Hide the Decline, Chevy Volt Edition

My auto industry insider has gotten back to me with another report. Here it is.

Seton [Motley]’s piece looks at Chevy’s decision to kill the Avalanche for poor sales performance (but not the Volt), correctly pointing out how insane this is:

A Volt which the American people don’t want to own. Made by General Motors, of which the American people are still forced to own 33%. As the result of the $83 billion auto bailout–on which we’re poised to lose more than $30 billion.

But he’s only on the tip of the iceberg, both in how bad the Volt sales reality is and in the company’s reasoning for propping up the Volt.

In his recent book, Car Guys vs. Bean Counters”, former GM Vice Chairman Bob Lutz claimed: “There were rumblings from prominent Democrats that “if they get our money, they’re going to produce the kind of vehicles we want them to produce.”” This is the same Bob Lutz, by the way, who has taken to the pages of Forbes in recent months to bash right-of-center criticisms of the Volt (see: “Chevy Volt and the Wrong-headed Right,” “The Chevy Volt, Bill O’Reilly, and the Postman’s Butt,” and “I Give Up on Correcting the Wrong-headed Right about the Volt“). Lutz is also currently a paid consultant for GM, but I digress. [I’ll add that the Volt was Lutz’s baby with GM. -Steve.]

It’s no secret that the Obama administration (including Obama himself, who reassured the UAW that he’d personally buy a Volt when his presidency ended) has been flacking for the Volt for a long time — but that’s kind of unfortunate for them (and for GM) because it helps set the stage for what an abysmal failure the car has been.

Volt sales were actually up in March. They “soared” up to about 2,000 that month, and lefty environmentalists, GM, and the administration are trying to call it a success. GM CEO Dan Akerson (the White House’s handpicked guy) said all the criticism would fade away if they sold about 3,000 Volts a month.

Basically, they’re trying to play the expectations game, hoping we forget that GM had expected to sell about 5,000 Volts per month — and the administration (according to a DOE report) was counting on them selling 10,000 Volts per month this year. It’s worth noting, too, that Akerson testified before a House Oversight panel that they “didn’t engineer the Volt to become a political punching bag.” Funny — I didn’t hear any outcry when the Obama administration hyped the Volt in official government documents….

Anyway, now GM is trying to pretend that 2-3k/month is “success,” so I drew up this handy chart — attached as a PNG as well — think you can use it? [Absolutely! -Steve.]

Click to embiggen — that’s one scary-ass chart.

UPDATE: Hat tip to Mickey Kaus, who found an interesting (related?) item from TTAC. A commenter there calls it “felony stupid.” See if you agree:

If you want to pretty-up the P&L of a car company, there are two quick fixes: You cut marketing expenses, or you cut R&D. A cut of R&D expenses won’t show up negatively for three to five years, when you suddenly lack new cars to sell. In the meantime, you look like a hero. General Motors plans to cut about a quarter of the workers at its R&D facility at the Warren Technical Center in suburban Detroit.

Kaus asks, “Why would GM cut R&D so profits look good in the short term? Is something happening in November?”

And that’s the problem with crony capitalism. Let’s pretend for a moment GM is making the right move here. But it would still appear that GM has made a political decision for Obama’s political gain.