The WSJ blog environmental capital argues that the GM Volt - that new electric car with a $40,000 price tag - may not make any sense once GM is in bankruptcy.
The blog seems to take the view that tough new shareholders — the Obama administration — will have to get a return on investment. To do so would mean jettisoning projects like the Volt, since it will never reach the mass market.
And the new owners–the government and taxpayers–will have to come to terms with this tension. GM can focus on making mass-market cars that sell well and abandon the Volt. Or it can carry on with the Volt and hope either costs come down or consumers suddenly change their habits and run out to buy a $40,000 compact sedan.
But this seems like a false choice. Obviously, GM’s systemic business problems have little to do with projects like the Volt. If they jettisoned it without dealing with the elephant in the room (costs, healthcare, etc.) the company still would hemorrhage.
If they do deal with those costs and keep the Volt, at least they might have a fighting chance to get a piece of a market GM already left once to the Japanese. A $40,000 car may be the answer, but it might be a start.