A Reuters' article earlier this week created quite a buzz when it suggested that General Motors was losing $49,000 on every Chevy Volt sold. While many continue to debate just how much money GM loses on the politically-motivated car, a more important story on the Volt was reported by Automotive.com last week which explained the increase in August sales numbers for the vehicle. The piece exposes how GM (along with taxpayers) is heavily subsidizing leases and even gets an embarrassing admission from GM on the struggling Volt that, "The whole idea is we're creating a market." And this blockbuster, "There is no plug-in market."
We have heard the claims over and over again from the Obama campaign; the President "saved" General Motors and Mitt Romney said "let Detroit go bankrupt." The clear implication is that GM never went through the bankruptcy process that Romney suggested. Here's news for voters who didn't pay attention to how, exactly, Obama "saved" GM; $50 billion dollars of taxpayer money was given to GM to get them through a manipulated bankruptcy process. Replacing the word bankrupted with saved does not change the facts. And the fact is, GM DID go bankrupt.
The Democratic National Convention continued to celebrate the General Motors' bankruptcy and auto bailouts last night. Guests at the party included union leaders Bob King, President of the UAW and AFL-CIO President, Richard Trumka, both of whom gave speeches at the event. Union members cheered and waved their UAW signs at the affair as President Obama was repeatedly given credit for "saving" GM and the American auto industry. The fact that GM, along with Chrysler, went bankrupt was not mentioned. The only time the word "bankrupt" was used was to condemn Republican Presidential candidate, Mitt Romney, for wanting to let GM go bankrupt. Democrats seem to be in denial that GM actually did go bankrupt.
USA Today reports that General Motors will be, once again, temporarily halting production of the Chevy Volt. According to GM, the halt is not due to low sales of the Volt. The article quotes a Chevy spokesman as saying, "We are not idling the plant due to poor Volt sales. We're gearing up for production of the new Impala."
Some truths are so obvious that they cannot be denied. But that doesn't stop General Motors and politically-motivated cheerleaders for the Chevy Volt from trying. In the case of the Volt, the truth is that this car has been a dismal failure when considering the amount of hype and taxpayer money that has been spent to produce the supposed green wonder-car. Let's review just how wrong GM CEO, Dan Akerson, has been regarding sales projections for the Volt and how he refuses to take accountability for GM's blunders.
Three years into their forced marriage with GM, the American taxpayers have seen the value of their investment in GM deteriorate by approximately $24 billion, largely due to continuing European losses. Exposure in Europe has contributed to crushing the value of GM's stock due to its chaotic and failing Opel unit in Germany. While government, journalists and Wall Street sympathizers have given the Obama Administration and GM leadership an almost incomprehensible pass on this value destruction and massive loss (presumably due to the macro-economic nature of the crisis), it's time to call for the accountability that this new Board was supposedly going to deliver.
It seems that the supply of taxpayer money available to support the Chevy Volt is never ending. Add the Department of Defense to the list of agencies tapping into the seemingly endless taxpayer funds to purchase Volts, as reported by Stripes.com. The US Military is buying Volts just as a recent poll at GM-Volt.com reveals that over 12% of Volt owners have had electrical problems with the vehicle.
General Motors announced an increase in government purchases of 115% in July. This follows June's jump in government fleet sales of 79%. Just what's going on? GM has claimed that it is localities (mostly for police vehicles) and not federal purchases driving the increases, but aren't localities struggling with their budgets? Why do the nation's police forces all of a sudden need new vehicles? A little research uncovers that the Obama Administration is once again being generous with federal grants to localities to purchase new cars, with one of the primary end recipients of taxpayer money being GM.
Well, I really have to hand it to the Obama Administration and General Motors when it comes to promoting green energy initiatives and the Chevy Volt; if nothing else, they are persistent. Unfortunately, that persistence continues to come at the expense of US taxpayers. The latest folly, as reported by Edmunds Inside Line, involves a $10.4 million grant from the Energy Department to create what Edmunds calls "Chevrolet Volt-ville."
When General Motors announced its 60 day return policy for the Chevy Volt over a week ago, I contacted them to make them aware of the potential for tax credit abuse on returned vehicles that qualify for federal and state subsidies. At the time, GM spokesman Jim Cain did not think that it would be an issue and it was up to purchasers to decide if they would submit for tax credits on Volts that they returned for refunds. I spoke with Mr. Cain to follow up on the story.