Winged Wheeler

Here is what happens when ideology replaces reason:

"Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy."
Hohman looked at total state and federal assistance offered for the development and production of the Chevy Volt, General Motors’ plug-in hybrid electric vehicle. His analysis included 18 government deals that included loans, rebates, grants and tax credits. The amount of government assistance does not include the fact that General Motors is currently 26 percent owned by the federal government.
The Volt subsidies flow through multiple companies involved in production. The analysis includes adding up the amount of government subsidies via tax credits and direct funding for not only General Motors, but other companies supplying parts for the vehicle. For example, the Department of Energy awarded a $105.9 million grant to the GM Brownstown plant that assembles the batteries. The company was also awarded approximately $106 million for its Hamtramck assembly plant in state credits to retain jobs. The company that supplies the Volt’s batteries, Compact Power, was awarded up to $100 million in refundable battery credits (combination tax breaks and cash subsidies). These are among many of the subsidies and tax credits for the vehicle.
It’s unlikely that all the companies involved in Volt production will ever receive all the $3 billion in incentives, Hohman said, because many of them are linked to meeting various employment and other milestones. But the analysis looks at the total value that has been offered to the Volt in different aspects of production – from the assembly line to the dealerships to the battery manufacturers. Some tax credits and subsidies are offered for periods up to 20 years, though most have a much shorter time frame.
GM has estimated they’ve sold 6,000 Volts so far. That would mean each of the 6,000 Volts sold would be subsidized between $50,000 and $250,000, depending on how many government subsidy milestones are realized.
If those manufacturers awarded incentives to produce batteries the Volt may use are included in the analysis, the potential government subsidy per Volt increases to $256,824. For example, A123 Systems has received extensive state and federal support, and bid to be a supplier to the Volt, but the deal instead went to Compact Power. The $256,824 figure includes adding up the subsidies to both companies.
The $3 billion total subsidy figure includes $690.4 million offered by the state of Michigan and $2.3 billion in federal money. That’s enough to purchase 75,222 Volts with a sticker price of $39,828.
Additional state and local support provided to Volt suppliers was not included in the analysis, Hohman said, and could increase the level of government aid. For instance, the Volt is being assembled at the Poletown plant in Detroit/Hamtramck, which was built on land acquired by General Motors through eminent domain.
“It just goes to show there are certain folks that will spend anything to get their vision of what people should do,” said State Representative Tom McMillin, R-Rochester Hills. “It’s a glaring example of the failure of central planning trying to force citizens to purchase something they may not want. … They should let the free market make those decisions.”
“This might be the most government-supported car since the Trabant,” said Hohman, referring to the car produced by the former Communist state of East Germany.
According to GM CEO Dan Akerson, the average Volt owner makes $170,000 per year.


Chevy Volt Costing Taxpayers Up to $250K Per Vehicle [Michigan Capitol Confidential]

jungle

As bad as it was, people bought the Trabant, it becomes much easier to market something when it is the only option available, no matter how bad it may be, slave labor always helps the bottom line.

I have to wonder how many of us can really afford to shell out 45k for a marginal product when there are a host of much cheaper and better alternatives out there.

The ultimate cost of 250k per copy is what many people would refer to as unsustainable, and as a result production has been halted.

DYNASTY HVY

Hmmm, production may have been halted but they are advertising the Volt on t.v.

Ally

tomgoodman

Just in case the reader doesn't know how truly bad the Trabant was:

1975 Trabant - The 50 Worst Cars of All Time - TIME

Winged Wheeler

Government-subsidized green light bulb carries costly price tag - The Washington Post

WW

11Fan

Ally,

Perhaps temporally suspended would have been a clearer description. They just stopped the line because they have such a backlog of vehicles waiting to be sold. They say they will start production again in the Spring, meanwhile, some 1200 workers were laid off while the Volts sit around collecting dust waiting to find homes. That also explains the advertising.

I did like the President's comment that the Secret Service wont let him drive one now but maybe in five years when he's not President anymore.

He's an optimist, but he should probably get his licence renewed before January.

jungle

Inventory levels too high: Code for we can't sell these things, the Pontiac Aztek comes to mind.
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Similarly, the Chevrolet Volt had a target of 10,000 sales in 2011. They actually moved around 7,700.

Chevrolet has announced that they will be suspending production of the Volt and its European sibling, the Opel/Vauxhall Ampera, for five weeks. For that time period, about 1,300 workers will be without jobs.

The reality is that manufacturers suspend production from time to time when inventory levels get too high or there are supplier issues.

According to Yahoo, Chevy has about 154 days worth of inventory currently at US dealers. The optimum turnaround time for a car on a lot is a maximum of 60 days.

The Volt is still a new product, both for Chevrolet and for the automotive market. Forecasting demand for such untested, new, products in any field is a guessing game. It seems Chevy's product planners were too aggressive with estimates for 2011 and possibly for 2012 sales.

The company was predicting 45,000 sales in 2012. This production halt will align them with the real numbers and will hopefully put the 1,300 Michigan-based employees back to full time work sooner than later.

February was actually a very strong month for the Volt, with 1,023 sold. Chevy sold 927 of the iconic Corvette in the same time period.



Read more: The Chevy Volt Production Halt Is Not A Big Deal - Business Insider


Just a guess, but with about a six month supply on the lots, the halt might be prudently extended four months or so.

Ah, the Aztek, a most impressive engineering tour de force for GM, it never sold enough to break even.


"GM forecast sales of up to 75,000 Azteks per year, and needed to produce 30,000 annually to break even. Just 27,322 were sold in 2001[15] with more than 50% being sold to captive rental company fleets or used by General Motors executives.[citation needed]

In 2003, the Aztek was criticized by George Ouzounian as the world's 2nd ugliest car on his website, The Best Page in the Universe. He described it as "pilfering the Aztecs of their last remaining treasure: their name." The page also included a picture of an Aztek next to the Aztec ruler Montezuma with text that says "Finally a car made with the sensibilites of a 14th century Aztec warrior in mind".[16]

Pricing of the Aztek was also an issue at launch. In addition to being widely criticized for styling, the vehicle was simply too expensive for its intended "Generation X" audience and was priced significantly higher than competing vehicles. After the 2001 model year, the GT model was dropped and pricing was slashed, in addition to extremely generous rebates and cut-rate financing instituted by GM in the wake of the terrorist attacks on September 11, 2001.

The Aztek was cited derisively numerous times in Steve McConnell's software design book, Code Complete 2: The Pontiac Aztek and the Perils of Design by Committee. wiki