Can't they declare bankruptcy, reorganize their debt and workforce and emerge a stronger leaner company? DD
The problem isn't building the cars, it's getting the public to buy them. GM made a massive investment in electric cars but there wasn't a market for them.
lithium ion batteries are super expensive and really dangerous. they tend to explode when they are not happy.
They made the investment because of a California law requiring production of electric cars. They made a whole bunch of them but refused to sell them to anybody - only lease. As soon as the law changed so that it was no longer required, they terminated all the leases and destroyed all the cars. There are still people whining about not being able to buy one. <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/nsJAlrYjGz8&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/nsJAlrYjGz8&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object> The Auto industry is like the RIAA on steroids - scared to death of any type of innovation, desperately clinging to 50 year old business models which are edging to obsolescence.
Yeah, right. GM built a car that would have sold like hot cakes but decided to shred them instead. They spent more than a billion bucks and then decided to cancel the line....and now are spending billions more developing the new gen of electric car? That makes a great mockumentary but not sure I "buy" that. GM's EV1 -- Who Killed Common Sense? I just finished an interview with ABC News' Bill Blakemore. I was a guest on his show covering the new movie Who Killed the Electric Car? The other guests were the film's director, Chris Paine, and a former EV1 sales assistant, Chelsea Sexton. The film has some basic points it tries to make, all of them quite predictable in a world where most Americans feel they pay too much for gas and faith in the stability of the Middle East is at an all-time low. In terms of timing I give Mr. Paine credit -- the political and cultural atmosphere is ripe for a film like this to make money. Now let's hit the basic points in the film, along with my responses to them: 1. Rumor: There were 5,000 people who wanted an EV1, but GM wouldn't let them buy it. Fact: There were 5,000 people who expressed interest in an EV1, but when GM called them back and explained that the car cost $299-plus a month to lease, went between 60 and 80 miles on a full charge, and took between 45 minutes and 15 hours to re-charge, very few would commit to leasing one (not too surprising, is it?). The film likes to quote a figure of 29 miles as the average American's daily driving needs, but that is a national figure and the EV1 was only sold in California and Arizona, primarily in Los Angeles. Anyone wanna guess what the average L.A. resident's daily driving need is? I'm betting it's higher than that national average. As a comparison I actually ran the numbers on a 1997 EV1 against a 1997 Volkswagen Jetta Turbodiesel based on electricity and fuel charges at the time. Between lease charges and fuel/electricity charges, the EV1 cost at least $500 more a year to operate than the Jetta, and the Jetta could hold over twice as many people (five versus two), 50 percent more cargo (15 cubic feet versus 10) and would go almost 600 miles on a tank of fuel versus 60 miles on a charge. And when the Jetta did need filled it took 10 minutes -- not 45 minutes for a partial re-charge and 15 hours for a full re-charge. Ask me again why the electric car died. 2. Rumor: The California Air Resources Board (CARB) originally required automakers to produce electric vehicles, but political pressure from the automakers and oil companies forced them to abandon this law. Fact: Actually, CARB simply wanted the automakers to produce zero-emission vehicles (ZEVs) and, in 1990, the only way to accomplish that was with electric vehicles. But in the past 15 years computer processing and fuel injection technology has allowed internal combustion engines to burn so cleanly that they are the equivelant of ZEVs (such as the Toyota Prius). Actually, some might argue gasoline-powered ZEV's are better than electric vehicles because they don't have to be charged by an electric power station, most of which have coal stacks that spew far more pollution than ZEV exhaust pipes. As an example, the average 1965 automobile emitted 2,000 pounds of hydrocarbons over 100,000 miles. Modern ZEVs (that still run on gasoline!) emit two pounds of hydrocarbons over 100,000 miles. Read more about ZEVs here. If you need further proof that the modern internal combustion engine has come a long way, consider the air quality in Los Angeles in 2006 versus 1976 -- despite having far more cars operating in the city today. And this air quality improvement came even with the death of the electric car! 3. Rumor: Many EV1 drivers and fans wanted to purchase their EV1 when the lease ended and GM killed the program, but GM crushed the cars instead to keep people from discovering how great they were. Fact: All U.S. automakers are required to provide parts and service on a vehicle for a given number of years after it is produced. To support the 1,000 EV1s GM had made would have cost the company a lot of money because of its advanced technology and totally unique nature (it shared almost no parts with other GM products). This is not the case with, for instance, Toyota's electric RAV4, which shares the majority of its parts with regular RAV4s. I'm sure GM also worried about the potential for lawsuits if owners bought the cars and started modifying them (something that surely would have happened -- look at what's already happening with the Prius). "But Karl, these EV1 fans were willing to sign waivers against future liabilities if they could buy the cars." Waivers are great in theory, but any lawyer knows there is always a path around them -- especially if the payoff is big enough (which will always be the case when GM is the defendant). 4. Rumor: GM purposely made the EV1 perform poorly so that it could never succeed. Fact: Before I define how "good" or "bad" the EV1 was let me first say that GM was given plenty of funding from the government to develop this car. They can cry about spending over a billion dollars, but much of that cost was covered by your and my tax money. That said, if GM was trying to make the EV1 fail, they did a poor job of it. The company tried to offer a vehicle that had every modern creature comfort (air conditioning, power windows, high quality audio system) and they offered free roadside assistance. They also developed a second-generation EV1 that used nickel-metal hydride batteries to get far better range on a charge (though these batteries were even more expensive, and hard to keep cool). They could have sabotaged the EV1 much more effectively by offering no creature comforts and no roadside assistance and spotty dealer training, yet most EV1 customers were thrilled with GM's support of the car. However, the company knew the vehicle would never offer the combination of utility and functionality demanded by 99 percent of U.S. consumers, and they knew it was a money loser for that other one percent. GM's biggest mistake was letting the R&D (largely funded by the government) from the EV1 program go to waste by not immediately transitioning it into hybrid drivetrain development. The film touches on this mis-step by GM, and it's the one point I completely agree with. http://blogs.edmunds.com/karl/2006/06/gms-ev1----who-killed-common-sense.html <embed style="width:400px; height:326px;" id="VideoPlayback" type="application/x-shockwave-flash" src="http://video.google.com/googleplayer.swf?docId=-5331337021910564036:120000:3241000&hl=en" flashvars=""> </embed>
The counterpoint to the above commentary is that GM blew an enormous amount of money on SUVs and now nobody wants them either. More to the point, if that money and the money wasted fighting federal mileage standards was instead spent on developing and marketing a more efficient vehicle, it is possible that GM would not be in the spot it is in now. They are (were?) spending 1 billion / month playing catch-up on hybrids and more fuel efficient cars...
Subsidize them. Add a dollar to the gas tax. Create the market. We already spend an estimated $1 in subsidies per gallon in military costs to subsidize gas. We have increased health costs etc.
Subsidize them. Add a dollar to the gas tax. Create the market. We already spend an estimated $1 in subsidies per gallon in military costs to subsidize gas. We have increased health costs etc. I doubt that is true with $/ gallon gas.
That really isn't a counterpoint. With cheap gas GM and others sold many many many SUVs. There was, in fact, a market for those. I doubt the money spent lobbying against mileage standards is anything comparable to R&D type money. But it's not relevant anyway to whether or not there was a market for electric vehicles at that point in time. Which is great and they should be applauded for it. The real question is whether or not we'll stop crying foul now that gas is becoming cheap again. I hope not. I don't disagree. Not sure what health costs you're talking about, but I wouldn't be opposed to subsidizing the market for these cars, if needed. My hope is that the gas price spike the last couple of years will shock us into the market regardless. Not sure why. Remember, we're talking about years ago before gas prices started to spike.
They bailed out chrysler in the 70's and ioccacca came back with the K car. I think and I hate to say it, maybe the govt should buy enough stocks to be the main share holders and push through the green car programs through gm. Get rid of some of the divisions which are replications of the same vehicle and move forward. I'm not anti union, but the union is killing the us automakers. Other foreign companies can make cars cheaper here than us auto makers which makes sense. They're workers make the same, but they don't have all the legacy costs associated with benefits for the rest of their lives and health insurance. That why we see german and japan autoworkers are building factories here and still building the gas guzzler trucks. In facts the asian automakers are starting to build vehicles here that are of the size of the traditionally larger american vehicles. Its a mess, but gm can't go bankrupt. Maybe reorginization, but not under.
I just don't know how beneficial it is for a company t provide lifetime benefits for its employees. It might be better to just give the people their money and let them do their own insurance and retirement investing and see how they fare. Its impossible to run you company like that. I love my workers and they're paid well, but I can't guarantee them they will retire with the same money they make now or have the same insurance. That's why I paid them more so they can invest their money wisely and get insurance.
This is why it is so important that we have universal healthcare. You can't afford it and old people can't afford it. When they get denied insurance, the insurance companies are signing their bankruptcy papers and their death warrant. Everyone should have access to medical care.
Let them fail. They can finally get out of the horrible contracts with the UAW and start to become profitable.
The reason I liked the wall street bailout is because there is a specific broad plan, aleviate the investment banks of their mortgage backed securities. that being said, would you guys think this is viable. Can the government aleviate GM of its Pension liabiality, as well as some of its post retirement benefits, and negotiate with the union on a go forward base on salary and benefits. I don't want cash just given to them without any plan, or just to keep them going.
This goes back to what someone else said earlier about them not ceasing to exist, just being able to reorganize.
Correct. No one is saying that they should liquidate, just that they should file Chapter 11 and reorganize like a few airlines did several years ago.
This sounds good to me. Well - anything sounds better to me than putting the onus on the taxpayer. Screw that. Good to see you around again Hayes.
