Saturday, September 17, 2011

Chevy Volt and Solyndra Linked?

Good story about how the Chevy Volt could be the car version of Solyndra.

A couple of years back, as President Obama was getting settled into the oval office, he entertained some sales pitches for federal money (your tax dollars) from the stimulus program to fund “green agenda” projects. One of those companies that reaped the taxpayer windfall was Solyndra: to the tune of half a billion dollars ($500+ million).

The sales pitch from the company to Obama, and Obama’s to the American people, was this green project was the wave of the future for creating jobs. Green technology was the way out of the recession, we were told. Never mind that it was an utter failure in other countries, the greenies just had to have these projects funded, dang the torpedoes. To give credit where credit is due, the $500+ million dollars did create about a 1,100 jobs. But I also must point out these jobs cost us taxpayers about $500,000 per job.

Well, Solyndra has fallen flat on its face, entering bankruptcy processing, and laying off about 1,000 workers (the remaining 100 are there to close up shop, and then they too will be without a job). So, we spent a half a billion dollars to create 1,100 temporary positions at a cost of $500,000 per job with only an empty solar panel factory and an increase in unemployment to show for the taxpayers funded efforts. File this under Epic Fail.

It certainly appears that the taxpayer funded Chevy Volt falls under the same category. The Volt is being pulled down by a myriad of issues

First, demand has dropped off a cliff and is quickly heading to the bottom. The only thing that will keep it from exploding once it raches the bottom is the so-called “fleet sales”. These are vehicles that are sold to companies and government agencies in large quantities. Rental firms like Hertz and Avis buy cars by the boat load to fill out their fleet of rental cars. State and federal government agencies also by cars for their “pool vehicles”. There is a big difference between the rental companies and the government. The biggest difference is that these rental compaines are not going to purchase an electric vehicle and put it in their fleet except for many as an oddity or prestige rental (like a Hummer or Corvette). Without regard to bailout status, when GM (received federal bailout money) and Ford (did not receive any federal bailout money) sells cars to Avis or Hertz, this creates a positive cash flow situation. When Ford sells cars and trucks to a government agency, this also creates a positive cash flow situation. But not so with GM. As they have receive a huge infusion of cash to stay alive, the money paid by the federal government is on top of the federal bailout money given to GM. This is not a positive cash flow situation for both the government and for GM. The feds are buying a car that was built with money already given to GM to build the dang thing. In simple terms, they are basically paying for the car twice. For GM, it is like getting a loan from the bank, only to get more money from the bank to pay the loan. Not Good!

BTW: I would not put it past the Obama adminstration to somehow force the car rental companies to purchase more Volts with some kind of threat. File that in the back of your mind for future reference.

Next up is just the usability of the Volt. It is not useable, at least in the way the greenies are trying to selling it to us. You can only get about 30 miles with a charge, then you have to switch over to the gas engine. All kinds of sound and fury from the greenies over an insignificant 30 miles. It is going to save the world from global warming and teenage acne.

Think about this for a second. The Volt, in gas mode, is a decently fuel efficient car with an MPG north of 30 miles. If you get 30 miles per charge, you are only saving one gallon of gas. That is a milk jug. Some will say that is great and I suppose there is some solace in small victories. But I’d like to point out that very few people actually put only 30 miles a day on their car. Take my wife for instance. She drives the kids to school each day, two miles total. Then she might have an errand or two with a trip to the market and whatever else. We live in a small town, so let’s say about five miles (seven so far, about 25% of the charge). But now it is off to work. She is a distributor so she puts a lot of miles on a car each day. I am not going to include that mileage, just the mileage to get to and from the center of her area. This is about 20 miles one way. So, by the time she gets to her work area, the charge is nearly done. From here on out, it all gas power movement. 20 miles to get home, add another 5 miles for errands, and then picking up the boys from school. One more point here: Her car is the family car, so when we go anywhere, it is in her car. We put WAY more than 30 miles a day on her car.

Now we have to point out the overall cost of this little run-about. Initial costs are more than $40K, even with the tax break. I have already provided you with a cost-benefit analysis when you include the cost of the battery, so I am not going to bore you yet again. If you desire, please refresh your memory here.

The federal government has used billions of your tax dollars to bailout a company that probably should have gone into Chapter 11 Bankruptcy. But that did not happen and now we are stuck with a company, that in order to survive, has to do Obama’s bidding by building cars that won’t sell and are not usable for the everyday person. The Volt is not profitable and will not be for the foreseeable future. If GM had not taken the bailout money, the Volt would have already joined the Edsel on the dungheap of automotive failures.

1 comment:

  1. It's coming out more and more how corrupt Obama really is. I wonder if America will wake up and force him out of office. There are so many instances where he has stolen the taxpayers money and used it illegally for bogus projects. When will this come to an end?