Chevy Volt a Failure - GM to Layoff 1,300

There is little short-sighted about Marchionne's statement. Just as there is rarely much short-sighted about anything he ever says.

The market for EVs is piddling, and hasn't come close to the number of sales people have said it will throughout the life of this thread -- and that is with all of the public money that has been thrown at the technology and the economic resources it has consequently drawn away from other, likely more productive, potential areas of our economy.

Maybe the viability of EVs will change some day, but not at the current cost structure for electric cars -- something that has not changed and shows no signs of changing. The batteries are way too expensive relative to conventional gas-powered cars -- just as they have been for the last 100 + years.

This whole discussion about EVs started with the Chevy Volt, right? I stopped bothering with that aspect of this thread a while ago, but sales for the Volt remain pathetic as ever. The car has been a sinkhole for GM and for Americans as a whole, who will pay for the debt it added to our public debt. They discontinued the European version of the Volt recently. And even the companies selling any number of EVs are not selling a lot of them. The Nissan Leaf sort of leads the way, and it doesn't sell that many cars relative to the car market. And Tesla is selling a relatively small number of cars that cost $100,000 into a market of "$30,000 millionaires" who are leveraged over their heads thanks to the distorted interest rate market our central bank has created, and they are using it to buy hot toys like Teslas. I can understand riding Tesla stock as a trading vehicle in an overheated stock market -- and I am sure someone has made good money on it -- but I can't understand anyone with a brain -- and having done reasonable analysis of its business -- thinking this is a formula for a sustainable business at the astronomical long-term growth rate the stock has built into it.

EVs are a very small market. Yet car companies continue to roll out half-assed versions of their cars with electric motors, because they get punished (the state of California, in particular) for simply selling cars that people actually demand, the way businesses operate in a market not being interfered with. It's like trying to operate a business with an anchor attached to it.

Tesla, in fact, has been posting lower losses, and then a small profit, for most of its life as a public company because its biggest business wasn't selling cars -- it was selling California emissions credits to other car companies that are afraid they are going to face huge fines. It as struck me as being kind of Kafkaesque.

As for Marchionne, I don't see how anyone could call him short-sighted. The guy is a breath of fresh air, actually, if you know about how he has run his businesses.

Our government should have never gone down the crony capitalism road of adding to our public debt to benefit private companies, but when they did it with Chrysler, the company STILL would have been bankrupt if it hadn't been for Marchionne's willingness to take on a risk that nobody else would touch. He got an amazing deal from the Treasury -- at all of our expense, which should piss everyone off -- because of the leverage he had -- including what was essentially a huge interest-free loan. But I blame our politicians, and the general public lack of vigilism for that, not Marchionne.

Since Fiat took over Chrysler (and they are really close to formally merging the two companies into one company right now), Chrysler has done way better than anyone could have expected due to the cost-cutting Marchionne imposed and the boost to its car sales, which sucked much worse than where they are now when he came in. Fiat has been getting hit hard by a miserable car market in Europe, and in fact, Chrysler has been actually propping up the company's earnings.

If you can find it, check out the 60 Minutes piece on Marchionne from 2009 or 2010. If GM was run with the culture he brought in, you wouldn't have the shit storm it has been facing due to the ignition problems and their mishandling of the whole thing. He boarded up the lush penthouse "ivory tower" floors that executives had sequestered themselves in and put himself in a small office on the same floor as the engineers. He cut as much dead weight as he could. The guy is a workaholic. He is one of the most honest CEOs you will ever find, which is why he was the one who said what every car company executive would say if they weren't afraid of the politicians who can arbitrarily squeeze them.

Fiat-Chrysler is facing severe headwinds, and as a company it may not do very well moving forward, or even survive. But if that happens, it won't be because Sergio Marchionne didn't embrace selling cars at huge losses because a bunch of politicians decided to favor those losing vehicles and try force car manufacturers to sabotage their own businesses.

As I have said throughout this thread, if electric vehicles ever make sense to consumers, there will be a market for them. There isn't today, because buying one makes little financial sense to most people, relative to a comparable gasoline-powered vehicle. And there really is no indication anything about the technology is going to change anytime soon to change that. But if it does, we won't need our government giving out financial favors to manufacturers and consumers of those cars to try to get them to develop or buy them. Companies will spend on their own if a technology is a potential moneymaker, and people will choose them on their own merits.

 

The way I post, it has more potential than battery-powered cars.