While I often complain about government waste and stupidity, I’m not even sure what to say about this grim bit of news from Reuters.
General Motors Co sold a record number of Chevrolet Volt sedans in August — but that probably isn’t a good thing for the automaker’s bottom line. Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts. Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce. …The weak sales are forcing GM to idle the Detroit-Hamtramck assembly plant that makes the Chevrolet Volt for four weeks from September 17, according to plant suppliers and union sources. It is the second time GM has had to call a Volt production halt this year. GM acknowledges the Volt continues to lose money, and suggests it might not reach break even until the next-generation model is launched in about three years.
Gee, it’s almost as if everything that critics have said all along is right.
But not to worry, taxpayers are underwriting the costs. So if bigger subsidies are the price of buying support from the UAW and allowing fat-cat incompetent managers to stay on the job, that just means a bigger tab to pay for the rest of us.
How comforting.
P.S. If you’re a taxpayer and need to be cheered up, these cartoons may help.
P.P.S. This spoof video on the Volt may be even funnier.
P.P.P.S. Last but not least, Government Motors plans to build on the success of the Volt with the Obummer. It was due in 2011, but standard government incompetence has pushed back the release date.
[…] From Dan Mitchell at the Cato Institute: https://danieljmitchell.wordpress.com/2012/09/10/government-motors-losing-49000-for-every-chevy-volt… […]
I take a back seat to nobody in criticizing GM for its outrageous bailout, its poor management, its rapacious unions, and its money-sucking boondoggle called the Volt. I have written plenty about why the GM bailout will cost far more than the government claims, and why ultimately GM has a very good probability of round tripping back into bankruptcy.
But GM is NOT “losing as much as $49,000 on each Volt it builds.” Reuters just doesn’t understand the distinction between sunk costs and marginal costs.
There are plenty of reasons to worry that the Volt project (and GM more generally) will continue to squander taxpayer dollars, Reuters faulty analysis just isn’t one of them:
http://senatorjohnblutarsky.blogspot.com/2012/09/no-gm-is-not-losing-49000-on-every-volt.html
http://drawforliberty.wordpress.com/2012/08/05/23/ Cartoon you might enjoy. Appreciate your timely information, love your site
The managers are competent…. at diverting taxpayer money earned in more productive endeavors. Greek style competency coming to America… It’s only the beginning…
It’s painful to watch you cheer on failure for American companies and American workers, and American consumers. You wouldn’t do that if you still lived in the U.S., would you?
Listen to Blutarsky: http://www.forbes.com/sites/boblutz/2012/09/10/the-real-story-on-gms-volt-costs/
Hey, Surrender Monkeys: It’s time to start cheering for GM, again. What’s good for GM, is also good for America — again.
Senator Blutarsky debunks this one: http://senatorjohnblutarsky.blogspot.com/2012/09/no-gm-is-not-losing-49000-on-every-volt.html
But: They are forcing the Dept. of Defense to buy 1,500 Volts for the military. I guess this is to replace all the military equipment that they are de-funding, or sequestering. This comes out of the DOD budget..
http://americanelephant.wordpress.com/2012/09/11/the-defense-dept-will-buy-volts-instead-of-military-equipment-to-make-obama-look-good/
[…] is losing $49,000 per Volt sold. Yeah, those bailouts were a brilliant […]
A little slow out of the gate, aren’t you? This news has been out for over a week, and it’s already been debunked numerous times.
Obama didn’t build that business by himself. Maybe he should blame the taxpayers for the problems the company is now having?
[…] Government Motors: Losing $49,000 for Every Chevy Volt Sold […]
[…] quite likely, after all, that GM is spending lots of money on the Chevy Volt because of pressure from Washington rather than demand from consumers. And when you have a car […]
lower prices in the production > depressed prices may put pressure on the RBNZ to review low inflation …
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[…] Government Motors: Losing $49,000 for Every Chevy Volt Sold […]
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