Wild Ass Rumor of the Day: Volt Battery = Epic Fail?

Robert Farago
by Robert Farago

Inside sources reiterate what we’ve heard before: the mission critical battery for GM’s plug-in Hail Mary hybrid gas electric Volt is not achieving its performance requirements. Not even close. In fact, we’ve heard that the battery is failing to meet ANY of its targets: range, recharge time, battery life expectancy, cold weather performance, cost, nada. That said, this is a rumor [see: question mark above]. Therefore, we invite representatives of GM to contact TTAC (robertfarago1@gmail.com) to spin the story until we pass out from dizziness—I mean, assure GM’s many stakeholders that mass production of the single most important vehicle in their portfolio—if not the last—will begin on the date promised. Wait, what was that date again?

Robert Farago
Robert Farago

More by Robert Farago

Comments
Join the conversation
4 of 38 comments
  • Phil Ressler Phil Ressler on Mar 18, 2009
    I read 80 billion dollars of debt, welfare recipient, and an organization that is rotten to its core. GM isn't rotten to the core; it is deeply flawed with massive dysfunction that has lumpy distribution. There is also lumpy distribution of brilliance, vision and competence. Fixing the company is a giant project that will require elevation and empowerment of talent already in the company, recruitment of talent not resident and removal of poor human assets that are obstacles to progress. And persistence. But no amount of effort to fix GM will bring it back to profitability in a market suffering credit drought, fear and oversupply. This is the objective of bridge loans: to fund reform through a period of inevitable losses so the company can reposition itself to compete upon return of a healthy and normal market. Future worth..sure, but see how much is it going to cost, the losses will continue to accumulate with every unit sold. GM is insolvent, do you understand that. Yes. This is why the government is lender of last resort to change the circumstances you describe. GM loses money on some -- not every -- unit sold in normal market circumstances. It has a path to profitability available to it, which it has to demonstrate it can find and walk. It was around about here I cam to a firm conclusion that you're employed by GM or a related entity. It’s not about making the cars, its about making money, GM can make them, but its really the next part that matters, making money. I post here under my name. It's an elementary search engine exercise to research me, and if you do you will see that professionally I am far removed from the automobile industry. My only relationship to the automotive domain is as a consumer. As the Malibu, for example, demonstrates, GM can make an excellent mainstream car, even raising its material costs in key areas. Now they have to reduce their overall costs of doing business, streamline distribution, raise perception of their brands and gradually regain pricing power in the market to make money on what they can make well. The essential point of debate is whether it is cheaper and better to get to that point by fixing GM or letting it die and starting over. In terms of holistic examination of the total costs, I come down on the side of fixing the company and bridging it through a collapsed market. You might have a different view. Phil
  • Nonce Nonce on Mar 18, 2009

    If the Volt performs roughly as advertised, they will have no problem selling 10,000 of them at $40K each. You might think someone is foolish for making that decision. It doesn't matter if you think that. There are easily 10,000 people in the country willing to pay a premium to give a big F-U to OPEC, even if you think they could make a better choice doing something else. It doesn't matter what you think. Will there be another 40 thousand the next year? Probably. Costs will need to come down after that.

  • Incog43 Incog43 on Mar 18, 2009
    But no amount of effort to fix GM will bring it back to profitability in a market suffering credit drought, fear and oversupply. This is the objective of bridge loans: to fund reform through a period of inevitable losses so the company can reposition itself to compete upon return of a healthy and normal market. Actually Phil, their problems were apparent prior to the market collapse, that would be when the market was having record highs. Losses in this record high period as well, the reality is, GM will struggle in a normal market. I think the first post on "GM must die" was made in 2005, perhaps others can see what you won't. GM loses money on some — not every — unit sold in normal market circumstances. It has a path to profitability available to it, which it has to demonstrate it can find and walk. Fair call, you overlook one fact however, they have already demonstrated how not to make money, rack up 80 odd billion in debt and tell porkies to the taxpayer, I know what they can do.. Now they have to reduce their overall costs of doing business, streamline distribution, raise perception of their brands and gradually regain pricing power in the market to make money on what they can make well. See, you know it, I know it, everyone know's it, but GM has reacted to late. I dont mind your arguement, but its not the 60's or 70's anymore, the market has changed and the competition is intense, GM is not competitive. It has not been for a while. Now they have to reduce their overall costs of doing business, streamline distribution, raise perception of their brands and gradually regain pricing power in the market to make money on what they can make well. You mean like a normal business would. These are fundermentals, thats how bad their situation is. Its sounds easy, but they are out of time, competition will see to that. By the time this is done, we will se nearly 100 billion put through GM and chrysler, and they will be bck for more within 10 years. We do have different view, you dont work for GM, okay, I am sorry for suggesting otherwise. I dont google people. But its getting a bit thick Phil.Its often much easier to dream, than to face reality, isnt that GM's problem to a certain extent.
  • Phil Ressler Phil Ressler on Mar 18, 2009
    Actually Phil, their problems were apparent prior to the market collapse, that would be when the market was having record highs. Losses in this record high period as well, the reality is, GM will struggle in a normal market. I think the first post on “GM must die” was made in 2005, perhaps others can see what you won’t. Citing their prior problems is a non-sequitur to my post. What matters now is fixing the company so it can perform in a normal market or worse. That will require bridge financing. There's a difference between seeing dysfunction in an organization and concluding that "GM must die." I recognize the former but disagree with the latter. Fair call, you overlook one fact however, they have already demonstrated how not to make money, rack up 80 odd billion in debt and tell porkies to the taxpayer, I know what they can do.. Again your language is past tense. I'm looking forward, not back. See, you know it, I know it, everyone know’s it, but GM has reacted to late. I dont mind your arguement, but its not the 60’s or 70’s anymore, the market has changed and the competition is intense, GM is not competitive. It has not been for a while. "Is not competitive" is your issue. That's the known problem. Reforming the company so it *will be* bompetitive is mine. Its sounds easy, but they are out of time, competition will see to that. By the time this is done, we will se nearly 100 billion put through GM and chrysler, and they will be bck for more within 10 years. You think $100B to fix them is expensive; I say it's cheap, so long as the project is seriously undertaken. $100B and ten years to see it through is fine with me. I'm sure they'll make something I like in the meantime. We do have different view, you dont work for GM, okay, I am sorry for suggesting otherwise. I dont google people. But its getting a bit thick Phil.Its often much easier to dream, than to face reality, isnt that GM’s problem to a certain extent. No offense taken. People think, somehow, that the only way I can stand up for bailout, bridging and reform is if my income is derived from a domestic automaker. Not true, though I'm fully aware I'm in the minority among people who contribute here at TTAC. Having done this many times on a smaller scale, I know that reforming a dysfunctional business requires a blend of hard core discipline and decisionmaking in the context of recognizing reality, and a measure of vision (or what you might call dreaming) to get both internal staff and the market to understand why you're putting in the effort, why you seek patience and what you intend to accomplish by when. Current leadership at GM hasn't given us reason to believe they can operate with both vision, discipline & results derived from reality-oriented execution. So bridging should be accompanied by conditions, beginning with reconstituting the Board of Directors, who in turn have a responsibility to shareholders to recruit effective executive management. As a taxpayer, US citizen, educated business professional, and buyer of cars, I'm up for repair over abandonment. Phil
Next