The Chevy Volt’s target audience
General Motors finds itself unprepared for a gas-driven consumer shift to smaller, more fuel-efficient cars, says Holman Jenkins in The Wall Street Journal, for at least the third time since 1958. One lesson from this is that planning your fleet on “a 'permanent' shift in auto tastes based on a quantum as volatile as the price of gasoline is nuts.” Well, GM executives aren’t nuts, so who do they expect to buy the $45,000, limited-range electric Chevy Volt when it comes out? The answer: Washington. GM is seeking “a whopping $7,000 tax credit” for Volt buyers, among other favoritism. U.S. automakers have spent years as “whipping boys” of Capitol Hill, and “the Volt is GM’s vehicle for making a bailout of GM politically acceptable.”
Chrysler’s public crisis
Chrysler “has been engaged in a vanishing act” ever since Cerberus took it private last year, says Jim Jelter in MarketWatch, and it’s hard to believe CEO Bob Nardelli when he says that the sputtering automaker isn’t headed for “the chop shop.” Its greater-than-expected 36 percent drop in June sales is one hint that the company, which doesn’t have to open its books, is in dire straits. But it’s private, “so who cares?” Well, Chrysler just cut 2,400 auto plant jobs, which means five times as many jobs will be slashed at publicly traded auto parts factories, transport companies, and other related industries. Nardelli says things are fine, but the downstream job “carnage” will give us a peek behind the curtain.