Lawmakers Envision Money-losing Operations From Detroit

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Steven Mufson / The Washington Post

WASHINGTON -- Many members of Congress believe they know what the car company of the future should look like.

"A business model based on gas -- a gas-guzzling past -- is unacceptable," Sen. Charles E. Schumer, D-N.Y., said last week. "We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car."

But the car company Schumer and other lawmakers envision for the future could turn out to be a money-losing operation, not part of a "sustainable U.S. auto industry" that President-elect Barack Obama and most members of Congress say they want to create.

That's because car manufacturers still haven't figured out how to produce hybrid and plug-in vehicles cheaply enough to make money on them. After a decade of relative success with its hybrid Prius, Toyota has sold about a million of the cars and is still widely believed by analysts to be losing money on each one sold. General Motors has touted plans for a plug-in hybrid vehicle called the Volt, but the costly battery will prevent it from turning a profit on the vehicle for several years, at least.

(more at link)

http://www.detroitnews.com/apps/pbcs...03/1148/AUTO01

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Volt Pricing (buried in story)

"That's why one of the mysteries about GM's plans to introduce the Volt in 2010 is how much it will cost to buy one. "What's the Volt going to cost? I would be happy to answer that if you can tell me the price of oil in 2010," said Robert A. Kruse, GM's executive director of global vehicle engineering for hybrids, electric vehicles and batteries. "I can tell you to the penny what it will cost GM, but pricing is much more related to market conditions."

[Bravada]

"A business model based on gas -- a gas-guzzling past -- is unacceptable," Sen. Charles E. Schumer, D-N.Y., said last week. "We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car."

It requires some huge deficit of self-esteem to allow such a heap of meaningless blabber being printed next to one's name!

[Dukeboy01]

Originally Posted by Bravada

It requires some huge deficit of self-esteem to allow such a heap of meaningless blabber being printed next to one's name!

See, I thought just the opposite: It takes a huge overabundance of ego to allow such a heap of meaningless blabber to be printed next to one's name. "We already know what that future is: the plug- in hybrid electric car." Really, Chuck? What special knowledge or wisdom have you gained from either your educational experience, work history, or life experience that gives you the authority to make such a sweeping pronouncement? Why plug- in hybrids instead of cars running on hydrogen, CNG, or the wishes of children and unicorn farts? Who are you, Chuck Schumer, to state such a thing? I will grant you that plug- in hybrids might be the car of the future, but being the senior blowhard from new York doesn't give you the magical ability to see the future. Show your work, please.

This is the least talked about problem with the bailout, IMO. I believe that the bailout will happen, in one form or another, in February of 2009. The problem is that our Democratic Overlords will insist in their noses so far into the product development side of things that instead of dealer lots filled with $40,000 Silverados that no one wants to buy we'll have dealer lots filled with $60,000 generation one Volts that no one wants to buy.

What's the point in giving GM, Ford, and Chrysler any money if you're going to saddle them with an unworkable business plan that kills them off anyway a few years down the road?

Chuck Schumer, Nancy Pelosi, and Harry Waxman don't know crap about cars, running a successful business, marketing, or any of the other myriad of roles that work together to make a successful car company. The problem is that they think they know better than you or me or anyone else what should be done. They will see this bailout as an opportunity to engage in a huge amount of social engineering for "our own good" or "for the good of the planet." Once started, it will be a never ending cycle of initiatives and mandates spewed forth from Washington.

Can't sell enough hybrids because oil prices stay too low for too long? Let's tax fuel until it's $6 or more a gallon. It's for your own good. Fuel prices now causing the price of food (and everything else moved by trucks) to skyrocket out of control? Let's try some price controls. We'll pass a law and everything will just be peachy. What you, the taxpayer and ripe suck living in flyover country, think you want isn't important. Our Dear Leaders will know what's best. On and on and on.

That's not to say that if the Republicans were in charge that they wouldn't be sticking their noses into the auto business too far as well. The difference is that they'd be working overtime to kill the UAW (good) and to protect the CEOs (bad). They'd still wreck GM, Ford, and Chrysler by the time that they were through.

No matter what happens, we're probably screwed.

[PhishPhood]

Originally Posted by Dukeboy01

See, I thought just the opposite: It takes a huge overabundance of ego to allow such a heap of meaningless blabber to be printed next to one's name. "We already know what that future is: the plug- in hybrid electric car." Really, Chuck? What special knowledge or wisdom have you gained from either your educational experience, work history, or life experience that gives you the authority to make such a sweeping pronouncement? Why plug- in hybrids instead of cars running on hydrogen, CNG, or the wishes of children and unicorn farts? Who are you, Chuck Schumer, to state such a thing? I will grant you that plug- in hybrids might be the car of the future, but being the senior blowhard from new York doesn't give you the magical ability to see the future. Show your work, please.

This is the least talked about problem with the bailout, IMO. I believe that the bailout will happen, in one form or another, in February of 2009. The problem is that our Democratic Overlords will insist in their noses so far into the product development side of things that instead of dealer lots filled with $40,000 Silverados that no one wants to buy we'll have dealer lots filled with $60,000 generation one Volts that no one wants to buy.

What's the point in giving GM, Ford, and Chrysler any money if you're going to saddle them with an unworkable business plan that kills them off anyway a few years down the road?

Chuck Schumer, Nancy Pelosi, and Harry Waxman don't know crap about cars, running a successful business, marketing, or any of the other myriad of roles that work together to make a successful car company. The problem is that they think they know better than you or me or anyone else what should be done. They will see this bailout as an opportunity to engage in a huge amount of social engineering for "our own good" or "for the good of the planet." Once started, it will be a never ending cycle of initiatives and mandates spewed forth from Washington.

Can't sell enough hybrids because oil prices stay too low for too long? Let's tax fuel until it's $6 or more a gallon. It's for your own good. Fuel prices now causing the price of food (and everything else moved by trucks) to skyrocket out of control? Let's try some price controls. We'll pass a law and everything will just be peachy. What you, the taxpayer and ripe suck living in flyover country, think you want isn't important. Our Dear Leaders will know what's best. On and on and on.

That's not to say that if the Republicans were in charge that they wouldn't be sticking their noses into the auto business too far as well. The difference is that they'd be working overtime to kill the UAW (good) and to protect the CEOs (bad). They'd still wreck GM, Ford, and Chrysler by the time that they were through.

No matter what happens, we're probably screwed.

The main problem with this whole scenario is that the D3 having painted themselves into a corner then shot nailguns into their feet now are in fixed in place. They are now in the position of begging at the public trough. As a result their options to remain independent are nearly over, finito, kaput.

By begging at the public trough they now have to cowtow to the Democratic Overlords and the Republican Slimebuckets. 'You want public largess then you will have to do what the public ( meaning Congress ) wants you to do.'

This has to be humiliating for three of the pillars of the American Century. "Please give us money, we'll do whatever you want."

[racy]

Originally Posted by adplusone

That's because car manufacturers still haven't figured out how to produce hybrid and plug-in vehicles cheaply enough to make money on them. After a decade of relative success with its hybrid Prius, Toyota has sold about a million of the cars and is still widely believed by analysts to be losing money on each one sold.
http://www.detroitnews.com/apps/pbcs...03/1148/AUTO01

We know that the Prius is now profitable. What's more, we also know Honda is coming out with a cheaper, Prius competitor. This article is a little misinformed.

[Dukeboy01]

Originally Posted by PhishPhood

The main problem with this whole scenario is that the D3 having painted themselves into a corner then shot nailguns into their feet now are in fixed in place. They are now in the position of begging at the public trough. As a result their options to remain independent are nearly over, finito, kaput.

By begging at the public trough they now have to cowtow to the Democratic Overlords and the Republican Slimebuckets. 'You want public largess then you will have to do what the public ( meaning Congress ) wants you to do.'

This has to be humiliating for three of the pillars of the American Century. "Please give us money, we'll do whatever you want."

Don't misunderstand me: I know the Detroit 3 can't have a blank check and I don't want them to get one. The problem is that I believe the Democrats will overreach in order to acheive social engineering goals that will result in eventually fatally crippling them instead of coming up with a business plan to ensure that the companies return to profibility and (ultimately) independence.

If the Republicans had total control of the government, they would probably overreach while trying to destroy the UAW, for example. I admit that I haven't thought out the scenario for GOP destruction of the domestic auto industry as much as I have thought about the Democratic destrruction of the domestic auto industry. I am sure the GOP would be capable of wrecking it just as thoroughly as the Dems. They might be less likely to encourage R&D into alternative fuel research, for example.

But, since they're not in charge, it will be the Democrats' attempts at social engineering that, provided they don't destroy the Detroit 3 outright, will consign them to a sort of mediocrity and on- going governmental dependence. The problem facing the Detroit 3 is so complex that dumb pronouncements by congress critters that "Plug- in electric hybrids are the future" isn't going to fix it. The UAW is a huge part of the problem and needs to be brought to heel if these companies are going to return to profibility. Show of hands: Who thinks the Dems are going to force any pain on the UAW?

If we had a divided government maybe the worst impulses of both parties could be contained, but we don't. So, we're left with a problem that will not go away until the Detroit 3 really are dead and buried.

[F14CRAZY]

I'm with you Dukeboy