WSJ Attack on Chevy Volt----Shocking

Posted by: David Kiley on April 23, 2008

Holman W. Jenkins, Jr. writes a pretty tedious editorial in The Wall Street Journal today, suggesting that General Motors is wrong-headed for developing the plug-in Chevy Volt.

Holman W. Jenkins Jr. does make one reasonable point. The Department of Transportation’s announcement that automakers will have to boost fuel efficiency in their cars and trucks by 4.5% a year until 2015, is subject to change by a future Congress and White House if automakers can’t get there, market conditions and oil prices changes, etc. There are a host of things that can happen between now and then to move the goal posts.

But here is where Holman W. Jenkins, Jr. loses me. “America’s biggest near-dead car company called in reporters this month to boast – boast! – about its willingness to lose money on its forthcoming electric car. That includes betting the farm on whether batteries can be developed with the necessary power-to-weight ratio and life expectancy to give the car its needed usability. “Whatever it takes to do, we will do” to deliver the plug-in Volt by a 2010 deadline, project leader Frank Weber told journalists.”

The scientists I have interviewed over the past few years tell me that not only is the technology within reach, but that it makes too much sense not to pursue with gusto. Do costs have to be brought down? Yes. But never has an application of technology come along that so perfectly matched the peculiarities of the U.S. driver. The plug-in is designed to run between 40 and 50 miles on an electrical charge. If you have to go a longer distance, an engine that kicks on to recharge the battery will get you there. It takes the nervousness of running out of juice out of the mix.

Honda doesn’t see the market for plug-ins. Okay. But Honda have us the awkward looking Insight to answer the Prius, as well as the Ridgeline pickup and the Element. Honda’s read of the consumer desire side of the busines can be off.

GM sees the Volt and its plug-in siblings as a new lens through which the U.S. and world will view the company—if it gets the products right and delivers. But fault the company for over-spending on breakthrough technology? Why? GM has gotten management decisions wrong plenty of times (linking with Italian automaker Fiat before its financial renaissance comes to mind) They have also gotten product decisions wrong plenty of times (see: Pontiac Aztek, Chevy Outlander and Saturn LS to name a few.).

A financial and management commitment to bring a game-changing technology to showrooms is hardly something to criticize. As Toyota has proved, the presence of the Prius in showrooms and in the papers makes even its thirstiest gas suckers like the Sequoia and Tundra appear greener than GM’s vehicles even when they aren’t.

More from Holman W. Jenkins, Jr. “For some number of dollars, GM can afford to bribe consumers to drive Volts off the lot…”

GM is betting that there will be early adopters, as well as government incentives to help consumers buy the new technology…just as there were for the Prius. GM opted out of hybrids in the 1990s because it rightly saw that gas-electric hybrids were an inelegant engineering solution for higher fuel economy. It made a bet that hydrogen-powered cars would come along faster than reality tells us now is the case.

Yes, it’s a bit of a roll of the dice for GM. And it’s unlike the way the “near death” automaker Jenkins describes has behaved in the past. From my vantage point, it looks like GM is taking in the political reality that we will never have European-style gas taxes to drive demand for smaller vehicles, so it is trying to one-up Toyota on the technology front. If GM falls on its face in the execution, we can all write that story. But to pillory the company for trying? What for?

Tag: http://www.thetruthaboutcars.com/volt-birth-watch-43-businessweek-vs-wsj-in-a-hybrid-smackdown/#comment-392822

Reader Comments

CanadaMark

April 23, 2008 3:19 PM

So GM bet the farm on hydrogen back in the 90s foregoing gas-electic, Toyota & to a lesser degree Honda make endless great press from thier G-E products while GM now plays catch up using bloated 90s SUVs and old tech pushrods in an attempt to jump on the bandwagon. The Volt will never be produced but makes nice TV for folks who do not follow the exploits of this dinosaur of a company. GM has a pile of 2009 models out now, so can we expect the 2010 Volt next spring?

Noz

April 23, 2008 10:06 PM

Kiley, you are not seeing straight again. First off, the Volt is just another failed publicity stunt on the part of Failing GM. Just what is the electricity source for you on the right (position not politics) side of our land? Coal? This would be my guess. What is the world's most filthy material widely used to generate electrical power? What spews the most Mercury, Thorium, Sulphur, and god knows what else in mega-tons/day into the atmosphere? Not NatGas or Nuclear. The latter exhausts only water vapour, no CO2. And realize that there is no such a thing as 'clean coal' despite claims to the contrary, it is an impossibility. Then we have the impracticality of the Volt as a styling exercise, typical of GM, no one short of an acrobat could enter and depart with ease and grace, let alone see out of the thing.

Then there is the pricing and how GM is fully prepared to go along with its present scheme and lose money on Volt along with everything it builds. Now that's a winner.

Why are you knocking the Element, Ridgeline, and Insight? the latter was a little strange, but certainly economical to operate. I interviewed two owners here on the Left Coast (position and politics) and both are enjoying their rides and are not about to abandon them. Clean, ding-free, easy-driving, fuel-sipping. No repairs at all since new, now at 45K and 73K. Now of course they could have bought some dog from the Failing Three and arranged for towing, over-night stays in the dealer's fetid bunk spaces... MB is offering these now for stays of up to 30 days while repairs are made by 'factory-trained technicians'.

Prefer something like the Avalanche or its clone 'slade' to the superb but a bit awkward looking Ridgeline? There are massive frame pieces in those thick panels, they allow the joining of two very different kinds of structure. GM can't make that excuse.

As to Hydrogen, well who has a fine sedan for lease in a couple of months? And a home-fueling station available? Not GM. And yes the Clarity will be found on the sorry streets of LA for the most part. But the practicality and cost are still vast issues. Toyota bet correctly, the proof is in the numbers. I believe this will remain the case in some form for years to come--Toyota and HONDA leading the way as GM, Ford, and what remains of Chrysler continue to crash and crumble, falling over their own shoes and those of their misguided and grossly over-paid management. Read this Lutz-baby? Copy one for your buddy in crime, Ricky.

Jim mbongo

April 24, 2008 9:57 AM

Only one idea came to my mind after I read Mr. Holman W. Jenkins, Jr's article: this man is stupid and I am still polite!

Ken Grubb

April 24, 2008 2:51 PM

It's likely all of GM's hybrid tax credits will be expended by the time the Volt hits the market. However, even if they aren't, all hybrid tax credits end December 31, 2010 so tax incentives won't offer much help to GM or Volt buyers.

After GM killed it's EV1 program, it does seem wrong headed for GM to now shift course and proceed full steam ahead on the Volt. GM crushed all the EV1 cars--despite leasees begging GM to let them buy the cars. GM had a chance to remain ahead of the hybrid game by mass producing the EV1 and bringing it's prototype EV1 hybrids and plug-in hybrids to market.

The Volt faces a huge uphill battle convincing buyers that their first model year $48K Volt is a better buy than a $30K to $35K plug-in Prius with a 13 year track record and 4th generation technology.

Given the choice, even if the Volt were cheaper than the Prius, I cannot see myself buying a Volt. It would feel too much like an EV2, also destined for the crusher. If GM announces they'll be leasing the Volt, rather than selling it, just look away and keep moving.

Avalon

April 24, 2008 7:31 PM

Noz:

It must make you feel really superior to heap criticism on others. So desperate are you to do so that you bend over backward praising the un-praiseworthy Ridgeline and Insight. There's a whole lot more than simple functionality that goes into selling cars.

There's an old saying that goes something like this: When you criticize, you say much more about yourself, and your NEED to criticize, than you do about the target of your criticism.

In case you haven't noticed, in your facts-be-damned determination to criticize all things American, virtually every new model introduced by GM in the past 2 years has not only sold quite well, but for substantially higher average prices than the models they replace.

In fact, it was reported only a couple of days ago that the average selling price of the new Malibu is HIGHER than Camry. And before you self-righteously point out that Camry sells in far higher numbers, I'll remind you that turning around perceptions takes time. You are a shining example of that.

I traded an Avalon for my current car, a 2006 CTS. The Avalon was JUNK, and it was better than that plain vanilla, problem plagued hunk of crap Avalon they're selling today. My CTS has zero problems at 45,000 miles. Admittedly a small sample (1), but no less relavant than your "left coast" owners.

I have recently purchased 2,500 shares of GM. When the labor savings really kick in in 2010, I'll make a boatload of money on it. It's unfortunate that you allow your prejudices and reflexive need to find fault with others (so long as they're not Japanese) to prevent you from profitable investments in the coming turnaround in GM and Ford.

Both companies have made mistakes in the past, but your insults at Lutz and Wagoner are just plain wrong. And they're childish as well.

Grow up.

Bill

April 24, 2008 9:23 PM

Nice article. I thought Jenkins article was a wierd excercise in spin doctoring. Even asked myself why he would bother to write it, unless he sold short GM shares and was hoping for a dip in the price.
The volt is obviously a good idea. We will find out soon enough if it will work.
And Noz, the argument that 'electricity comes from coal' is getting a bit tired. Everybody knows that there are many other sources of electric power. Even coal power stations have significant momentum that leads to excess generation at night - the ideal time to recharge your car. But do some research yourself unless you are just trying to prove a point.

Robert Goldschmidt

April 25, 2008 1:19 AM

When the gas lines hit again in the next few years, GM will not be able to produce these fast enough for the foreseeable future -- and they will be able to name their margins. Who is going to get the last laugh -- GM.

Charlie H

April 25, 2008 9:03 AM

"From my vantage point, it looks like GM is taking in the political reality that we will never have European-style gas taxes to drive demand for smaller vehicles, so it is trying to one-up Toyota on the technology front."

Without European-style gas taxes, Toyota still, somehow, manages to sell small cars. If GM can't sell small cars, perhaps it's because Toyota's cars are better.

Rather than blow in a couple of billion developing the Volt, perhaps GM should invest a few hundred million improving the Cobalt? The Volt can't get here in any serious quantity before 2011. A better Cobalt could be here much faster.

Phil

April 25, 2008 9:51 AM

It is so easy to criticize without doing your homework. GM is working on more than one avenue for energy independence: bio fuels, plugins, and hydrogen. They are pushing for hydrogen infrastucture. I haven't heard any other auto company doing that. Their duo mode hybrids are more fuel efficient, although I wish they would use it on smaller vehicles. I think people just need to be objective and do their research before they publish or open their mouths.

Jon Phillips

April 25, 2008 10:37 AM

wow i had no idea how many GM haters there were.

Well if you like the concept of the Volt and would like to find out more please check out www.gm-volt.com
You can find anything you would like to know about the Volt, and then you can generate your own desicion.

PS The Volt will be built in 2010/2011, it is not a publicity stunt, anyone who tells you it is, is probably a troll for Toyota.

Chevonly

April 27, 2008 1:24 PM

Its always a great idea to bash American car companies. I guess you BOZOS do not remember WWII if it wasn't for them we would all be wearing brown uniforms. GM is the only company developing alternate technologies. We have plenty of reserve electricity for the Volt. Check out Plug in America they have all of the stats. i have my deposit ready to put down and I plan on buying gas for my Volt once every two to three months. As far as quality goes my other two Chevy's one with 230k and the other with 55k will outlast any Honda or Toyota, the one Honda I had was great I miss the exercise I had to push the pile of JUNK on three different occasions NEVER HAD TO PUSH A CHEVY.

Schmeltz

April 28, 2008 9:24 AM

David:
Excellent article in response to the tear down remarks of the WSJ editorial. I usually hold the WSJ to a high media standard, but definitely not so in this case. I still don't see the point of the article even after reading it a couple of times.

You hit the nail on the head when you rightly ask, why chastize a company whom is clearly trying? Maybe Jenkins just needed something controversial to say to sell a few newspapers.

LeoG

April 28, 2008 10:34 AM

Get a cheap car insurance quote and buy your car insurance quickly online with The Auto U.S.. See if we can bump down the price of your car insurance. We'll beat your car insurance renewal quote.

Auto insurance can help protect you, your family and your car. Auto insurance can help you restore your assets if they're lost or damaged. It can also help protect you in the event of a lawsuit. All of which can mean greater peace of mind for you.

Auto insurance will help:

* Safeguard your investment in your car
* Pay for medical expenses in case of an accident
* Provide financial protection from lawsuits
* Cover losses caused by uninsured or underinsured drivers
* Pay for damage due to theft, vandalism or natural disasters
* Auto insurance coverage helps you to meet whatever might be coming down the road with a greater peace of mind.

With The Auto U.S. it is easy to buy your auto insurance online. Our site is easy to use and our goal is to show you how much you can save with our services. Not only will you save your money, but you will save your time too. We are here to make it easy for you to get a free rate quote online, anytime, 24 hours a day when it’s convenient for you. You can complete the process and have your proof of insurance in 10 minutes!

Our benefits:

* Low down payments
* Low premiums that fit your lifestyle
* Fast and easy process

The Auto U.S. has developed a better, more affordable way to help keep safe drivers covered and rewarded. Accidents happen – we understand. We also understand you deserve something back when they don’t. Now it’s time you get the auto insurance you’ve always wanted. The auto insurance features are available in many states and provide greater choices and the rewards you deserve – from day one and at an affordable rate.
http://www.auto.crdcards.com

Pat

April 28, 2008 6:56 PM

It's always interesting when people reflexively react in a negative fashion to anything the American car companies do. If Toyota's next gen Prius was promising 40 miles of pure electric driving, people like Noz would be shouting about it from the rooftops. (Since the next gen Prius will still have the inferior nickel metal hydride batteries of the current gen Prius, it will not achieve anything close to 40 miles of all electric driving). GM is on the right track here - I applaud their efforts. Yes, the Volt will be expensive for the first few model years. But a lot of people like me are willing to pay a little extra in order to stop lining the pockets of the Middle East mullahs and the Hugo Chavez's of the world. And when the Volt appears in November of 2010 (do your homework, CanadaMark)and gas prices are $5-$6/gallon, the price premium won't look so bad at all. Furthermore, the E-Flex platform of the Volt will allow GM to transition the Volt from electric batteries to hydrogen fuel cells as that technology becomes more feasible. Great job, GM. Sign me up.

ThankGod4LeoG

April 29, 2008 6:03 AM

With so many scams around it's hard to know from whom we should buy our auto insurance. Thanks to blogger LeoG, who reveals his unabash exploitation of BW blog audience, we now know the business ethic of at least one auto insurance company. If not revealing his own business ethic, LeoG exposed his lack of training by his employer, or maybe because of special training by his employer but certainly his degree of cerebral activity leave much to be desired. The persona revealed behind the expedient salesmanship,and clever manipulation of empathy should make us cautious about this blogger's extraordinary agendas.

mmmeccano

May 14, 2008 5:18 PM

Phil - Sorry, but GM's dual mode hybrid is decidedly NOT more fuel-efficient than Toyota's. GM's hybrids are barely that - the battery only ever kicks in when the car is idling and then only if the AC isn't on. I test drove a dual mode hybrid Saturn and was shocked that the AC wasn't working only to be told the EccoAC was on so that I could see how the engine shuts off when the car is stopped. EccoAC = Air Vent and you have to put the "real" AC on to cool the car down and then the batteries NEVER kick in. Their MPG on the car was but a few miles better than conventional model Saturn. No, GM's dual mode hybrid is the low-tech stepsister of Toyota's synergy drive system (which is also used by Nissan). I would love to buy a American made car that will help rid this country of its addiction to foreign oil; as it stands now that car would be a American made Toyota Camry over a Mexican or Canadian made gas pig from the big three.

jeremy

May 19, 2008 5:56 PM

The Prius is not the answer. It only averages around 45mpg. I have a Chevy HHR that gets around 34mpg. For about 4k less I got a larger vehicle, and a better warranty. I'm at 55k miles and haven't had a problem yet.

The Prius and other hybrids are only a short term solution. At least GM is trying to move ahead (past the mediocore response to hybrids, I do know they have made a few) to something that could actually make an impact. Any car that will rely on gas is not much of an alternative. The volt's ability to drive 40 miles on a charge would be more than enough for a lot of people to get to work and back and a few not out of the way erronds. The electric cost to charge the battery is around 85 cents. Since I'm getting around 35 mpg at close to $4 that's more than a fourth of the cost to run.

I've owned three chevy's already and have NEVER had a problem with them, and now with GM's 100k warranty you can't say Toyota has better quality.

fallout11

November 4, 2008 9:21 AM

Followup: It's now November 2008. GM has pushed back the Volt until 2011 (or later), and lacks the cash to even continue the development of the Cobalt's successor, the Cruze (delayed indefinitely). GM has gone hat in hand to the US government asking for a $25 billion dollar bailout, and is considering merging with the failed and collapsing Chrysler (Cerberus) Motor Corp.
Sad days for GM indeed.
In light of such, Jenkin's article appears prescient, while Kiley's and most of the later posters about appear to be what they are - badly out of touch with reality.

Chris

November 7, 2008 5:30 PM

After the debacle of the EV1 in which GM made about $1b (not lost) by selling the patents and processes involved to Exxon-Mobil for $1.3b, there is little public confidence left that the Volt will ever appear. 1) the money for the re-tool for Volt has already been spent to prop up underfunded retirement accounts, 2) it is only 2nd generation technology, which at best combines a less-than-adequate gasoline engine with a less-than-adequate electric drive to produce less-than-adequate performance, 3) the price point is still screwed up. If you just buy a comparable gasoline vehicle and apply the difference in purchase price to the price of gasoline, you are still in the hole with the Volt even if gas is at $8/gal. 4) GM has no funds to survive until 2011 without a huge ($100b+) federal bailout. 5) As soon as the Volt puts out a 2nd generation car, the Japanese companies will put out a 2nd generation car at much lower price and announce a 3rd generation vehicle and Volt will still be a whole generation behind.

Rene

February 18, 2009 1:54 AM

hey everybody just to tell you that recent news gm and chrysler asked for money again why cause they keeping making the gas guzzler cars to see if they try to capture the market again with those cars why just gm and chrysler give it up when is ever going to be enough for them to make those big boxy ugly squared gas guzzling cars?They should concentrate on the 4cylinder suv's and 4 cylinder compact cars and sedans you know gas right now is 2 dollar a gallon and what are people doing buying the big cars God forbid gas goes up they start saying we need to sale the big car and get a toyota corolla and honda civic that makes 27mpg in the city and 35 mpg but those are people you have to see them how they talk about the small car we have in this country and that wonderful volt electric car that supposely makes 100mpg and beat the prius technically it makes 48 mpg so the volt electric cars plus hybrids are not convincing cars people people record it in your head is the toyota corolla camry honda civic accord and nissan sentra and altima that is the most cars sold in the usa but with the economy now nobody is selling but the toyota camry is best sold car in america not the volt or prius

tryintowork

May 12, 2010 11:13 AM

Wake up to reality folks, the toyotas are made in Kentucky, the big three have made 100k mile cars for years (then they become costly), I have had six toyotas that usually go about 300k before anything costly wears out.

Post a comment

 

About

Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

BW Mall - Sponsored Links

Buy a link now!