It was recently reported that the plug-in Saturn VUE program was being moved from 2009 to 2011 due to GMs financial crisis. While partly true, the statement is not entirely correct.
GM had never stated the plug-in VUE would arrive in 2009 (see post).
GM spokesperson Brian Corbett has provided us the following statement:
“Our original statement said that production would begin “as soon as 2010” because we did not want to create artificial deadlines. We have dedicated significant resources to the program and it is progressing rapidly. Now that we are further along in the development process, we can now give a more up-to-date projection.”
So the plug-in VUE isn’t dead, and despite the intensity of GM’s financial crisis, the development program is moving ahead.
The car is production-intent but the delay likely represents a cost saving measure with the hopes of an interval financial recovery (or federal infusion). It is also possible that GM had been considering having the VUE follow the Volt for a longer time frame for other reasons.
Of course, the Volt program is exempt from these delays. The Cruze as well is still scheduled for 2010.
Source (CNNMoney)
This entry was posted on Monday, November 10th, 2008 at 3:23 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
Nov 10th, 2008 (3:25 pm)Ok, this is great news that the p;ug in is expanding to more than just the one vehicle, but if they can do a Vue, Lets do the Sky too!! There are those of us in the population who want to keep our two seaters but still have the plug!
First!
Nov 10th, 2008 (3:29 pm)Interesting.
Let’s hope these vehicles make it to showrooms eventually, or we will all be in trouble.
Nov 10th, 2008 (3:35 pm)If they do this, delaying the Plug-in Vue, all I can say is that it is a shame.
Nov 10th, 2008 (3:38 pm)At least the Cruze is still on for 2010. At least for now. The Cruze should be a cash cow for GM if expectations hold true. It is a very nice looking car.
Nov 10th, 2008 (3:43 pm)It actually makes sense, given the slump in SUV sales. Chrysler had to cancel their hybrid entirely. However, I hope they do have a market for it, as the Volt, despite being a totally different animal, will make people ask “Why doesn’t this one get 40 miles as well?” Don’t forget, Americans don’t always think logically in terms of features. If they want it to drive gas free for as long as the Volt and it doesn’t, they will pass, even if it means they’ll wind up with an all-gas version. I don’t know why this is, but it has happened time and time again.
Nov 10th, 2008 (3:43 pm)Cruze in 2010 is more important good news than plug-in Vue in 2011 is bad news, IMHO. Chevy dealers really need the Cruze.
Jean-Charles Jacquemin:
Thanks for your comment at #33 on the “Obama May Help GM…” thread. I did reply at #88.
Nov 10th, 2008 (3:54 pm)BTW, it has just been announced that AIG’s bailout package has been increased to $150 BILLION. AIG???
Nov 10th, 2008 (3:57 pm)#6 Noel Park
Yes, the Cruze is an important car for GM. Just too bad it doesn’t get here by mid-year 2009. GM really needs a vehicle they can sell. They have a decent selection to chose from, except some of them are a little long in the tooth. I wonder if the refreshen version of the Impala is still on for fall 2009? Anybody know? If it stays on course, it would give GM some boost. The Impala has been a pretty good seller.
Nov 10th, 2008 (4:00 pm)#7 Noel Park
I believe AIG is suckering Uncle Sam. Ask for a few billion, then ask for more and now comes the whammy. They let Uncle Sam take a nibble, then let it take the bait and run a little bit with it and now comes the big jerk and cranking in the catch. $150 billion is just the starting point.
Nov 10th, 2008 (4:01 pm)I bet these dates will also keep moving – as gas prices continue to drop, so will Americans’ interest in EVs.
Nov 10th, 2008 (4:06 pm)The more I think about it, the more I am beginning to believe we should just pull the plug and let them all go down. Chapter 11 or 7, whichever is best for the situation per company. Otherwise, the taxpayers are going to get hosed very bad. No one is congress or the administration is going to claim responsibility for this mess. They all bear varying degrees of responsibility. We should take them all out to the wood shed.
Nov 10th, 2008 (4:09 pm)With a new administration coming in January, it would do no real good to name names, but many in the new administration’s party is responsible for some of this mess. That is why I do not see any one stopping it from happening again in a few years. The same people are still in office doing the same thing.
Nov 10th, 2008 (4:11 pm)Union = Bankrupt! Sorry people but the price of cars being hugely inflated by over paid workers = less profit. True there were other bad choices made but until this is fixed they will continue to lose money. I hope for the volt and will buy a Chysler EV if the price is within reason.
Nov 10th, 2008 (4:12 pm)#10, Yoshi,
The problem is that oil/gas prices will climb when and as the worldwide economy improves, so they need to be ready with fuel efficient vehicles when it happens, and not have a multi-year lag time it takes to get them out once they decide when the time is right.
On top of that, they do need to be focusing on affordable reasonably fuel efficient vehicles now as most folks are holding off on new vehicle purchases entirely due to the economy, and those that are looking to purchase now (because they have to) aren’t able to finance those big and expensive vehicles any longer, as well as the consumers, while they do have short term memories, have not had enough time to forget how expensive gas was and could get again.
Nov 10th, 2008 (4:15 pm)Paulson repealed (says it was in the fine print) a provision in the tax code that explains why the banks are buying banks with our money instead of lending it. This allows the banks to take any paper they write down from a bank they purchase off their taxes which another way of saying the taxpayers pay. Also, in other news, one of the guys that was sacked, when AIG went down, was hired back as a consultant for AIG and getting paid a million a month. No wonder they need more of our money and it is no wonder that Paulson can’t find any money for GM (not that I think we should bail them out either).
Nov 10th, 2008 (4:21 pm)That is true that the Plug-In was schedule to be in production in 2010…not 2009, CNBC flip flopped the two mode with the plug-in…good catch Lyle.
I will say that post-poning it to 2011, puts the project at a virtual standstill…and makes it dead man walking, unlikely to see that light of day. (especially given GM’s likelyhood of seeing the new year). Basically, it has no funding at all…and I don’t see how it gets its budget back.
Even if they get the ‘bailout’ GM has yet to prove they can make a hybrid on any type of platform like this and get paid. I question the fact they can tack on another 5-6K on the price of the 2 mode and sell them in this environment. We are talking the 33-35K price tag.
The thread also fails to mention that the source article now states that it can not run on electric power alone…and that is a huge change (if true):
“Now GM says it won’t come out until 2011, launching after the Chevrolet Volt. Unlike the Volt, the Vue plug-in will not be able to drive under electric power alone.
Other than being able to take on electricity from a wall-plug it will operate like other hybrid SUVs. A gasoline engine will do most of the work with electric motors assisting. Nevertheless, fuel economy will be greatly improved compared to ordinary hybrids.”
Nov 10th, 2008 (4:22 pm)It is a mess anyway you look at it. But, what are we to do? There is no “Holy Grail” out there. Just more crooked politicians and bankers. Working hand in hand.
Nov 10th, 2008 (4:24 pm)I really thought the plug-in Vue was farther along than they seem to say now. I though it was to be released next fall. Oh, well. Some other company will be selling a lot of plug-ins next year. Probably the Chinese company BYD.
Nov 10th, 2008 (4:27 pm)I guess Noel Parks mother’s saying is best here: IYCSATNDSAAA. Is that stated correctly, Noel?
So, I guess I will just shut up.
Nov 10th, 2008 (4:28 pm)Perhaps my mind is easily boggled, but I can not imagine someone getting paid a million a month for anything (unless it is a payoff to keep his mouth shut).
Nov 10th, 2008 (4:29 pm)#10, #14 …
Not very many people are smart enough to live for the future… they live for the now, and with gas prices low and big SUVs cheap, they will likely buy those up pretty quick and be in trouble in a few years. IMPO.
Otherwise, i would think EV is still the future, and GM needs to be ready when the economy is as well.
Go VOLT!
Nov 10th, 2008 (4:51 pm)I may be living in a wish world, but I think this time big oil, starting with the wells and the speculators and including the likes of shell ect. have made nearly all of the consumers mad. The timesd before we were more scared than angry. And the result will be a strong desire to buy the Volt and other E-REV as they vecome available. Those that can’t wait will make a purchase decision based on mpg
Nov 10th, 2008 (5:18 pm)You could always get the Ford Escape Hybrid ($30K) then purchase the “Plugin” mod from http://www.lionev.com/DIY_Escape_PHEV_Hybrid.html
Then you can get their LiPo battery pack and voiala. A PHEV Ford Escape. Of course it will cost an additional $3K but it’s not dead before it reaches manufacturing…lol.
Nov 10th, 2008 (5:29 pm)Scrap the technically inferior plug-in Vue design and go straight to the Saturn Flextreme.
Nov 10th, 2008 (5:35 pm)It’s do or die time.
GM, focus on becomming the leader again. Focus on E-Flex.
Then again, The unions have forced GM to give too many golden parachutes and other legacy expenses for them to survive.
Perhaps they could form another corp. Sell the E-Flex rights, R&D and manufacturing facility to the new corp, then liquidate GM to rid themselves of the union legacy costs anchor that’s pulling them under. The new corp could hire the best and fire the rest to rid themselves of the union.
Instant profitability for “son of GM” and we “their customers” get E-Flex!
Nov 10th, 2008 (5:40 pm)Um, uh
http://www.thetruthaboutcars.com/gm-shares-rated-at-zero/
what volt ?
Nov 10th, 2008 (5:48 pm)#
Jim 75 Says:
November 10th, 2008 at 4:11 pm
Union = Bankrupt! Sorry people but the price of cars being hugely inflated by over paid workers = less profit. True there were other bad choices made but until this is fixed they will continue to lose money. I hope for the volt and will buy a Chysler EV if the price is within reason.
*****************************************************
Jim,
I don’t think you are aware that the GM, Ford and Chrysler new workers are making a lot less than the Toyota workers. It is something like $14.00 versus $26.00 an hour. GM workers wages were cut in half at the last contract. If GM can endure this financial crisis another two years with all their new high tech products up the line, I believe GM could become top dog again in time. In as much it is hard to believe, I truly believe that could happen.
Nov 10th, 2008 (5:59 pm)I am just glad to see that they are not going to delay the Cruze.
Nov 10th, 2008 (6:05 pm)#15 Len
You lack of trust in our elected leaders is shocking and unamerican my friend. I’d trust Paulson with my retirement & my firstborn son. Hehehe.
In the gov’t, I must trust that someone else will act in my interest. In a free market, I must trust that someone else will act in their own interest. It’s fairly obvious which one is more likely to work better.
Nov 10th, 2008 (6:20 pm)I thought the Cruze was one of those 3 very small cars that weren’t going to make it to the US, what were those called again?
Stew.
Nov 10th, 2008 (6:26 pm)I don’t believe GM would sell that many Saturn Vues anyways, unless they’re substantially cheaper to buy than a Volt or they’re upgradable to a higher battery range. It’s too large a cost to produce a niche vehicle.
The government has get the credit business rolling again to save GM (Ford and Chrysler as well). Most people can’t get loans to buy cars.
I strongly believe if the credit markets get rolling, all will be ok. I’m not saying a return to 1990s but better than under Bush.
Nov 10th, 2008 (6:37 pm)This is another nail in the coffin.
Sell your stock now while you have a chance.
Remember MCI.
GM’s 2008 4th Quarter Sales # will be 60-75% short of last years.
NPNS!
Nov 10th, 2008 (6:57 pm)Slow down/kill everything that isn’t the volt or cruze. I don’t really care much about the Cruze (npns) but I’m sure it fits in a lot more peoples price range and if it gets 40 – 50 MPG I’m sure it will sell. As for the Volt, I’m glad that is the last thing they plan on delaying. Probably too little too late but I think it’s the right thing to do today.
Nov 10th, 2008 (7:05 pm)Not only $150 Billion now to AIG but there is another $18 Billion from a sale of commercial paper by AIG to the Federal Reserve. The Fed has purchased, at times, nearly $500 Billion in short term paper from troubled financial companies, many that are not covered by TARP. The $50 Billion or so that the auto companies need now sure feels like pocket change by comparison. It is going to be pretty scary when all the chickens come home to roost. Hopefully it will take a decade, but it might be sooner.
Also, if we let our auto industry go, then we are at the mercy of the Asian and European auto companies with NO competition. Remember that there is no antitrust in Asia as we know it. If Honda and Toyota want to raise prices we can’t stop them; only competition can. If it comes to that and our currency keeps dropping, no one in the US will be able to afford even a golf cart.
Nov 10th, 2008 (7:06 pm)I have been bullish on GM through this last year of rough cost cutting and efforts at prioritization.
I had planned on buying 800 shares of GM at $5 (just yesterday). The money had been pulled from my Wachovia account.
Now to hear the news of this weekend’s slide of GM shares in the foreign markets. And this mornings follow up news of down grades.
Let’s do the math. Even with all of hard core wage cutting and the closing of SUV factories. And with the start up cost of the $600 million Cruze factory absorbed in the LAST quarters numbers. How does GM come out with a $6.9 billion in cash loss for the quarter?
The news I had heard during this quarter was that GM was doing better in South America. And that China sales were not great, but holding steady. Europe sales had dipped somewhat. And U.S. sales were obviously lower.
But, a $90 million a day loss rate for the quarter? This would be difficult to achieve if workers were being paid to shovel dollar bills into a furnace.
Something isn’t right with these numbers.
Now that we are somehow here, a $25 billion dollar tax gift will extend operations (being that it all goes to GM only) to just one more quarter beyond GM’s current bank holdings.
I suggest GM have a 25% off sticker price sale on all remaining 08′ models. And a 10% sale on 09′s. This includes the Corvette.
This action combined with an Iacocca-like statement from the board members concerning their $1 million a month pay rates will give GM an outside chance of making it to the summer of 2010.
++++++++++++++++++++++++++++++++++++++++
If Wall Street executives want traction on a bailout, they need to get smart and study Lee Iacocca.
Iacocca cut his salary to $1 a year as Chrysler arranged concessions that the Loan Guarantee Act required.
“I didn’t take $1 a year to be a martyr,” Iacocca wrote in 1984 in his bestseller “Iacocca: An Autobiography.”
“I took it so that when I went to Doug Fraser, the union president, I could look him in the eye and say: ‘Here’s what I want from you guys as your share,’ and he couldn’t come back to me and ask: ‘You SOB, what sacrifice have you made?’ ”
_____________________________________
“The American people are angry about executive compensation and rightfully so,” Treasury Secretary Henry Paulson told the House Financial Services Committee.
_____________________________________
BTW: The $4000 I had pulled to buy GM went into MEA (recycling) and EEE (clean coal technology). MEA is under $3 and worth $10. EEE is an Obama play as I have heard him say “clean coal” at least 3 times a month for the last 6 months.
=D~
Nov 10th, 2008 (7:18 pm)@RichardG
Golf carts…..hmmm…..
Maybe that’s what people should be driving. Short run EV’s or aka LSEV ot NEV. I have seen people take their GMC Tahoe or Suburban to the grovery store half a mile away. Gimme a break.
When I drive past a park on the weekends while baseball and soccer games are going on, all I see are monster “Bradley Tank” SUV’s. lol…
All I can say is, at this point, even if GM goes down but they at least get the Volt to market, I will buy one. This will give me bragging rights to the tune of “I have the last vehicle model GM made in their regime….”. Kind of like when Enzo Ferrari’s last input to a Ferrari was the F-40 and it automatically became a collectors car.
=D)
Nov 10th, 2008 (7:26 pm)#19 N Riley:
Close enough. Me too.
Nov 10th, 2008 (7:48 pm)N Riely, I agree…shame.
Nov 10th, 2008 (8:49 pm)GM spokesperson Brian Corbett has provided us the following statement:
“Our original statement said that production would begin “as soon as 2010” because we did not want to create artificial deadlines. We have dedicated significant resources to the program and it is progressing rapidly. Now that we are further along in the development process, we can now give a more up-to-date projection.”
_________________________________
Whether this clarification reflects an honest misunderstanding or not, the public will see variety of EV and plug-ins available over these next three years. 40,000 plus people have $30,000 waiting for the availability. Not to mention State, town management vehicles, and law enforcement uses.
Please Christ, let at least one of the better EV’s be 100% American.
http://garfwod.250free.com/Photos/Vue%202009%20ish.jpg
=D~
Nov 10th, 2008 (9:10 pm)L.A. Auto Show 11/21 ~ 11/30
http://garfwod.250free.com/Photos/L%20A%20auto%20show.jpg
http://www.laautoshow.com/
I’ll try to take a few pictures for the gm-volt community.
=D~
Nov 10th, 2008 (9:24 pm)I think it’s a great idea to have extra design provisions for the aftermarket to install another battery pack. As long as the many, many compatibility specs are rigidly met, (and I think that there would be lots of these), that increasing the EV range by even 15 more miles would be outstanding as prices taper down. The OEM would be the ones who would let us know which aftermarket packs would be acceptable to maintain warranties. Having lower power demands (in parallel) over time to the OEM pack (with an add-on of proper OEM specs), may go far to enhancing the life expectancy of the original pack, since demand-rate is cut to the OEN-Warranted packif there is a proper guideline for a parallel aftermarket pack.
Dan Petit Austin, TX
Nov 10th, 2008 (9:40 pm)“Our original statement said that production would begin “as soon as 2010” because we did not want to create artificial deadlines. We have dedicated significant resources to the program and it is progressing rapidly. Now that we are further along in the development process, we can now give a more up-to-date projection.”
Sorry team, no more overtime or weekend work. Deadline now 2011 model year.
Nov 10th, 2008 (10:15 pm)It irritates so much when I see this VUE thing. Go to to the freaking hell with SUV’s. They are heavy, and naturally not as fuel efficient as the market demands at this time. THat’s why GM unfortunately deserved what they’ve got.
Nov 10th, 2008 (10:42 pm)In case you are not aware, Cruze already launched, in Korea. It is the US production that’s holding Cruze back, not the vehicle itself.
Nov 11th, 2008 (12:33 am)Dave K #35
“How does GM come out with a $6.9 billion in cash loss for the quarter?”
I think the 6.9 billion is sitting in the sales lots of America.
Vehicles that GM built last spring and summer are quickly becoming write offs. They’re sitting partly because there are few purchasers because of fear in the economy and partly because no can get loans. These vehicles will sit for some time.
The wages and materials costs for these unsold vehicles have been paid I would presume but there’s no way to recover these costs.
I’m not an accountant but that’s my take on the losses.
For sure, as I commented in #31, we’ve got to get the credit markets rolling or we’re in for one heck of a rough ride.
Nov 11th, 2008 (12:58 am)I agree!
The Volt should be the first plug-in product from GM. It’s that important. Second, I think the Vue is kind of like the bastard son of the e-flex technology. Maybe they have gained so much experience with the e-flex technology that they have decided to drop kick it into the Vue. Now that would be great. Why mess around with anything less? Make a Cruize e-flex as well.
They could also be delaying these programs to put pressure on Congresss to send some dough. Hey Congressmen, soon we will have to delay the Volt and then it will be all over. What will happen to GM-Volt.com if GM announces a Volt delay? Well, I guess many of us will quietly move to other forums. Maybe we’ll have an Internet funeral for GM and wish whoever gets the technology good luck.
Anyway, Mr. Lutz seems a bit tired. It’s kind of a shame that this old war bird has to endure such stress at this stage in his life. Of course he doesn’t need the money and can just say, “Bye bye guys!” but I hope he sticks with it and finishes his baby. His capstone project. Come on Mr. Lutz, please hang in there for a little while longer. Try not to get too upset with people who think the Volt program should be cut or they they want to at least put in a delay. Tell them to get bent and that they might as well pack up their box and go home now.
Mr. Wagoner should tell everyone to get off of Mr. Lutz’s back and let him finish the Volt. If they have any financial or doom and gloom questions to come to him.
I truely feel that the Volt is the only thing that is going to save GM in the long-run. Competing with the Japanese on tiny rice-burners? Good luck. Many of you haven’t even seen how tiny cars can get! The Japanese have been building excellent shoebox cars for a long time. They are even cool looking. They can immediately drop down a class and already have dozens of models to choose from. All proven, debugged, in volume production, etc. Again, good luck.
The electrification of the automobile is the Big 3′s only hope. Thinking otherwise is just nieve. Experience takes time, even with brilliant engineers and bucket loads of money. Finish the Volt and drive into history.
Nov 11th, 2008 (2:36 am)I watched an interview with the new CEO of AIG, Liddy, on fox news today and he said that no more ex’s will get paid weekends again at resorts, then later in the day there was a report on Fox news that a luxury resort in Ar had another weekend stravaganza, this was before the 150 B. was announced.
Cruze, Vue or Volt better get here pretty soon, gas is comin down. but I’m waiting for a Volt, cause I know its goin up again and all those new SUV owners can pay through the nose but not me.
NO PLUG, NO SALE, LJGTVWOTR, =D~~~~~~~~
Nov 11th, 2008 (5:47 am)hi Casey #47,
“better get here pretty soon, gas is comin down…I know its goin up again”
___________________________
The price of pump gas seems to be connected directly to the S&P. Which is a confirmation of it being manipulated and adjusted to consumer sentiment. The price of premium gasoline and the stock price of GM are also running parallel. Dropping from 4.25 to 3.50 to 3.20 in a couple of months. Almost and exact match.
But, this is good for GM. The heavier vehicles will finally sell and make room for the new wave of public favorites. However, I am a realist and I believe GM has been too careless with it’s future for too long. I believe the Chevy brand will live on, but not as we know it. The Volt will be produced in 10′s of thousands and will be very popular around the world. The post GM boardroom will look much different as well.
Pump gas will be back to $3.60 by summer 09′. And returning to $4.00 in 2010. The small SUV EREV Cruze plug-in will be the absolute bomb.
=D~
Nov 11th, 2008 (1:20 pm)#13 Jim 75:
#27 Joe:
And also people forget that Toyota has ONE union shop here in the US… It’s the New United Motor facility right here in the SF Bay area in Fremont. It was started as a GM/Toyota joint venture but GM doesn’t use it much. Toyota keeps threatening to close it, but they don’t. It actually is one of their premiere shops. For awhile, they even exported Matrix cars built there BACK to Japan, which is almost unheard of. Last rumor I heard was they were going to actually move Prius production there.
Nov 11th, 2008 (1:33 pm)#35 Dave K says,
“I suggest GM have a 25% off sticker price sale on all remaining 08′ models. And a 10% sale on 09’s. This includes the Corvette. This action combined with an Iacocca-like statement from the board members concerning their $1 million a month pay rates will give GM an outside chance of making it to the summer of 2010. ”
#42 Ed M says,
“I think the 6.9 billion is sitting in the sales lots of America.
Vehicles that GM built last spring and summer are quickly becoming write offs….The wages and materials costs for these unsold vehicles have been paid I would presume but there’s no way to recover these costs. I’m not an accountant but that’s my take on the losses.
—————————–
I was not going to mention this, but it has come up a few times now.
Automakers book revenue as soons as they ship vehicles to dealers, not when the dealer sells them. GM revenue is contingent on dealers buying more product for their lots.
That is the original reason why GM formed GMAC as a wholly owned subsidiary (in like 1919), to be able to have a standard, easy access way for dealers to access credit to buy from GM.
Now that GM has sold the majority off to Cerberus, they no longer can control it…and Cerberus, through GMAC, is cutting off many dealers access to credit completely in the last three months(rendering them the ‘walking dead’) and ALL of the rest have to pay 5% per month on any new inventory purchase, with the full 100% due in 180 days.
That is a major reason (along with the loss of incentives and consumer leases from GMAC) sales were off 45%. Dealers are desperately trying to sell inventory to just make payments to GMAC, or to line their own pockets before they go bankrupt, not inventory replenishment.
Lot sales right now are not translating to re-orders to GM. A far greater percentage of sales to GM are now being generated from specific customer orders. Lot inventory discounts/reductions actually hurt customer orders for the short term future (and GM corporate) until the remaining dealers can find alternative sources of financing other than GMAC, or they can trim their lots to be a viable, on-going concern.
If GM gets bailed out (or somehow survives another few months), the next wave of news is massive closures amongst the dealers, which will continue to translate to huge year over year loses in sales.
Note to Matt: No ‘lol’ or ‘hehe’s in that one for you. I did not spell check it though.
Nov 11th, 2008 (11:19 pm)they have it why dont they just give them to us, gosh. ill miss you gm
Nov 12th, 2008 (2:06 pm)I want a Cruze.
Nov 16th, 2008 (10:49 pm)Before I say this about fuel prices let me say I believe the Volt will be successful anyway, but here goes to #48 Dave who said
“Pump gas will be back to $3.60 by summer 09′. And returning to $4.00 in 2010. ”
I suggest you read what one and only one lone stock analyst was saying while all the others were getting caught up in the hype of the speculators who were predicting $200 a barrle when it topped out at about $140 before taking the constant slide to where it is now below $60 a barrel.
This guy said the prices were all out of whack with reality and being driven by the traders and speculators who were creating an artificial market because they were allowed to under the current administration.
The reality he suggested was that after the summer months where usually demand was highest that gasoline would steadily drop till it dropped to at least below $2.50 a gallon on election day. This all happened because the eventual call for investigations by some members of congress gave the boys at Exxon some call for concern since very shortly they would no longer control the Whitehouse, and be able to hold off the previous investigation into price fixing. The truth is that regardless of what the Spot Price of the day paid by futures traders the big guys like Exxon are actually buying Oil from Fields they have already secured years back on longer term contracts that most likely only reflect an actual cost of anywhere from $35-$55 a barrel crude price. The prices for the refined products are justified by the Traders daily prices so the likes of Exxon was very happy to see the Speculators get crazy and drive prices sky high as their profits tracked accordingly. The simple explanations of increased profits due to volume don’t track as this last quarter Exxon posted it’s highest quarterly profit ever when actually demand in the US has been not just flattened but has shrank by 7% this last year due to increased conservation by consumers.
Why do you think Exxon is laying off 3,500 people when they are at their highest profits ever? I would say it is in preparation for the future where they know the likes of “W’ won’t be there to give them the ability to rape the consumer for obscene profits in a time when this country is at it’s lowest point in 80 years economically.
Get real guys gas will probably go back up to about $2.50 a gallon by summer 2009 which the same analysts I quoted earlier said it would. This guy’s has been spot on so far so I suggest we all plan for that, and Bob Lutz and the boys at GM have planned for this as well because in an interview he said that as long as fuel stays above $2 a gallon all the more efficient vehicles still have a market in the USA, and this is a market GM will be able to address quicker than many people think as they already build these kind of vehicles in Europe under the Opel Brand.
Nov 23rd, 2008 (10:30 am)Its a shame. The major advantage this had was speed to market. A plugin Vue with limited range and all the complexities of two complete systems (electric and gas) will seem foolish at a time when one could get a Volt, Karma, the BYD F6DM or countless other electrics.