Posted on 02/11/2013 10:01:12 AM PST by jazusamo
Perhaps General Motors should have put more focus on competing in the largest segment of the auto market instead of focusing on being the market leader in the least popular, plug-in, electric vehicle (EV) field. A Detroit Free Press article reported that GM had to slash Chevy Malibu prices by hundreds of dollars to try and catch up with vehicles like the Toyota Camry, which is currently eating the Malibu's lunch.
Chevy spokesman Michael Albino is quoted as admitting that, "The midsize segment is the largest and most competitive in the industry." Maybe GM should have realized that when they spent so much time and money hyping the Chevy Volt instead of building the most competitive car that they could in the best-selling, midsize field. In fact, the Toyota Camry (built in America), which is the market leader in the segment, sold 31,897 units in January to make it the best selling car in the USA. The Malibu sold 15,823, less than half the amount of Camrys sold. 2012 totals for the two cars shows a similar gap with the Camry selling 404,886 compared to 210,951 for the Malibu. The entries in the field from other manufacturers also outperformed the Malibu, as the Honda Accord, Nissan Altima, Ford Fusion, and Hyundai Sonata all topped the Malibu in 2012.
As the Malibu struggled against the competition with 210,951 sales in 2012, EV proponents at websites like plugincars.com boasted that sales for the Chevy Volt "sizzled" and led the market in 2012 with a "remarkable" 23,461 units. That seems like anything but remarkable to me, but green energy extremists never seem to let logic get in the way of ideology when reporting on the Volt. And the Obama-appointed management at GM seems to want to continue the misguided focus as it now plans on offering a Cadillac version of the Volt along with a plug-in Chevy Cruze and plug-in Chevy Spark; even as competitors Toyota and Nissan acknowledge that plug-in EVs are not the wave of the future.
The company also known as Government Motors has pitched its tent in the solar arena as well, recently joining the Solar Energy Industries Association. From GM's media site, "'Part of our renewable energy goal as a company involves helping other organizations learn how to successfully implement renewable energy strategies,' said Rob Threlkeld, renewable energy manager for GM. 'Joining SEIA enables us to reach a pool of like-minded companies committed to making solar energy a significant energy source.'"
Really? Part of GM's goal is "...helping other organizations learn how to successfully implement renewable energy strategies?" I would have thought that their goal was to make money by selling competitive cars with a loyalty towards shareholders, not to green energy ideologues. Statements like these really give an indication of how much influence the Obama Administration has had on GM. The result seems to be that the quality and value of conventional, gas-powered cars like the Malibu have suffered as GM puts it focus on little-wanted "green" vehicles.
According to a Bloomberg report on the Malibu's woes , "The Malibu has received middling reviews. The redesigned car was 'good, but not great at any single thing,' Lawrence Ulrich wrote in January in the New York Times." Being just "good" isn't good enough in a highly competitive field. As a result, prices need to be dropped to compete. This is exactly why GM has to operate at low profit margins. Add in the fact that UAW labor costs and pension obligations weigh on profits, and the outlook does not look as rosy as many would have us believe.
General Motors would be well-advised to focus on building vehicles that consumers want instead of trying to "help other organizations learn how to successfully implement renewable energy strategies." They should stop the nonsensical efforts to fool the American people into believing that the Chevy Volt is a "game changer" for the company and that demand for the car is exceeding supply, which has been proven to be untrue time and again. If GM is to be successful in its turnaround, the government needs to completely remove itself from operations there. That also means that the Obama-appointed management, which has proven that it lacks the proper focus, should leave as well.
Mark Modica is an NLPC Associate Fellow.
Working link:
GM’s “green” line-up will continue as long as Obama is in office, and for good reason. How much “free” bailout money did the company get from the administration? Last I heard, GM had repaid only $7 billion of the bailout, which totaled more than $30 billion. And they claim they’ve repaid their obligations to the government in full (with no disagreement from the White House). Building a bunch of plug-in cars that don’t sell is a small price to pay for $20 billion that you’ll never have to repay. And when things get slow again (during the next Obama economic crash), they know where to go for the next handout.
It’s the new American business model, as exemplified by GM and Amazon.com. Lose money hand over fist (or minimize your profits), in exchange for good publicity about your devotion to the consumer or “green” causes. That, in turn, generates a short-term stock boost, so if you time it correctly, you can make a profit. As I recall Amazon shares went up almost 20% after their last earnings report, which showed a net loss for the quarter. But they were praised for selling items to consumers at prices that cannot be sustained. So, Mr. Bezos and other big shareholders made a nice return, while he publicly proclaimed he “doesn’t care about profit margins.”
Next time Obama has to pick a new chairman for GM, I think he’s found his man.
We really do have to get the government out of GM and let General Motors stand or fall on their own. Of course the UAW and their supporter in the WH are not about to let that happen as long as the turkey in the WH is there.
We still have to remember that GM is a government run operation and they think they can charge anything and we will pay it. They are just getting a (surprise) lesson in free market economics.
Expect that to change soon.
Agreed, and the sooner the better.
And the Malibu frame its set for the next five years, meaning that GM could literally go back onto bankruptcy with just this one loser within five years.
And the Malibu frame its set for the next five years, meaning that GM could literally go back onto bankruptcy with just this one loser within five years.
If they continue to take a hit like that for their midsize car and continue the Volt nonsense with those losses it surely could put them back in bankruptcy.
Thanks for that info.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.