The esteemed William Teach has a story up today about automobiles:
By William Teach August 29, 2012 – 2:50 pm
I remember seeing a Tweet from Obama yesterday about them passing “historic” new auto MPG standards, because obviously no one else has ever passed them. Hell, if Obama bakes cookies, it’s probably historic. But, as for real historic
(Washington Post) The Obama administration announced strict new vehicle fuel-efficiency standards Tuesday, requiring that the U.S. auto fleet average 54.5 miles per gallon by 2025, an uncontroversial move that, unlike other administration energy policies, was endorsed by industry and environmentalists alike.
The new rules, announced by Transportation Secretary Ray LaHood and Environmental Protection Agency administrator Lisa P. Jackson, expand on existing standards requiring American-made cars and light trucks to average 34.5 mpg by 2016. They will significantly cut U.S. oil consumption and greenhouse gas emissions by the time they are fully implemented, according to the EPA.
“Customers want higher fuel efficiency in their cars and trucks, and GM is going to give it to them,” said Greg Martin, General Motors’ executive director for communications. “We expect the rules to be tough, but we have a strong history of innovation, and we’ll do our best to meet them.”
Yeah, that type of “innovation” has led to vehicles that are much lighter, meaning that they are more deaths from auto accidents. If customers really wanted higher fuel efficiency GM and others would do this, not have the government force them to do it.
Auto dealers warned Tuesday that making the technical changes required to achieve greater efficiency would increase the average price of a vehicle by $3,000 by the time the rules are fully implemented.
“This increase shuts almost 7 million people out of the new-car market entirely and prevents many millions more from being able to afford new vehicles that meet their needs,” Bill Underriner, who chairs the National Automobile Dealers Association, said in a statement.
Well, do we really want so many cars on the road? That’s bad for globull warming, and, hey, look
In addition to increasing fuel efficiency, the rules also establish an emissions standard of 144 grams of carbon dioxide per mile for passenger cars and 203 grams of CO2 per mile for trucks.
So, more globull warming rules by executive fiat. Must be nice to be the king and drive around in a vehicle that pays absolutely zero attention to the rules passed for Everyone Else.
Unfortunately, Mr Teach slipped up; he should have made the connection to a story he had the previous day:
By William Teach August 28, 2012 – 2:01 pm
Sales of Volts have certainly been a little bit better than previous. Of course, how many of those have been purchased by government? On the few occasions I see them on the road they have government tags or sticker denoting that this is a government fleet vehicle
(USA Today) General Motors is halting, for a month, the manufacture of its well-known Chevrolet Volt extended-range electric car.
Automotive News, citing unnamed sources, reports the Detroit-Hamtramck plant will suspend production from Sept. 17 until Oct. 15.
It would be the second interruption in production for the Volt, which can go 38 miles on battery power before needing a recharge from its gasoline engine. GM late Monday disputed published reports that the move is because of slow Volt sales. GM sold 10,666 Volts through July, way up from the 2,870 sold during the same period a year earlier.
“We are not idling the plant due to poor Volt sales. We’re gearing up for production of the new Impala,” Chevy spokesman David Darovitz said in an email.
Hmm, the Impala? It gets much less miles per gallon, but, it is a favorite with businesses and rentals for business travelers, as it drives very well on the road, which means it, you know, sells. It also tends not to catch on fire when involved in a minor fender bender. And did I mention it tends to sell?
It’s unlike Mr Teach to miss a connection like that one!
Now, let’s be clear here: when a Chevrolet spokesman says, “We are not idling the plant due to poor Volt sales. We’re gearing up for production of the new Impala,” he is lying to you! This is still a tough new car market, and manufacturers don’t close down production lines for the models of automobiles that are actually selling. Volt sales have actually increased, but sales will be well below the initial sales goal of 45,000 vehicles for 2012. At the end of June, GM had an 82 day supply of Dolts in inventory, which means that Chevrolet has been building Volts faster than consumers have been buying them; of course the shutdown is due to poor Volt sales.
And, as one might guess, there’s the dirty little secret no one wants to tell you about: 12% of Volt sales were commercial and government fleet sales purchases. And why would governments buy Volts for their automobile fleets? You will not be surprised:
Submitted by Mark Modica on Mon, 04/23/2012 – 07:25
A Jacksonville.com report gives a good explanation for why some Florida localities are purchasing Chevy Volts. When Jacksonville’s chief of fleet management, Karim Kurji, was asked what the advantage of going green by purchasing Volts was he hit the nail on the head when he replied, “Federal money.” The story goes on to reveal that the total federal taxpayer money used to subsidize one Chevy Volt purchased by Atlantic Beach was over $33,000. It now appears obvious that the Obama Administration and General Motors are willing to pay just about any price, even if the taxpayers are footing the bill, to see the Chevy Volt “succeed.”
Two more Volts were purchased by the city of Jacksonville with taxpayers subsidizing about $26,500 each. Using the Atlantic Beach example, here is how taxpayers are getting bilked; the US Department of Energy gives a $25,600 grant to the locality to purchase a Volt. In return the township must keep logs. As stated in the article, “Federal grant requirements mandate that logs be kept of the Volts’ mileage, fuel use and how far they go on battery power.” The taxpayer giveaway doesn’t stop there. The dealership that sells the Volt gets the federal tax credit of $7,500 and reduces the price of the Volt (which usually sells for over $40,000) to $38,600. So, for a net cost of $13,000 the locality gets a new Volt. I guess the government has finally figured out how to sell the car that President Obama uses to pitch his green energy policies as he campaigns for reelection.
In the Jacksonville cases, the two Volt purchases were subsidized directly with about $38,000 in grants and another $15,000 in dealership subsidies. What are the gas savings for Jacksonville to justify the spending of $53,000 in subsidies for the purchase of two Volts? Kurji states, “We are getting 56 mpg for that.” How absurd has this whole Chevy Volt and green energy thing gotten? Is it any wonder America has such debt problems with such wasteful spending habits?
Of course, proponents of the Chevy Volt and Big Government will point out the small percentage of vehicles purchased in this fashion. We don’t really know the true figures, but GM claims that about 9% of Volt sales are fleet purchases. The same defense will be used as the one used when I uncovered that dealerships were selling Volts to each other and claiming the tax credits. It doesn’t happen that often, so it’s not a problem. After all, it’s “only” a few million dollars in taxpayer waste. Just add it to the multi-billion dollar tab for promoting electric vehicle development and subsidizing wealthy purchasers of the cars.
More at the link.noted previously that our environmentalist friends think that the Chevrolet Volt would be an absolutely great car . . . for their neighbors. And as the General Motors’ stock chart to the right shows, investors aren’t exactly thrilled with GM’s performance: though above it’s 52 week low of 18.72, it is well below it’s 52 week high, 27.68. From Forbes:
By Louis Woodhill | 8/15/2012 @ 6:24PM
President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.
Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.
Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.
It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.
GM is unlikely to hit the wall before the election, but, given current trends, the company could easily do so again before the end of a second Obama term.
In the 1960s, GM averaged a 48.3% share of the U.S. car and truck market. For the first 7 months of 2012, their market share was 18.0%, down from 20.0% for the same period in 2011. With a loss of market share comes a loss of relative cost-competitiveness. There is only so much market share that GM can lose before it would no longer have the resources to attempt to recover.
More at the link.
Mr Woodhill’s prediction of another bankruptcy for General Motors isn’t shared by everyone, and Forbes published another article, this one by Micheline Maynard, which disputes Mr Woodhill’s conclusions, but even in saying that GM will probably not go bankrupt, noted, “in a sense, the perception that GM could end up in the soup again is GM’s own fault.”
The increased CAFE standards Mr Teach noted in the first article cited, 54.5 miles per gallon by 2025, will require very significant new engineering changes, changes which will necessitate building smaller, lighter automobiles, the replacement of steel with aluminum (Ford announced that it would be replacing a substantial amount of steel with aluminum on its best-selling F-150 truck line; your Editor drives a 2010 F-150.), a more expensive and harder-to-work-with metal, and an enforced push on hybrids. All of these things will cost money, and will push the price of new vehicles substantially higher. This will mean that the number of people who can buy a new vehicle will fall, keeping older, less fuel-efficient vehicles on the road longer.
And the vehicle that General Motors touted as the car of the future, the Dolt? It isn’t selling because people don’t want the fool things, and many of the people who do buy them are doing so because they are, in effect, being bribed by the Obama Administration. If Mitt Romney and the Republicans win in November, count on that foolishness to end!