Low Voltage at GM

File under: You have to pass it to see what's in it. We now have a glimpse at what the billions of tax dollars invested in General Motors has purchased. It's the Volt. Edward Niedermeyer at the New York Times looks under and behind the hood.

GENERAL MOTORS introduced America to the Chevrolet Volt at the 2007 Detroit Auto Show as a low-slung concept car that would someday be the future of motorized transportation. It would go 40 miles on battery power alone, promised G.M., after which it would create its own electricity with a gas engine. Three and a half years — and one government-assisted bankruptcy later — G.M. is bringing a Volt to market that makes good on those two promises. The problem is, well, everything else.

For starters, G.M.'s vision turned into a car that costs $41,000 before relevant tax breaks ... but after billions of dollars of government loans and grants for the Volt's development and production. And instead of the sleek coupe of 2007, it looks suspiciously similar to a Toyota Prius. It also requires premium gasoline, seats only four people (the battery runs down the center of the car, preventing a rear bench) and has less head and leg room than the $17,000 Chevrolet Cruze, which is more or less the non-electric version of the Volt.

Now let's get this straight.

1.    GM is producing its own version of the Prius. Except that GM's version costs $41,000 whereas the 2010 Prius starts at $22,750. Okay.

2.    If you purchase a Volt, you get "a vehicle that costs $41,000 but offers the performance and interior space of a $15,000 economy car."

3.    Tax breaks make the Volt less expensive to the buyer, which means that wealth is shifted toward GM through tax policy.

4.    Billions of government loans and grants were invested in the development of the Volt, which means that it is in fact much more expensive than the $41,000 that appears on the cute sheet in the window.

That is what GM has produced while it was managed by the Obama Administration. I can't wait to see how the health care reform works, now that we have passed it. Niedermeyer tries to be fair. It isn't all Obama's fault.

The Volt appears to be exactly the kind of green-at-all-costs car that some opponents of the bailout feared the government might order G.M. to build. Unfortunately for this theory, G.M. was already committed to the Volt when it entered bankruptcy. And though President Obama's task force reported in 2009 that the Volt "will likely be too expensive to be commercially successful in the short term," it didn't cancel the project.

That doesn't help Obama much, does it? GM was going broke while designing a car that no one in his right mind would buy. The President steps in to save GM and, instead of suggesting that they build cars that might actually sell, he encourages them to continue developing the Volt. Green Jobs! Of course, all the green comes from the taxpayers.

It's true that Obama saved a lot of jobs by continuing the GM bailout that was George W.'s idea. Each of those jobs probably didn't cost more than three or four jobs in the private sector (such as remains private). The result is the Volt. Welcome to the future.

Comments

[BillW]

KB - looks like it doesn't matter much:

SUV Sales Surging Faster than Small Cars

Automakers are tantalizing the market with 40-mpg small cars and 30-mpg sporty cars. Electric cars from major automakers are due by year's end. Plug-in gas-electric hybrids are under development.

But guess what? The full-size SUV market segment — the bane of mileage-minders — is where the action is

The jump in sales of full-size SUVs the first half of the year outperformed the rise in the overall auto market, according to tally master Autodata. And the growth rate also outpaced that of small cars, which conventional wisdom says should be the darlings now because of their lower prices and higher mileage.

Read more: http://www.azcentral.com/business/consumer/articles/2010/07/30/20100730Sales-of-big-SUVs-surging-faster-than-small-cars.html#ixzz0vFtd1KGI

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