Nearly two years after the introduction of the path-breaking plug-in
hybrid, GM is still losing as much as $49,000 on each Volt it builds,
according to estimates provided to Reuters by industry analysts and
manufacturing experts.
[...]
GM's quandary is how to increase sales volume so that it can spread its
estimated $1.2-billion investment in the Volt over more vehicles while
reducing manufacturing and component costs - which will be difficult to
bring down until sales increase.
All this at the expense of taxpayers, investors and non-union laborers:
Admirers of the GM bailout should bear in mind that it was the Bush administration that first decided to intervene at the firm, offering a bridge loan on the condition that it draw up a deeply revised business plan. President Obama’s unique contribution was effectively to nationalize the company, seeing to it that the federal government violated normal bankruptcy processes and legal precedent to protect the defective element at the heart of GM’s troubles: the financial interests of the UAW. It did this by strong-arming GM’s bondholders into taking haircuts in order to sweeten the pot for the UAW. The Obama administration also creatively construed tax law to relieve GM of tens of billions of dollars in obligations — at the same time that Barack Obama & Co. were caterwauling about the supposed lack of patriotism of firms that used legal means rather than political favoritism to reduce their tax bills.
Economics through the lens of communism.
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