August 11, 2009

Epiphany: The GM puzzle is coming together

More and more I find myself sounding like a conspiracy theorist, but if the puzzle pieces seem to fit together, it cannot simply be ignored. We are hit with thousands of bits of information every day. It's all too much to process, let alone analyze. It's just such circumstances that allow some obvious things to hide in plain site. However if you take the time to look at a few seemingly incongruous elements together, you can see a relationship that might actually exist, emerge into view.

The catalyst for me today was the announcement from GM that the new Chevy Volt scheduled for release next year is on track to get a whopping 230 mpg in the city. WOW! That is indeed a game changer.

The question is, why did they announce it now?

At an expected retail sales value of $40,000 it would seem to be a tough car to sell. But with a government cash for clunkers program, and gas prices back on the rise, it might still be worthwhile to a larger segment of the population than one would have expected months ago.

When the GM bailout occurred, the nickname Government Motors started making the rounds. President Obama claimed he didn't want to run GM, he wanted the government out of the car business. Many bloggers (myself included) and pundits called him out on that. He was lying, he was/is a socialist. The US federal government's ownership share could in fact go as high as 70% of the company. No doubt it will.

That's because Obama isn't interested in running GM. I think he's just interested in their profits. Think about it; a struggling company that despite itself is on the verge of coming out with a game-changing vehicle that needs government help. The government bails out the company, but unlike previous bailouts, under the guise of being a fiscal watchdog, presents a number of conditions - including a restructuring deadline. A deadline that ensures that GM will have to declare bankruptcy. The government then attempts to dictate the terms of that bankruptcy to it's advantage, and ensure it's ownership of the company. So far it could be about money, or power, or it could be about control, it could be about socialism, it sure doesn't seem like it's about helping the company out and getting paid back and moving on with governing where the government should be.

Then look at that Volt. It will get 4 times the gas mileage of the current leader fuel efficiency leader, Toyota's Prius. Look at that mountain of debt the government is racking up with reckless abandon. With 70% ownership comes a hefty share of GM's bottom line. That's a revenue stream that could be used to pay for, say, health care. And ditto for any of the banks the government has it's claws into. Obama doesn't care much about telling GM how to make cars, just like he doesn't really care about the environment - Cap and Trade is window dressing for more taxes. The President wants the money so that he can finance the government's ability to create and run programs. Programs that will do for health care what welfare did for people's actual welfare; not solve the problem but create a group that is dependent on the government for the meager scraps it's thrown. A class that will be beholden to that elite group of leaders in Congress, specifically the Democrats - who can scare up a conservative bogeyman who 'wants to take your benefits away'.

So it is about power, but GM is about the money that can help buy that power. Now that the government is in the car playing field, they wasted no time getting the cash for clunkers idea out of the gate. But why announce it now, I asked already? Because the cash for clinkers program is getting results. And now that they know that they have to make ensure that the demand doesn't burn itself out before next summer - the table has to still be set for the Volt in September 2010.

These things may be nothing more than coincidences, but they sure do fit together awfully nicely, don't they?

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