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As Obama once again regurgitated the the talking points of the U.S. auto industry bailout complete with assumptions and fuzzy math during his State of the Union address, I couldn't help but ponder the status of the icon of GM's return to greatness and a dawning of a new age of American 'green' transportation, the Chevy Volt...
Government Motors Co. had planned to sell 10,000 Volts last year and announced this boastfully when they unveiled the car even though any other model that only sold 10,000 units would be considered an abysmal failure. GM however fell short of their 'goal' even as low as it was managing to move only about 7600 units or about the same number of Tahoes sold every MONTH last year which was less than half it's 2002 peak as well at just over 80,000 units compared to 209,000.
Obama though touted GM as a success. It's sales WERE up almost 5% on the year which is great though the industry average was more than double that. Still, that's fairly impressive considering how many areas GM is still bleeding out in. The aforementioned Chevy Volt starts at about $39,000 but production costs per united have been estimated at $250,000. Add to that the fact we're giving anyone who buys one a $7,500 tax credit (assuming you buy the car and can itemize your deductions and have a high enough tax liability to take the full deduction, see your accountant for details) and We the People, the shareholders of Government Motors Co. are really getting taken...
Then there's the whole recall fiasco... Wait, GM won't call it a recall, but they're calling back 8,000 Volts (yea, damn near all of em) for 'structural modifications'. Volt battery packs have been catching fire days after crash tests.
And on the topic of success... Obama's definition of success seems to be that of 2008's Wall St. bankers. Since GM's IPO, share prices have been plummeting, and prices quickly dropped below the $28/ share break even point and haven't recovered. So what we have is a company falling behind the competition, losing share value with unmarketable products and Obama calls it a success...
Maybe there's hope...
Upon thinking the $39,000 price tag was a bit much for what I was getting, I looked into what else I could get get for that money and the inconvenience of having to stop at a gas station more often.
Mercedes Benz C250 $36,000
Cadillac CTS $39,000
BMW 328i $35,000
Just to name a few.
I'm not holding out much hope. GM is scrambling their eggs in the wrong basket and their number one cheerleader has a strange idea of what success is. The front office is a revolving door and we seem to have resurrected the Titanic and set it to sail without fixing the gash in the hull.
