We use your money to build ‘em, and then we use your money to buy ‘em

When the Obama administration took over financially ailing General Motors instead of allowing the bankruptcy courts to reallocate the bloated firm’s assets to sharper entrepreneurs, more than one wag dubbed the resulting state-socialist enterprise “Government Motors.”

Since then, GM has geared up production of pricey “hybrids” that supposedly cause less pollution — until one considers battery manufacture and disposal.

You also may not want to ask how they’ll fare in highway crashes.

Critics complained the central state was mandating production of a kind of car that truck- and SUV-hungry American consumers don’t want. The Obama administration responded, in effect, “Not so: Lots of the hybrids are selling.”

But an examination of just where those sale are coming from gives the “Government Motors” label new relevance.

President Obama’s own administration has bought almost a fourth of the Ford and General Motors Co. hybrid vehicles sold since he took office, Bloomberg News reports, accelerating federal purchases to make up for waning consumer demand.

The U.S. General Services Administration, which runs the government fleet, bought at least 14,584 hybrid vehicles in the past two fiscal years, according to sales data obtained by Bloomberg under a Freedom of Information Act request.

“The government is boosting investment in a technology that has failed to win broad acceptance after more than a decade in the marketplace,” conclude Bloomberg reporters Angela Greiling Keane and Jeff Green. “Consumer sales of hybrids are headed for their third consecutive yearly decline.”

“At some point, the reality is that for this technology to be accepted, it needs to be done without a government crutch,” comments Jeff Schuster, director of forecasting at J.D. Power & Associates in Troy, Michigan. “But without a huge gas-price increase or further government demand, the natural demand just isn’t going to be there.”

Not only that, about 3,100 of the hybrids purchased by GSA were paid for out of $300 million that the agency received from the 2009 economic stimulus package, says Sara Merriam, a spokeswoman for the agency.

So the government brags of creating “green jobs” by giving the “stimulus” money to itself, and then using that tax loot to buy cars from a bankrupt auto giant the government itself is now running, so it can claim it’s manufacturing a “popular” product? Isn’t that a little like using a roulette wheel that stops on the green zero whenever the operator pushes his knee against the side of the table?

Once the government subsidies run out, after all, it’s not as though you can merely “flip a switch” and start manufacturing SUVS or pickup trucks on what was previously your “hybrid” or “all-electric” assembly line. If the government “bets wrong” on what consumers will want to buy in a few years, that factory is closed; your workers will all line up for the two remaining jobs making root beer floats at the local A&W.

But the politicians won’t be broke and out of work … will they?

Another 5,600 “hybrids” were bought with proceeds from selling older cars in the government fleet, Ms. Merriam says, without explaining whether those gas-guzzlers had actually worn out or not.

“This is the beginning,” Ms. Merriam says. “Our main goal is to increase the fuel efficiency of the federal fleet. The other goal is to drive the market toward cleaner technologies.”

The “market”? This is what the Obama administration describes as “the market”? That’s like saying the Russian “market” was happy with the Lada, since that’s pretty much the only car Russians used to buy.

As though they had a choice.

“The lesson learned is that it isn’t easy to make these vehicles mainstream,” comments Brett Smith, who specializes in alternative propulsion vehicles at the Center for Automotive Research in Ann Arbor, Michigan. “They are still not near the point where they are cost-competitive in the market.”

The government purchased about 64 percent of GM’s Chevy Malibu hybrid models and 29 percent of all Ford Fusion hybrids manufactured since Obama took office in 2009, the data show. GM stopped making the Malibu hybrid in 2009 after lack of consumer demand.

Hybrid and electric vehicles can be $3,000 to $20,000 more expensive than gasoline models, according to Smith Electric, an affiliate of Washington, England-based Tanfield Group. The U.S. offers as much as $7,500 in tax credits for the purchase of plug-in vehicles and about a dozen U.S. states offer additional incentives.

But hybrid and electric vehicle technology only makes sense if it can stand without government support, Ford Chief Executive Alan Mulally told Detroit-area supplier executives in a Nov. 8 speech that was closed to the media.

“He was saying, ‘You have to have a business that doesn’t need all these government incentives,’” Karen Hampton, a Ford spokeswoman said, told Bloomberg News. “Incentives have a role to play when you’re trying to get new technology off the ground or change behaviors, but it’s not meant to be a permanent part of the business equation.”

In Washington, that message doesn’t seem to have sunk in. The Obama administration says they’re getting ready to purchase lots of the new all-electric models being introduced by automakers including GM — plug-ins which some wags have already dubbed “coal-powered cars.”

2 Comments to “We use your money to build ‘em, and then we use your money to buy ‘em”

  1. John Taylor Says:

    One wonders only how long it will be before the next manufactured “energy crisis” drives the price of oil through the roof, thus enabling foreign and domestic goals in one fell swoop.

    Let’s see … perhaps a nice drilling platform underwater spill? N-a-a-h, too soon.

    I know! How about a nice war with Iran? The Straits of Hormuz will seize shut like a new prisoner’s sphincter in a communal shower.

    Now, that’s the stuff!

  2. Bob Copeland Says:

    It won’t be a manufactured crisis that triples our gas prices. It’s when we lose our reserve currency status. It is happening now, which is why commodities are sky rocketing up in price. Most of the world pays $6+ a gallon now. When oil isn’t priced in dollars anymore, and we can’t just print what we need, oil will triple compared to our devalued dollar. It won’t be pretty as it passes through every part of our economy. No conspiracy, just stupidity in how we have wasted our assets.