More Problems for the Chevy Volt
A new report by USA Today offers further evidence that demand for the much-hyped Chevy Volt is not living up to the great expectations laid out by General Motors. Additional negative news includes an overheating charger fault and a power loss glitch, both of which were recently exposed. The USA Today piece cites a study by CNW Marketing that revealed that "prospects are starting to lose interest in the Volt."
Starting to lose interest? That's pretty funny, considering that Chevy sold only 125 of the money-losing Volts in July. How much more interest can be lost? The real story is that GM, the Obama Administration and the media have been so dishonest regarding the potential and the demand for the Volt since the vehicle was first offered to the public.
Apologists for the Volt with ties to GM continue to try and spin the story. A Motortrend.com piece points to a shut down of the plant that builds the Volt as a reason for the struggling sales. A comment on the article by reader, "mrry18", astutely points out that dealers have vehicles offered for sale when she states, "In the NY/NJ region the 3 nearest dealers to me have a couple volts on the lots for months now. All American Chevy in Old Bridge NJ has 2 and Malouf in N. Brunswick has 2 also. Both there since June at least." I have also disproved the supply argument by calling local dealers who had Volts available.
Supporters of GM and the Volt continue to lose credibility as they stubbornly refuse to admit that America has been duped by GM and the Obama Administration regarding huge demand for the vehicle. A major financial TV network is now hyping the new Cadillac Volt based vehicle that is in the works. The same commentator who spent the better part of a day hyping the Chevy Volt rollout now is implying that the new Cadillac version of the Volt will be big for GM. Is there any credibility left to be lost?
I have said that the Chevy Volt was an over-hyped vehicle for some time now. I have also been warning that GM stock is a dangerous investment since the IPO. Shares are currently down about 35% YTD compared to down about 5% for the S&P index. I don't think I am smarter than many of those that have hyped the GM and Chevy Volt story as much as I believe that many have been dishonest in presenting the facts. So, why is any of this important and what happens now?
The Chevy Volt epitomizes what has been wrong with the whole government intrusion into the auto industry as well as what is currently wrong at GM. New GM was birthed from a womb of deceit when the Obama Administration orchestrated a bankruptcy process under the false impression that Obama's Auto Task Force would try to restructure the company outside of bankruptcy, even though this was never the intention. More devious still was the attempt to place the blame on GM bondholders for the bankruptcy when a plan was devised to offer an exchange of debt for a miniscule amount of equity. This offer was designed to fail as statements were made by GM and the Task Force that the fate of GM was "in the hands of bondholders." The Task Force then went on to proceed with a manipulated bankruptcy process that favored the politically powerful UAW over other classes.
The deceit continued with the unrealistic expectations for the Chevy Volt which was presented as a savior for both GM and the environment. The Volt helps neither, but the misguided and dishonest propaganda continues, all at the expense of the American taxpayer. Billions of dollars have been wasted promoting a vehicle that is virtually a failure.
GM CEO, Dan Akerson, (in photo) has stated in the past that the Chevy Volt is the future for GM. If that is the case, GM has failed and has no future. GM has an opportunity to stop digging the hole deeper and admit that the Volt is not, in its present state, a large contributor to the potential success of the company. Mainstream media is not helping GM by advancing the deceit.
The alternative to ending the Chevy Volt folly is for GM to continue to hype the vehicle as a major success with the help of friends (well paid for) in the media and in government. If GM chooses this path, watchdogs should closely monitor sources of sales for the Volt. I would expect many orders to come in from government fleet purchases, as well as from corporations like GE, headed by Obama crony Jeff Immelt.
GM, the Obama Administration, and the media should think carefully before making their choice. Choosing the path that relies upon continued deceit regarding unrealistic Volt expectations may eventually result in a scandal that has grown large enough to bring down GM as well as having a major negative impact on stock markets and economies that are currently too sensitive to deal with the realization that such corruption exists in a major US corporation and the American government.
Mark Modica is an NLPC Associate Fellow.