General Motors’ recently deceased, plug-in electric Cadillac ELR had not even officially been declared dead before word was out that GM has plans for another plug-in Cadillac for American markets; this one to be built in China. It seems that the brass at GM believe that the Chinese can succeed where American manufacturing has failed regarding being able to build electric Cadillacs that appeal to American consumers.
It has now been about seven years since taxpayers sunk about $50 billion into GM to fund the Obama Administrations’ auto sector bailouts which rewarded the Obama-friendly UAW while hosing less politically-popular classes like GM bondholders. That time span seems to be long enough for GM to feel that moving manufacturing jobs to China will not face criticism as the move to build Cadillacs in China follows earlier announcements that the Buick Envision SUV would also be built there.
During the 2012 … Read More ➡ “Romney Was Right: GM to Make Electric Cadillacs in China”
Tesla Motors recently reported that it has received close to 400,000 orders for its yet to be released, $35,000 Model 3. Most of the pre-ordered vehicles are not even expected to be delivered until after 2018. While congratulations may be in order to Tesla for seemingly developing a mainstream electric vehicle (EV) that has so much consumer interest that demand is far outpacing supply, one question must be asked. Why the hell is the vehicle being subsidized to the tune of $1.5 billion in future tax credits?
If Tesla has proven that EVs can be profitably manufactured, it is time for our government to stop handing out the $7,500 tax credit that goes to each of the mostly affluent purchasers of the cars. The credits are capped for the first 200,000 vehicles delivered, making the total subsidy $1.5 billion. Tesla reportedly has doubled that sales figure before even building a … Read More ➡ “Hot Tesla Model 3 to Get Unneeded $1.5 Billion Tax Subsidy”
General Motors recently reported lackluster sales results for the month of March. GM share price took a hit on the news, but there is one fast-growing area of sales for the company that is outperforming other segments. Government sales for GM rose 55% in March and capped off a first quarter that saw government sales increase 23% over the prior year.
GM did not give an explanation for the increase in government sales, localities often contribute to the sales figures. In the past federal grants went to localities to pay for GM vehicles when the Obama Administration sought to prop up crony corporation GM in any way possible. Given the close ties between the Administration and GM, more transparency is needed as to exactly how taxpayer money is getting to GM.
I reported in November of last year that the Department of Homeland Security has been overspending on vehicle purchases… Read More ➡ “Is Obama Propping up GM With Government Purchases?”
The Wall Street Journal recently reported that General Motors has paid over a billion dollars in cash and stock to acquire Cruise Automation, a San Francisco startup company that designs self-driving software. The technological and regulatory obstacles facing autonomous driving development are huge, but don’t expect that to stop GM from throwing billions of shareholder dollars at the latest hyped wonder-technology.
Cruise Automation is a small firm that employs about 40 people and has no major sales revenue to speak of. That works out to GM paying about $25 million per employee. The billion dollar company, however, is reported to be growing quickly with plans to hire another ten people.
The idea of GM wantonly spending $1 billion for the start-up brings to mind the costly Chevy Volt folly which saw a multi-billion dollar investment in an infeasible technology reap no rewards for GM shareholders. Even with billions of dollars … Read More ➡ “Innovation Desperation: GM Overpays for Self-Driving Car Startup”
“Fool me once, shame on you; fool me twice shame on me.” That is a cliché that investors should keep in mind if they are considering buying into General Motors’ latest debt offering. In fact, holders of GM common stock should also assess the growing similarity that New GM has with the bankrupted Old GM.
GM announced last week that it will be offering an estimated $2 billion of unsecured debt to help prop up underfunded pensions with additional proceeds used for general business purposes. The move follows a contradictory continuing dialogue that proclaims the company is so cash rich that it can afford to buy back billions of dollars of common shares as it doles out $11,000 bonuses to UAW workers. GM share performance belies the notion that the company is firing on all cylinders.
Since GM’s public offering in late 2010, shares are down over 15% while the … Read More ➡ “After Original Bondholders Stiffed, GM Issues New Debt”
Here’s one that wasn’t hard to see coming. General Motors has announced that it is ending production of the Cadillac ELR, which was essentially a gussied up Chevy Volt at twice the price. You can call this one a mercy killing as the overpriced, pseudo-green, government-subsidized vehicle was doomed for failure as low sales figures reflected the lack of value offered by the vehicle. That failure was predicted here back in December of 2013 when the ELR was rolled out.
As with the sales-challenged Chevy Volt, most of the media bought into the Cadillac ELR hype, calling it a potential “Tesla Killer.” Priced at about $76,000, the ELR ran a 0 to 60 time in an embarrassing 10 second range. Despite that, GM CEO Mary Barra had high hopes for the car. That is a fact that should make GM shareholders nervous.
Here’s what I said over two years … Read More ➡ “GM Finally Puts Cadillac ELR Out Of Its Misery”
It has now been more than three months since news broke that General Motors, once again, failed to properly protect owners of its vehicles from risks resulting from shoddy quality control. The latest incident involves about 1.4 million GM vehicles that were at risk of erupting into flames due to engine oil seepage. The at-risk vehicles were previously recalled by GM years ago, but the quick-fix remedy offered by GM did not solve the underlying problem.
It appears that most of mainstream media has been fiddling while the GM vehicles burned. One of the few articles that criticized the latest GM recall failure came in November of 2015 from the Associated Press via the Detroit Free Press. That story questioned the actions of GM in the case along with the crony government regulatory environment as NHTSA failed, yet again, to take action on a well-known safety problem. Following are excerpts … Read More ➡ “GM and NHTSA Elude Accountability in Failed Fire Risk Recall”
The Obama Administration’s Justice Department is now suing Volkswagen for “up to $90 billion for allegedly violating environmental law.” Politically-favored General Motors was fined $900 million, or 1% of that amount, for covering up an ignition switch defect that led to the deaths of at least 124 people. At last count, the number of people who lost their lives as a result of emissions' tampering by VW stood at zero.
Meanwhile, the GM board unanimously elected CEO Mary Barra as its Chairman, demonstrating that it is still not independent of political influences, even years after the 2009 bankruptcy process.
Barra was in charge of quality control during the time that GM was hiding its deadly ignition switch defect. She became CEO while the company continued to cover up the extent of a problem that was putting motorists' lives at risk. Barra repeatedly evaded and misrepresented in public statements, and in … Read More ➡ “Justice Dept. Assails VW as Barra is Elevated to GM Chair”
When Bob Lutz speaks, automotive journalists listen. Well, at least they usually do. When a recent Automotive News roundtable discussion showed Lutz blasting General Motors’ Chevy Bolt (and electric vehicles like it), mainstream journalists failed to pick up on the story. Lutz was right on the money when he exposed the EV folly, which is costing automakers billions of dollars and driving up prices of conventional, gas-powered vehicles.
Bob Lutz certainly has credibility in the automotive world. As an ex-GM executive he was known as the father of the Chevy Volt, a taxpayer-subsidized vehicle that I have had plenty of criticism for. Now that such a noted figure as Lutz has changed direction and is questioning the logic of lithium-ion battery technology, the automotive community should be taking notice.
So, since Lutz’s criticisms carry much more weight than my own, we can proceed to some of the bombshells that … Read More ➡ “Chevy Volt ‘Father’ Bob Lutz Changes Tune on Electric Vehicles”
A report by the Office of the Inspector General (OIG) for the Department of Homeland Security has found that the Department’s Federal Protective Service (FPS) division wasted about $2.5 million of taxpayer money in 2014 on an extravagant fleet vehicle program. It is not surprising that images show that the vehicles in question appear to be manufactured by crony company, General Motors.
A House of Representatives Subcommittee on Oversight and Management Efficiency, headed by Rep. Scott Perry (R-PA), requested the audit on the FPS’ fleet operation. The report unveils a fleet of 1,169 vehicles which were leased at an operating cost of $10.7 million. That’s over $9,000 a year per vehicle or over $750 a month. Would any taxpaying individual agree to a personal lease deal for that amount? Probably not, but the Obama Administration has no problem spending the taxpayers’ money to lease vehicles which apparently come primarily … Read More ➡ “Did GM Get Sweetheart Deal on Homeland Security Vehicles?”