Despite rapid advances in automobile technology in recent decades, the manner in which manufacturers distribute their products to the end customer has remained relatively unchanged for nearly one hundred years. New vehicles in the United States are almost exclusively distributed
Pension Obligations Could Still Sink General Motors
General Motors took the first step toward a new public offering last week with the filing of a massive Form S-1 with the SEC. While exact terms of the offering are not known yet, Barron’s has estimated that the IPO transaction may be worth $15 billion and would result in a market capitalization of $60 billion. With the United States Treasury owning over 60 percent of the company, the IPO represents a partial exit strategy for Uncle Sam and an opportunity for GM to shed the “Government Motors” stigma that has negatively impacted consumer perceptions. However, aggressive pension plan assumptions could still sink the company in the long run. Read this article for more information.
GM Announces Volt Pricing Starting at $41,000 Limiting Mass Market Appeal
General Motors has announced a starting price of $41,000 for the Chevrolet Volt, the company’s first move into the nascent market for electric vehicles. Buyers may be eligible for a federal tax credit of up to $7,500. The Volt is advertised to offer “up to 40 miles” of driving on an electric charge with a range extension feature that uses a gasoline generator to provide additional electric power for up to 300 more miles. Read this article for more information.
GM’s Television Commercials Seem Out of Touch with Reality
Any regular viewer of NFL football is well aware of GM’s advertising campaign starring former NFL star and current Fox Sports commentator Howie Long. While many of the ads, particularly for Chevy trucks, are effective and amusing, the ad shown below seems immature and silly. Comparing Honda vehicles to a lawnmower may have made sense in 1970. It isn’t remotely amusing in 2009 and chances are the GM executives who find this clever are out of touch with reality. Read this post to view the video.
Consequences of Political Manipulation in the Auto Bankruptcies
The focus of The Rational Walk has always been on business and investment topics rather than political commentary, but lately is has become increasingly clear that the line between politics and business has ceased to exist when it comes to the toxic interplay between the auto bankruptcies and the interests of the Federal Government in the nation’s banking system. Far from being an isolated intrusion by government into the private sector, recent actions run the risk of permanently impairing the nature of our capitalist system.