Last week listening to one of Bloomberg's guest experts on the auto industry I learned something new I didn't know. Hybrid automobiles are not profitable. This came as something of a shock. Nobody makes money on those things, not even Toyota, except perhaps when they license their Hybrid Synergy technology to other manufacturers.
Conservatives like to make a lot of noise about Congress dictating what automakers have to make in reaction to the possibilities that the Democrats may cram CAFE down the Big Three's throats, but there are subtleties here. One of them is that basic fact - the very fact that they're essentially broke means they want to build fewer of those things. The break-even point for GM is 12 million vehicles. No real profit until 13.5-14million. It's going to be a hard slog.
Tied to this, does anybody know which side of the fence bankruptcy judges are politically? Are the courts even staffed to handle the kind of crap they would deal with - or is everybody in the mortgage business retraining to be expert witnesses in bankruptcy court?
Recent Comments