Posted on 09/11/2012 2:39:01 AM PDT by Kaslin
This is getting redundant.
If you want investment losses for tax purposes, Barack Obama is your guy.
Now, if the country could only figure out how to write off the five trillion dollars we’ve lost during his presidency. As the man said: A billion here and a billion there, and pretty soon were talking about Barack Obama.
Readers of my column know that there are few things that I dislike more than the Chevy Volt. I don’t like the inflated claims that government-corporate elites make about it; I don’t like that it costs more than a normal car to keep it driving; I don’t like that European journalists gave it the automotive equivalent of the Nobel prize for engineering; I don’t like that it catches fire; or that the Volt’s voltage puts first responders at danger at accident scenes because engineers didn’t think about safety for first responders.
No, instead they only considered Obama’s desire to put one million electric vehicles on the road no matter what the cost.
Today, I’m very pleased to announce that I have a new reason to dislike the Volt.
And it’s probably the best reason of all.
The Chevy Volt costs close to $90,000 to manufacture while it retails for $40,000 according to information gathered by Reuters.
“Nearly two years after the introduction of the path-breaking plug-in hybrid,” writes Reuters, “GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.”
“Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher,” the wire service says. “There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.”
Ok. So here’s the math that GM (GM) faces on the Volt: 10,666 Volts were sold in the first seven months of 2012. At an average loss of $49,000 per vehicle that’s a loss of $522,634,000.
A $523 million dollar loss on a car that won’t sell 20,000 units in 2012?
To put this in perspective, the company has probably shaved at least $4 billion off its market value by squandering money on the Volt. Right now the company is trading at about 8.31 times it’s earning. Assuming GM didn’t produce the Volt at all and just held on to the cash savings, the $523 million in cash multiplied by the market value of 8.31 times earnings comes out to $4,343,088,540 in lost value for the shareholders.
Those shareholders are you and me.
It would be cheaper for the company to quietly ask potential Volt buyers if they would take a $40,000 check just to go away.
Two weeks ago GM was bragging that Volts were selling at a record pace. Now it appears that it may be years and years and years before the company makes money selling the Volt’s old technology as something new.
“We’re really seeing momentum continuing to build,” Michelle Malcho, a GM spokesman told the press a few weeks back according to the Detroit Free Press. “As people see their neighbors have one and as they start to understand the technology and are able to drive it, they put it into their consideration.”
Can we stop the momentum please? Like so many of Obama’s plans, the momentum in this one is killing the company.
So far the company has lost over one billion dollars by it’s investment in the Volt.
“GM's quandary is how to increase sales volume so that it can spread its estimated $1.2-billion investment in the Volt over more vehicles while reducing manufacturing and component costs” says Reuters, “which will be difficult to bring down until sales increase.”
And why doesn’t it surprise me that so many of those neighbors reside in California?
“Californians are buying one-third of GM’s supply of Volts,” reports Freep.com, “but Malcho said other markets are showing strength too. Michigan is one of the vehicle’s strongest regions.”
Great news: Assuming those Michigan sales are largely in the Detroit area, we can safely say that “robust” Volt sales are coming from areas of the country that seem to have a terminal case of financial mismanagement.
Because did I tell you that while Obama made a gift of most of the money and tax breaks he has given General Motors, the company still owes American taxpayers at least $25 billion that Obama converted into shares of the company?
That’s true. But that not the worst of it.
The shares are trading so low that selling now at current market prices would bring a loss of $14 billion, according to bailoutcost.com.
The $523 million the company lost on production of the Chevy Volt in the first seven months equals losses of $896 million over the whole year.
That money would make a heck of a dividend to American taxpayers, wouldn’t it?
Oh, that’s right.
It’s the Obama policy on investments: No dividends, no refunds and no exchanges for you.
Only losses.
So if purchasing a Volt is supposed to be patriotic then wishing you could afford one is also patriotic, right? What a crock.
Why dont we hear about this From Republicans? Could it be they are afraid because of Michigan and Ohio?
If they were giving them away?
I wouldn’t be in the line.
How about a going away gift for Mr O?
And they aren't paying gasoline taxes, either.
Recken MITT and Bain Capital would have shut off that Volt spigot a long long time ago? And far away?
The median household income is $52,026 (well, it used to be, now it is less). For every million dollars that government wastes, it consumes and destroys all the jobs held by 20 median households. A billion dollars represents the jobs held by 20,000 median households.
As a point of reference, according to USA Today [1]:
“Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.”
So, for every federal position “saved or created” , about 2 1/2 private sector households had their total income consumed.
[1] Federal workers earning double their private counterparts, By Dennis Cauchon, 8/13/2010.
Link:
http://www.usatoday.com/money/economy/income/2010-08-10-1Afedpay10_ST_N.htm#
In a recent issue of “Wired” IBM had a full page ad extolling the incredible sophistication of the computer driven environment of the Volt. Basically, the thing is a computer network that you sit in. All I could think of is how fragile the car is as a result. Of course, all modern cars won’t go without the onboard computer functioning but the Volt seems to take that to another level.
The Volt will be as gone as the Edsel or the Tucker (Both better cars) when Obama leaves the White House. They just cost too much. I am not against electric cars but they need to make em so real people can buy them—and they don’t burst into flames. Still, better to build small fuel sipping cars here in the USA rather than import them from India or Korea.
“Californians are buying one-third of GM’s supply of Volts,” reports Freep.com
Freep.com = Detroit Free Press (Gannett), nothing to do with FreeRepublic
The left OWNS the pravda-media, lock, stock and barrel. It's a wonder most of the population doesn't think Republicans are some sort of vampire-species and aren't out driving stakes through their hearts on sight. Probably on their "to do" list come November 7th.
The real answer is to produce more and cheaper gas. Then you can have cheap transportation.
Pray for America
The GOP needs an ad that says Obama is a waste of our money and list all his failures.
And they aren't paying gasoline taxes, either.
I’m sure they pay taxes on the electricity, or at least the electric power industry certainly does - but for sure, they’re paying nothing for the upkeep of the roads.I guess taxes are only good if they’re not earmarked for something actually useful . . .Actually, I keep wondering if the cheap shale gas will ever be reflected at the household appliance, hence at a point accessible to a CNG auto owner. I could use a puddle jumper strictly for local use as a second car - just give me a CNG tank to store the energy equivalent of a couple of gallons of gasoline, and there would be little reason for me to ever stop at a gasoline pump. That’d give me much better range and performance than a Chevrolet
VoltEdsel - and it would be dirt cheap in comparison.
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