BIG OIL's Fall ... No Bail Out needed!

I saw two recent adds that I thought would be interesting to point out.
1. A full size Chevrolet Tahoe for sale at almost $10,000 off the list price with LOW interest financing and 'employee pricing.'
2. An add for a Chevy Tahoe Hybrid for about $46,000 also discounted.

And it really made me think, 'who the Phuket does GM think they are?' $46,000 for a Hybrid Tahoe? Really? You can get the good old base model for $28,000 right now from from CHEVY. So lets look at the figures on this.

The HYBRID gets you a super gas sipping 21city/22highway vs the 'gas hog' that slurps 14city/20highway. So, that means that you would be willing to pay almost $18,000 more for the 7 better mpg in the city and minimal highway mileage???

So, if you drive 12,000 miles a year, here is the breakdown at $3.75 a gallon.

GH:Gas Hog (Regular Tahoe) $28,000
ES:Elegant Sipper of fuel (HYBRID) $46,000

GH: 857 gallons of fuel burned = $3213.75 YEARLY
ES: 571 Gallons of fuel sipped = $2141.25

GH: 71.41 gallons a month = $267.78 MONTHLY
ES: 47.58 gallons a month = $178.42

GH: 2.38 gallons daily = $8.93 DAILY
ES: 1.59 Gallons daily = $5.96

HAIL THE SAVINGS OF THE HYBRID!
CLEANSER OF ALL THAT IS BAD!
HAIL THEE HYBRID!
SLOW SIPPER OF THE PETROL THAT DRAINS THEE WALLET!

But wait...(screeching record sound) with that savings you can't even afford to be a pack-a-day smoker in 2001. And let's not forget that the HYBRID is a whopping $18,000 more that the gas hog regular Tahoe (the hybrid also is the only model that does not come with a luggage rack). On a yearly savings, the HYBRID saves you $1072.50 in fuel costs based on ALL city driving (note the mileage is very similar on the highway). With this Sipping savings it will take you, Mr. Green in the pool room with the candlestick, over SIXTEEN YEARS to recover the cost on your truck-- and let's not even bring in the depreciation aspect of this little game. Case and point-- it you buy a HYBRID Chevrolet you are either:
1. independently wealthy
2. stupidly green.
3. Caught up into too much media hoop-la to understand the basics of money management.

And this brings up another point-- US motor companies 'WANT' 30-50 billion dollars to fix up their aging plants and help them produce 'more fuel efficient' vehicles. So will they get the bail out? Will the feds pull an old Fannie/freddie out and slap down the cheddar for these GIANTS of the auto industry?

I say NO! and you know I will tell you why:

1) Big Auto cheated. With lacking sales in the 80's and early 90's, GM and FORD turned to SUV's that were not held to the same clean air requirements as cars-- they were considered light trucks. This was the only market share that the US autos held over the last 10 years. With higher fuel costs, this market is crumbling. Why would we bail out companies that, instead of working harder to create better vehicles, looked at ways to beat the system. Are they surprised that someone would prefer a Camry or an Accord over a tired rent-a-car Malibu or Taurus? If the quality standards would have been increased in the past, they wouldn't be in this situation now.

2) Big Auto is no longer essential. It's sad, but if US big auto fails, we have other options. I understand that many will lose jobs, but how can you defend a job that costs more to pay the workers that the product you are selling. US auto has been failing for a long time, and plants keep producing a poor product with no buyers. People don't need GM, FORD or D/C for their automotive needs. Asian and European automakers have had high prices for petrol for a long time and have given us a great selection to choose from.

3) There is no guarantee that anything will work. GM, FORD and D/C have had bad business plans in the past and giving them keys to the bank would look to be a delay of the inevitable here. Poorly ran pensions and bad union contracts have left there 'big 3' looking like a bunch of little cry babies who want a suckle of Uncle Sam's tit. And to top it off, they have all become 'lenders' in the past 10 years, trying to maintain their platforms as auto giants while shoving financing arms like Ditec, GMAC, Ford Credit and Chrysler financial down investor's mouths. You know the terms: No money down and 0% financing loans on a product that loses 40% of it's value in the 1st year. Keep the money FEDS! Milk the GDP numbers with another round of stimulus checks instead.

4) Oil is a bad thing to be dependant on. Why do you think these big autos went to the SUV? They were hoping that the oil market would change-- not the auto market-- the OIL MARKET. The reason that US big auto is FAILING NOW is because they were not timely in changing their product to change with oil needs. Oil is not getting more plentiful, and the warnings on limited oil in the US and the rest of the world have been ringing in the ears of big auto since the 70's (with some reports even written in the 50's). Big auto could have created better vehicles in the past, but didn't-- they just hoped that the oil industy would keep clicking at the same pace and price as 1955.

5) Public transportation. The money to bail out big auto needs to go into what it should have gone into 50 years ago, public transportation. US cities are dependant on the cars and trucks of the world. In most cities people have to drive to the grocery store, even if it's only a mile or two away. Instead of giving these dollars to big auto, lets give each state 1 billion dollars and make them use the money for the depressed (and sometimes non-existant) public transportation systems.
History lesson: In the 1950's GM bought the rights to the majority of bus lines and locomotive contracts, turning cities away from the light rail system for diesel powered busses and taxi cabs, and converted coal and steam engines to diesel engines. This explosion in gas powered engines made it easy, and almost essential to have a car, and in turn killed the public transportation system in sprawling cities and suburbs. There are econimists that claim this action was critical in making the US 100% oil dependant, opposed to seeking alternative energy sources in the 60's and 70's. Now, more than ever, the US is depend on oil, and GM should not get more money to again block the hope that we can create an affordable, dependant and cleaner source to move the masses in our massive transport free cities.

6) The Chevy Cavilier. The Ford Tempo. The Dodge Neon. Please people, these were the attempts to get more fuel efficient cars in the past and if history repeats itself (it does) we can expect the same junk products that last a few horrible years on the road, get low marks in most safety tests and lose value faster than Micheal Vick after he went to prison.

Now I will go and drive my 4runner home-- still gets 21 mpg in the city and 24 on the highway!