Information about General Motors’ Chevy Volt surfaced last week that caused the blogosphere to light up. It seems that the much-hyped Volt is technically a hybrid vehicle as opposed to a true electric car since at certain acceleration points it relies on a gas powered engine to assist its electric powertrain. This comes after three years of GM touting the Volt as a “one of a kind, all-electrically driven vehicle.” Sites such as Edmunds’ Insideline.com proclaimed that “GM Lied: Chevy Volt is Not a True EV.” There appears to be a disturbing picture developing at GM of a government owned corporation that is fostering a culture of deceit in order to generate public acceptance.
General Motors was also less than honest a few months ago when advertisements featured then CEO, Ed Whitacre, boasting that GM had repaid all government loans “in full”. This was obviously not the case and GM was rightfully criticized for trying to mislead its audience into inferring that over $50 billion of taxpayer provided loans had been paid in full. Other recent marketing campaigns are based on paid endorsements by Consumers Digest.
The latest Volt debacle is particularly troubling, since the American taxpayers are once again footing a bill with vehicle sales to be subsidized by big federal tax credits. These tax credits come on top of a huge tax benefit that GM received in the form of a $16 billion tax loss provision that it was allowed to carry over from its bankruptcy restructuring. All of this at a time when the Commander in Chief Executive Officer, President Obama, makes arguments that big corporations and the wealthy should be made to pay more to help reduce the burgeoning federal deficit. This type of hypocrisy along with recent attempts to fool the public lead one to believe that GM is a company driven by political philosophies. While it should be getting back to the basics of building quality vehicles that people want, it is hyping a $41,000 hybrid that will admittedly not be profitable.
It now rests upon the guardians of American taxpayer investments to ensure that General Motors proceeds in an ethical, as well as logical, manner as it attempts to return to profitability. Our elected officials have a fiduciary obligation to those who placed them in power. They should be vigilant and honest with the American people as the outcome of the unprecedented governmental involvement with the US auto industry unfolds. It seems this vigilance should start with a review on whether or not millions of taxpayer dollars should be spent to subsidize and market the Chevy Volt, a vehicle that is clearly not worthy of the hype it has received.
GM’s Stagemanaged IPO (Investor’s Business Daily)