Obama's own 'hero project'

By Lee DeCovnick

While gas prices accelerated towards $4.00 a gallon, sales of the Chevy Volt, GM's highly touted hybrid electric car, declined in February. Nationwide sales for the 2011 Volt were 281 vehicles. This is drop from December 2010 sales of 326 units and January 2011 sales of 321 units. Purchasers of the Chevy Volt and the Nissan Leaf (Leaf sales in February 2011- 67 units) both qualify for the maximum $7,500 Federal tax credit due to their large capacity batteries.

This could be discouraging news for GM and its stockholders, but in fairness there are some underlying supply issues. From The Strategic Sourceror we learn the following:

Rob Peterson, a Volt spokesman, said that the slow sales are actually expected as the majority of Volts produced in February ended up at dealerships as demo units for customers to take test rides in. "I wouldn't go so far as to say that sales were down," Peterson said. "I would say that more production was earmarked toward demos. The average daily inventory is the lowest in our fleet, if not the lowest in the industry." He expects Volt sales to pick up significantly after April when all 600 Chevy dealerships have gotten their Volt demo models.

The Volt, with a whopping MSRP of $40,289, goes about 40 miles on battery power alone before needing to be recharged. However the Volt also comes with a backup gas engine that can extend its range to 375 miles. GM plans to sell 10,000 Volts in 2011 and between 35,000 to 45,000 in 2102. As a comparison, Ford Focus sales in February 2011 were 23,111 units while the brand new Ford Fiesta sold 6,270 units.

When consumers purchase Apple products they do not receive a tax credit, yet the demand (sales) for iPads is expected to triple this year. So why should our government spend $7,500 of the taxpayer's money for each vehicle, to create a false demand for a consumer product? Simply stated, the role of government is not to pick winner and losers in the competitive market place.

These boutique hybrid and electric cars are reminders of the "Hero Projects" in the old Soviet Union. These projects were meant to show the world how the admittedly cumbersome Soviet system of centralized government planning could also build sophisticated aircraft, rockets and dams. After the fall of the Soviet Union, it became evident that every one of these projects produced stunning levels of wastefulness, graft, incompetence, mismanagement, shoddy construction plus an unprecedented loss of life.

The Volt is destined to become one of Obama's "Hero Projects," an over priced monument to union payoffs and mushy green thinking, and to governmental overreach in the automotive market place, squandering billions and billions of dollars.