a loan.

I don't know, folks. There is a lot of reason to hate the Big 3, I realize that. Still, we're giving hundreds of billions to just Citibank, and no one hardly says anything. Yet, when we try to help the auto industry - an employer of millions directly and indirectly - America wants to crush them? Does America really hate the UAW that much more than billionaire Wall Streeters?

Give the Big 3 a break, Take 1

Even Honda is getting hammered?

Both Toyota and Honda posted sales declines of over 30 percent in November compared to last year. While that wasn't as bad as GM or Chrysler, those numbers were roughly in line with Ford's numbers.

And, for those buying cars, would you buy a car from a company that was weeks away from bankruptcy without government help? I wouldn't.

Does that justify Detroit's years of SUV madness at the expense of a balanced product portfolio? Of course not, but all of these automakers had started making serious changes before the credit crisis - a crisis that is hurting all automakers, even those making hybrid cars and small cars.

This alone doesn't justify a bailout, but it adds a little perspective. More coming on Take 2.

Waxman to make life tougher for automakers?

Higher CAFE requirements coming?

If I had to make a wager, I'd bet that a bailout for US automakers is inevitable, despite the recent hardball from Democrats. While that might irritate most, relax a little if your focus is fuel economy and global warming.

Now that Henry Waxman has replaced John Dingell as the leader of the Energy and Commerce panel, tougher CAFE and global warming requirements for automakers now seem inevitable. If Democrats hold to their guns, a bailout can be a good thing.

F Congress: Give automakers the money

Or do I mean F America?

Congress is in a tough spot. The majority of Americans don't want Congress to help the US auto industry, despite the fact that all of the Big 3's competitors receive heavy subsidies from their governments.

I understand. For decades the Big 3 built a lot of crap and, even after 9/11, they still didn't react to fuel economy. Profit was more important than national security.

Nonetheless, Congress has to give automakers the money and, we the people, should accept that because we the people are also responsible for the state of the US auto industry. We bought the gas-guzzlers. We demanded that gas stay cheap. We voted for politicians that made gas taxes and increased fuel economy standards dirty word for decades.

I know. None of that justifies the failures of the Big 3, whom helped brainwash the people into gas-guzzling stupidity. And, I know most Americans want the corporate big wigs of America, including those from Detroit, to suffer. Yet, it will be average Americans - all over America - that will suffer most if Detroit goes under. Now is not the time to seek revenge, it's time to turn a wrong into a right.

Bail out automakers to save the Chevy Volt? Part II

I still love the Volt, but it's time for some reality

On Monday, after reading some stories supporting a US automaker bailout to save the Chevy Volt, I slammed the suggestion (more). It's not that I don't believe in the viability of the Volt, it's that I don't believe the Volt is the critical piece of this discussion.

After watching the CEO's of the Big 3 testify before Congress Tuesday, I believe that even more. Both Ford and GM insisted that the new CAFE requirements - 35 mpg by 2020 - were the absolute most achievable limit. Any new strings for the bailout, they argued, should not include higher fuel economy standards.

Hence, by 2020, most US-made vehicles will still be conventional vehicles - though conventional vehicles with direct injection and other technologies that will increase fuel economy - not vehicles like the Volt.

More important, while 35 mpg fleet fuel economy means foreign oil dependency from the Persian Gulf will be reduced by half, America will still be terribly dependent upon foreign oil in 2020. This reality, not the Volt, should be the focus of the bailout talks.

Why can't automakers help end foreign oil dependency by 2020? If EVs and hybrid cars can't get us there be 2020, what other technologies, fuels, etc. can get us there? Can cellulosic ethanol be significantly increased in the next 10 years? Can natural gas help? Something else?

The US auto industry needs government help, and I'm inclined to help. However, if the government and US tax payers are going to partner with the US auto industry to achieve success, why not strive for revolutionary success?

Auto suppliers ALSO need a bailout

An automaker bailout won't save suppliers

So, you're against an automaker bailout, but the loss of jobs is making you more open-minded. In particular, the idea that an automaker bankruptcy won't just result in automaker job loss, but auto supplier job loss has become alarming.

Well, according to a report Phil Lebeau made on CNBC a few minutes ago, an automaker bailout WON'T save auto suppliers. Regardless of any bailout for automakers, auto suppliers will need their own bailout according to Lebeau.

This story is apparently just breaking, so details are scarce. When asked about numbers, however, Lebeau guessed that auto suppliers would probably need as much as $15 to $20 billion from Congress - apart from any money Congress gives to the Big 3. Happy Monday!!!

Bailout automakers to save the Chevy Volt? No.

The Volt is not the reason to bailout GM

Today, 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.

Bailout v. bankruptcy: Which influences consumers more?

Does a bailout really appease auto consumers?

On Wall Street, most believe that bankruptcy is the best way to save the US auto industry for it will cut a lot of dead weight quickly. Those against such a plan claim that consumers won't buy from automakers that had to declare bankruptcy.

Perhaps. Still, will buyers - whom probably feel financially stressed and also in need of a bailout - feel so much more comfortable buying cars from automakers that needed massive government help to prevent bankruptcy? Might there not even be some anger transferred to such automakers?

Poll - Most Americans support an automaker bailout

At least Ford pickup owners do

I was just given the poll results from a Peter D. Hart Research Associates, Inc. survey that indicates the majority of Americans support a bailout.

First, it must be acknowledged that the Peter D. Hart group is a pro-Democrat group. Second, I was looking through the data, and there are some interesting things to note.

For instance, the number one vehicle type owned by the group interviewed was a pickup. That is, unless you bulk all SUVs into one segment. Then SUVs represented the most owned vehicle. 

The top two owned brands were Ford and Chevy. And, almost no one owned a hybrid vehicle. Politically, the largest group defined themselves as middle class Democrats.

I'm exaggerating a bit here, but this study seems to indicate that middle class Democrats whom buy American-made trucks and SUVs largely support an automaker bailout. Is that surprising?

Re: Why Americans hate Detroit

The icon of American stupidity

Was it intelligent or morally ethical for GM to develop the Hummer brand as it was dismantling the EV1 program?

Of course not. It was asinine to anyone that cared about foreign oil dependency or the environment. Unfortunately, at the time GM rolled out the Hummer instead of the EV1, MOST Americans didn't care about either global warming or the environment.

So, GM followed the American ideal - "Show me the money."

Today, Republicans in Congress are aghast at the idea of an automaker bailout. Yet, I bet most of them drive gas-guzzlers.

There is no doubt the Big 3 have demonstrated little leadership in fighting global warming and foreign oil dependency, and Americans hate that because it's a reminder of how stupid most American consumers have been acting. Blaming it all on the Big 3 while that big gas hog sits in the driveway is so much more convenient.

Isn't a Volt delay inevitable?

All about the battery

GM is on life support. Without government money, bankruptcy is inevitable. Yet, GM has made it clear that not only is work on Chevy Volt development ongoing, but that more resources and money are being put into the Volt - the icon of GM's future.

Still, the most critical element of the Volt's success - the lithium-ion battery - is dependent upon technologies not wholly owned by GM. Ultimately, the battery supplier is almost just as important as anything GM is doing.

Isn't it, therefore, reasonable to assume that Volt suppliers might proceed cautiously and slowly until the viability of GM is guaranteed?

Vue 2 mode hybrid launch date scrubbed?

Dependent on the bailout?

Back in April I found myself sitting next to Bob Kruse, Executive Director of Vehicle Integration and GM Performance Division, at a dinner hosted by GM for a media update on the Chevy Volt.

Turns out Kruse had been driving the soon-to-be-released Saturn Vue dual mode hybrid, a vehicle Kruse was pretty excited about. In fact, he told me that although the numbers had not yet been finalized, the Vue dual mode was testing 70 percent more fuel efficient than a conventional Vue in city driving.

More important, by the end of 2008, GM would begin selling the Vue dual mode, Kruse confirmed.

Today, GM notified me that the Vue dual mode hybrid is set to go on sale some time in Q1 2009. This Vue of GM's future, it seems, is now completely dependent upon an automaker bailout.

Global warming goes away if Big 3 go under?

Kill Detroit, kill CO2 emissions?

Despite my previous bailout post, I'm still an advocate of an automaker bailout with strings. A new string that environmental activists are now advocating is a bailout only if the Big 3 drop their suit against California and its desire to regulate CO2 emissions - an interesting idea.

Yet, I have some questions. Why are autos the environmental whipping boy? Don't houses and buildings cause far more environmental damage? Doesn't the food industry, especially the meat industry, cause more environmental damage?

Anyway. If automakers go bankrupt, do CO2 emissions go down? Does not bankruptcy only ensure that we drive gas-guzzling polluters longer?

F Wall Street - Give GM the money

At least GM has something to offer

I've not been a big fan of an automaker bailout, unless used to make the Big 3 significantly more efficient. Earlier today, I even argued the bailout MUST include strings.

Well, I've changed my mind. Give GM the money.

Does GM deserve it? I don't care. If not for the Wall Street-created financial crisis GM wouldn't need any bailout money. Instead, we could just be angry at them for not making enough fuel efficient vehicles.

Still, if GM was selling two hybrid cars as successful as the Toyota Prius - for as long as Toyota has been selling hybrids - GM would STILL be facing bankruptcy.

GM is facing bankruptcy because of Wall Street. Yet, Wall Street is leading the charge to bankrupt the US auto industry? Please. The automaker bailout isn't even chump change compared to the money being spent on the chaos caused by Wall Street. At least GM sells a real product, unlike the expensive lies Wall Street sells.

Gas prices - Why strings MUST be attached to any bailout

Detroit still far behind the Prius

Pop open the bubbly, ladies and gentlemen, it's party time. In 4 states gas has fallen below $2.00 per gallon. On Wall Street, the overwhelming consensus is $50 oil before $65.

But, is that a good thing?

When gas was $2.00 US automakers laughed at the Toyota Prius. Today, the Prius has already sold more than 1,000,000 Prius hybrid cars, yet there won't be one US made Prius-contender on the road until late 2010 with the Chevy Volt. Moreover, GM probably won't be selling the 100,000 Volts per year until at least 2014.

Fortunately, if gas prices remain low, America's gas-guzzling will decline thanks to CAFE, but CAFE regulations won't be strong enough to end foreign oil dependency. Unfortunately, as history as proven, US automakers will simply do as much as needed to achieve CAFE, and when foreign oil dependency again rears its ugly head, America will again be unprepared.

Thus, a bailout must include strings.

LeBeau - Automakers open to fuel efficiency strings for cash

Time to make the best out of this bailout?

During CNBC Reports just a few minutes ago, Phil Lebeau - whom interviewed GM CEO Rick Wagoner this morning - stated that US automakers would be open to fuel economy strings for government cash.

Seems like a positive sign, and an angle that Congress should exploit.