As Mark Twain might have put it, the reports that General Motors is alive are somewhat exaggerated.
“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,” the news agency reports.
Talk about a loss leader: Is the car company hoping to make up the difference on floor mats and rust proofing? It would cost GM half as much to shut down Volt production and give everyone who wants to buy one a new Honda Civic hybrid (MSRP $24,800) instead.
This isn’t what we heard in Charlotte, of course. The auto bailout “saved more than one million middle-class jobs all across America,” insisted Michigan’s former governor, Jennifer Granholm (D). “All across America, autos are back! Manufacturing is rebounding!”
Sadly, the purported manufacturing rebound turned into a dead cat bounce in August, as the country lost 15,000 manufacturing jobs.
Meanwhile, the GM bailout simply spotlights the danger of cronyism—where the federal government determines winners and losers instead of a free market. “This growing partnership between business and government is a destructive force, undermining not just our economy and our political system, but the very foundations of our culture,” warns Charles Koch in The Wall Street Journal. “Profiting from government instead of earning profits in the economy, such businesses can continue to succeed even if they are squandering resources and making products that people wouldn’t ordinarily buy.”
Such as Chevy Volts.
The joke, regrettably, is on taxpayers: The government bailout of General Motors (GM) and Chrysler between 2008 and 2009 will cost taxpayers approximately $25 billion—which went to the United Auto Workers, Heritage’s James Sherk writes. You’re paying for that Volt even if you don’t get to drive it.
Given the news about the Volt, it’s no surprise that GM “is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market,” as Louis Woodhill notes at Forbes. The only surprise is that so many are still eager to point to the auto bailout as a success.