Rooted in Reason: Nurturing the Seeds of Liberty

General Motors, Government, and You by grassroothawaii
November 16, 2010, 11:53 am
Filed under: Uncategorized

By Hideo Hikida

The much anticipated Chevrolet (Chevy) Volt is going to be hitting the showrooms of car dealerships soon and you should know about it. General Motors has been touting the upcoming hybrid vehicle tirelessly through a barrage of ad campaigns on TV and in newspapers around the country. General Motors claimed that the Volt was going to be an all-electric car that would revolutionize the automobile industry through clean emissions and excellent fuel economy. Apparently, that’s not the case because of the fact that the Volt is actually a hybrid vehicle that runs on gasoline and electric; GM says that at some point when the battery’s charge declines, or when the car is moving near 70 mph, the gas engine will power the wheels.

Now some of you may just dismiss this as the classic switch and bait that has been synonymous with American consumerism, but what makes this little misstep interesting is the fact that GM seems to be spending tax-payer dollars to advertise the bait. Little does the general public know that GM is actually 61% owned by the Federal Government.

Yes, I know that GM released an ad back earlier in the year saying that it repaid all of its loans that it took from the US and Canadian Governments. But if you do a little digging into the story, it seems that General Motors had instead just used more taxpayer money through the Trouble Asset Relief Program (TARP). GM, which has received almost $50 billion in government subventions, repaid a $6.7 billion loan using other federal funds, a TARP-funded escrow account. Sen. Charles Grassley (R-Iowa) called this a “TARP money shuffle.” A commentator compared it to “paying off your Visa credit card with your MasterCard.

Back though to the original point: The Volt. Chevy desperately needs this car to succeed. The Government has backed the car with the money of tax payers and GM is still bleeding profusely in the red. It would make sense for Chevy to have these cars available just about everywhere correct? The sad thing here is that the Volt is only going to be available in “CA, TX, MI, NY, NJ, CT and Washington, DC, at the end of 2010. Quantities limited.” 44 States will not be able to buy the Volt in-state, which in the end might be a good thing because the government is also giving away a $7500 tax break to any Volt purchaser going forward. GM was supposed to make as many as 60,000 units for next year. It now says that it will make 10,000.

What’s more, is that the Federal Government is also giving an up to 50% tax rebate (up to $2000) to any purchaser of a 240 Watt charger (you use it to charge the electric battery in the Volt), and CA (yes, the already pretty much broke CA) is giving away a $5000 tax rebate for those who purchase the Nissan Leaf, another “green” vehicle.

In the end,  this car was made to 1) appease the auto making engineers in congress and 2) create a “greener” vehicle that won’t damage the environment as much.

The ironic thing about #2 is the fact that these “green” vehicles are still going to have to be charged by households that are powered by coal and gas in the end.



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