July 22, 2006

G.M. Wastes Money to Appease Liberals

No, not that G.M. He has more sense than that. It's General Motors. I have to hand it to G.M. Vice Chairman Bob Lutz for his honesty, when he essentially said that it's easier to give in than to argue with liberals obsessed with saving the Earth over all reason and costs. This involves Lutz's statements on hybrid cars:

Hybrids are technologically of doubtful benefit, and expensive, but necessary from a political and public relations point of view.

Toyota has said, economically, hybrids make no sense. The reduction in fuel [consumption] does not pay for the technological content and cost of the vehicle so therefore economically it remains fairly nonsensical, so that's the left-brain analytical argument.

The right brain is it's the popular thing to do, many people believe that if we all drove hybrids the world would suddenly get cooler again and then it's the patriotic thing to do because if you drive a hybrid you will no longer be funding the Arab terrorists, and so forth.

So, with all those beliefs out there, you have to do a hybrid for public policy reasons.

Then, Lutz said in regards to G.M. entering the hybrid market after Toyota:

For Toyota, it was a huge, huge, immeasurably valuable PR coup. (GM's decision not to pursue a hybrid car) was a mistake from one aspect, and that's public relations and catering to the environmental movement.

Besides private businesses spending money just to make liberals feel good, how about government spending to subsidize hybrid cars? Well, people who purchase hybrids receive tax credits (not deductions, but the higher credits which are dollar for dollar) of around $2,000. If the car is so efficient and great, then why are U.S. taxpayers having to help people pay for them?

How many other bad business and government decisions have been made to cater to the "environmental (anti-capitalism) movement?" How many more bad decisions will be made, and at what costs, if you let them continue to have their way simply because they will not shut up until you do?

There has to be an end to this insanity somewhere.

Posted by Woody M. at July 22, 2006 03:20 PM | TrackBack

Woody, I think your 3:40 PM post answers your 3:20 PM post.

Posted by GM Roper at July 22, 2006 03:46 PM

Hybrids aren't worth the investment if you're looking to save money. I heard a guy on the radio from Consumer Reports the other day who said a hybrid wouldn't save you enough in gas to pay for the difference in price over a 5 year period.

I subscribe to Consumer Reports online In looking at their ratings, there are some cars that get better mileage than hybrids and plenty that get nearly good, within a mile or two per gallon.

Lutz is correct. At this point hybrids are a PR game.

Posted by DADvocate at July 22, 2006 04:57 PM

Yes, but since when did common sense or logic ever factor into it when The Environment (*gasp*) was on the line? (Damn the expense, Mallory - we're buying it for the Environment! And besides, we'll be getting a hefty tax credit as well, heh...)

All things considered, it would be kind of silly to let Toyota lap up all the profits from the "environmentally conscious" (read: "stupid") who are bound and determined to have their hybrid cars no matter what.

Mind you, as DADvocate points out, they're not exactly cheaper or more practical, so the rest of us can chuckle at them (although not at the tax credit - the bastards!) while they try to hold up their noses at the rest of us "ecologically challenged" driving around in our non-hybrid, cheaper, better-mileage cars. What we all need to be doing is pushing for the proper development of alternative fuels (something the big oil companies have been particularly good at quashing over the past few years).

Posted by Katje at July 22, 2006 06:50 PM

People buy all sorts of products that don't make economic sense for them. If Toyota or GM can make a profit selling these cars, that's what free market capitalism is all about -- matching supply to demand.

The problem I have is with the tax credits, which distorts the market. On the other hand, all levels of government (federal, state, local) seem to hand out tax credits like candy to support all sorts of projects of questionable benefit to the taxpayer but of beneft to lobbyists with vested interests.

In the long run, despite the tax credit, hybrid cars will stand or fall on their merits; either they will manage to make economic sense or they will disappear -- I don't think a $2k tax credit is large enough to change the outcome. While hybrid cars may represent an example of overselling environmental benefits, compared to the many far more egregious abuses of tax credits I see, I'm willing to suppress my "outrage" and allow more time to see if the technology can actually" turn the corner".

That said, I appreciate your bring to my attention evidence that hybrids are not cost-effective -- as well as highlighting another example of environmental wishful thinking trumping sound judgment that does not meet the "required" threshold of EC (environmentally correct) thinking. Fortunately, the market is usually able to "terminate with extreme prejudice" economically infeasible projects so long as government doesn't "raid the game".

Posted by civil truth at July 22, 2006 10:14 PM

Yeah, what civil truth said.

Posted by Oyster at July 23, 2006 09:22 AM

Most of the time, business has no choice on such issues. The government dictates questionable requirements and penalizes "bad behavior." We see this with tax penalties on "gas guzzlers," requirements for pollution control with costs far more than benefits, employment rules and quotas that cripple productivity, and even replacing toilet seats with the split version to make OSHA happy.

If government doesn't directly spend our tax money on questionable rules, they force private businesses to pay the price themselves--a hidden tax that we pay via the back door.

Posted by Woody at July 23, 2006 11:09 AM

As usual, your post and the GM statement while correct, miss the point entirely. Hybrid cars are not bought because they are, or should be, inexpensive. They are bough to use less gas. Now GM and Lexis are producing hybrids that do not get any better milage than sime standard autumobiles. That is the stupid factor. The Prius is a auto that gets 40 or better miles to a gallon.
Oh, when gasoline is $10.00 a gallon, then a good hybrid will pay for itself.

Posted by James S Melbert at July 23, 2006 02:20 PM

Here's another site weighing in on the matter:


(no, I still haven't figured out how to do the link thing properly yet!)

At any rate, this tells about how hybrid production and sales have been bombing recently and why - makes for an interesting chuckle, enjoy.

Posted by Katje at July 24, 2006 07:58 AM

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