The Volt And Fox News

Every once in a while the press pursues an agenda that facts just don’t support.  This time Fox News is being irrational.  They have engaged in an extended campaign against the Chevrolet Volt believing the car has been an instrument of the Obama administration’s green agenda.   Fox’s intention is to persuade the public against the DOE’s loan subsidy program.   

The campaign has taken the form of pouncing on every story that can impact the public’s perception of the Volt.  Any negative Volt news has been given prime spots on Fox News shows without presenting known facts that would balance the stories.  There was a Volt fire that the NHTSA eventually cleared that was a major source of Fox negative comments.  Despite the fact that recalls are not uncommon for newly released models, Fox covered a recall of the electrical cords that connect the car to the owners‘ outlets.  Fox News claimed that it cost GM $81,000 of subsidy per copy to produce it without presenting the math.  A one month production halt begun in late March due to oversupply has received more attention from Fox than other news outlets despite the fact that such suspensions are not uncommon.  Suspensions are a result of poor management planning that has nothing to do with the integrity of the car.

The Volt is a great car.  It has excellent handling and acceleration.  Its fit, finish, and materials are better than a Cadillac.  Its MPG surpasses any other regular hybrid by far.  If people would drive it, they would be impressed.  Fox’s Neil Cavuto drove it and did not even understand that the Volt was electric-gas plug-in hybrid.

But the real story of the Volt is in its development.  Before GM’s bankruptcy, Bob Lutz, then GM Executive Vice Chairman, was impressed that a little startup called Tesla could develop its electric roadster.  He asked why GM could not do the same or even better.  With that, he began development of the Volt.  When bankruptcy came, the project was well on its way towards production.  It was based on the same platform as the Cruze, a very necessary car to GM’s successful post-bankruptcy performance.   The idea that the Volt was a government-developed product does not match the facts.

Bob Lutz agrees as well as journalists, Volt owners, and perhaps even Fox News itself.  When it comes to Fox News and the Volt, fair and balanced was missing.

More On TARP, GM, and the Stimulus

Here are a some updates on a few of my favorite topics. 

The White House has announced recent studies indicating that TARP will cost less than anticipated, specifically, no more than $50 billion, and perhaps zero when all the repayments are in.  Even if it turns out that TARP costs $50 billion after the final accounting, I still think TARP was worth it considering the personal havoc it avoided.  Yes, it was flawed and, yes, it was not executed as planned, but it protected us from a very ugly downside.  Banks are very different from normal businesses.  They have our money.  They play with our money.  We need to remember that.

On another matter, the White House announced that taxpayer losses from the auto bailouts are estimated at $17 billion.  In fact, because the new GM has not yet reached its goal of 19% market share, some speculate that the IPO may not happen, which will leave the American taxpayer holding the bag for a while longer.  Car companies are different from banks.  They don’t have our money, or at least they are not supposed to.

Finally, President Obama told the New York Times this week that there is no such thing as a shovel ready project, a major component of the stimulus package.  Well, this has opened a Pandora’s box of criticism.  The next post will examine the mess that the President has unleashed. 

(Tease?   That’s what my wife said.  She wanted some meat on this last subject, somewhat like the old Wendy’s commercial, “Where’s the beef?”  Well, it’s coming.  I actually started writing the stimulus part of this post and it just grew and grew and grew.  I read a little and wrote a little and suddenly it was bigger and being bigger it deserved its own post.  Okay?.........Remember when Walter Mondale tried to use the Wendy’s beef line in a joke during his 1984 debate with President Reagan?   Didn’t go anywhere then either….)

GM, TARP, and China

My wife and I proudly own only GM cars.  All told, we have owned eight GM cars, as well as a few Fords, in our combined lifetimes.  To me, it was a patriotic thing to buy an American car and create more American jobs.

So, it pains me to present the following, all of which have been sourced from mainstream financial and auto industry publications.

• The government owns 60.8% of GM. 
• GM is planning to sell a portion of the government’s share in an IPO right after the elections.
• GM needs an estimated $133.78 per share for the government to re-coup its $49.5 B investment.
• Financial press has speculated for months that GM and the government will lose money on the initial sale of shares in the upcoming IPO.  In fact, the latest speculation is that the IPO will yield only $10 B when the initial target was $16 B.
• The new GM CEO has said that it will take years for the American taxpayer to realize a payback.

But wait, there’s more.

• SAIC, a Chinese auto company intends to buy GM shares in the upcoming IPO.
• China has signaled its intent to force US and other automakers operating in China to share its technology.  Rep. Dingell, a Michigan Democrat, has voiced his strong objections.  This means that the new battery technology behind the Volt will be at risk.
• GM recently sponsored a film in China promoting the Chinese Communist Party.
• GM has recently begun giving money to various candidates for the upcoming election, mostly incumbents from both parties.

Just a few more facts. Most Apple, HP, or Dell computers are made in China when the technology was invented here.  China is at the top of the FBI’s list of nations sponsoring industrial espionage? 

My boss’ favorite saying is ‘you can’t make this stuff up.’

I have been visiting the AutoTrader website recently and found myself looking at BMW coupes, 3-series, automatic with paddle shifters, and a sunroof.  White with a tan interior would be nice.