Dear GM: Melt Down Your Hummers and Give Us Electric Cars
Editor’s Note: Marc is one of the newest additions to the Gas 2.0 writing team. Welcome Marc!
In between a heavy rotation of aspirin, Tylenol, and Motrin, washed down with the cheapest scotch I could find, I took a few minutes to stop focusing on the ever-imploding economy and my prospects for having a job in six months, to do some problem solving for the world.
According to what anyone of any authority in the United States would have you believe, the collapse of the Big Three automakers (as if they are inextricably linked) would send our economy from the thin patch of ice that it is currently skating on, into the frigid depths to drown. Job loss estimates that I’ve seen range to two and a half million, not much less than one percent of the entire population of the country. It is for this reason, apparently, that Congress will likely throw a lifeline to each of the Big Three, by printing up trainloads (a Hummer might do actually – thanks GM!) of cash and wishing it well (thanks taxpayers!).
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It is said that GM, without assistance, could fail before the end of December. So, I suppose that now would not be a bad time to stop running those Hummer and Cadillac ads, and concentrate on conserving some cash. I remember back in the summer, when there was nothing but optimism surrounding GM. The Volt, as everyone has forgotten by now (especially GM) was going to be the most technologically advanced, most efficient vehicle ever produced. And the best thing about it? It didn’t resemble a GM car at all. Never mind that it wasn’t expected to roll out until 2010.
So by saving GM, Congress can preserve for all of our consuming pleasure, any and all Buicks, Pontiacs (name one), GMCs and other assorted large, heavy, gas-guzzling vehicles. To my understanding, cars that get twenty miles to the gallon, are unreliable, and unattractive, don’t sell too well in this market. Years ago, economists, governments, and even CEOs fighting regulation, referred to a concept, termed by Adam Smith, as the “invisible hand.” Though the concept over time strayed from Smith’s original metaphor, it essentially promoted that market forces, namely consumers, should determine whether a business fails or succeeds. Producers making a good product would thrive, in theory. Those making an inferior product would fall by the wayside.
It’s hard to argue that GM shouldn’t fall by the wayside. They’ve come too far, and accomplished far too little. But perhaps there is a solution. If you’ve been digging under rocks or dynamiting mountains in search of gold or diamonds, you may have noticed that GM actually produces some hybrid vehicles. In fact, one of GM’s few successful vehicles, the Chevy Malibu, is available as a hybrid model. You can buy an Escalade hybrid, or a Saturn Vue hybrid.
Why these vehicles idle noiselessly in obscurity is anyone’s guess. But as part of the agreement to bail out this stubborn and plodding old car company, the government should mandate the company one simple task: Within six months, produce only hybrid or electric vehicles. Leave it to GM to decide which brands to delete, or whether to double its efforts on the Volt. The government can only do so much. GM may choose to leave its redundant brands intact, and the Volt may (following form) become an afterthought to the company’s survival. In any case, eventually the invisible hand will do its work.
Image Credit: gmeurope at Flickr under a Creative Commons License
They already had an electric car that worked just fine - the EV1. So, they can make that one too.
We probably need to bail them out, but in exchange they should be forced to:
-decrease production and advertising for large gas hogs
-increase production and advertising for alternative vehicles
-follow a higher standard for fuel efficiency
-cut back on salaries,bonuses, and other extras
The UAW needs some discipline also.
Editor’s note: Doug made this comment before the last paragraph of the article was changed to include more cars than the Volt.
Yeah because making just 1 car style would be SO brilliant. Stick to your cheap scotch because you are terrible at business. I love how everyone acts like EVs will save the world. If GM scales back their product line and just produces the Volt, they will be bankrupt in 1 month because most people will not buy that Prius looking untested vehicle. Now everyone short of Wagoner and the UAW know GM must make some serious changes, but they can’t throw out the baby with the bath water. Yes they need to 86 Buick and Pontiac; they can take the few successful models from them and sell them as Chevy’s. De-unionize all of their plants and concentrate on performance based pay from their employees and the could and would be competitive.
Those cars on the lot are doing GM no good. Converted to cash, even at a loss, is more useful to them at the moment. You’ll see ads and red tag specials all over the place for a [short] while.
GM is offering some good fuel efficient cars now.
Prior to this crisis, they were doing a good job of turning themselves around. Cue the credit crisis, caused in large part by the government strong-arming banks (mainly Freddie Mac and Fannie Mae) to make loans to “less fortunate” people for homes they couldn’t afford, brought it all to a grinding halt.
Consider the following 2009 models (These mpg numbers are of the format city/highway and were obtained from the EPA website at http://www.fueleconomy.gov):
1) The Chevy Cobalt XFE and Pontiac G5 XFE at 25/37 mpg (city/highway, respectively) (best in class …most notably better than Honda Civic at 26/34)
2) The Pontiac Vibe at 26/32 mpg
3) The Saturn Astra at 24/32 mpg
4) The Saturn Aura and Chevy Malibu at 22/33 mpg (also the Hybrid versions at 26/34 mpg) (best in class)
5) The Chevy HHR at 22/32 mpg
6) The Chevy Aveo (and Aveo5) and Pontiac G3 Wave (and G3 Wave 5) at 27/34 mpg (Not their best cars but they also have the distinction of being the lowest price cars on the market)
7) The Pontiac G6 at 22/33 mpg (best in class)
9) The Chevy/GMC C15 Hybrid (full-size 1/2-ton ext-cab truck) at 21/22 mpg (only one in class)
10) The Chevy/GMC C15 XFE (full-size 1/2-ton ext-cab truck) at 15/21 mpg (best in class for 2008, now Ford has their new truck mpg also at 15/21…but they’re both better than Toyota Tundra (15/19) and Nissan Titan (13/18)).
*XFE stands for eXtra Fuel Economy (a version GM started offering in 2008 models)
For 2010, they have the Volt and the Chevy Cruze (which is purportedly going to have a 1.4L turbo engine that gets 45 mpg highway)
(Note that many of these vehicles are leaders in their class, MPG-wise, while also leading in torque and/or horsepower at the same time (and, most often, being lower priced). Yes GM has problems, but the sentiment that “all their cars are worthless gas hogs” is patently false.)
“the government should mandate the company one simple task: Within six months, produce only hybrid or electric vehicles.”
CalCars PlugInAmerica just proposed a plan to make them do exactly that:
Make the big three accept $10,000 deposits on electric cars and then build the electric cars - to meet the orders. Earn $50 billion to just make EVs.
The Feds would pay back the private fleets and government fleets and individuals making the deposits out of the electric car tax credit of $7,500 from last month.
The funding would provide the money to make them. The rest, all the Pontiacs and the Buics and whatever…meh.
Tim - what is so good about 22/32 mpg?
PlugInHybrids routinely get 100+ mpg. There are plenty of aftermarket conversions driving now for the last 4 years, getting over 100 mpg.
The trick is making Detroit build them. That’s why the PlugInAmerica plan is so cool. It forces action.
22/32 means most people will get 20, which isn’t good.
One of the best way to kick start the revolution we need is a plan that enforces air tight minimum standards of quality and efficiency.
The main reason the economy may take a hit is if people panic (which they will!).
Chances are successful car makers like Toyota will buy out parts of the American car makers’ infrastructure. Smart businessmen will recognize that a recession is the best time for growth because everything is undervalued. While some job loss will occur, the niche will be filled by another player.
Another option is a nationalized automaker. As much as America hates the idea of big government socialism, some of the best pieces of America are nationalized. Why can’t we have a nationalized car company?
I provide a list of nationalized services that would be less efficient in a free market economy:
http://optimism.thorscave.com/?p=55
Cars should be added to the list if we hope to become the world leaders in reduction in oil consumption, and domestic energy production, along with other ‘green’ goals.
… the government should mandate the company one simple task: Within six months, produce only hybrid or electric vehicles.
If you think converting to only hybrid or electric vehicles within six months is simple, go back to your bottle. There isn’t a single profitable car company in the world that produces only (or even a majority) hybrids or EVs. Further, hybrids make little or no profit. People don’t want to pay a large premium for marginally better fuel economy. This is [w]hy these vehicles [Detroit hybrids] idle noiselessly in obscurity… . If the government is going to mandate terms, they could start by loosening or eliminating government restrictions on high mileage small cars that are sold in Europe by Ford and GM. These cars get better mileage than hybrids, they cost less, they aren’t burdened with the complexity of a hybrid drive system and, unlike hybrids, they are already being sold in large numbers by Ford and GM.
It would be monumentally stupid for the government to give or loan tens of billions of dollars to Detroit and condition this money on measures that will ensure Detroit’s demise. I won’t be at all surprised if the idiots in Congress do just this.
“Tim - what is so good about 22/32 mpg?”
One of the premises of the article is that GM makes only “gas guzzling vehicles” and “cars that get twenty miles to the gallon”. A little research shows that it’s simply not true. In fact for people who need an economical midsized 4-door sedan but can’t afford a Prius, the Malibu/Aura/G6 are better mpg-wise than any other car in that class (including Toyota Camry and Honda Accord).
For people who need a full-sized pickup truck, GM wins again. Ditto for people who can afford only a small entry-level car (Cobalt/G5 XFE).
GM already has plans for a plug-in hybrid (The Volt) and we’ll see how well it sells. I’m hoping it’s able to transform the industry and the country, but forcing it sooner will only hurt that possibility.
“22/32 means most people will get 20, which isn’t good.”
Ryan, where the heck are you driving? I’ve owned six different GM vehicles in my life (been driving for 25 years) and every one of them was under-rated by the EPA. I was able to regularly beat the EPA highway rating for my mixed-driving commute (and this was before they “pared down” the ratings in 2008 to account for A/C use and faster driving).
-Tim