Chevy Volt: A $60,000 Mail Truck in the Near Future?

November 25, 2008
People are getting increasingly creative in their legitimization of massive amounts of government money propping up the U.S. auto industry. One anonymous individual wrote in with a detailed plan of how to save GM (and the U.S. economy, and the American auto worker) on GM-Volt.com, parts of which seem workable and prudent. This individual's ideas spring from a post written by retired NASA engineer Phil Toney.

But the blogger's entire plan relies on, and I quote, legislation allowing the purchase of "massive quantities of Chevy Volts to replace the current government fleet." What's more, these government-service Chevy Volts would be sold "at a premium" and "without a battery warranty." The writer goes on to suggest that these new-fleet Volts could replace one-sixth of U.S. government fleet vehicles, totaling some 100,000 cars. And what kind of premium does the author suggest? "Due to the cost of the lithium ion battey of about $10,000 - $15,000 per car," he writes, "GM has stated it won't be able to make a profit at a cost of $40,000 per car." That makes for quite a pricey fleet, and one footed in part by your tax dollars.

Wait a minute--fleet sales to ensure GM's viability? Haven't we seen this before? Isn't this tantamount to admitting that an automaker has failed at building products that consumers will buy of their own accord and at a profit to the automaker? Fleet sales became a dirty word not so long ago, as they were a quick and  clandestine way to offload thousands of Corsicas, Sebrings, Tempos, and Escorts to languish on Hertz and Budget Rent-a-Car lots. The image problem alone that this created is precisely the one GM, Ford, and Chrysler have been desperately trying to abandon as they swear up and down, "But we DO build competitive small cars! Promise!" Indeed, these companies not so long ago severely limited fleet sales because they realized that the buying public didn't want to pay tens of thousands for a new car only to rent its lowly base model on vacation, beat up and reeking of cigarette smoke.

Engineer Phil Toney compares this Volt governmental fleet plan to actions pursued in the '30s and '40s: "in fact, the US rose from a desperate, financially-anemic economy in the 30’s to the world’s strongest economy after WWII!!! ….due primarily, I believe, to the multi-billion dollar government contracts placed with the big 3 for the machinery of war! We know it works. So let’s do it again!!!" Well, if you consider social workers and postal workers soldiers, then perhaps you might also consider an armada of Chevy Volts the "machinery of war." But who wants to drive a postal van to the club on Saturday or to their parent's place for Christmas? Maybe if we upped the price of this GoverVolt even more, we could share a communal Volt with the neighbor: He could drive it on the even days, you on the odd. Come on, stop that complaining--if we're going to get through these tough times, you are simply going to have to make some sacrifices.

My favorite response to this concept is as follows: "Does this mean they will sell the car to the Gov't at $50,000 to $60,000 per car? Kind of like the $25k toilet seats?"

What are we: a free-market economy or one propped up with huge government programs that pay exorbitant amounts for products that otherwise wouldn't succeed in the marketplace?

I really, really want the Volt to succeed. ON ITS OWN MERITS. Should you and I, with our tax dollars, be forced to purchase an enormous fleet of Volts at ridiculous prices in order to keep a lumbering giant...well, lumbering along? And what of the sprawling network of 7,500 GM dealers that all want a piece of the pie? Do we keep them clunking along with handouts in the above scenario?

I'm not just a little troubled by the scenario proposed above. What's your take?--Colin Mathews
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