Jim Kingsdale

China May Have the Lead in Developing the Next Generation of Cars

Also, re: bankruptcy of G.M.and Chyrsler, going through bankruptcy seems to be the only way the existing capital structure will become rationally re-alligned. So far negotiations with bond holders seem to have failed.

China May Have the Lead in Developing the Next Generation of Cars

Hmmm. A good bit of steamed up commentary here. Please keep in mind that I concluded my observations by saying that the EV race is in the first inning. I didn't predict a winner, which nobody can know at this point. The article simply observes that the Chinese are taking the EV very seriously and seem to be making more progress than the much more experienced American companies have made.

Anyone who wants the U.S. governement to invest more money behind the management of G.M. and Chyrsler, sans bankruptcy, does not seem to appreciate that historical failure by a management team is a pretty goodpredictor of future results (it's one basis on which successful investors make decisions) and also fails to appreciate that only a bankruptcy can re-align the disfunctional legal constraints on G.M. and Chrysler in both manufacturing and distribution.

It does seems strange that the C-M study concluded that a 40 mile all electric range is not cost effective and yet the BYD PHEV is said to have a much greater range. I can't explain that unless the BYD battery's weight/performance characteristics are much different from the C-M assumptions or unless the final BYD export vehicle will be different from the one described.

I completely agree with comments pointing out the history changing consumer perceptions of quality of other countries' exports, especially cars. Anyone who thinks the Chinese could not become known in the U.S. for producing high-quality, high-value cars is an idoit...er idiot.

Battery Wars

Thanks for all the good comments, all valid. I tried to indicate that the field of battle is continually changing and the ultimate outcome is totally uncertain at this point. So it's not clear that investors should be betting money on one technology or another right now. On the other hand, demand for Rare Earth Metals is growing independent of NiMH batteries. If Lynas clears up its financing, its stock could prove very rewarding. But in this market that is a big if.

GM: Natural Death or Suicide?

hoffman, my point is not to predict the future of GM so much as to suggest that if I am right about GM going into a slow liquidation of a great deal of its business (Saab, Saturn, Pontiac for starters, probably more to follow) the impact on the general economy will be significant and has probably not been discounted by stocks. Maybe I was not clear enough, but this piece and the better written piece by Bloomberg argue, in my view, for staying invested mostly in cash.

That was the main point. The other point was to bring the Bloomberg history of GM to people's attention just because it may be of interest and is very well done, I think.

GM Volt: Dream Car or Road to Bankruptcy?

Interesting discussion except for the baseless ad-hominem attack that contained no substantive counter-arguments. Seems like the contentions boil down to:

1. Will GM have to go bankrupt or can its non-US operations salvage it? I have not done my homework on that but my reading says an awful lot of people who say they have done the homework think a bankruptcy is inevitable. More to the point, why would they be asking for a govt. bailout if they were not on the edge of insolvency? Bottom line: my suggestion of a likely GM bankruptcy is not unreasonable.

2. Will the Volt and its siblings work economically: as I said, it depends on the ultimate battery cost. There are mixed views. Clealy right now the li-on battery is too expensive, but things change with volume production and new technologies. Maybe GM is smarter than we give them credit for and maybe they can make money from the Volt at some point. I hope so, but a lot of people believe the bankruptcy will come before the Volt profitability does.

3. So, as Paul asks, why all the ads for the Volt since it won't be here for a couple of years and then not in enough volume to make much difference? I don't think it's unreasonable to speculate (which is the point of my article) that the real reason GM is hyping the Volt now is to give Congress the cover it needs to bail GM out from a likely bankruptcy by making sure everyone in America knows GM's future could be a lot more interesting and worthwhile than its miserable past. If Americans have a reason to keep GM alive other than to line the bulging pockets of top management, they will be a lot more foregiving of the Congress that wants to do just that. The Volt may be GM's hope for that reason that Americans might want GM to be saved.

In other words, the Volt is now as much about politics as it is about business. Sure that's just a guess on my part. But it seems not unreasonable and generally consistent with most of the commentary above.