Volt Birth Watch 177: Can't We Spend $100m On Something?

Edward Niedermeyer
by Edward Niedermeyer
volt birth watch 177 can t we spend 100m on something

“A Flush GM to Lavish Cash On New Vehicles,” goes the NY Times headline, forshadowing the kind of profligacy that only happens when you have $42.6 billion of taxpayer money burning a hole in the corporate pockets. From the next generation of truck and SUV platforms to the Cadillac Alpha (known in-house as “BMW Fighter”), that money is going towards products…. at least it is when it’s not going to faltering overseas operations. And in most cases that’s a good thing. For example, Mark Reuss explains “ with the BMW fighter, the steering in that vehicle is going to be absolutely critical. In the past we would have gone to the lowest cost source, but not anymore.” Well, good on ya, mate. When it comes to the Volt though, the money doesn’t seem like it’s being quite as well spent.

The NYT explains:

At a meeting last month, directors offered to put another $100 million into the Chevrolet Volt if the company could get the battery-powered sedan into production sooner than its current start date in November, according to people with knowledge of the board’s move.

Dedicating more money for the Volt would not necessarily move up its timetable, said Jon Lauckner, G.M’s vice president for global product planning. But it could allow G.M. to build more vehicles for consumers to test-drive before full manufacturing begins.

“We have already reduced the Volt’s development time by about seven months,” Mr. Lauckner said in a recent interview. “Our date with destiny is November of 2010, but it could be useful for us to have the money to get some vehicles to consumers earlier than that.”

What’s the most worrying aspect of this situation? Is it that the Volt program is so rushed that $100m won’t speed it up any more? Or is it that GM felt it had to burn the cash on the program anyway, even if it only meant a few extra pre-production vehicles? Or is it the fact that the extra $100m raises yet another barrier to profitability for the Volt? There’s no argument that GM should spend cash on its future products, but reports like this make it sound like spending money is an end unto itself. For a firm that will never fully repay the American taxpayer, that’s a disturbing sign.

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  • Tparkit Tparkit on Dec 08, 2009

    Coupla points: - when the Volt rolls out, it won't be priced at $40,000. The sticker will be much less, with the taxpayer making up the difference. - the cost to produce a Volt will likely be much higher than $40,000 a copy, but the extra will simply be capitalized, or allocated away to other cost centers so the Volt program doesn't appear to be such a boondoggle. - this NYT article is a calculated puff piece. It makes GM look strong and committed to top-quality, competitive products. It helps insulate the Obama administration from charges it is pouring tens of billions down a rathole. The Volt is dragged in because GM hopes it can provide political cover for profligacy. We're not wasting money, we're investing in a brilliant, Green future that will benefit generations of Americans to come. We'll get a second chance to invest if the government floats the IPO. I wonder how the US government will bribe China's government to buy the shares.

  • Porschespeed Porschespeed on Dec 09, 2009
    The outrage happened at the voting booth when the repubs lost the house in 06 and the senate and the WH in 08. No one is happy when the government wastes money except the people getting it. The order of magnitude just seems to keep going up from billions (clinton) to tens of billions (early bush 43) to hundreds of billions (late bush 43) to now trillions (obama). You probably aren't old enough to remember when we changed from the world's largest creditor nation on the way to the world's larget debtor, where we are now. Pivot point was about 1976. Carter Billions. Reagan Hundreds of Billions. Bush Sr. Hundreds of Billions but not as many as Reagan Clinton some up, some down. Net, net few hundred Billion. About the same as Bush I. Bush II - Trillions. Obama- Same as Bush II. Just more Trillions. Will become less of a problem as we bring back 70's style inflation to pay back what we borrowed.
  • Sayahh Is it 1974 or 1794? The article is inconsistent.
  • Laura I just buy a Hyndai Elantra SEL, and My car started to have issues with the AC dont work the air sometimes is really hot and later cold and also I heard a noice in the engine so I went to the dealer for the first service and explain what was hapenning to the AC they told me that the car was getting hot because the vent is not working I didnt know that the car was getting hot because it doesnt show nothing no sign no beep nothing I was surprise and also I notice that it needed engine oil, I think that something is wrong with this car because is a model 23 and I just got it on April only 5 months use. is this normal ? Also my daughter bought the same model and she went for a trip and the car also got hot and it didnt show up in the system she called them and they said to take the car to the dealer for a check up I think that if the cars are new they shouldnt be having this problems.
  • JamesGarfield What charging network does the Polestar use?
  • JamesGarfield Re: Getting away from union plantsAbout a dozen years or so ago, Caterpillar built a huge new engine plant, just down the road here in Seguin TX. Story has it, Caterpillar came to Seguin City council in advance, and told them their plans. Then they asked for no advanced publicity from Seguin, until announcement day. This new plant was gonna be a non-union replacement for a couple of union plants in IL and SC, and Cat didn't want to stir up union problems until the plan was set. They told Seguin, If you about blab this in advance, we'll walk. Well, Seguin kept quiet as instructed, and the plan went through, with all the usual expected tax abatements given.Plant construction began, but the Caterpillar name was conspicuously absent from anywhere on the site. Instead, the plant was described as being a collective of various contractors and suppliers for Caterpillar. Which in fact, it was. Then comes the day, with the big new plant fully operationa!, that Caterpillar comes in and announces, Hey, Yeah it's our plant, and the Caterpillar name boldly goes up on the front. All you contractor folks, welcome aboard, you're now Caterpillar employees. Then, Cat turns and announces they are closing those two union plants immediately, and will be transporting all the heavy manufacturing equipment to Seguin. None of the union workers, just the equipment. And today, the Caterpillar plant sits out there, humming away happily, making engines for the industry and good paying jobs for us. I'd call that a winner.
  • Stuki Moi What Subaru taketh away in costs, dealers will no doubt add right back in adjustments.... Fat chance Subaru will offer a sufficient supply of them.