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GM may have something big in store for its 100th anniversary in September

General Motors is treading in some dangerous waters these days. The company -- along with a number of other auto manufacturers with a truck-heavy product lineup -- is seeing a huge decline in sales as gas prices soar. GM’s stock price hit $9.92 last week -- a 54-year low. 

The company is in full crisis mode now and already announced plans to either idle or close some of its full-size truck production facilities. GM also halted plans for the next generation of its highly profitable full-size trucks and put its engineers to work on more fuel efficient car platforms.

GM is also considering slashing its sizeable brand portfolio. There are already talks in place to sell its Hummer brand, but other possible candidates include Pontiac, Saab, and Buick.

With all of the negative vibes surrounding GM these days, the company needs something to get public's mind off its problems. Thankfully for GM, it has the perfect cure-all in the form of the Chevrolet Volt.

According to sources familiar with the Volt program, GM is working overtime to ready a production version of the vehicle to celebrate its 100th anniversary on September 16. Although it’s highly possible that GM could pull off showing a production version of the Volt within the next few months, the vehicle still won't arrive at dealerships until 2010 at the earliest.

The production version of the Volt is expected to differ greatly visually from the concept vehicle that has been on display at numerous auto shows and technology expos. Significant changes have been made to improve the aerodynamics and make the vehicle meet all federal safety regulations.

The Chevy Volt houses a powerful lithium-ion battery pack and electric motors to propel the vehicle for 40 miles. A 1.0-liter turbocharged gasoline engine springs to life to recharge the battery pack once it reaches a predetermined level. Most, however, will likely plug their Volt into a standard household outlet to charge the battery pack overnight.



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This always amazes me...
By Bender 123 on 7/8/2008 9:35:23 AM , Rating: 5
Did the American car makers not see this coming? I laughed as my sister in law bought an H2 last year...she is not very bright, so I could understand that she would not understand world oil pricing...but the leadership of GM not figuring this out?




RE: This always amazes me...
By Brandon Hill (blog) on 7/8/2008 9:41:16 AM , Rating: 5
Granted, even Toyota "didn't see it coming".

Toyota built a brand new truck plant in Texas (IIRC) for its full-size Tundra. And it just recently introduced a full-size Sequoia based on the Tundra. And I believe they have more same-branded SUVs than anyone else:

RAV4
Highlander
Venza (coming soon)
4-Runner
FJ Cruiser
Sequoia
Land Cruiser

Toyota's trucks sales tanked last month as well.


RE: This always amazes me...
By jay401 on 7/8/08, Rating: 0
RE: This always amazes me...
By creathir on 7/8/2008 1:09:25 PM , Rating: 5
Wow... this is totally untrue.

The plant was not closed at all, production was just slowed. The plant is located in San Antonio, but it has not closed.

- Creathir


RE: This always amazes me...
By erikejw on 7/8/08, Rating: -1
RE: This always amazes me...
By masher2 (blog) on 7/8/2008 4:14:55 PM , Rating: 4
> "Toyota sells 90% small-medium sized cars"

Passing off fabricated statistics is difficult on this board. As of last year, 43% of Toyota's sales came from pickups and SUVs. And even of the remaining 57% from cars, well over 10% came from its full-sized Avalon and Lexus models:

http://www.gminsidenews.com/forums/f78/us-septembe...


RE: This always amazes me...
By erikejw on 7/8/2008 6:43:02 PM , Rating: 1
Well, for most of us the world is not USA.
Using figures that suit your purpose that you pulls from your arse won’t do anyone any good.
This board will not tolerate it anyway.

I guess you've never been outside the US. In Japan they barely use them at all and in Europe they are scarce.

Toyota sold 9.08 million cars fiscal year 2007.
http://www.toyota.co.jp/en/ir/library/annual/pdf/2...

A pickup is a light truck and not a car.
I don’t see families driving pickups but lots of small companies.

Wikipedia:In North America, the word pickup generally refers to a small or medium sized truck. This light commercial vehicle features:
and rear load area or compartment (separate cargo bed).

Avalon is not sold outside USA, 50k in USA.

Lexus sold 490k world wide and about 350k in the US.
Not all Lexuses are “large” cars.

SUV sells with an even larger ratio USA/World wide.
But use the same ratio as in the Lexus case, hell most of the SUVs doesn’t sell at all outside the US.

353k SUV makes 494k worldwide and another 3 months gives 659k.

(50+490+659)/9080 = 13.2%

Add the sales declines for SUV and large cars this year the figure might be 12% for 2008.

Add a percent or two for some other large cars that don't go into those categories and remove the small Lexuses and we have the same percantage.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 11:36:14 PM , Rating: 3
> "Using figures that suit your purpose that you pulls from your arse won’t do anyone any good."

My figures were exact data. Yours were fabricated from thin air.

> "a pickup is a light truck and not a car."

Yes, which means it can't possibly be a "small/medium car", now can it?

> "I guess you've never been outside the US. "

You're close -- I've been to a bit less than 50 countries, actually.

In any case, if you include world sales, your figures are just as far off. You forget GM owns such brands as Opel (many small cars), Saab (several small cars), and the small Matiz/Spark and Aveo models. In Asia, more than half of all GM cars sold are from its Daewoo acquisition; nearly all these are small cars.


RE: This always amazes me...
By erikejw on 7/9/2008 12:37:45 PM , Rating: 1
So you are arguing that 43% is closer to 10% than 12%. That is hilarious.

Of course I did not include the pickup sales in the world overall sales.

Your sales were US sales which is about as worthless it can be to compare small, medium and large cars sold in a company persepctive.

The world is larger than USA.

Why not mention that large cars in Japan is 4% of Toyotas sales.


RE: This always amazes me...
By griffynz on 7/8/2008 11:53:48 PM , Rating: 2
http://www.toyota.co.nz/AboutUs/Press+Releases/200...

Avalon is not sold outside USA, 50k in USA.

who are you? get your facts right or go home...


RE: This always amazes me...
By paydirt on 7/9/2008 9:58:45 AM , Rating: 2
In the early 1980s, oil prices spiked, every one bought Yugo's and Vega's, businesses became more energy efficient, and demand/usage crashed. Over the next 20 years, the price of oil fell 90% when you include inflation.

Then everyone traded in their fuel efficient cars for SUVs because it seemed gas/oil would "always" be low. Now oil has spiked again and everyone is trading in SUVs for fuel-efficient cars and oil will likely decline in price.


RE: This always amazes me...
By erikejw on 7/9/2008 12:33:06 PM , Rating: 2
I any major market that is. No EU or Japan.

Add those 50 Avalons that is sold in New Zealand then and be happy about it


RE: This always amazes me...
By creathir on 7/8/2008 10:16:01 AM , Rating: 5
I would say the "slump" is just a minor issue here.

GM and Ford's major issue at hand is the fact that they are slaves to the unions. While they had cash reserves, they should have closed down legacy plants, and oppened new ones in non-union states. Their costs would be much lower, meaning they could charge much less, meaning more cars would be sold, meaning their stock would be much higher.

- Creathir


RE: This always amazes me...
By FITCamaro on 7/8/2008 11:51:48 AM , Rating: 4
Definitely agree. Close the old plants where the unions are entrenched like a tick. Reopen in new areas offering pay competitive with the competition. Hell they could pay higher and still be spending far less.


RE: This always amazes me...
By rudy on 7/8/2008 5:27:41 PM , Rating: 2
yeah but they cant shake the legacy costs of all the employees on retirement which will not go away the major cost in their business. The reality is that the big 3 are in a rut they cannot get out of. For years they covered it up by making cheaper cars and cutting costs which resulted in lower customer satisfaction but they sold the junk because it was "American" Then they started shifting jobs to Canada and Mexico. And now they have lost all credibility. Americans are jaded because the big 3 are not really supporting them with jobs and were selling them junk and so they have decided to try foreign cars. The Unions are not willing to help. The only way I see out is to crash the company take all the talent and start new car companies. The japanese auto makers have mostly seen this mistake and have made moves to make sure that in the long run legacy employees will not drag the company to the ground. Make sure in your future if you have employees and retirement you write into their contracts that their retirement check is directly proportional to your companies performance. That should keep them buying your cars and keep them working on the job instead of the terrible inefficiency the unions have created in the US auto market. Also its really difficult for the big 3 to open plants and not see them become unionized. And the foreign car makers are for some reason not being effected by this, most likely because right now pay and profits are good.


RE: This always amazes me...
By theapparition on 7/8/2008 12:09:32 PM , Rating: 5
It's far more difficult than that. States have no jurisdiction over the Union's established contracts with GM/Ford, et al.
You can't just close a factory (BTW, states fight it since they don't want the unemployment burden on their economy) and open another one. That violates the contracts that were signed.

While I agree with you in intent, it's just not going to happen that way. Instead, the big 3 have taken the next step, to seriously undermine the power that unions have. Remember GM's last hold out when negotiating and forcing the union to pay pensions? Trust me, in twenty-thirty years, unions in the auto industry will be long gone. Change takes time.

While the intent of unions was noble when formed decades ago, thier time has long since passed.


RE: This always amazes me...
By theapparition on 7/8/2008 12:16:54 PM , Rating: 4
Just to give you an example, GM is prohibited from making a Firebird, Formula or TransAm model, since the right to build that car still resides with a Union.

If GM wants to make a Chevy Camero, no problem. But if they want to make a Pontiac Firebird......that vehicle must be made by union labor in St. Therese, Quebec. They can't make it in the US, Austrailia, or anywhere else for that matter.
(FYI, to everyone who doesn't know Chevy Camaro and Pontiac Firebird were basically the same models with different badges).

I don't know why such contracts exist (a concession for something more important I'm guessing), but contracts exist and can be enforced.


RE: This always amazes me...
By jamdunc on 7/8/2008 1:10:56 PM , Rating: 5
So let's give the Unions a choice, no Pontiac Firebirds being made so no job's and so the worker's becoming unemployed...

OR

..the Pontiac Firebird being employed at GM's demands.

I know if I was in business the decision for me wouldn't be hard. There's no point giving in to the Union's if it's only going to cause financial trouble for the company.

And I can guarantee the Union member's wouldn't then be happy with their leaders. Sometimes they just push too far!


RE: This always amazes me...
By MarcLeFou on 7/8/2008 3:16:15 PM , Rating: 3
They closed the plant in Ste-Thérèse about 3 years ago since it was tooled exclusively for Camaro's and firebird's and these were not selling well at the time according to GM. So unless GM finds a way to break its contract, you'll never see a Firebird again.

I also don't see the point in showcasing a tricked out Camaro that cost them millions and millions of dollars in Transformers only to still be unable to buy one two years after the fact. While I believe GM is on the right track, that's just downright bad management.

As for the Firebird, they could just rebadge the Camaro as a Saturn. That seems to be the brand they want to move forward with anyway.


By theapparition on 7/8/2008 5:35:23 PM , Rating: 2
You are correct,
If GM wanted to use the Firebird badge again (for the next x years), they must re-open the St. Therese plant. That is, unless some concession is given.

As for why you can't buy a Camaro right now, it's being finalized along with the rear drive Zeta platform in Austrailia. It will be released next year, and trust me, you still won't be able to get one. It's one of the hottest upcoming cars, and predicted a hit for GM. I'd call that pretty good management.


RE: This always amazes me...
By FITCamaro on 7/8/2008 4:54:32 PM , Rating: 2
Contracts expire. When they do, you close the plant and move elsewhere unless the union leaves. Simple as that.

The only thing stopping GM is that the UAW would destroy GM in the media.

And 20-30 years is too long. That's 20-30 more years that GM and Ford are paying a far higher cost of labor than other automakers.


RE: This always amazes me...
By theapparition on 7/8/2008 5:25:44 PM , Rating: 4
If it was that simple, it would have been done.

What happens when union "brothers" at all your other plants suddenly walk out in protest?

Guess what, no products at all.

The unions aren't stupid you know, they know how to play the game too.


RE: This always amazes me...
By jamdunc on 7/8/2008 9:09:57 PM , Rating: 2
But no products means no future income (only income from already built stock) and so the company could go into dire straits and lay off most of it's staff.

So because they were all standing side by side during the strikes, they can now all stand side by side at the dole/employment office.

Well done Unions :)


RE: This always amazes me...
By FastLaneTX on 7/9/2008 12:59:20 PM , Rating: 3
quote:
That's 20-30 more years that GM and Ford are paying a far higher cost of labor than other automakers.

That depends how you measure. Per hour, the highest-paid autoworkers in the US are non-union guys at Toyota and Mercedes plants (in RTW states). However, their productivity is so much higher than it more than makes up for the higher wages -- and they're making cars that sell for much, much more than GM/Ford crap.


RE: This always amazes me...
By wallijonn on 7/8/2008 1:07:22 PM , Rating: 1
quote:
GM and Ford's major issue at hand is the fact that they are slaves to the unions. While they had cash reserves, they should have closed down legacy plants, and oppened new ones in non-union states.


Oh, please don't pull out the "Union card" as the "major" issue when in fact the auto makers have have been using second and third world countries to make many of their parts, thereby making record profits for their investors.

The automakers have been making money hand over fist for years and instead of making more fuel efficient engines they decided to sell trucks. They had very poor fore sight. They lobbied to overturn EPA standards, future EPA gas mileage mandates, air quality standards, etc., all the while manufacturing heavier and heavier trucks and cars with more and more horse power.

The plain fact is that years ago there were cars which were getting 40mpg. It is those cars which need to be bought back, like the Suzuki Swift with it's air cooled 10,000 rpm 3 cylinder engine, the Honda 600, the clean air Honda Civic, etc.

Don't blame the Unions, blame the suits. They're the one's who tell the engineers what to build. They sold the people on what they should buy. If you can afford a $50,000 SUV you can afford the $5 a gallon gas. The same goes for your sedan that has 400 horses under the hood.

Some of us still remember the '70s, when you couldn't give away those 8mpg "boats," the Caddies, the Buick Electras, etc. Now you can't give away SUVs. Maybe you shouldn't have invested $3000 on those over-sized 22" wheels with the rotating covers. I doubt people will pay extra for a truck that looks great but gets 12mpg.

The chickens have come home to roost.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 1:30:01 PM , Rating: 5
> "when in fact the auto makers have have been using second and third world countries to make many of their parts, thereby making record profits for their investors"

Domestic automakers making record profits? What planet are you checking in from? GM LOST $38,000,000,000 in 2007 alone, and a few billion in 2005 as well.

n 2006, they made $2B on revenues of over $200B...a margin of under 1%, not exactly stellar. In fact, from 2000-2004, they ran dismal margins of 0.7% to a 1.5% margin. Go back to the 1990s, and you find them losing billions again. In fact, GM's largest loss ever on a percentage basis came in 1992...and it was due to their cost adjustments for retiring workers.


RE: This always amazes me...
By FITCamaro on 7/8/2008 4:58:18 PM , Rating: 3
quote:
The chickens have come home to roost.


Nice to see you here Reverend Wright.

And the "suits" tell the engineers to build what the people want to buy. The people wanted trucks and SUVs, so they built them. That's changing now and as such, they're focusing on small cars.

It's called a free market economy.


RE: This always amazes me...
By qdemn7 on 7/8/08, Rating: 0
RE: This always amazes me...
By masher2 (blog) on 7/8/2008 1:31:09 PM , Rating: 3
As others here have pointed out, GM made small, fuel-efficient cars all the way back to the 1980s. Problem is, no one bought them.


RE: This always amazes me...
By qdemn7 on 7/8/2008 1:44:47 PM , Rating: 2
Funny how all these Japanese companies making small fuel efficient cars, sold THEIRS just fine, eh?

Once again, it's blame the Unions, blame the Consumer, blame the Oil Companies, blame the Arabs, blame EVERYONE, but the people actually running GM (into the ground).

That is nothing but typical American corporate BS-speak excuses. When an American company does great, it ALWAYS only due to the brilliance of Management. When an American company does terrible, it's the fault of everyone BUT management.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 1:58:31 PM , Rating: 5
> "Funny how all these Japanese companies making small fuel efficient cars, sold THEIRS just fine, eh"

Because those cars were cheaper and put together better...both of which are certainly at least partially the fault of the union structure at Ford and GM.

Certainly management bears a lot of the blame as well. But denying the unions are an albatross around the neck of domestic automakers is denying reality.


RE: This always amazes me...
By blaster5k on 7/8/2008 3:16:56 PM , Rating: 2
+1

The union dealings added some huge overhead costs to every vehicle made. They had to build their cars -- especially the smaller ones -- on the cheap as a result. In most cases, they couldn't turn a profit still. This is also plays a role in why they went after the truck and SUV markets. Those were the only vehicles they could make decent margins on with the extra baggage.


RE: This always amazes me...
By kmmatney on 7/9/2008 12:06:00 AM , Rating: 2
Agreed. I'm not sure if I can by American for my next car, knowing that a huge percentage is to pay off ridiculous retirement funds to the unions.

What really got me was when one plant wanted to reduce their overhead - by paying people $140K to retire early or leave the company. $140K! Then some of the workers regretted it, since they had a hard time finding a job in the outside world - the same world the rest of us work in!
I read about that in our local paper - can't find a link, though.


By mmcdonalataocdotgov on 7/8/2008 2:55:57 PM , Rating: 2
Like what, the Vega? No one bought them cause they were cr*p. If people wanted fuel efficient cars back then, they bought Japanese, just like they are doing now.


RE: This always amazes me...
By Hiawa23 on 7/8/2008 2:13:32 PM , Rating: 1
Wow, the Volt isn't coming anytime soon, so I really don't see merely talking about it changing anyone's bottomline. Did the American companies not see this coming? Someone said Toyota did not see it coming either, but I bet Toyota is nowhere near in trouble as GM


RE: This always amazes me...
By Pneumothorax on 7/8/2008 11:10:08 AM , Rating: 3
The major difference between Toyota and Ford/GM/Chrysler is that while they have a lot of truck models, they also have a strong car lineup. Can't say that about most of Ford/GM's lineup.


RE: This always amazes me...
By deeznuts on 7/8/2008 1:46:46 PM , Rating: 2
quote:
Granted, even Toyota "didn't see it coming".


Toyota depends on their SUV sales a lot less than the other manufacturers in question. They saw it coming, shit the prius is so ubiquitous it's almost synonymous with hybrid.

Offering different alternatives doesn't mean they didn't see it coming. I mean, no matter how much sales do slump, some people just flat out need trucks. Was toyota 100% on target? I don't freaking know, I'm not a automobile analyst. But they're in the best position for what was an annoying "green movement" but now a very pragmatic efficiency movement.


RE: This always amazes me...
By Noya on 7/9/2008 5:54:15 AM , Rating: 3
quote:
some people just flat out need trucks


Just looking around my neck of the woods (NW), the only non-business use for full size trucks are people with boats/trailers/etc. Not the hicks that commute in them just because they're rednecks and think trucks are cool (and go "muddin" in them once a month)...and OMG are there tons of them in the NW.


RE: This always amazes me...
By erikejw on 7/8/2008 3:53:13 PM , Rating: 2
LOL.
Toyota sells 90% small-medium sized cars but of course they still have some large ones.

GM is 75% large cars with a huge fuel consumtion.

According to the United States Environmental Protection Agency, the 2008 Toyota Prius is the most fuel efficient car sold in the U.S.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 4:16:06 PM , Rating: 1
Did you need to post this twice? See above: your facts are incorrect.


RE: This always amazes me...
By iviythos on 7/8/2008 9:36:40 PM , Rating: 3
Unfortunately, your facts are skewed
Is it your life's joy to make an ass of yourself on these boards and lessen the enjoyment of readers of the conversation here? Nobody likes a selrighteous p***, especially one who thinks he knows so much more than others that it is his duty to ferret out every possible misstatement. State your opinion/facts and have done with it, for the love of all that is holy.


RE: This always amazes me...
By masher2 (blog) on 7/8/08, Rating: 0
RE: This always amazes me...
By jamdunc on 7/8/2008 9:15:54 PM , Rating: 2
Well I don't know about the EPA, but every motoring magazine in the UK has categorically stated that the Prius is not that fuel efficient. If you want fuel effiency, you buy a small diesel engined car. Something like a VW Polo Bluemotion or Seat Ibiza Ecomotive.

You can even watch Top Gear. I think it was series 11, episode 1 where they had a BMW M3 getting a better fuel consumption than a Prius.

Youtube link - http://uk.youtube.com/watch?v=PP6fe6i1vaY


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 11:42:48 PM , Rating: 2
In highway cruising, sure. A hybrid shines at stop-and-go city traffic however. Whereas most vehicles get substantially less mileage in city traffic, a hybrid usually bests its highway MPG.


RE: This always amazes me...
By mdogs444 on 7/8/2008 9:43:00 AM , Rating: 2
Most people buying a $60k H2, or any $60k car for that matter, are not typically worried about the difference of $3 and $4 gasoline.

quote:
she is not very bright, so I could understand that she would not understand world oil pricing

Well neither is the democratically controlled congress, as well as Nancy Pelosi (didnt she say that she'd take care of gas prices when she took speaker of the house?). Their solution is to windfall tax the oil companies, which will only drive up retail consumer gas prices. Then force wind & solar power on the public, when both are junk sources and not reliable for at least another 20 years.

quote:
but the leadership of GM not figuring this out

Sure they are, the hard way. GM has no control over oil or gasoline prices, and in fact, they'd much rather see gasoline go back down to $1/gallon. I dont see how people honestly think the oil companies and gas companies are in this together. Seeing as how GM, Ford, Chrysler, etc were all making fantastic profits off of SUV sales, and minimal profits off small car sales, they didnt want things to change.


RE: This always amazes me...
By retrospooty on 7/8/08, Rating: 0
RE: This always amazes me...
By mdogs444 on 7/8/2008 10:04:36 AM , Rating: 3
False - the dollar is weak because of the slowing economy (housing & credit markets), and the Clinton-passed Enron loophole to fuel speculation. Has nothing to do with the national debt, and balancing budgets.

Oil prices are fueled by speculation concerning the value of the dollar, supply/demand, wars, economic matters, etc.

But that's a way to be a good little liberal and ignore the real reasons for sake of a Bush bashing.


RE: This always amazes me...
By retrospooty on 7/8/2008 10:13:29 AM , Rating: 1
Well, your half right... The dollar is weak because of the slowing economy and the debt, its all related, and its NOT Clinton from 8 freegin years ago. Get out of denial and admit your boy has screwed up royally.


RE: This always amazes me...
By Doormat on 7/8/2008 11:40:03 AM , Rating: 1
"and the Clinton-passed Enron loophole "

Thats, "and the Sen. Phil Gramm (R-TX) sponsored, Clinton-passed Enron loophole..."

They're both responsible. But don't let facts get in the way of partisan bashing.


RE: This always amazes me...
By BansheeX on 7/8/2008 11:58:47 AM , Rating: 5
quote:
the dollar is weak because of the slowing economy (housing & credit markets), and the Clinton-passed Enron loophole to fuel speculation. Has nothing to do with the national debt, and balancing budgets.


Dollar strength is at odds with this, not alongside it. That's why the Fed is in a box right now. They have two options. They can act like Volcker and prop up the dollar by raising interest rates, which would purge the economy of years of excesses in these markets (this is called a recession, which would hurt, but is necessary). Or the Fed can keep interest rates low and hyperinflate to continue propping up the artificial environment it created at the expense of the dollar, causing prices of everything relative to dollars such as commodities to keep skyrocketing. So far they are taking option #2. No references to CPI please unless you want me to laugh.


RE: This always amazes me...
By Ringold on 7/8/2008 4:56:43 PM , Rating: 2
quote:
No references to CPI please unless you want me to laugh.


Hostility to the fact that core inflation hasn't gone out of control won't get you anywhere. No one denies that if you mix in food and energy, the numbers become ugly. Add in the underlying complaint with the CPI, that it corrects for people shifting the basket of goods (for example, if the citrus crop fails and prices are high, they buy more apples, thus dulling the impact), and then sure it becomes even more ugly -- but not necessarily more accurate.

I've come around to a gold standard possibly not being a bad idea, but implying that the current situation is hyperinflationary is silly, as the data doesn't seem to prove it.


RE: This always amazes me...
By Reclaimer77 on 7/8/2008 10:08:54 AM , Rating: 1
quote:
You do realize that Oil is expensive because the dollar is so weak,


WRONG !

Its expensive because the supply is barely meeting demand.


RE: This always amazes me...
By retrospooty on 7/8/08, Rating: 0
RE: This always amazes me...
By Reclaimer77 on 7/8/2008 10:19:20 AM , Rating: 4
Thats assanine and I can't believe anybody would buy into that.

We need more supply with a strong boost in DOMESTIC drilling and refining. A stronger dollar is not going to fix this problem.

Our dollar was plenty strong before the first quarter of '08 brought us this so called " economic crisis " and gas prices were already significantly higher then previous years. How do you explain that ?

If our supply is so good, how come 1/3 of our country faced gas shortages just three days after Katrina knocked just ONE oil refinery and pipeline off line ?

This is a supply and demand issue. Purely.


RE: This always amazes me...
By retrospooty on 7/8/2008 10:23:55 AM , Rating: 2
uh... that was not an oil supply issue it was a refined gas issue.

Increasing supply will not resolve anything, unless the US drilled oil can be purchased at a much lower price... Lets see the Oil companies go for that one.


RE: This always amazes me...
By Reclaimer77 on 7/8/2008 10:32:23 AM , Rating: 2
quote:
uh... that was not an oil supply issue it was a refined gas issue.


Until oil drilling AND refining is dramatically increased, we will NOT see lower prices at the pump.

Do you not understand that was a symptom of a supply and demand problem ?

quote:
Lets see the Oil companies go for that one.


You mean the ones trying to lobby for more domestic drilling ? Yeah, I think they are " going for it ". But they can't get anywhere because the Democrats insist on treating them like evil corrupt gouging energy barons.

Where did you learn economics anyway ? CNN or a Cracker Jack box ?


RE: This always amazes me...
By rudolphna on 7/8/2008 12:48:06 PM , Rating: 1
Its not even just that. After Katrina, and the oil companies saw that they could get away with raising oil prices to that incredible high... They said, "Hey! I have a great Idea! lets raise it higher and higher (all while making record profits) While saying its because there is not enough supply) We were fine before Katrina, did demand really skyrocket that much since then? Uh.. No. Unless the population jumped by a couple million people with big SUVs. While there may be a supply issue, with a weak dollar... The fault rests primarily on oil companies who are making RECORD profits.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 12:56:22 PM , Rating: 5
> "They said, "Hey! I have a great Idea! lets raise it higher and higher "

How many times do we have to tell people that oil companies don't set oil prices?

> "We were fine before Katrina, did demand really skyrocket that much since then? "

Yes. Petroleum consumption demand data is all public information. Why not look at it sometime? US demand didn't change much since 2005, but consumption from places like China and India has skyrocketed.


RE: This always amazes me...
By Reclaimer77 on 7/8/2008 2:14:49 PM , Rating: 2
quote:
The fault rests primarily on oil companies who are making RECORD profits.


They are always GOING to be making record profits because more and more people NEED what they are selling.

The AP reported world wide energy demand is GOING ( fact ) to increase %50 over the next 20 years. How can you conserve your way out of that ? And how could you possibly blame the ones making " record profits " ??

Oil and energy mean prosperity. Not just for the suppliers of it. But for NATIONS.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 10:31:57 AM , Rating: 4
> "There is plenty of supply right now - Even the Saudi's say that..."

The Saudis...you mean the people making trillions from high oil prices?

Increased supply reduces prices. There's nothing simpler than that.


RE: This always amazes me...
By eetnoyer on 7/8/2008 10:54:25 AM , Rating: 2
As simple....

Increased prices reduce demand. Considering the doubling of oil prices over the last year, the total demand hasn't really changed all that much. In reality, the oil demand is very much inelastic.

The last few years have seen the supply chain figure this out and start experimenting with how far they can stretch prices before a breaking point is reached. Once the push past the breaking point, the world economy will collapse and prices will go down. Of course we'll be in a world-wide depression by then and won't even be able to afford cheap oil.

I don't really think we'll ever get to that point. I believe that we're on the verge of going in another direction.

One thing that I think looks promising is using aluminum alloys to generate hydrogen from water on-demand for vehicular use. The alloy packs can then be sent for centralized recycling co-located with power generation facilities (I vote to rapidly expand nuclear capacity).

The infrastructure build cost (for any new direction) would be high, but the current state of affairs is going to prove untennable.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 11:06:16 AM , Rating: 4
> "In reality, the oil demand is very much inelastic."

That's just the point. While this means a small increase in demand dramatically escalates prices, it also means the reverse -- a small increase in supply can as dramatically reduce them.

> "I vote to rapidly expand nuclear capacity"

Hear hear! Unfortunately, it won't happen. We'll continue to build electric cars without expanding our electric capacity, right up to the point that we're experiencing brownouts and blackouts on a regular basis.


RE: This always amazes me...
By retrospooty on 7/8/2008 11:44:19 AM , Rating: 4
I am with you both on Nuclear... We should expand it massively to help us get by until new tech is decided upon and generating economically viable power.


RE: This always amazes me...
By BansheeX on 7/8/2008 11:48:05 AM , Rating: 2
I disagree with the idea that speculators are the driving force of prices, since it would take physical accumulation with the intent for later resale for that to sustainably occur. But I agree that the price is not infinite and we will see price pullbacks as a result of high prices reducing demand. The reason you people have been caught so completely off guard here is a result of the lag effect of years of inflationary policy that started in the 90s, and a total misunderstanding of relative wealth. As the dollar declines, that by definition causes foreign currencies and demand to rise against it. It's a giant bidding contest for a finite resource, always has been. That's what sets the price, and we in America are starting to get outbid by foreigners as a result of our insane inflation and taxation. That's what's stretching the price, we're seeing foreign buying power in China where there was none before. There's no good excuse for this, it's akin to having an 17-0 lead in a baseball game and completely blowing it.


RE: This always amazes me...
By MarcLeFou on 7/8/2008 3:35:02 PM , Rating: 1
Actually, speculation is actually mostly contrated on contract for future deliveries according to an article I read on the local paper (I even recall they were saying the delivery dates were decades off). So long term contracts are what are driving the prices up currently.

That's also what the US congress (or senate can't remember which) is currently trying to litigate so that speculation can stop. Speculation is also said to be one of the major causes of food price hikes (corn, wheat, etc.) because union retirement funds are currently massively investing in the base goods of the economy.

Also, another important cause of the price of gas at the pump are taxes (duh!) and (for the northeast anyway) the fact that there has not been enough refining capacity to have actual competition. In the last 8 years, the average refining margin per liter of gas has actually gone up 400% (from 4 cents a liter to 12 cents a liter) because of the lack of capacity for refining. Katrina also shut down most of southern refineries 2 years ago for over half a year which only contributed to the problem.

Lastly, for the person saying the US dollar has only started plummeting in Q1 2008, have you actually looked at the US dollar compared to the Euro and CDN dollar in the last two years ? The canadian dollar reached parity with the US in Q3 07. That had not happened since the 70's. Just a few years prior, it was 65 cents CDN to a US dollar. And the canadian dollar didn't gain on the euro at all while it was eating alive the US dollar.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 3:49:20 PM , Rating: 4
> "Speculation is also said to be one of the major causes of food price hikes "

It's only said by those who don't understand the commodities market. Speculation cannot exert anything but a very short-term effect on prices. Speculators make money by estimating what price will match supply to demand -- if they guess right, they make money. Guess wrong, and they lose their shirts. In either case, though, they do us consumers a service.

As for government legislation to "stop the speculation", I don't think I've heard a sillier idea yet. Commodities traders fulfull a vital market function. They insure producers against price swings, add liquidity to the market, and help cushion consumers by telegraphing demand and supply changes well in advance, so the market can better react to them.

In the days before commodity markets, the slightest bad news could result in prices quadrupling overnight, wiping out scores of businesses and opening the market to extreme manipulation.

The strength of the US (and before that, the British) economy is largely based on its stable, efficient market system. That relies on commodities traders, and their resultant speculatoin.


RE: This always amazes me...
By MarcLeFou on 7/8/2008 4:12:15 PM , Rating: 2
Define short term ? Weeks, months or years ? The rising food prices have only really started about 2 years ago with corn.

While the argument for increased demand for the rise would be the sensible one, I was actually reading an article yesteday that in the last 7 years, demand in China for cereals has actually gone down 17% with meats and fruits getting the biggest increase.

While you could say meats actually use lots of cereals, it is most often byproducts used and not likely to affect the demande by such a wide margin.

The only other argument I've heard that would be left would than be the ethanol subsidy program by the US which then had a ripple effect on other cereals as farmers switched from wheat and other cereals to corn. While I agree that the ethanol subsidy for corn is most likely one of the stupidest ideas ever I really doubt its responsible for the 50%+ raise we've seen in the cereral pricing over the last year (nearly a 100% in two years for wheat).

I have also not heard of any major disaster which would have destroyed huge amount of crops and affected offer in a significant way except for the normal annual events in different regions of the world.

So, what's left I wonder ?


RE: This always amazes me...
By Ringold on 7/8/2008 5:05:00 PM , Rating: 2
quote:
ever I really doubt its responsible for the 50%+ raise we've seen in the cereral pricing over the last year (nearly a 100% in two years for wheat).


How can a third of the US corn crop being diverted to create fuel not have a large impact?

As for failed crops, if I'm not mistaken Australia has had a drought.


RE: This always amazes me...
By Jaybus on 7/8/2008 4:59:08 PM , Rating: 2
Yes. Speculators winning or losing is not to blame. But let the losers lose. Wasting hundreds of billions bailing out the losers is counterproductive. Its akin to giving your dog a treat whenever it bites someone. And where, exactly, does the money for the bailouts come from? Increased taxes and/or printing up some more dollars. Of course, they don't have to actually print them any longer.


RE: This always amazes me...
By MarcLeFou on 7/9/2008 11:34:12 AM , Rating: 2
According the the USDA in 2005, in 2004/2005 the % of corn in the US used for Ethanol was 12% and it was expected to be around 23% in 2014/2015. That's an increase in 11% - or diminution on 11% of available corn. If we take the worst case scenario and take into account that that increase of 11% that was forecast in 7-8 years has already happened today and apply that percentage of production to US overall metric ton production and compare it to worldwide metric ton production, that's an offer difference of 5,4% on the worldwide market. And that's ignoring the fact that a raise in corn prices would stimulate farmers to switch from other cereals to corn which would increase overall offer and lower that percentage even further (which has been happening).

Now I don't know the elasticity of corn, but I would HIGHLY doubt that a 5% change in the worldwide offer would cause the price of corn to skyrocket to 50%+ increase levels especially if demand in the biggest worldwide consumer base has gone down 17% in the last 7 years.

My original question then was, what factor would be at play here ?


RE: This always amazes me...
By Pneumothorax on 7/8/2008 11:14:58 AM , Rating: 3
It makes me want to slap the lawmakers around who keep saying "It won't affect short term pricing" or "It won't make a difference in 10 years" That's the same crap we heard 10 years ago. If they actually start showing the world's markets we will be agressive expanding oil production it will start to lower prices much faster than congress just sitting on their "behinds" Which all they're pretty much good for.


RE: This always amazes me...
By FITCamaro on 7/8/2008 11:54:55 AM , Rating: 2
Exactly. Prices were still reasonable 6 months ago. In January, oil was between $70-80 a barrel. There has been no major world event in the past 6 months, nor has the value of the dollar fallen THAT far in that 6 months.


RE: This always amazes me...
By wallijonn on 7/8/2008 1:19:52 PM , Rating: 1
quote:
If our supply is so good, how come 1/3 of our country faced gas shortages just three days after Katrina knocked just ONE oil refinery and pipeline off line ?


Because the supply is tightly controlled to maximize profit. If too much product is produced then prices go down. Therefore keep the supply taut, just a little under actual needs and the profit margin is stabilized to where it will last longer. Unfortunately any disruption will send ripples down the supply chain.

How much oil was actually being produced by those off shore wells? Very little, I hear. But the speculators pounced on the bad news, which caused many to hoard, which shot up the price. It's all orchestrated, much in the same way that factories keep as little inventory as possible, thereby maximizing profits vs. inventory space occupied. Inventory now has to change direction on a whim. It's called "efficiency."


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 2:03:28 PM , Rating: 2
> "How much oil was actually being produced by those off shore wells? Very little, I hear. But the speculators pounced on the bad news"

You're totally off base here. First of all, the Katrina price runup had nothing whatsoever to do with oil shortages. It was due to a loss of refining capacity for gasoline. We temporarily lost some 23% of the nation's refining capacity. That's the largest historical drop ever...and some areas in the Southeast were in danger of losing 100%.

The part you people always miss is *why* prices react the way they do. The whole point is to equalize supply and demand. If prices didn't rise after Katrina, people would have kept buying until the pumps ran dry. Prices escalated, to force down demand until supply could catch up.

The only other option is government price controls, which we tried in the 1970s. Do any of you REALLY want to return to government rationing, and only being able to buy gas on certain days of the week?


RE: This always amazes me...
By Reclaimer77 on 7/8/2008 2:11:22 PM , Rating: 3
quote:
Because the supply is tightly controlled to maximize profit. If too much product is produced then prices go down. Therefore keep the supply taut, just a little under actual needs and the profit margin is stabilized to where it will last longer. Unfortunately any disruption will send ripples down the supply chain.


So wrong.

They could not increase supply if their life depended on it. We have a handful of refineries running at max capacity nation wide when we should have DOZENS more. And where are we going to get more oil ? *cough* Drill *cough*.

Your scenario only works if use is kept at a constant. Which we know its not. If the price was less, people would buy more, thus keeping profit margin goal. Not to mention cars like the Volt and hybrids, which very well could hurt the oil business long term, wouldn't be nearly as in demand. Not NEARLY.

quote:
I hear. But the speculators pounced on the bad news


Oh here we go. I bet you didn't know what a speculator even was last month. Suddenly you turn on the news and your an armchair economist expert like all the other liberals ?


RE: This always amazes me...
By 67STANG on 7/8/2008 11:48:30 AM , Rating: 2
I agree for the most part. Oil's massive price increase is due to a lot of reasons:

1) Oil is bought world-wide with the U.S. Dollar. When the dollar loses x% of value, it buys x% less oil... To add insult to injury, people who see a flailing economy put money in safe bets, (ie-Gold, Bonds)-- unfortunately, you can add oil to that list of safe bets now-- which of course drives the price up even more.

2) Oil demand increases every year, especially due to China and India as of late. Oil exploration / production has not kept up with increases. There's plenty of oil in the ground (to last until ~2050), the problem is no one is pumping more of it.

I am hesitant to believe anything an OPEC member says about supply/demand/value of oil-- it is in their best interest to keep the price high, after all, they are making money hand over fist right now.

Saudi Arabia, supposedly our "friend" (I hear they have great pilots there...) acts generous enough by "boosting" oil production, but this is more to increase oil revenues-- rather than to help anyone else out.


RE: This always amazes me...
By JustTom on 7/8/2008 12:08:50 PM , Rating: 2
You do realize the Saudis have a vested interest in high oil prices?


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 10:10:11 AM , Rating: 3
> "You do realize that Oil is expensive because the dollar is so weak"

You've been listening to too much oil sheik propaganda. The dollar has declined only some 30% against the Euro...yet oil prices have rise from $50/bbl to almost 3 times that.

Oops...so much for that theory.


RE: This always amazes me...
By retrospooty on 7/8/2008 10:21:19 AM , Rating: 1
nice.... leave it to Masher to post a statistic and twist the facts... You are a master at that. You should really go to DC and get some gainful employment as a lobbyist - if that not already what you do.

Its not a 1 to 1 relationship mr econimics majotr... a 30% drop vs the euro does not equal a 30% increase in oil price. Oil has gone up somewhat , but far FAR worse for the US because of our weak dollar.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 10:37:15 AM , Rating: 3
> "Its not a 1 to 1 relationship mr econimics majotr"

I'm sorry, but it is. When one currency drops against another, the change in commodity prices between the two nations is indeed a linear relationship.

It's (slightly) more complex because world oil producers work in many different currencies, which mean we really need to track the dollars decline against a global currency basket, rather than the Euro itself. But that change is very close to the dollars fall against the Euro...and far, far, far smaller than the meteoric rise of petroleum prices.

This really isn't open to dispute. The dollar's slide is but a very small factor in oil's runup...which explains why every other nation on the planet is also paying stratospheric prices as well.


RE: This always amazes me...
By Reclaimer77 on 7/8/2008 10:41:47 AM , Rating: 3
Yeah isn't gas in the UK and most of Europe up to like 10 bucks a gallon now or something ?

How is that because of a " weak " US dollar ?


RE: This always amazes me...
By mdogs444 on 7/8/08, Rating: 0
RE: This always amazes me...
By retrospooty on 7/8/08, Rating: 0
RE: This always amazes me...
By mdogs444 on 7/8/2008 11:34:03 AM , Rating: 3
Oil has gone down the past 2 days, not week.

And everyone is suggesting that it will increase - not because of the weak dollar long term, but because of lack of democrat controlled congressional action in terms of drilling & refining, which is a direct problem because of the high demand and limited supply (or supply games, more correctly).

However, even oil tycoons are suggesting that it will drop back to $100 after some time. http://www.cnbc.com/id/25564736

You are quite blind to blame that the weak dollar is the factor in expensive oil. Not sure why you cannot get across your skull that the OPEC games with supply & demand increase the prices, thus forcing the dollar to weaken. When oil, transportation, food, everything costs more, but wages are stangant, the dollar has weakened. And that can be a direct result of an increase in demand for a product, without an increase in supply.


RE: This always amazes me...
By retrospooty on 7/8/2008 11:42:42 AM , Rating: 2
Me blind?

I was simply responding to you above blaming the democratic congress for the current issue.

You say " because of lack of democrat controlled congressional action in terms of drilling & refining," How can you even say that? reps controlled congress for how many years before the last 2 and did they do anything? NO, we haven't done any new drilling since the early 1980's.

Whatever though, I dont want to fight about it any longer - there is nothing I can do to change your mind on anything... Enjoy your prez's last few months in office.


RE: This always amazes me...
By jamdunc on 7/8/2008 9:25:10 PM , Rating: 2
quote:
NO, we haven't done any new drilling since the early 1980's.


Well that's a blatant lie for a start. As someone who works closely with the oil industry, I have had many close personal friends working in the Gulf of Mexico these past few years installing new pipelines and such.

What do new pipelines connect to if they haven't been drilling? Or were all these new pipes just for fun?


By theapparition on 7/8/2008 12:25:41 PM , Rating: 2
quote:
This really isn't open to dispute. The dollar's slide is but a very small factor in oil's runup...which explains why every other nation on the planet is also paying stratospheric prices as well.

Ding...Ding...Ding...We have a winner.

Can believe I'm reading that retrospooty actually believes the weak dollar is solely to blame for gas prices. While it has an minor exchange rate effect on fuel prices, please explain again why everyone else in the world is paying more too.


RE: This always amazes me...
By FITCamaro on 7/8/2008 11:58:11 AM , Rating: 2
So you're saying a 30% drop in the value of the dollar vs. the euro equals a nearing 300% rise in commodities prices. Yeah ok.


RE: This always amazes me...
By smitty3268 on 7/8/2008 11:50:56 AM , Rating: 2
A 30% decrease in prices would have gas under $3 a gallon, so I find it hard to see someone saying it doesn't make any difference at all.

Sure, it's no long term solution or anything, but we wouldn't be having the same debate we are now about oil if prices were at that level.


RE: This always amazes me...
By robywire on 7/8/2008 2:15:13 PM , Rating: 2
Always interesting....

But, your comparing apples and oranges, or more precisely, a barrel of oil to a sheet of paper. Governments can produce their paper money at will, not so with oil, corn, iron ore, bauxite, etc, etc.

If you chose to compare the price of oil to anything else of tangible value, I'm sure you will find that everything is in harmony with the forces of supply and demand. The paper money you keep comparing everything to is a government construct that has come to its current iteration with various tweaks (Breton Woods, Nixon, etc.) since the end of WWII.

quote:
dollar has declined only some 30% against the Euro


This simply means that the Europeans haven't deflated their paper quite as fast as we have deflated ours.

Did I mention that a governments ability to print money at will is a very, very, very bad thing if you plan on accumulating any of that money.

The Treasury prints 500 billion dollars and gives it to the Fed to loan, and the Fed gives the Treasury a note that says "Federal Reserve Note, $500,000,000,000" . Of course, the Treasury can then borrow the $500 billion it printed and give the note back to the Fed.
One years deficit covered.
And that, my friends, is how deficit spending deflates "your" money.

Yes, I know they can do it electronically and not actually print the money.


RE: This always amazes me...
By Ringold on 7/8/2008 5:18:26 PM , Rating: 3
quote:
The Treasury prints 500 billion dollars and gives it to the Fed to loan, and the Fed gives the Treasury a note that says "Federal Reserve Note, $500,000,000,000" . Of course, the Treasury can then borrow the $500 billion it printed and give the note back to the Fed. One years deficit covered. And that, my friends, is how deficit spending deflates "your" money.


That's a little vague..

Congress sets a spending goal. They look to the Treasury to fund it.

The Treasury doesn't have it, so they auction off bonds (just like how a company would) to investors to borrow the money. In fact, they make it easiest to buy their bonds then probably any other financial instrument:

http://www.treasurydirect.gov/tdhome.htm

The money thus in hand from private investors, the Treasury hands out the government to Congress.

If we had a gold-backed dollar, do you know how the process would work during a budget deficit? Exactly the same as it does now.

Can they print money? Yes. Is the process you describe above printing money? I don't see how it is.

Also, when the fed conducts open market operations, they use Treasury notes/bills/etc that they own themselves to push interest rates around. When they run out of a stockpile of bonds then things get interesting, but thus far they have not. Owning actual bonds, and thus receiving interest payments from the government, is one reason the Fed is a profitable bank.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 5:43:37 PM , Rating: 2
> "If we had a gold-backed dollar, do you know how the process would work during a budget deficit? Exactly the same as it does now"

Not quite. Becaues the price investors are willing to pay for those bonds (and thus the total amount the US government can finance) is determined by expectations of interest rates. The Fed -- with its state-sponsored monopoly over interest rate and the total money supply -- ultimately controls the process.

In fact, that's the reason we have inflation in this country, because the Fed is growing the money supply faster than the economy. That's a hidden tax on us all, one that for many people, far outweighs what they pay directly.


RE: This always amazes me...
By Ringold on 7/8/2008 7:34:17 PM , Rating: 2
quote:
Not quite. Becaues the price investors are willing to pay for those bonds [...] is determined by expectations of interest rates.


The process wouldn't change, and interest rates would still be above zero, would they not? They'd simply represent the zero-risk time value of money in case of treasuries, instead of that plus inflation assumptions. The time value of money has components beyond inflation and gaming the Fed; namely, opportunity costs. People would still bid less than face value for t-bills -- though the yield curve would be flat for the government.

quote:
In fact, that's the reason we have inflation in this country, because the Fed is growing the money supply faster than the economy.


Several other things play their role, but no general disagreement. I was simply correcting the OP's process through which the government finances its deficit, and the idea that they print dollars from thin air during the process of selling bonds. They're instead soaking up existing money that was already out there.


RE: This always amazes me...
By SiliconJon on 7/8/2008 7:35:19 PM , Rating: 2
Not at all true that a currency backed by an auditable control such as gold works anything the same as a fiat currency like we have now. There are pro's and con's to either method, but there is a huge contrast between the way the two work.

With gold a major con is the increased value of a precious metal that could be used for more constructive purposes, such as in electronics. Another major con is reduced productivity since the only way to obtain it is to get someone else to give you some of it (earned, given, whatever) or to mine for its backing. A major plus is its value remains constant to a much greater degree than fiat currency as corrupt bankers or politicians can’t just print it up and devalue all currency. The law of supply and demand dictates that the more of a resource there is the less it is worth if demand remains the same, so more money printed into a market that hasn’t expanded its demand to the same degree causes the money to decrease in value. Using a solid auditable backing for your currency keeps your bankers and politicians from essentially stealing from you without you having any say in the matter – an issue quite prevalent during the American revolution and embedded within our very constitution despite seeming to the contrary today.

As for fiat money*, it does not have a predetermined or relatively fixed quantity. One can obtain more gold and print more money accordingly, but the ratio of gold to money remains fixed according the currency standards often set by law with a fixed currency. But with fiat currency it's up to the big guys how much money there is and its backed by nothing more than “faith and credit”, and the supply and demand model is far more malleable with fiat currency. Many will say there are no positives, though I think like so many of the mistakes we make today, there are a great deal of short term positives, or profits, to be had with fiat currency, particularly in productivity**, but the long term profitability is not sustainable and easily disastrous. As more money is pumped into the market it loses its value, but those who receive the “fresh” money don’t feel it as it takes time for the market to adjust. Those at the bottom of the financial classes will feel it the hardest as they fail to capitalize on this free money, beings they aren’t receiving any of it, but they see their money decrease in value quickly. Fiat currency also does not adjust with a 1:1 ratio due to our global economy – funds are shipped off shore so our local market doesn’t adjust the same as if all this dumped cash remained local. In that sense fiat money is superior in the short term, but as the global market consolidates our money finally starts catching up on its more accurate market value which is a large factor in recent dollar value changes.

* The money we have now that is printed out of thin air which is not regulated nearly as much by bonds but more by our bankers lending ratios, aka fractional reserve ratios, and the Fed's self imposed lending cap which we can see news of being increased to aid in banking consolidation similar to that during the great depression.

** There are monetary theories that allow for both an auditable backing of currency and expanded productivity capabilities.


RE: This always amazes me...
By JustTom on 7/8/2008 11:43:13 AM , Rating: 3
The Clinton surpluses were not sustainable nor were they real. Total national debt –public debt and intra-governmental debt -went up every year he was in office. Much of the increase in revenues was directly attributable to the dot com bubble and shady accounting practices driving the stock market and increasing paper wealth.
The claimed surpluses were actually a transfer of debt from the public to the government. All those surpluses were fueled by transfers of money from the Social Security Administration to the general fund, transfer that must be paid back.
A large part of the slowdown in expenditures was a direct result of failing to adequately budget for national security needs. It was thought we were at the ‘end of history’ and had no real need for a large robust military. That calculation was tragically wrong.


RE: This always amazes me...
By Reclaimer77 on 7/8/08, Rating: 0
RE: This always amazes me...
By Bender 123 on 7/8/2008 9:54:18 AM , Rating: 3
No she cant...believe me. Thats why she had to eat a 30000 loss to sell it.
But you are right, my car is a shitbox, not because I cant afford a new car, but because i am just very cheap and its paid off. I am just trying to keep my crappy Buick running until the Volt hits...It goes 16 miles a day, just enough to get me to the office and back. My wife gets the good car, because despite being cheap, I am smart enough to know that she would kill me if she had to drive my old college beater...


RE: This always amazes me...
By Bruneauinfo on 7/8/2008 10:23:20 AM , Rating: 3
erh... i may be dumb, but $30,000 will buy a whole lot of gasoline. even at $10 a gallon. i'd of had to keep the hummer at least until the loss was at $0. unless i was so brilliant that i paid cash for it in the first place.


RE: This always amazes me...
By Bender 123 on 7/8/2008 10:28:35 AM , Rating: 2
Not when the financing corp is going to repo it, so the loss was basically forced, in order to mitigate the damage and lower her payment on a car she no longer owned. That is why i said she is not bright...because she truly is not very savvy with figuring a 700 a month payment on a 1800 a month income is a very bad idea.

Thats why i keep my Buick, it sucks gas, but it is in the free and clear, so no worries on either front.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 10:52:22 AM , Rating: 3
It seems clear you misrepresented the situation in your first post. Your sister certainly would have had that H2 repossessed with or without the recent increase in gas prices.


RE: This always amazes me...
By Bender 123 on 7/8/2008 11:02:43 AM , Rating: 2
Sister in law...And she could afford the truck...barely...with gas at 2.50, but when its 4.00 and cost over 120 to fill the tank? Too much...Causing the repo man or you can pay for a car you park and cant drive...either way its a bad investment, so you need to take a loss to clear room to purchase a car you can drive to work.

And yes, thats the point, the manufacturers allowed many people to buy big expensive trucks, they could not afford, in order to to pad their bottom line...0% financing anyone? No credit no problem sales?...Its the exact same as the the housing crisis, just on a smaller scale. At some point high gas prices and credit concerns were going to catch up with consumers and now they are just scrambling to function the way a sane business should function.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 11:08:17 AM , Rating: 2
> "the manufacturers allowed many people to buy big expensive trucks, they could not afford, in order to to pad their bottom line...0% financing anyone?"

Ah, so its all the fault of the evil corporations for saving us some money on finance charges?


RE: This always amazes me...
By Bender 123 on 7/8/2008 11:16:45 AM , Rating: 2
No, it was also stupid people. In the old days of finance, you could not even get loans without collateral that adequately covered the chance of loss.

The problem is greed up and down, but the banks used to stop this type of mess before it happened, by denying loans based on credit reports, income to debt ratios, etc...

The people were stupid thinking they could afford it, the companies were stupid because they encouraged it and the banks were stupid because they took on risks they used to never take on, just to get some extra "profits"...

Glad it worked out for everybody...


RE: This always amazes me...
By Grast on 7/8/2008 11:52:04 AM , Rating: 3
Bender,

Very good and accurate point, the current credit crisis and housing crisis is the direct result of the banking industry. I work for the number 1 bank in the world. I have seen the empty desks of the risk managers which formulated the banks risk acceptance policies.

This down turn is the direct result of 6 years of uncontrolled loans for products which individuals could not afford. In short, banks lent money to people with out the neccessary income and assest to qualify for the loan.

In my experience, the major failure of all banks is lack of ibility for the banks to effectively manage their risk. This applies to loaning money and backing securities.

Later...


RE: This always amazes me...
By BansheeX on 7/8/2008 12:42:41 PM , Rating: 2
Since the rate at which private banks get financing from the Fed is determined by the Fed, I would think that the root cause is not spontaneous evolution of man becoming more greedy in 2000, but an artificially low interest rate by the Fed to induce such a reaction by the banks. In other words, would any of this stacked risk and imprudent lending happened at the level that it did with a market-determined rate of interest? I'm thinking not.

So we have two solutions to fix the Keynesian mess. The monetarist solution says "we need new and better leadership at the Fed to prevent this from happening again." The Austrian solution says "that is the benevolent dictator argument, we should abolish the Fed and have market-determined money and interest rates."

I choose the latter.


RE: This always amazes me...
By masher2 (blog) on 7/8/2008 2:04:16 PM , Rating: 2
quote:
The Austrian solution says "that is the benevolent dictator argument, we should abolish the Fed and have market-determined money and interest rates."

I choose the latter.
Bless you.


RE: This always amazes me...
By TETRONG on 7/8/2008 2:29:33 PM , Rating: 2
Would you mind elaborating on the latter solution?

By the way - don't worry about gas so much everyone. It's just to get "around". Let's keep it in perspective. We're creative and strong enough to get off of this drug and find new ways to scoot about.



RE: This always amazes me...
By Spuke on 7/8/2008 3:30:50 PM , Rating: 2
quote:
Very good and accurate point, the current credit crisis and housing crisis is the direct result of the banking industry.
Bender didn't just state the banks were at fault. It's the fault of the customers too for not understanding how much they could afford.


RE: This always amazes me...
By FITCamaro on 7/8/2008 3:33:58 PM , Rating: 2
Then your sister in law is just as dumb as people who bought a home on a variable rate mortgage because they could afford it then.

But allowing people to buy things by offering $0 down, 0% financing is not a bad thing since it allows those just starting out to afford things. I bought my car that way and I'm paying it off. Granted my income is far greater than $1800 a month. I'm hoping thats after tax, not pretax.


RE: This always amazes me...
By Bruneauinfo on 7/8/2008 11:43:00 PM , Rating: 2
so basically all you have established is that your sister-in-law is really dumb. i assume she doesn't read DailyTech.

at $700 of an $1800 a month income - she should have planned to move into the Hummer.


RE: This always amazes me...
By Bender 123 on 7/9/2008 8:19:32 AM , Rating: 2
It actually is not that uncommon if you take a drive into lower income areas in the rural area of the midwest...You will see a mobile home worth 15000 next to a three car garage, filled with a jacked up truck, a new Pontiac Grand Am with a #3 We remember you sticker in the back window and mid 80s camaro with T-tops...

I always laugh at these people and wonder what messed up values are at work to have two vehicles that cost more than your house and one that firmly establishes you as a mullet club member.


RE: This always amazes me...
By Digimonkey on 7/8/2008 9:44:42 AM , Rating: 2
To be fair, full sized trucks are a bit different than an H2 or an SUV for that matter. While the H2 is a recreational vehicle, full sized trucks serve mostly as work vehicles. The need for full sized trucks still exists, but with the poor state of the economy and these workers having to put in over $400 a month, they are probably putting off buying another truck until their old one dies.


RE: This always amazes me...
By DASQ on 7/8/2008 11:12:29 AM , Rating: 2
Of all the people that I know that own trucks... exactly two of them own their truck for 'work related purposes'. And they're coworkers.


RE: This always amazes me...
By Bender 123 on 7/8/2008 11:52:55 AM , Rating: 2
Come visit Central Wisconsin and try to keep a straight face when you say that...Most companies around here that require a pick up, construction, farm, etc...provide company trucks, because they cost less to maintain and expose the company to fewer risks associated with insurance and wage and hour laws.


RE: This always amazes me...
By Spuke on 7/8/2008 3:33:25 PM , Rating: 1
I disagree. Most pickups are used for personal purposes. How do you think that Ford was the number one vehicle seller on the F series for 30 friggin years?! Because the average Joe was buying them too.


RE: This always amazes me...
By Digimonkey on 7/8/2008 4:11:24 PM , Rating: 2
It's kind of moot to argue about really. I am unaware of a survey that checks up on owners of heavy duty pickup trucks to see if they use them for work or not. Mostly when I see such trucks I see them hauling materials, tools, or with some company logo on them which has to do with construction or utilities. I've at times seen them full of hay or dirt so I could assume they are used at a farm perhaps.

I was going off my own observations which may only be relevant to the area I live in and may have been presumptuous at best. I can rephrase my argument and say I believe that there is a higher need for heavy duty trucks than H2's and SUV's combined.


RE: This always amazes me...
By Bruneauinfo on 7/8/2008 11:48:49 PM , Rating: 2
people who work for a living and own vehicles ARE average Joes. what's unique about needing a truck for your work?


RE: This always amazes me...
By Lord 666 on 7/8/2008 9:45:24 AM , Rating: 1
Not only did they see it coming, but they were told as well. FoIA for the meeting minutes for that one? How about the secret Cheney meeting with oil executives that the Supreme Court that prevented FoIA because of executive privilege?

http://www.nytimes.com/2006/05/16/automobiles/16au...

Talk about putting all of your eggs in one basket with the Volt. What about the rest of the product line?


RE: This always amazes me...
By czarchazm on 7/8/2008 9:49:43 AM , Rating: 2
Remember, it was the author of the article that asserted that GM was putting all of its eggs in the Volt basket.


RE: This always amazes me...
By Lord 666 on 7/8/2008 9:50:34 AM , Rating: 2
I concur with the author


RE: This always amazes me...
By SiliconAddict on 7/8/2008 11:16:34 AM , Rating: 1
Many if not most have zero foresight. Look at global warming as a perfect example. Until something is directly effecting that person its business as usual. Now when it impacts us directly, say in the form of $4 a gallon gas. Then everyone panics. I simply love how in 2006 everyone was shitting on mne for getting a Prius for my job. (80-120 a day for Dell warranty work) Yet when in the history of the petroleum industry has prices dropped and stayed down for long. It was just as much an investment for the future as it was because I wanted to get rid of my pile of shit '02 Merc Cougar.
Now? Now those same people are coming to me asking question. It isn't me being smug or anything. I'm not a pretentious prick of a Prius owner. Its that I'm amused that people SHOULD have seen this coming an astronomical unit away. But again, many Americans can't see two inches in front of their nose when it comes to reading the writing on the wall, and sadly I fear the same thing will happen with global change. Only after you get those ski resorts to permanently close during the winter and Minnesota winters look more like San Francisco winters will people finally get it. That you can't look at a single day or a single figure. Its about trends, be they gas, or global temperatures.


RE: This always amazes me...
By mdogs444 on 7/8/2008 11:22:40 AM , Rating: 3
quote:
Look at global warming as a perfect example.


Err. Global Warming cannot even be proven, must less be show that people are directly effected by it.

If anything, people are only effected in the forms of taxation & cost increases due to the scare tactics of global warming pushers like Al Gore & Democrats in Congress.


RE: This always amazes me...
By JustTom on 7/8/2008 12:16:26 PM , Rating: 2
quote:
Yet when in the history of the petroleum industry has prices dropped and stayed down for long.


Lots of times, check for yourself.

http://www.wtrg.com/oil_graphs/oilprice1947.gif


RE: This always amazes me...
By JustTom on 7/8/2008 11:24:07 AM , Rating: 2
So you are a billionaire because of all those oil futures you bought when oil was cheap?


RE: This always amazes me...
By 1prophet on 7/8/2008 12:18:40 PM , Rating: 3
The real reason they were pushing trucks so hard as opposed to cars, short term profit mentality that is culturally ingrained in most American businesses today and it is very hard to overcome on its own.

http://www.msnbc.msn.com/id/25481305/

quote:
“Car sales might be up, but the average profit margin difference for trucks and cars is massive, so people are concerned about GM’s health,” Bragman said.

“If you have a Chevy Silverado Heavy Duty it’s not uncommon to make a $10,000 profit on each vehicle, but there’s a much smaller profit margin for the average Chevy Cobalt, which is the sort of fuel-efficient car people are looking for right now,” he said. A small car like that might yield only a $100 profit for the manufacturer, he said.


RE: This always amazes me...
By Hiawa23 on 7/8/2008 7:36:13 PM , Rating: 2
I don't get it. Did these companies think when gas prices went to $4/gallon that alot of consumers would continue buying these big trucks, & don't they pay someone alot of money to monitor the market, look at trends to see what's happening before it even happens instead of just reacting like they are now with mass panick? Seems like management has to take some responsibilty, & I am sorry, seems like the Japanese or most of the Non American run auto makers seem to make better business decisions. Who really is to blame for this? Will the Volt save GM, not sure it will.


Because nothing will raise stock.
By Reclaimer77 on 7/8/2008 9:39:31 AM , Rating: 2
Like a new, unproven, and frankly impractical alternative vehicle made by a company that the US consumer has all but lost faith in ?

Gm just stick to what your good at and show us the 100'th Anniversary Corvette. Something people can actually get excited about.

p.s. Nice touch with the glass roof. All but a guarantee that nobody in southern states will love driving this in the summer.




RE: Because nothing will raise stock.
By Digimonkey on 7/8/2008 9:48:33 AM , Rating: 2
I doubt that glass roof will make it into production. The production vehicle will probably be a lot less glamorous from the sound of it.

I'm sure it will also sell well...for the savings, being green, and for having something different out on the road, people always crave that.

They're not doing well doing what they do best, which logically means they need to go a different route.


RE: Because nothing will raise stock.
By Reclaimer77 on 7/8/2008 9:57:04 AM , Rating: 1
quote:
The production vehicle will probably be a lot less glamorous from the sound of it.


Can't argue there. GM wouldn't know glamorous if it slammed them upside their heads.

quote:
I'm sure it will also sell well...for the savings, being green, and for having something different out on the road, people always crave that.


We'll see. I'm highly skeptical about how well received a car will be that you have to plug into your house every night. And I believe there is SERIOUS doubts in the American consumer that GM can do it right.

quote:
They're not doing well doing what they do best, which logically means they need to go a different route.


The problem with GM is they don't give the American public their best.

Why is it that they can make a world class sports car in the Corvette, and absolutely fail to do the same in every other automotive class ?

Their stock isn't plummeting because of gas prices. Its because they make garbage for the most part and everyone knows it.


RE: Because nothing will raise stock.
By vdig on 7/8/2008 10:17:31 AM , Rating: 2
quote:
Their stock isn't plummeting because of gas prices. Its because they make garbage for the most part and everyone knows it.


Let me correct this little bit:
Their stock isn't plummeting SOLELY because of gas prices.

You better believe that oil prices have something to do with it. The same applies for every other vehicle maker and transportation provider that uses oil based products, and that is nearly everyone.


By Reclaimer77 on 7/8/2008 10:26:42 AM , Rating: 2
The " consumer confidence " index is down on large purchases like cars and homes, so its really hard to tell right now.

I agree with you, however, that it does logically have some impact. No argument there.


RE: Because nothing will raise stock.
By mdogs444 on 7/8/2008 10:00:56 AM , Rating: 2
quote:
.for the savings, being green, and ...


At roughly $40,000 for the production vehicle, I'm not seeing any viable savings here. If you're that worried about the $5, or even $7 price of fuel, spending an additional $20k-25k on a car is not going to yield any savings versus your average fuel costs over 8-10yrs. In fact, quite the opposite. And lets not forget the rising costs of electricity to charge this thing.

If you drive an average of 12,000 miles per year, at 25MPG at $5/gallon of gas, it will cost you roughly $2400 per year in fuel. 8 years of fuel will run you $19,200. That more than makes up just the difference in cost of the vehicle, not even accounting for the fuel you will use in the Volt when the battery runs out, and not counting the increase on your electric bill to charge the car. Maint. costs on the volt will be more expensive than a typical ICE vehicle, but we wont even get into that.

So I ask, what are these "savings" that people are talking about?

Now, are people going to spend $40k on this thing for the feeling of "being green"? Yeah, I'm sure there a bunch of people who will skip the common economics of the vehicle for the symbolism of being green. Sure doesn't make them wise people though.


RE: Because nothing will raise stock.
By Digimonkey on 7/8/2008 10:15:12 AM , Rating: 3
It's a bit early to be guessing at the MSRP, and we all know you can get a car well under MSRP. Then of course they'll probably be government rebates. So who knows, the cost may be more like $32,000. If you were already looking at a car in the $25,000-$30,000...why not go with a volt? I'm not saying there are a lot of savings involved, and maybe you're right and there will be none at all.

The biggest selling point these have is their statement/image value. For one you'd be supporting an American car manufacturer. Another you'd use a lot less oil which may lower the need to import oil from foreign countries. Then there is the green aspect. While I'm not sure how green it'd be if your electric grid is powered from coal, it will be labeled green which is a big seller these days.


By blaster5k on 7/8/2008 10:25:54 AM , Rating: 2
quote:
While I'm not sure how green it'd be if your electric grid is powered from coal


Supposedly, even using coal, you're much better off. Power plants have a much higher efficiency than an ICE.


By Bruneauinfo on 7/8/2008 10:35:06 AM , Rating: 2
quote:
and we all know you can get a car well under MSRP.


tell that to people trying to buy a hybrid right now.


RE: Because nothing will raise stock.
By bldckstark on 7/8/2008 12:16:37 PM , Rating: 2
The MSRP was reported on Dailytech to have been pegged by GM at ~$40k.

If someone made a hybrid, and it didn't have any outward markings that it was one, would anybody pay extra for them?

Why buy a $40k Volt, when you can buy a $22k Civic hybrid? Save $18k, and get similar mileage. The Volt will be a big loser overall. It will take decades for GM to recoup the cost of this vehicle.

The Texas Toyota plant (TMMTX) did not close. They slowed production drastically. They have not increased the length of their summer shutdown past one week, which just about every other manufacturer has done. Chrysler has a few plants with 5 week shut downs. GM is at 3-4 weeks now. I work for a company that ships parts to Ford, Chrysler, GM, and Toyota every day.


RE: Because nothing will raise stock.
By Digimonkey on 7/8/2008 3:42:51 PM , Rating: 2
When have Daily Tech articles ever been 100 percent correct? The MSRP hasn't been set, and this car is still at least 2 years away from production. They could still hit the 30k mark, or maybe even go to 50k.

People will more than likely see electric cars more green and novel than hybrids. Since Nissan and Toyota are making their own versions I'd say the market maybe safe for electric cars.


By Spuke on 7/8/2008 7:09:41 PM , Rating: 2
quote:
When have Daily Tech articles ever been 100 percent correct?
Dailytech didn't say it, Bob Lutz said it might cost that much but wasn't sure. See the following interview: http://tinyurl.com/3a4orf.


RE: Because nothing will raise stock.
By JustTom on 7/8/2008 12:22:26 PM , Rating: 2
quote:
and we all know you can get a car well under MSRP.


You can get some cars under MSRP some of the time. This will be a small run, at least initially, highly sought after vehicle. It would not suprise me to see dealer prices significantly higher than MSRP.


By Spuke on 7/8/2008 3:55:40 PM , Rating: 2
At a projected 10k units a year, the Volt WILL have a substantial markup at the dealers and people will lined up around the corner to get one. It's not about actually being green (whatever the hell that really is), it's about LOOKING green.

Green is just like every other fad that's hit America. It's about perception without substance.


By Cheapshot on 7/8/2008 10:24:40 AM , Rating: 2
You haven't taken Leaser's in to consideration.

Someone who leases a vehicle every 2 or 3 years has no equity in a vehicle to begin with.

As a business owner the payments (which are lower than if purchased) can be written off. People who claim small businesses from home also write them off.

Not a huge impact, but all the same the math can work for some.


RE: Because nothing will raise stock.
By 4play on 7/8/2008 11:18:45 AM , Rating: 2
There will be no savings initially, the first gen volt owners will buy it because it's green, plain and simple.

Later on they will have to drop the price of the car, and they will as the tech becomes cheaper. There might also be government incentives to lower the cost to the consumer (savings would kick in).

If this tech takes off they can have it in other vehicles as well and eventually GM could be a leader with their head start, like Toyota was with their Prius.

It is a gamble, but if it pays off then it could revolutionize transportation.


RE: Because nothing will raise stock.
By masher2 (blog) on 7/8/2008 12:29:53 PM , Rating: 2
> "There will be no savings initially, the first gen volt owners will buy it because it's green, plain and simple."

Many people -- myself included -- will buy it simply because its unique and sexy. That of course assumes they don't degrade the design too much in moving from concept to production.


RE: Because nothing will raise stock.
By 4play on 7/8/2008 1:12:47 PM , Rating: 2
Indeed the concept looks sexy, but usually they water down the production model significantly. Though I'm keeping my fingers crossed.


By Spuke on 7/8/2008 3:58:38 PM , Rating: 2
quote:
The production version of the Volt is expected to differ greatly visually from the concept vehicle that has been on display at numerous auto shows and technology expos. Significant changes have been made to improve the aerodynamics and make the vehicle meet all federal safety regulations.
This is what the article says. Sounds like a different car to me.


RE: Because nothing will raise stock.
By djc208 on 7/8/2008 4:57:25 PM , Rating: 2
True, though one factor to consider is reducing or eliminating the variability of fuel costs. Reduced purchase of gasoline means increases or decreases in the price won't affect your budget as much since your dependance is reduced. Sure electric costs factor in but they do not vary as much and can be suplimented with alternative sources. A solar setup to charge one of these and suplement the house when not used for instance (yes more money but the payback time is going down as electricity costs increase).

Your analysis also starts to look better if you do add in a year or two of $7/gallon gas.

Why would the volt require additional maintenance? The electric motors and generator should need little if any real maintenance since there is only one moving part. Transmissions are already fairly low maintenance. The electronics don't need anything other than maybe a flash every once in a while, and the battery packs probably can't be serviced at all other than to replace them completely.

As for the ICE, it should require no more maintenance than any other engine, and with the useage based oil change reminders most cars have now the oil change intervals could be very long if you don't need the engine much. In fact engine maintenance would have to be based on hours run vice miles driven since the amount of time the engine runs has nothing to do with how far the car has been driven. For someone who runs electric only 90% of the time it could come down to changing the oil once a year or so.


By masher2 (blog) on 7/8/2008 11:41:01 PM , Rating: 2
> "Why would the volt require additional maintenance? The electric motors and generator should need little if any real maintenance since there is only one moving part. Transmissions are already fairly low maintenance."

If the Volt is a true electric, it won't have a transmission at all. Maintenance should be substantially less than a similar power gas vehicle...at least once GM gets all the kinks out.


RE: Because nothing will raise stock.
By FITCamaro on 7/8/2008 9:59:24 AM , Rating: 2
Well considering the Corvette hit its 50th birthday in 2003, that's a little difficult.


RE: Because nothing will raise stock.
By Reclaimer77 on 7/8/2008 10:02:53 AM , Rating: 2
quote:
Well considering the Corvette hit its 50th birthday in 2003, that's a little difficult.


I meant for GM's birthday, not the 'Vette.

Lets be honest, the Corvette is the flagship of GM. Its the most historic, recognizable , and loved thing they ever built. The 'Vette is an icon, its right up there with apple pie, baseball, and Thanksgiving day football.

But.. the VOLT !? Who cares !


RE: Because nothing will raise stock.
By blaster5k on 7/8/2008 10:20:48 AM , Rating: 2
Honestly, I think more people are interested in the Volt right now than the Corvette. As far as high performance gasoline powered sports cars, we've been there, done that. It's just not that exciting anymore to most of us.


By FITCamaro on 7/8/2008 3:21:19 PM , Rating: 2
Maybe not to you. I'd own a Vette right now if I could afford one. $4.10 a gallon(here) gas be damned. 18-19 city and 29-30 highway is plenty considering I'm getting a 420hp car.


By Spuke on 7/8/2008 4:01:55 PM , Rating: 2
quote:
It's just not that exciting anymore to most of us.
I've been driving eco-cars for the past 20 years. I now own a sports car. This is the best, most exciting car I've ever owned. I look forward to driving it every single day. I've NEVER had that feeling with ANY other car I've owned.

Most of us, huh? Speak for yourself.


RE: Because nothing will raise stock.
By Lord 666 on 7/8/2008 10:01:36 AM , Rating: 2
Why not make a Volt-enabled 100th Anniversary vette and limit it only to 5000 copies.

That way people like Apparition will line up to add to their Vette collection, it will compete with Telsa, and satisfy the greeness/cool factor? With the vette platform, it is favorable to making it a hybrid and show that GM is serious about fuel efficiency in an already fuel efficient flag ship car.


RE: Because nothing will raise stock.
By Reclaimer77 on 7/8/2008 10:06:27 AM , Rating: 2
quote:
Why not make a Volt-enabled 100th Anniversary vette and limit it only to 5000 copies.


A 'Vette with a 1.0 liter shoebox motor isn't a Corvette at all.

quote:
That way people like Apparition will line up to add to their Vette collection, it will compete with Telsa, and satisfy the greeness/cool factor? With the vette platform, it is favorable to making it a hybrid and show that GM is serious about fuel efficiency in an already fuel efficient flag ship car.


The last thing, LAST THING, GM should do right now is mess with the Corvette formula. Even with todays gas prices, every Corvette made is sold. They sell like hotcakes !


RE: Because nothing will raise stock.
By Lord 666 on 7/8/2008 10:21:14 AM , Rating: 3
They can call it the Chevette ;)


By Reclaimer77 on 7/8/2008 10:24:04 AM , Rating: 2
LMAO !!!

That litterally just made me crack up out loud. Good stuff Lord. That was a +6 comeback !!

*thumbs up*


By bobsmith1492 on 7/8/2008 1:37:57 PM , Rating: 2
The 1.0 liter engine has nothing to do with the car's output power or acceleration.

It's all in the massive electric motors that actually run the vehicle unless you're going to be doing high speeds for extended duration (so no stock-car races for the Volt...).


By Spivonious on 7/8/2008 11:09:21 AM , Rating: 2
Impractical? The Volt would be the perfect commute vehicle for me. 10 miles each way, I'd never use any gas.


By aftlizard on 7/8/2008 11:16:31 AM , Rating: 2
In defense of GM, I don't think the car is targeted as replacing a current car just for the sake of being green, although eventually it will be that car. However if you are in need of a new vehicle, which would you have? A $35k car that gets 35mpg which costs $568 per month(72 month loan at 6.8% w/ a 1500 down payment)and $143 a month in fuel costs(12k miles at $5 per gallon) or a 40k car at $653 per month(same rate, length and downpayment as the other car) and $33 per month on fuel(using the 150mpg and the same fuel and yearly distance as before). I realize it is only a 25 dollar difference but when you figure that fuel is likely only to go up in price the savings difference would only increase overtime from where it is now.So you have yourself a built in safety net by paying a higher loaner amount that is fixed instead of the lower priced loan and a not fixed fuel cost.

The best option overall though is to pay off your car now, or just keep your current car that is paid off and just suck it up with the higher fuel prices until a truly economical option comes along.


By Doormat on 7/8/2008 11:47:08 AM , Rating: 2
The concept version of the Volt will look nothing like the production version.

There were rumors that the volt concept got better aerodynamic numbers running BACKWARDS through the wind tunnel, rather than forwards.


Cool to Ugly
By phattyboombatty on 7/8/2008 10:03:56 AM , Rating: 2
quote:
The production version of the Volt is expected to differ greatly visually from the concept vehicle that has been on display at numerous auto shows and technology expos. Significant changes have been made to improve the aerodynamics and make the vehicle meet all federal safety regulations.

In other words, the good-looking, cool car that everyone was excited about will be transformed into a boring, ugly-looking car that nobody will want to buy.




RE: Cool to Ugly
By mdogs444 on 7/8/2008 10:07:50 AM , Rating: 2
quote:
In other words, the good-looking, cool car that everyone was excited about will be transformed into a boring, ugly-looking car that nobody will want to buy.


Lets change that a bit:

In other words, the good-looking, affordable , cool car that everyone was excited about will be transformed into a boring, ugly-looking car that nobody will want to buy, and most will not be able to afford .


RE: Cool to Ugly
By phattyboombatty on 7/8/2008 10:14:42 AM , Rating: 2
If GM wants the Volt to be a success they will absolutely have to be willing to take a loss for the first couple of years on the vehicle (think Xbox360) until the cost of production comes down.


RE: Cool to Ugly
By mdogs444 on 7/8/2008 10:24:08 AM , Rating: 2
You think with their stock at the lowest its ever been, and talks about a possible bankruptcy filing, that the shareholders will allow them to take a "loss"?

Never happen. What will happen though are government subsidies. Some of those who cannot personally afford a $40k Volt, will be happy [sic] to help buy yours for you in the form of federal income taxes.


RE: Cool to Ugly
By masher2 (blog) on 7/8/2008 10:43:32 AM , Rating: 2
> "they will absolutely have to be willing to take a loss for the first couple of years on the vehicle (think Xbox360)..."

Cars are not semiconductors. Nearly all the manufacturing costs of a chip are front-loaded: research, design, and tooling. For a car, a much larger percentage of the cost is in the materials and labor used in construction.

Put simply, you're just not going to see costs plummet for car construction, no matter how many units you build. The largest factor is the LiIon batteries, and only technology improvements will bring that down...and that takes more than a couple years. In fact, in that short term, increased demand from a rapidly selling Volt is more likely to *raise* battery prices than it is to substantially drop them.


RE: Cool to Ugly
By CatfishKhan on 7/8/2008 12:11:23 PM , Rating: 2
Sounds like we'll know what it looks like in September:
http://gm-volt.com/2008/07/07/breaking-production-...

Here is someone's guess:
http://gm-volt.com/2008/07/01/artists-estimation-o...


RE: Cool to Ugly
By masher2 (blog) on 7/8/2008 12:32:28 PM , Rating: 2
I think it's going to have a much more promiment kammback than that.


RE: Cool to Ugly
By MarcLeFou on 7/8/2008 3:56:38 PM , Rating: 2
You're just showing bad faith.

GM has actually had a change of design philosophy in the last few years.

The whole Pontiac redesign was ok. The Chevy redesign is pretty damn good (excep Aveo, god that's an ugly car) - I mean the Malibu is pretty nice, the Colbalt is a nice looking car and the next Impala looks to be awesome. Even Cadillac has now a younger look with the CTS which is pretty cool looking. And I haven't even talked about Saturn which used to be boxes on wheels. I really like the look of the Sky. That's a really nice car right there.

I do think GM is in the right direction as I stated earlier.


RE: Cool to Ugly
By phattyboombatty on 7/8/2008 8:04:58 PM , Rating: 2
I do agree with you that GM is improving.


My view
By FITCamaro on 7/8/2008 10:08:35 AM , Rating: 2
GM should not sell Buick. Drop it here in the states though. Buick is wildly successful in China. Keep that money coming in from there.

GM should drop Saab. They're not terrible cars, but really with Pontiac and Cadillac, the brand isn't really needed. Especially if they plan to have Pontiac compete with BMW as they've claimed.

They should definitely not drop Pontiac. It's one of their hottest brands.

Really what I think they need to do is a few simple things:
1) Get more RWD cars back on the road. They're more fun. They're better balanced. The weight difference isn't that big. And mechanically they're simpler since you don't have to cram the engine and transmission into the same space. Which means lower maintenance costs for the owner.

2) Get more manual transmissions into their vehicles. The Accord, the Maxima, the Camry. All have manual versions. The Malibu, the G6, the Grand Am, and nearly all Cadillacs don't. Manuals are not only cheaper to build, the maintenance is much lower, they last longer, and they give better fuel economy. Plus they're more fun and that's what the younger generations want.

3) Get some turbo-diesel options out there. At an affordable price. Don't offer it just on the top models like many car manufacturers. Give us a base model with a diesel option. With mileage that'll make the extra cost of diesel be offset with fewer trips to the pump. I'd drive one. Turbo-diesels can take boost like Paris Hilton takes a d*ck in a crappy hotel room.




RE: My view
By masher2 (blog) on 7/8/2008 10:13:51 AM , Rating: 2
> "GM should drop Saab. They're not terrible cars, but really with Pontiac and Cadillac, the brand isn't really needed"

Saab rounds out their product line. It allows them to sell cars to people who would never buy unreliable American cars...but will happily purchase unreliable European cars.


RE: My view
By Reclaimer77 on 7/8/2008 10:22:23 AM , Rating: 2
I sure as hell would buy a Saab before I bought a GM.

All wheel drive turbo ? Yeah, sign me up. Problem is the Japanese already do this better and cheaper.


RE: My view
By FITCamaro on 7/9/2008 8:24:53 AM , Rating: 2
GM owns Saab. So to make the statement that you'd buy a Saab before you bought a GM vehicle makes you look like an incredible fool.


RE: My view
By Reclaimer77 on 7/9/2008 6:37:07 PM , Rating: 2
No.

GM owning Saab does NOT mean GM designs, builds, and tests the vehicles does it ?

And since you called me out, your the fool if you think GM going back to the days of the 50's and 60's is going to fix things. Hey Fit while your at it why don't you add bringing back bench seating to your list ? That will bring their stock up for sure !

Ask any salesman and they will tell you, the test drive is what makes or breaks sales. Every single TIME I drive or ride in a GM vehicle its a huge let down. The ride quality is the absolute WORST of any vehicle brand I have ever sat in. The dash and interior looks cheap with a poorly laid out control scheme thats not as intuitive as Asian cars. And the gauge cluster.. wtf ? It looks like they spent about 10 bucks on the whole thing and its HORRIBLE for night driving.

I mean honestly. Save the RWD vs FWD and manual vs automatic details for later. If you can just make a car that people wont sit in it and throw up, you have won half the battle.

Dude, reliability didn't even make your list ? Are you serious. Thats the BIGGEST knock against GM and American vehicles in general.


RE: My view
By blaster5k on 7/8/2008 10:46:48 AM , Rating: 2
I'm with you on all three points, but unfortunately, I don't think most people have any interest in manual transmissions anymore. They tend to promote better driving I think, and they're definitely cheaper on the maintenance end. The numbers they sell though have been getting smaller and smaller.


RE: My view
By MarcLeFou on 7/8/2008 3:59:49 PM , Rating: 2
In the US.

Elsewhere in the world, I doubt that trend holds true.


RE: My view
By FITCamaro on 7/9/2008 8:27:07 AM , Rating: 2
Automatics are popular in the US because we suffer from more traffic jams than Europe does.

And the numbers they sell are getting smaller because fewer and fewer cars are offering them.


RE: My view
By Spuke on 7/9/2008 5:50:05 PM , Rating: 2
quote:
And the numbers they sell are getting smaller because fewer and fewer cars are offering them.
Actually, more and more cars are offering them. Most of the Japanese and German cars have manual's as standard equipment. Even some of the SUV's have manual's. It's just that most dealers only stock autos because that's what the lazy or the physically impaired buy.

With people buying small cars, I AM seeing more manual trannys popping up.


What is so special about the Volt?
By pauldovi on 7/8/2008 12:47:28 PM , Rating: 2
I can't figure it out? I know GM claims it is an electric vehicle and not a hybrid. But it is a hybrid, a series hybrid. Series hybrid vehicles are heavier than parallel hybrids because they require at least 2 electric motors.

Series hybrids don't make sense are much simpler to design and build then parallel (thus I don't understand what all the fuss is over the Volt).




RE: What is so special about the Volt?
By masher2 (blog) on 7/8/2008 2:07:56 PM , Rating: 2
Eh? The benefit of a series hybrid is that you can design the gas engine to run in a very narrow RPM range, which greatly boosts its efficiency. A series hybrid doesn't require more electric motors than a parallel either...the only downside of a serial hybrid is that it requires batteries with a very high coulumetric charging efficiency, which pretty much requires the pricey LiIon packs.


RE: What is so special about the Volt?
By pauldovi on 7/8/2008 2:57:18 PM , Rating: 2
Series hybrid requires 2 electric motors. 1 to drive the car and another to act as a generator to charge the batteries from the gasoline engine.

So you have a minimum of 3 engines, while only 1 actually runs the car! Big waist! So you get lower performance (only 1/3 motors is driving the car), additional weight (extra motor and a lot more batteries), and no real advantage.

Parallel systems are much better, although harder to implement well.

I am on my universities Formula Hybrid team. We compete in a competition against other universities in high performance, fuel efficient, races. Our car uses a parallel system and was 1/2 the weight of the series cars that some universities used.


RE: What is so special about the Volt?
By bobsmith1492 on 7/8/2008 3:46:34 PM , Rating: 2
You don't need a transmission, though, and a smaller gas engine to boot.

Actually you'd probably have more like 6 electric motors (one per wheel plus a pair of generators).

I disagree that parallel systems are better. Every single train in the country is a serial diesel-electric hybrid. Granted, that's because they need the torque but it is still a good way to boost fuel efficiency by optimizing the gas motor's RPMs. Then there's the fact that you can just plug in and go although that can be done on a parallel hybrid. Plug-and-go works better on a serial hybrid because it is designed to use the batteries as the main power source rather than just a temporary storage from braking energy.

Plus, as you said, serial hybrids are simpler. Simple is good - less to break down.


RE: What is so special about the Volt?
By pauldovi on 7/8/2008 4:00:12 PM , Rating: 2
Simplier to design... as in easier. But they are heavier and have more components.

You better have a transmission on that electric motor if you plan to go faster than a golf cart!


By djc208 on 7/8/2008 5:31:05 PM , Rating: 2
The overall complexity isn't that much different. The parallel hybrid has a more complex drivetrain compared to a series hybrid (even with a transmission you'd probably only need two speeds vice 4 to 6 with a gas engine). The electronics of controlling both systems is very complex just in different ways.

The electric motors in use here are much faster than your average golf cart. The ones in the hybrid project I worked on in college were capable of 10k RPM. We were looking at a two speed transmission to help with low speed take-off so it ran a 1:1 second with some reduction for first.

Most of the extra weight comes from the battery pack, which is usually larger than a parallel hybrid. But you also get improved packaging efficiency/flexibility which can also help a lot with stability and performance.


RE: What is so special about the Volt?
By FITCamaro on 7/8/2008 4:50:44 PM , Rating: 2
Uh...you'd have 2 motors, same as like the Prius. Except that the electric motor solely provides drive power. And a gas engine to charge the batteries likely by spinning a magnet in some coils to generate electricity. Where is this 3rd engine you are claiming?

And I notice you claim half the weight, but don't mention whether you win. While the Volt clearly will weigh more than the Prius since it is a larger vehicle. The Prius does not get the mileage of the Volt. Even with the plug in kits. Depending on your driving habits with the Volt, you could potentially never use any gas at all. The same is not true of the Prius.


By pauldovi on 7/8/2008 7:42:38 PM , Rating: 2
That device that spins a magnet through a coil is called an electric motor.....

We did win, 1st place in the United States, 2nd place in the World, and we got 1st place in every single design category except for rack and pinion (we got second).


By djc208 on 7/10/2008 5:02:44 PM , Rating: 2
The problem is that a good series hybrid is very expensive to implemnent properly since most of the components you want doen't currently exist off the shelf. A high quality battery pack, a properly sized and tuned power source mated to the right motors and components. Not easily do-able in a college competition where money is a small fraction of what a major auto manufacturer will spend and time is seriously reduced.

Parallel hybrids are just suplementing something that is already very well developed and built for what it does. You take an engine that some manufacturer has already designed, tested, tuned, and manufactered for driving a car and add some sort of electric motor assist. It's not grade school simple but you're starting with a solid base and tweaking.


This story, like every other...
By mpjesse on 7/8/2008 10:36:58 AM , Rating: 5
You can literally skip the first 4 paragraphs of this article and not miss a thing. I absolutely cannot stand that every single story has to summurzie the entire recent history of the topic (complete with links to other dailytech stories.)

In fact, I routinely skip the first few paragraphs of every story here because it's all "we were first to report" or "dailytech reported on" bullsh*t. And if it's not self congratulatory paragraphs, it's opinionated trash about the current status of said company or topic.

Stop stroking your egos and get to the stinkin' point!




By mendocinosummit on 7/8/2008 11:25:59 AM , Rating: 3
If they did not have those paragraphs the pictures would be bigger than the article and that just would not work.


Don't Overcharge Batteries!
By WhatAbout on 7/8/2008 10:34:11 AM , Rating: 2
quote:
Most, however, will likely plug their Volt into a standard household outlet to overcharge the battery pack overnight.


Perhaps GM should add some circuit or something to prevent this from happening.




RE: Don't Overcharge Batteries!
By Rasterman on 7/8/2008 11:33:22 AM , Rating: 2
Are you kidding, of course they will, they are not going to sell a $10,000 battery pack and not have protection and monitoring for it.


Solar Panels
By CurtOien on 7/8/2008 11:04:57 AM , Rating: 2
How come no solar panels on this thing? Are they not economical?




RE: Solar Panels
By Rasterman on 7/8/2008 11:39:31 AM , Rating: 2
Solar panels on a car are worthless. They are 3-10x the cost of simply plugging it in and will never recoup their cost if used 100% since the life of a car is under 10 years. Sun tracking home solar panels take at least 15-20 years to recoup their cost. The extra weight is also a bad thing. Additionally only areas with a lot of sun would use them, and many people park their cars in garages, there are way too many drawbacks for them to sensibly be used on a car.

Basically the only reason you would want them is if you don't have a generator on your car and you can wait the 20-60 hours it will take to recharge your car in the sun.


GM Playing Catchup as Usual
By Rasterman on 7/8/2008 11:48:22 AM , Rating: 2
The concept is great, but what concept car isn't, the real version will probably be bland and ugly. Given their total failure of the 1 BILLION dollar EV1 program I have little reason to believe that this car will outperform any of its competitors.

A lot of info is in the Wikipedia article, pricing, specs, performance, etc:
http://en.wikipedia.org/wiki/Chevy_Volt




RE: GM Playing Catchup as Usual
By FITCamaro on 7/9/2008 8:05:20 AM , Rating: 2
Ah so despite the fact that this will be the first serial hybrid on the road, they're playing catch up.

And define outperform. It can go 40 miles on a charge. No gas. Can the Prius or any other gas/electric hybrid do that. It's currently rated at 150 mpg when using the gas engine. Whats the Prius at again? 60?

No. You're just another person who hates American products. I'm sure you lauded Honda for releasing their hydrogen fuel cell car by selling a few dozen to celebrities and didn't even acknowledge the fact that GM has been working on hydrogen cars for over a decade and has 100 hydrogen powered Equinoxes on the street already.


Their slogan is now causing them disprofits
By krwhite on 7/8/2008 3:43:23 PM , Rating: 2
CEO: They'll have to buy new trucks when they break down! How long do they last?

Marketer: They're the longest lasting trucks on the road, sir!




By bpiermat on 7/8/2008 4:05:01 PM , Rating: 2
To bad for the Volt, by the time it comes out there will be no engine/batteries for it. Anybody want to buy one without an engine?


Why?
By rcabor on 7/8/2008 9:56:56 AM , Rating: 2
quote:
Most, however, will likely plug their Volt into a standard household outlet to overcharge the battery pack overnight


Why would they overcharge it?




GM-Renault-Nissan
By kuk on 7/8/2008 10:47:47 AM , Rating: 2
Back in 2006, GM dismissed a Renault-Nissan alliance. That could have been the right ticket to a stable future, by tapping into Renault's small platforms. They were afraid that it would give Ghosn, head of Renault-Nissan and the man who turned around Nissan, too much power. Quote from the Washington on Post October 5, 2006:

quote:
General Motors Corp. rejected an alliance with Nissan Motor Co. and Renault SA yesterday, contending that it still has the size and strength to fight on its own.

GM chairman and chief executive G. Richard Wagoner Jr. said joining an alliance would distract the automaker from its turnaround.

[...]

Wagoner said GM has made a "shocking amount of progress" in executing its turnaround plans. In the past year, GM has cut billions of dollars in overhead costs, reorganized operations, cut employee medical and retirement benefits, sold large parts of the company and eliminated 30,000 jobs. Wagoner and the company's directors have also taken pay cuts.

GM lost $10.6 billion last year, the most since 1992. Most of the loss was in the company's North American division, where executives bet heavily on continued profits from large pickup trucks and sport-utility vehicles before the market stalled.




Silly story
By theBike45 on 7/8/2008 10:49:32 AM , Rating: 2
Apparently it doesn't take much if you want to manufacture a story. The timing of the Volt has nothing to do with either 1) the fact that Toyota said they were going to put some solar panels on thir Prius ; or 2) GM sales (along with all other automakers) are slumping. The event has been planned for months, something you can't whip up in a few hours, or even days. Must be a slow news day if the writers are resorting to imagination stories lie this one, which, even if true, has no significance that I can see.




By joex444 on 7/8/2008 6:48:03 PM , Rating: 2
Read the last paragraph again and tell me to my face that car will go 40 miles on a single charge.




why not just bring the EV1 back
By cokbun on 7/9/2008 2:16:03 AM , Rating: 2
Seriously. Why not EV1? Just fix the model a little bit to look normal. maybe Add a solar panel for auto recharge. Come on.. think, GM




"Outsource" designs
By nitrus on 7/9/2008 3:12:00 AM , Rating: 2
Toyota, Honda, Nissan, and even GM pull designs from other markets. Japanese makers have a large portfolio of small cars they now sell with success in the us (Fit, yaris, Scion, versa). GM sourced Opel for Saturn, and GM austrailia for the G5. Why isnt Ford tap Ford Europe? I would trade the Five North AM focus for the UK FIESTA, yes I said FIESTA! goto Ford.co.uk, their cars look better inside and out.

As for unions, Would you buy a Mustang GT V8 with IRS for 25k? the union wage premium prevents that. I saw in TOP GEAR that they would drool over a Cheap IRS mustang.




"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad














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