Blind Spot: The Coming Of The “Digital Car”

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A good friend of mine, a brilliant dev/ops guy with several successful startups under his belt, option-trades Tesla’s stock when he’s not developing cloud systems and social platforms. Like many successful tech workers, this friend has an unshakeable faith in technological progress which underpins his support for Tesla. “Look,” he tells me when I suggest that Tesla’s stock valuation is wholly unmoored from its fundamentals, “new technology takes over and transforms everything. We see it again and again in other sectors, why wouldn’t it be the case for cars?”

His favorite example: the transition from film to digital photography. “Sure, it was crazily expensive to develop… but it matured rapidly, took over the market and nobody looked back. Why wouldn’t electric cars be the same?” Attempting to answer his question got me thinking: what would it take to fundamentally revolutionize the auto industry to the extent that digital revolutionized film? More specifically, what would the “digital” car look like?

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Welcome to General Tso’s Motors (SWWE)

GM Shanghai Motor Show 2013

After decades of slogans like “See the USA in Your Chevrolet” and “Baseball, Hot Dogs, Apple Pie and Chevrolet,” General Motors GM +1.27% has retreated from its overtly patriotic marketing approach since emerging from government-funded bankruptcy. Maybe that was a wise move, given that American taxpayers paid for the $50 billion bailout of “Government Motors” and not all of them were happy about it.

But another dynamic also seems to be at work: The auto maker has fundamentally shifted its focus. American taxpayers may have rescued GM during its moment of need, but it is China that is disproportionately benefiting from the bailout of America’s erstwhile automotive icon. [Continue Reading]

Romney’s Plan Would Also Have ‘Saved’ Detroit (SWWE)

Mitt Romney - Pictufre courtesy Huffingtonpost.com

Of all the issues broached in the presidential campaign, the auto-industry rescue of 2008-09 stands out as an example of the triumph of spin over facts.

Keying off the New York Times’s headline for Mitt Romney’s 2008 op-ed, “Let Detroit Go Bankrupt,” President Obama has argued that the only alternative to his “bold” rescue of General Motors and Chrysler would have been a disorderly liquidation of the entire U.S. auto industry. Yet a close reading of Mr. Romney’s op-ed reveals that his proposal was actually quite similar to the course of action the president took, right down to government funding of the bankruptcy reorganization process and warranty backstops. [Continue Reading]

A Green Detroit? No, a Guzzling One (SWWE)

Gas guzzlers - Picture courtesy savingadvice.com

WHEN President Obama announced in March 2009 that his administration would guide General Motors and Chrysler through a government-financed bankruptcy, he made it clear that the taxpayers’ $80 billion would buy nothing less than a sweeping transformation of the entire auto industry. [Continue Reading]

Taking Taxpayers for a Ride

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GENERAL MOTORS raised more than a few eyebrows last week by announcing plans to repay what it describes as $6.7 billion in outstanding loans to taxpayers. So provocative was this announcement that it all but overshadowed the real news of the day: G.M. had lost $1.2 billion since exiting bankruptcy in July, and its fourth-quarter results were expected to be worse.

The company’s chief executive, Fritz Henderson, called the repayment plan “a personal commitment.” The Obama administration, wardens of the 60 percent taxpayer stake in the company, declared itself “encouraged” by the news. Many commentators followed suit. But in the premature rush to herald the beginning of the end of the government’s involvement in the auto industry, a number of key considerations were left out. [Continue Reading]