Big SUV Sales Key To GM Profits, Climate Change Be Damned

Here’s a headline for anyone who wants to see cars and trucks become more fuel efficient with fewer emissions. In the General Motors annual report, the company announced “our profitability is dependent upon the success of full-size pickup trucks and SUVs.” The General is fired up financially because sales of its mammoth Chevrolet Suburban SUV were up a stunning 86% in October. Sales of the slightly less portly Tahoe were up 81%, while the Yukon XL climbed 27%.

Chevrolet Suburban SUV

In the premium “in your face large luxobarge” category, sales of the Cadillac Escalade rose 9.2% while sales of Ford’s Expedition and Navigator fell. According to the Automotive News Data Center, sales of full size SUVs in general were up 4.9% overall. As a result, General Motors claimed 45% of the large SUV market in October, which must have Mary Barra and her merry minions dancing in the boardroom.

A GM spokesman said the large increase was due to more sales to commercial fleets and government buyers, which typically bring higher margins than rental company business. What? Avis and Hertz can buy cars for less than the government that bailed GM out just a few years ago? How’s that for “your tax dollars at work,” people? Fleet sales were only part of the story, though. Retail sales of large SUV vehicles rose 33% and accounted for 68% of their total volume.

These large vehicles are enormously profitable for manufacturers. The profit margins on a large SUV can top 20%, according to Morgan Stanley analyst Adam Jonas. The average transaction price in October for a Chevrolet or GMC full size SUV was $56,630, according to GM. That figure is down from $59,100 last year at this time because dealers are discounting 2016 vehicles to make room for the 2017 models.

As auto enthusiasts who also don’t want to see the earth destroyed by mankind’s unquenchable thirst for fossil fuels, what should we make of this news? Should we be celebrating because General Motors has gotten off the mat — thanks to taxpayer support — to once again bestride the automotive world like a Colossus? Or should we be worried that with all the hype and hoopla about the coming green car revolution, the biggest, thirstiest polluters ever created are thriving in the marketplace?

Free enterprise means commercial fleet operators and individual buyers should be able to purchase any products they wish, provided they have the money. But why are governments loading up on such behemoths? Why should taxpayers be forced to support peripatetic potentates who want to be driven around in such ponderous pachyderms?

Quite frankly, this is madness. We are all fiddling as Rome burns. Have you watched Leonardo DiCaprio’s Before The Flood yet? Have you seen how the quest for fossil fuels is scarring and torturing the land so clueless clods can continue to ride around in gargantuan motor vehicles? Are we ever going to get real on climate change? Or are we going to still be talking about it as the waves close over our heads?

I have embedded the DiCaprio video below so you don’t even have to go look for it. You can watch it from the comfort of your own home. It is the best argument yet for a carbon fee. Unless we make the cost of fossil fuels equivalent to the all the burdens they place on society, we are doomed as a civilization. As voters we can object to our government spending our money on these monstrous machines. And we can refuse to elect so-called leaders who won’t lift a finger to address the most crucial challenge mankind has ever faced.

If the news about GM selling battalions of rolling battleships upsets you (it clearly upsets me). use the power of your vote to elect people who will represent you, not corporate interests who place profits ahead of people.

Source: Automotive News


Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.