When Government GEVeth, Government Can TakEV Away

GM, Ford and Stellantis all jumped on the EV bandwagon in compliance with President Biden's edict to shift to electric vehicles.  The edict came with the carrot of many government subsidies for doing so, including $7,500 direct to each consumer.

The problems that then ensued is that the infrastructure for such vehicles is still not in place even after billions spent by the Biden Administration to force such to be created - only to have it bogged down in  Democrat-created red tape that basically spent the funds to create jobs for Democrat functionaries with little actual results to show for it. Even Democrat cheerleader and mouthpiece John Stewart was appalled. Nor are the vehicles themselves suitable to fully replace ICE vehicles on a one-for-one basis.

But the market for electric vehicles was pretty much created and expanded by these edicts and subsidies.  Now that President Trump's administration has ended the taxpayer give-aways and drunken spending on electric cars, economic reality has set in.

The current limits on electric cars still make them a niche vehicle that are only good for certain conditions - and not for the Democrat-Greenie-demanded total replacement of internal combustion engine vehicles.

The results are that the manufacturers that went all-in and complied with the Biden Administration's edict and promise of government subsidies while ignoring economics and the actual current use case for electric vehicles are now realizing reality:

The Detroit News: Stellantis writes down $26.5 billion from EV investments

Yahoo Finance: What Ford Motor (F)'s $19.5 Billion EV Reset and Hybrid Pivot Means For Shareholders

 GM Authority:  GM Writing Down Another $6 Billion For Cutting Back On EV Investments

 Jumping on the Biden EV bandwagon cost the automakers over $58 Billion dollars so far and the losses continue to pile up.

Again, EVs do have some niche uses and appeal, but to expect based on government edict and the promise of tax breaks and subsidies alone that they would replace ICE cars and especially work trucks was foolhardy in the extreme. 

To No One's Surprise, Electric Vehicles Are More Expensive To Operate

The Detroit Free Press: Study compares electric vehicle charge costs vs. gas — and results were surprising

In fact, the results were not surprising to anyone paying attention. 

EVs cost more to use and operate than gas vehicles, and that's not counting the time value of time/money when you're siting somewhere waiting for the EV car to charge.  The study did however take into account the estimated time to find a charging station.  I suspect their numbers would be even worse if they added the cost of the substantial lag caused by waiting for a vehicle to recharge versus filling it with gas and going on your way.

In short, EVs are nice as a second vehicle for in town short jaunts and can fill that role well if you have the cash to cover the higher costs, but you really need a gas- or diesel-fueled vehicles if you plan any seriously long trips.

Still no answer as to where all these electric vehicles will actually go to charge, nor any answer as to the current lack of infrastructure to provide the increased power demanded for them to charge, especially as the Dems and Greens are focused on shutting power plants down rather than building new ones.

I'm puzzled that they haven't come out with diesel-electric hybrids where all the diesel engine does is power a generator to recharge the batteries as needed when the vehicle is on the road.  Possibly too practical and not green enough, or something.

Even More Automotive Supply Chain Woes

Now supply shortages of chips are seriously affecting GM, leading to idled plants.

The Detroit Free Press: GM to halt production at nearly all North America assembly plants due to new chip problem

This is a very big deal and it's a sign things are not getting better in the automotive industry.

Shutting down production will cost GM lots of money each and every day these plants are shut down.

Don't expect either the new nor the used the car market to stabilize anytime soon.

GM Folds

And in record time, too.

The Detroit Free Press: GM CEO Mary Barra to meet with Black media owners days after they call her racist

The media owners refused to meet with GM's head of marketing, so Barra after being called a racist by them is going to meet with them.

Playing the race card sure brings in the Danegeld.

So With The Race Card Played, Will GM Pay The Danegeld?

The Detroit Free Press: Full-page ad blasts GM CEO Mary Barra as racist

As one might expect, it's all about the money.

A groupd of Black publications including Ebony which is now only available digitally after going bankrupt, demanded that Mary Barra meet with them to give them more advertising dollars or they'd play the race card.   She didn;t immediately do so, so they did.

It's based on a false premise that presupposes that Blacks only use Black Media to see things, and eyeballs on ads and that the ads lead to the eyeballs going forth and buying the product is the only thing that matters in the world of advertising.   How may subscribers to the now free digital edition of Ebony exist and are there, and are there more effective ways to advertise to them and many others such as on TV and other media with larger subscriber bases and regular viewers?

Basically this is another shakedown for money and we will see if GM bends the knee.

Putting The Electric Car Before The Horse (Power)

While GM announced the they have plans to exclusively offer electric vehicles by 2035 on January 28, its only today that people are asking the question that policy poses: 

The Detroit News: EVs are coming: Can Michigan's power grid hold up?

Behind a paywall, as that's how Detroit News rolls these days.  But the answer at first glance would be no.  

We haven't built a new power plant in Michigan in decades and a few windmills aren't going to cut it.  

Going to all-electric vehicles sounds nice until you realize there is insufficient electricity generating capacity and infrastructure to meet the demand from such a fleet of electric powered vehicles.

Indeed as noted in an op-ed article not behind a paywall, the answer is no.  Especially as Michigan under Dem Governor Granholm denied the permit to build a 600 Megawatt coal plant and there has been no further serious power generation plant built  in Michigan since.

We simply don't have the generating capacity nor the infrastructure to support an all-electric vehicle fleet.  Meanwhile the supporters of vehicle electrification are in general the same people preventing new generating capacity from being built.

Rent Seekers Gotta Rent Seek

The Detroit Free Press: Gov. Snyder signs bill banning direct Tesla sales

Quick summary and explanation: Dealer franchises and GM make campaign contributions in Michigan, and Tesla Doesn't. Therefore, Telsa can't have a direct company sales model or even have a car display and answer potential customer questions in Michigan at such a display.

Did Government Motors Get A Government Blind Eye? The Curious Case of NHTSA And It's Slowdown Of The GM Ignition Recall

The recall of GM's Chevy Cobalt and other compacts is very much in the news. An interesting story that is developing is how slowly the government acted and how it waited to take action in regards to this serious fault at Government General Motors:

The Detroit Free Press: Government's safety agency missed clues to Cobalt issues

Missed clues seems to be quite the understatement.

For years, the U.S. government’s auto safety watchdog sent form letters to worried owners of the Chevrolet Cobalt and other General Motors small cars, saying it didn’t have enough information about problems with unexpected stalling to establish a trend or open an investigation.

The data tell a different story.

An Associated Press review of complaints to the National Highway Traffic Safety Administration shows that over a nine-year period, 164 drivers reported that their 2005-2007 Chevrolet Cobalts stalled without warning. That was far more than any of the car’s competitors from the same model years, except for the Toyota Corolla, which was recalled after a government investigation in 2010.

Stalling was one sign of the ignition switch failure that led GM last month to recall 1.6 million Cobalts and other compact cars, including the Saturn Ion, Pontiac G5 and Chevrolet HHR. Another 971,000 cars from model years 2008-2011 were recalled late Friday to find faulty replacement switches, bringing the total to about 2.6 million.

It gets even more interesting:

The government opened an investigation into the Corolla in late 2009, which led to the 2010 recall of nearly 1.3 million cars to replace faulty engine control modules that could make the cars stall without warning.

The agency investigated the Toyota complaints even though there were no reports of deaths or injuries related to the stalls. By contrast, it had already learned about deadly crashes in the Cobalt.

NHTSA did go full-bore enforcement on Toyota, when there had been no reports of injuries or deaths, but was curiously slow to act with GM after deaths had already been reported.

Was this uneven enforcement perhaps due to a massive bureaucratic oversight?

Or instead, was it a happy coincidence that while there was swift enforcement against Toyota, a major competitor of GM, GM had just been bailed out and essentially owned by the US Government and certainly didn't need any negative news about its vehicles at the time these faults were being heavily reported?

Volting Through The Snow, In A Really Limited-Range Car.....

Henry Payne in the Detroit News has an interesting comparison of the three different engine stylings of the same car sold as the Chevy Volt, Cruze or Cruze Diesel.

As most people know, cold kills batteries, and the Volt's winter performance is pretty darn underwhelming:

GM claims the Volt is good for 50 miles on a full charge, but range plummets to around 25 miles on a sub-freezing December day.

25 miles between plug-ins makes the car a no-go for most people who would use it to, you know, drive places, at which point it switches to gas and then the economics of it get even less desirable.

At current gas prices, recovery of the operating price of either the diesel model or the Volt over the standard gas Chevy Cruze is well in excess of the typical expected life of the car - around 13 years plus, depending on the numbers, and the purchase price of the Volt over the Cruze would take 5 years to recover (Yeah, the math in the article is weird and I wonder how they got to those numbers). Anyone want to pose a guess on how many volts will last 13 years without major overhauls?

Now,if you've got the means to throw away money, have an enviro-uber-alles sensibility, and don't have to go farther than 25 miles between plug-ins, then by all means buy the Volt.

For the Volt to be viable, you have to revolve your life around the limits of the vehicle, and most people rarely want to by a car to limit their options.

"For the Volt to work, your life has to be set up for it,” says Devin Scillian, WDIV-TV news anchor, best-selling author, and Chevy Volt evangelist. “And my life is set up for it.”

Most people's lives aren't, nor do I think most people want to switch their lives around just to have a Volt. Cars are supposed to be liberating and expanding your options, not confining and limiting them.

For now the Volt can't be considered a primary vehicle in Michigan unless you have a very limited range commute without much in the way of side trips and have charging stations everywhere you go, and that's not the case for most people.

The Electric Obama Lada Receives A Price Shock

Funny how people don't want to overspend on what is a short range electric vehicle, no matter how much the administration and GM, but I repeat myself, doubles down on it.

The Detroit Free Press: GM cuts Chevrolet Volt price by $5,000 as sales stall

General Motors is cutting the price of the Chevrolet Volt by $5,000 after rebates failed to revive the extended-range plug-in’s sales when competitors also cut prices.

GM said the 2014 Volt will start at $34,995, including a $810 destination fee. The 2013 model will continue to be priced at $39,995 with $5,000 cash back.

There is still a $7,500 federal tax credit for buyers and additional tax incentives in certain states and localities, especially in California.

Sales have stalled in 2013, rising a meager 0.1% to 11,643 vehicles through July. The Volt was the best-selling plug-in vehicle in the U.S. in 2012, but Nissan’s pure-electric Leaf and Tesla’s luxury electric Model S could surpass it this year.

Even with all these incentives piled on incentives and tax breaks its not enough. After all, $35k for a vehicle that could only be a secondary car for non-urban folks is quite the expense in return for false environmental consciousness othat comes from owning a coal-powered car. Note that even with all the push for electric cars and the high sticker price,

GM is not making a profit on the Volt, according to analysts.

But fear not, the 2014 version will have - ta da! - A leather-wrapped steering wheel! Oooh, now that should increase sales!

A Potential Car Company Match Made In Hell

Just barely out of bankruptcy itself, thanks to an extraordinary government bailout and rule changing on its behalf, GM is now being asked to save.....the French?

The Detroit News: Peugeot rescue too risky for GM

After 203 years in control, the Peugeot family appears to be angling for General Motors Co. to come to the rescue of its ailing French automaker, PSA Peugeot Citroën.

Descendants of Jean-Pierre and Jean-Frédéric Peugeot, who founded the industrial concern in 1810 as a steel foundry, are prepared to cede control of their money-losing automaker in exchange for another cash infusion from GM, Reuters reported Thursday, citing “sources.” PSA also pursued talks with its Chinese partner, Dongfeng Motor Corp., but is renewing an interest in a bailout from Detroit.

GM shouldn’t, unless the new brass atop the Renaissance Center is eager to repeat the mistakes of its predecessors. You’ll recall that GM alums Jack Smith and Rick Wagoner, among others, were the brains behind a web of global alliances connecting GM to second-tier players Isuzu, Suzuki and Subaru of Japan, culminating in the Fiat SpA folly that cost $2 billion in cash to exit.

It’s all gone now, unwound in a desperate attempt over much of the past decade to rationalize the company, better manage resources and focus limited executive attention on core GM business at home and abroad before bankruptcy forced an even starker restructuring. With $15 billion in losses over the past dozen years in Europe, can GM profit by doubling down on Europe’s sickest volume automaker?

Remember, GM just might do it as an opportunity to lose even more money, which appeals to GM's fabled culture: GM loses money on every car, but they make it up in volume.

GM already has a $1 Billion investment in Peugot.

Hopefully GM's execs have now learned when to cut their losses and not throw good money after bad.

Remember the old joke about Heaven and Hell?

Heaven Is Where:
The French are the chefs
The Italians are the lovers
The British are the police
The Germans are the car makers
And the Swiss make everything run on time

Hell is Where:
The British are the chefs
The Swiss are the lovers
The French are the car makers
The Italians make everything run on time
And the Germans are the police

Further investment in a dying French automaker would be one helluva decision.

US Government To Take $12 Billion Plus Loss On GM Stock Sale

As Obama frets about sequestration cuts that are poised to cut all of $85 billion dollars from government spending, his administration is poised to lose over $12 billion in its quixotic GM stock sale/loan forgiveness program.

The Detroit News: U.S. selling GM shares on open market

The Treasury has said it "intends to sell its shares into the market in an orderly fashion and fully exit its remaining GM investment within the next 12-15 months, subject to market conditions."

The government needs to get $72 per share for its remaining shares to break even on its $49.5 billion GM bailout. It initially held a 61 percent stake before selling about half of its shares in GM's November 2010 IPO at $33 a share.

At current prices, the Treasury would lose more than $12 billion on its GM bailout.

Last week, the Treasury Department said its estimate of losses on the $85 billion auto bailout fell by 16 percent, or $4 billion, in large part because of a rebound in General Motors Co.'s stock price.

The Obama administration said in a report to Congress that its projected auto losses fell to $20.3 billion, from its prior quarterly estimate of $24.3 billion.

The government isn't selling the shares itself, apparently an organization as large and sophisticated as the Treasury can't handle such things, instead it is paying a commission to have them sold:

Last month, the Treasury named Citigroup Inc. and JPMorgan Chase & Co. to manage the sale.

The banks will get a 1 cent per share commission — or $3 million — for the sale of the entire stake.

It's just a funny coincidence how Treasury is using Citigroup and JPMorgan Chase for the sale......

Government investing at a loss, while rewarding its friends - with your tax money.

Taxpayers To Take A Bath As Gov't Sells Stock Back To GM At A Massive Loss The Media Fails To Mention

In yet a new corporate welfare move to help out Government motors, the Obama Administration is going to sell half of its stock in the corporation back to GM, and taxpayers will take the loss.

For the government to recoup its money it used to buy the stock, it would have to sell them for $53 a share.

They're being paid $27.50 per share.

Remember, these stocks were acquired in exchange for the loans made by the government to the corporation. The loans were converted to stock which is now being sold back at a loss thus having the government incur the loss and allowing GM to announce all their government loans are paid off and to receive billions without needing to really pay the billions back.

Government Motors indeed.

The Detroit News: Treasury announces GM exit strategy; automaker buying 200 million shares from U.S.

The Obama administration said Wednesday it will sell 200 million shares — or 40 percent of its remaining stake in General Motors Co. — back to the automaker and announced plans to completely exit the Detroit automaker by March 2014.

. . .

Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout. If the government sold the rest of its stock at current prices, taxpayers would lose more than $13 billion.

Since the article refuses to do the math I guess I'll have to do it for them: if 60% of the remaining stock sold at this price would mean the taxpayer suffers a $13 Billion dollar loss, then the government selling the 40% at this price right now is an $8.7 Billion dollar loss.

The Detroit Free Press fared no better in its report, but at least acknowledged that for the government to break even with its remaining shares after this deal it would require thiose share to be sold for $70 a share to break even, up from having to sell all of them at $53 per share to break even rather than this 40% at $27.50. The Freep, just like the Detroit News won't do the math nor report the actual loss that will be incurred by this sale.

I would have thought that would have been rather newsworthy and an important fact to put in the article, don't you think?

The Auto Financing Industry Has Learned Nothing And Forgotten Nothing

The US Auto financing industry seems obliviously to history and is increasingly making subprime loans so it can keep vehicle sales moving along.

The Detroit News: New subprime vehicle loans rise nearly 3%

I think we've seen how this ends quite recently with the subprime housing market, but at least people aren't investing and flipping cars with subprime financing, at least not yet. Then again, cars rapidly depreciate much faster than houses, from the moment they're purchased, which can make recovering on a defaulted subprime loan rather difficult.

Note which companies are more reliant upon, and are pushing these subprime loans:

General Motors Co.'s Chevrolet brand, along with Chrysler Group LLC and Fiat SpA brands Dodge, Chrysler, Ram and Fiat all demanded among the lowest credit scores.

Yes, the very same companies that were so recently bailed out are now dipping into the subprime market to keep selling their cars and making sure some are driving off the lots to keep the sales figures up.

Meanwhile, Chrysler's sales of the Dodge Dart seem to be missing their target.

But don't worry, because this time it'll be different.

Obama And The GM Quagmire

Instapundit blogs and links to others that point out that if Facebook's low performing IPO is a scandal, then what about GM? Not to mention that criticism by Obama of Bain Capital's activities is unwarranted, considering that Bain's approach is the same as that which the Obama Administration did to GM.

Significantly unlike Facebook however, GM's bailout and investment is with taxpayer dollars, rather than individuals and entities paying their own money and taking their chances. Oh, and Ezra Klein doesn't seem to be upset that he didn't get a chance to invest in GM. Then again, as a taxpayer he is invested with GM with no upside in sight. The Obama administration seems to be inexorably tied to the GM bailout with no way out in sight, and that is now confirmed.

The Detroit News: Treasury: No schedule set to exit GM

The Obama administration's nearly three years as part owner of General Motors Co. isn't going to end anytime soon.

The official overseeing the government's 26 percent stake in GM says there's no timetable for exiting the Detroit automaker.

In a Detroit News interview this week, Tim Massad, the assistant Treasury secretary who oversees the $700 billion Troubled Asset Relief Program, said investors aren't giving GM enough credit.

GM stock has fallen sharply since its $33 IPO in November 2010, and closed Thursday at $22.37, down seven cents, or 0.3 percent.

"Our perspective is that the company has made real progress, but the market hasn't given them as much credit for that as it might," Massad said.

Last October, in the face of the steep sell-off of GM stock, the Treasury shifted course and said it no longer planned to exit the automaker as soon as was practical.

At current prices, the government would lose more than $15 billion on the $49.5 billion bailout.

It's a quagmire all right, and the Obama administration has no timetable or exit strategy for pulling out.

For a guy that demands an exit strategy for every engagement, it's a pity he doesn't seem to have a workable one for GM.

GM Not Paying Federal Taxes Due To Obama Administrations' Manipulations

Under Obama, those rich and evil 1% corporations should be paying their fair share...except when they aren't, courtesy of the Obama Administration. The Detroit News: GM rakes in big profits, avoids U.S. income tax

But the Detroit automaker, which reported $1 billion in profits for the first three months of the year, has legally avoided paying U.S. federal income taxes since exiting bankruptcy. And GM likely will pay no income taxes for many more years. A series of Treasury Department rulings since 2008 let GM use $18 billion in losses — from the "old GM" that was left behind in bankruptcy — to offset any profits.

You'll note that using losses from a prior bankrupt corporation is not a typically permitted tax dodge:

But some experts have criticized the U.S. Treasury's decision as part of its $49.5 billion bailout of GM to allow the company to retain the losses of its predecessor General Motors Corp. Under the 1986 law, a change in control of a company typically limits the use of tax losses by the company. That's to prevent "trafficking in tax losses," where big profitable companies could buy money-losing firms to reduce their tax bills. The Treasury has allowed many companies that received big government bailouts to retain tax losses estimated to cost the Treasury more than $100 billion in tax revenue. That includes companies like AIG, Citibank and other banks. Since the government owned 61 percent of GM after it exited bankruptcy, the credits should not have transferred, some say.

Crony capitalism at its finest. That's $100 billion with a B in an additional funds giveaway as a bailout to these same too-big-to-fail corporations

"It was basically just ignoring the law," said J. Mark Ramseyer, a Harvard law school professor who wrote a 2011 paper on the Treasury's decision to exempt GM.

Well yes, when convenient, the Obama administration seems to be quite flexible on the whole concept of the law when it gets in the way of things.

"Had the president tried to give GM $18 billion forthrightly, voters might have complained. By hiding the gift in an obscure tax section, he reduced that electoral scrutiny," Ramseyer and Indiana University business professor Eric Rasmusen wrote.

The bailout that keeps on giving.

"GM Alive" sounds better than "GM on perpetual taxpayer life support" as a campaign slogan, and fits better on a bumper sticker.

It is no wonder that Obama proceeded as he did with hiding this additional bailout-that-is-not-a-bailout-on-top-of-the-original-bailout.

GM Can't Sell Volts Even As Gas Hits $4/Gallon

The bad news is yes, stations around here are now selling gas at the 4.00/gallon mark. That's not good for the economy but a market response to Obama's war on oil production and the many rounds of quantitative easing.

The bad news for GM, even with high gas prices, they're producing more Volts than the public wants to buy.

The Detroit Free Press: GM to pull plug on Volt production for 5 weeks

Even with gas prices climbing past $4 a gallon, General Motors plans to halt production of the Chevrolet Volt for another five weeks to keep inventories from swelling, the second extended shutdown since late December.

Production of the plug-in extended-range electric car will stop at the Detroit-Hamtramck plant from March 19 to April 23. Chevrolet sold 1,023 Volts in February, or more than twice the number of all-electric Nissan Leafs sold.

"Volt sales are increasing but we are currently at a point where we have to maintain inventory levels," said GM spokesman Chris Lee.

In February, hybrids and electric cars accounted for 3.2% of U.S. industry sales, up from just more than 2% for 2011, said Jessica Caldwell, senior analyst for Edmunds.com.

However, GM ended the month with a 154 days' supply of Volts, according to WardsAuto. That's more than twice the 60 days' supply considered adequate.

Read the rest of the article on how smart GM is to pause production because no one is buying the $40,000 car, even when the price drops to $32,500 after the federal tax credit for purchase.

It's expensive, short-ranged, immature technology that occasionally goes up in flames?

So now why is it again that Americans aren't buying them?

Why Does GM Give The UAW Workers $5000 Each In Bonuses When Taxpayer Loans Are Outstanding?

Instapundit links to Mickey Kaus who cogently wonders why GM is giving UAW Union workers at General Motors $5,000 bonuses instead of using the profits to pay back the taxpayer bailouts.

Simple, the UAW is an Obama core constituency of course.

The average American taxpayer, not so much.....

Senator Levin Loves Himself a Government Motors Volt

The Detroit Free Press: Sen. Carl Levin loves his new Chevrolet Volt -- and what it means

But its electric power was the reason he bought it.

"It's much cheaper to run it on electricity. And cleaner, of course. So I bought it to get those savings downstream," he said.

Cleaner out the tailpipe perhaps, but not if you take into account the coal needed to provide for the electricity to charge it. Also accoridng to the article he seems to run it on gas a lot, nullifying the whole "cleaner" claim. Nor is the Volt cheaper if you run an total cost of owenrship analysis - wish it was, but it isn't yet.

The article does show that, at least on this occasion, even Senators can be hampered by Washington bureaucracy and regulations, namely the difficulties in getting a charging station for the Volt installed at the Capitol building. Of course unlike us, he can push legislation through to make this annoyance go away.

The sad thing is, he's pretty representative of the congressman that passed the bailout of GM among other things and are helping run this economy into the ground:

At one point, the glowing digital letters on the dashboard made him wrinkle his forehead.

"This A and B, I'll be damned if I know what that means," he said. (A and B are trip odometers for separate journeys.)

Democrats in this modern day can't even figure out what a trip odometer is, much less the fine art of good governance.

GM to spend $109 million, create or save 96 jobs

The Detroit Free Press: GM to pump $109 million into Flint, Bay City plants

General Motors says it will invest $109 million in its Flint and Bay City, Michigan, operations, keeping or creating 96 jobs.

That's over a million dollars per job saved or created.

At this rate, it would take GM spending $589,811,111,111 to create enough jobs to fully employ all 487,000 of Michigan's unemployed (Source State of Michgian's labor market Information website) assuming these were all for jobs created not just "saved".

And you wonder why, with that kind of job creating power and efficiency, wags call it Government Motors.