Poetically enough, The Wall Street Journal's Holman Jenkins wants to know if "GM is a genius or a dolt for developing the Volt." Why would a company that's lost $4.3b in North America the last three years throw billions into developing a car they know will lose money? Jenkins notes that when gas prices dropped after the original federal Corporate Average Fuel Economy (CAFE) regs, the standards devolved into "an elaborate scheme engineered by Washington and the UAW to keep auto workers busy manufacturing small cars in the U.S. at a loss, subsidized by the profits of big pickups and SUVs." Jenkins reckons GM– "America's biggest near-dead car company"– plans a similar tactic with the new standards. "[I]t's hard to see why a reformed GM would bother building such a car now unless it's planning to throw its lobbying clout behind a final set of CAFE rules designed to disadvantage its rivals." Then they'll "bribe consumers to drive Volts off the lot" because it'll let them "build and sell other cars bigger and more powerful than the cars its rivals can afford to build under the CAFE rules." And it's all because "GM intends to beat Toyota at its own game of selling bogus green symbolism to Washington and Hollywood." Let's hear it for the home team!
Find Reviews by Make:
Read all comments
Oh well, so much for innovation.
We are so screwed by corporate interests; this country (and all of the talent that resides here) has its creative hands tied behind its back.
No wonder the last 20 years have been so fucking boring.
I’ll have the Tahoe with the “mass-transit drivetrain”, please. :-(
Enjoy the following chart. It shows a likely development in the price of oil, due to an inability to meet rising demand. (From eschatonblog.com)
http://bp0.blogger.com/_Vo6z5fxMMqs/SA9aYqCxzxI/AAAAAAAAAMU/KE7SSAYTTK8/s1600-h/oilmarket.JPG
Basically over some range of the supply curve (marked S), firms are willing to increase the quantity supplied without charging much more. That’s the flat horizontal section of the upward sloping curve. More oil can be easily pumped out of existing fields, or gasoline refineries are running below capacity. Eventually you get to a quantity where no more oil can be pumped out of the fields, or gasoline refineries are at capacity. Then increases in demand (rightward shifts in the demand curve marked D), lead to sharp increases in price without any noticeable increase in the amount of oil or gas supplied.
OK – now cue the Canadian Tar Sands!
Great theory, with one enormous flaw. In the not too distant past I would have tended to agree with that assesment. However, with gas prices in an upward spiral and demand for Trucks and SUVs, in a freefall, why on Earth would GM spend billions to develope the Volt to allow for the continued manufacture of vehicles in a fast shrinking segment. I suspect most long term views, even at GM, show Trucks and SUV’s losing significant market share. Not a particularly good business plan, even for GM.
I would like to believe that GM is actually trying to innovate and bring vehicles to market that we need and want. I can dream I suppose. The more likely scenerio is that GM hopes to greenwash the American public with the Volt the way Toyota has with the Prius, and hopefully the Volt will one day become profitable. All the hobby environmentalists love Toyota for the Prius, so much so that they look right past the Tundras and Land Crushers on the dealership lot. In their greenwashed delusional state all they see is Toyota’s love for the planet earth. Now that’s PR at its best, something GM would no doubt like to get a piece of.
I am not sure why GM is being singled out, Toyota after all sells a full line of trucks and SUVs as well. The sale of those gas guzzlers made possible by vehicles like the Prius. If memory serves, Toyota was right there beside GM fighting the higher CAFE regulations.
I am not sure why GM is being singled out, Toyota after all sells a full line of trucks and SUVs as well.
Dare to compare the ratio of gas guzzlers to hybrids sold by GM and Toyota.
How many vehicles with 35mpg+ GM sell v Toyota?
Dare to compare the ratio of gas guzzlers to hybrids sold by GM and Toyota.
How many vehicles with 35mpg+ GM sell v Toyota?
I am sure it would be similar to the ratio of Gas Guzzlers Toyota wishes they could sell to how many low profit small cars they sell. Toyota is not the saint you and others make them out to be. Toyota will sell as many full sized SUVs and Pickups as they possibly can, the only thing holding them back is demand. If the big three shut their doors tomorrow, Toyota would be falling all over themselves in an effort to increase capacity and supply our nation with thirsty SUVs and Trucks. Toyota, like GM is in it to make money, not save the planet. Soon Toyota will have heavy duty trucks and an even broader range of Tundra models that will also get a free pass from environmental types.
Toyota brand + Scion Brand:
114K Cars
91K Trucks (includes Sienna at 12K and 12K of Rav4s)
Adding in Lexus would increase the truck : car ratio slightly.
GM
117K Cars
163K Trucks (includes about 7K HHR and a near-negligible quantity of minivans leftover).
Toyota makes $12 billion with a mix that’s heavily weighted towards cars and offers more smaller, fuel efficient cars than GM does, including the highly advanced and likely somewhat costly to build Prius.
GM loses $ billion with a mix that’s heavily weighted towards trucks and larger cars. GM sold 28K Impalas last month. GM’s profit margins are thought to be larger on their larger vehicles.
Toyota developed the new Tundra because Americans do buy large trucks. Why leave money lying on the table? But Toyota does not DEPEND on large trucks the way GM does.
gamper:
I am sure it would be similar to the ratio of Gas Guzzlers Toyota wishes they could sell to how many low profit small cars they sell. Toyota is not the saint you and others make them out to be. Toyota will sell as many full sized SUVs and Pickups as they possibly can, the only thing holding them back is demand. If the big three shut their doors tomorrow, Toyota would be falling all over themselves in an effort to increase capacity and supply our nation with thirsty SUVs and Trucks. Toyota, like GM is in it to make money, not save the planet. Soon Toyota will have heavy duty trucks and an even broader range of Tundra models that will also get a free pass from environmental types.
“If”, “maybe”, “possibly”.
Sorry, but there are too many “ifs” here, and a lot of Toyota critics seem to be curiously attracted to making idle speculation.
Getting back to reality, FACT IS that GM DEPENDS on trucks, and Toyota does not. Simple as that.
“If”, “maybe”, “possibly”.
Sorry, but there are too many “ifs” here, and a lot of Toyota critics seem to be curiously attracted to making idle speculation.
Getting back to reality, FACT IS that GM DEPENDS on trucks, and Toyota does not. Simple as that.
You mean speculation like GM is making the Volt purely to offset CAFE regulations?? I am not trying to defend GM or even criticize Toyota. I am just trying to point out the obvious lean in the story and suggest another motive behind the Volt. I dont own a full sized truck or SUV, or even a domestic brand vehicle. I just find the constant attempts to vilify the Detroit automakers laughable.
I will be the first to admit that the Detroit automakers (sadly) would go to great lengths to maintain sales of their cash cows. However, the assertion that GM will spend billions on the Volt to maintain truck sales under tougher CAFE regulations is silly due to the fact that consumer demand for thirsty trucks and SUVs will continue its freefall in spite of CAFE compliance. There are much cheaper ways of meeting CAFE requirements by using existing technology, so this story is simply a reflection of the author’s wishful thinking and personal beliefs.
The difference between Toyota and GM in this subject of Greenwashing their selling of SUVs is that I CAN buy a Prius. I can’t buy a Volt.
Wow, gamper. That’s what I call evasive action.
@yankinwaoz
You just had to come along and spoil the party by stating the obvious, huh? :-)
The CAFE standard is as relevant to the future of automobiles as the Maginot line was in stemming the tide of Germans who wanted to visit Paris in the spring of 1940.
We’ll be seeing customers voting with their wallets, performing their own end run past the hulking behemoths that carmakers wish they could keep building, because it’s so much easier to make a paper profit with huge, irrelevant cars.
Here we go with another round of Toyota bashing while the vaporware Volt languishes in pre-production. Hey, there is apparently one Lithium-Ion mule running around somewhere. How many Priuses, Yarises, Corollas, PZEV Camrys, and assorted other hybrids and high mpg cars have Toyota and Lexus put on the roads to date?
As for their big trucks, Toyota managed to increase the size and power of the Tundra while increasing mpg (best in class according to Edmunds) and coming in with LEV emissions.
Greenwashing indeed.
CarShark :
Wow, gamper. That’s what I call evasive action.
Carshark, I am not following you. I thought I had stuck to my guns. I have never owned a GM or a Toyota, but I call them like I see them, it would be nice to see more even-handed reporting. Many commentors take the stories for fact, following the authors lead like lemmings. This just seem like more hateraid for those predisposed to be anti-Detroit. I guess I am just one of those people who likes to make up my own mind rather than have my thoughts fed to me.
Marc, there is nothing Green about full sized trucks, so maybe you have been drinking the cool-aid if you count the Tundra as one of Toyota’s green accomplishments. Kudos to Toyota for offering a number of relatively efficient cars. However, the Europeans have access to much more efficient vehicles, some even from Toyota. If Toyota was so green, why arent they selling those vehicles here? Maybe because they are more interested in selling profitable vehicles?? Bottom line, Toyota is no different than any of the other major automakers, just better at making people think they are. Jesus, I feel like Poland here.
I think that there is so much resentment for Detroit because we americans have been so poorly treated by them. Detroit always assumed we would go like sheep to the slaughter [Dealer] and ante up to buy their products. The Japanese have caused Detroit to wake up and start treating us customers better and not like sheep. IMO that is why Detroit gets no breaks and the Japanese do. There is a completely different set of criteria based upon the way we customers have been treated. Until Toyota/HOnda start taking us for granted and treating us poorly, Detroit is going to have to take alot of flack and work doubly hard for new business. They are reaping the crop from the seeds of discontent that they have sewn in the past.
While it is true that Toyota would love to sell as many cash cow trucks and SUVs as possible, the fact remains that Toyota is where it is today because of the fortune it made with its SMALL CARS, the same small cars GM says are “impossible” to make a profit with. If truck sales were to totally disappear tomorrow, Toyota would still be around and making (less) profits, GM would die almost instantly. GM is a truck maker that uses its profits to experiment with cars. Toyota is a car maker that uses its profits to experiment with trucks.
Don’t believe me? Here’s an example: Toyota never planned for the Tundra to be its corporate savior like GM did with the GMT900. They probably knew they were going to actually LOSE money on it. They make so much money from their car sales that it didn’t matter if it flopped or not. They could stop selling it at anytime and it wouldn’t matter at all. Think GM could do the same with the Silverado and survive? Of course not.
Toyota is not the saint
Toyota gives Americans public a choice to buy either gas guzzlers or 40mpg+ fuelmisers.
Where can we buy a 40mpg GM vehicle?
Last time I checked Toyota was a mass market auto maker. They are in business to sell to as many and as varied a customer as they can. Customers come in all shapes and sizes, and so do the vehicles they want; from efficient small cars, midsized cars, SUVs to trucks. Toyota is just trying to please and market to all of them and do it as efficiently and profitably as they can, well except for us that like to drive since all they make is bland and not very sporty. I’m no Toyota lover but I think everyone is just upset because they beat GM at the game they created, “a car for every purse” and it’s reliable and efficient.