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  1. #1

    Laurie David - Misguided logic?

    A lot is being said about what we SHOULD be driving. Not a lot is being said about WHY we drive the vehicles we do.

    Read interview:

    Last I checked, automakers are owned by shareholders who expect profits. Nobody can expect businesses to risk profitability and loss of market share by adopting a small-car (fuel-efficient) portfolio when the customer base doesn't want it.

    Automakers sell what consumers want at the highest price they can. Their product portfolio will change only when consumers see a direct benefit. Gasoline is still not pricey enough to warrant this change.

    Laurie David is talking about what we SHOULD do. I disagree with her logic. It is impossible to legislate consumer preferences.

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  3. #2

    Laurie David - Misguided logic?

    Actually, I differ from you.

    Whether or not a hybrid car is worth it, that is not the point. When there is a HUGE demand for hybrid cars such as the Prius and the Civic, why would a company like GM not try to build a hybrid themselves?

    That's a HUGE profit that is being missed. For a company that relies heavily on SUVs, when gas prices go up, SUV sales drop, and so does GM's already sorrowful profit. And for an investor, that can be a bit speculating.

    Even GM's ex-vice president stated that GM "miscalculated" their outlook on hybrids, and stated that any hybrid model would work, as to make sure Toyota does not get any bigger than it already is.

    As with all big critics, some information may be overdone/overhyped, but Laurie David is right. But it will take higher gas prices and a final severe drop of SUV and Truck sales (which have already been weaning-the SUV "boom" of the 90's is over) to "slap" the US automakers into realizing that higher gas mileage is key.

  4. #3

    Laurie David - Misguided logic?


    I disagree with your logic too.

    There is no HUGE profit in selling hybrid cars. Automakers are investing hundreds of millions of development dollars. It is unlikely they are recovering their investment monies via selling price upcharges at these relatively low volumes (under 200,000pcs per year).

    As a shareholder, I want my automaker to squeeze out every last $$$ selling big fat SUV's until the market dries up.

    I have no argument that Hybrid technology is good for the environment and that everyone should be driving one. I just can't skip the business model portion of the argument... something that Laurie David is doing.


  5. #4

    Laurie David - Misguided logic?

    I don't think the focus of the Laurie David interview was shareholder profits...she's a committed environmentalist, and I admire her integrity and energy. She's been speaking out about fuel efficiency for several years and she was right!

    I was happy to buy the first generation Ford Escape hybrid, because it was made in Kentucky by American union workers, AND I could get 32 mpg while driving a nifty SUV. That was back in 2004....and I am now stopped and asked how I like my hybrid car almost everyday. Thank you, Ford. Hope I've sold some more for you-

    Fuel efficiency is nothing new....we all drove compact cars in the 70's and 80's (loved my Datsun B210.) The American auto industry's big mistake was not reinvesting in R and D, while the Japanese corporations figured out "what's next." As a stockholder, I not only look for profits, but American companies with foresight- like Apple, Amgen and Google.

  6. #5

    Laurie David - Misguided logic?

    As is typical of the folks, like "G," who quote the party line about shareholder value and other fairly meaningless phrases, they simply miss the point. GM says Toyota isn't making a profit on hybrids--Toyota says they are. GM's sales are steadily falling, Toyotas are rising..... I will tend to believe the company who has a proven ability to make money, increase market share and stay in business over the company with no vision, no innovation and no leadership----ahhh, but they do pay exceptionally large bonuses to their executives. That's leadership, by gosh.

    You want GM to maximize its profits so that your stock goes up. Which is to say, you want YOUR profits maximized. That's fine. However, why do you, and many others, not get the connection between vehicle mpg, wars for oil, global warming costs, and health care costs.

    Let's look at the costs GM (and others) are causing you to spend: The more oil you need (want?) to fill your gas guzzler:

    1) the more oil companies have to plunder third world nations for their resources. This makes a lot of people hate Americans--look at NIgeria, Venezuela, Bolivia, and of course the middle east.

    2) the more CO2 is put into the atmosphere--causes global warming and related droughts, floods, stronger hurricanes, etc. all major costs in terms of repairs, lost crops, famines, possible disease outbreaks, etc.

    3) the more NOx, SOx, and particulate matter put into the atmosphere---health-care costs related to asthma, chronic obstructive pulmonary diseases, lost time from work, school, "ozone action days" (i.e., lost "freedom from being able to go outside and enjoy the fresh air") etc.

    4) the more we have to spend through the defense department to protect our nationa interests (spelled: O-I-L). We now spend $9 billion / month in Iraq based on a lie from a president and his henchmen who did NOT listen to all the experts about how to plan and prepare for this war.

    Many people try to make business-type arguments to justify GMs (and others') stupidity and lack of vision, and their own for buying a gas guzzler, However, for some reason these same people have tunnel vision and do not look at ALL the related costs. GM may be trying to maximize its profits, but it is MINIMIZING yours! Many people would be smart enough to see this if it weren't for the misinformation being put out by many of these same vision-less companies (oil and auto).

    These costs may not be in GMs economic analysis--and one can argue whether or not they should be, but they should be in yours, your state's and your country's.

    Me, I drive a hybrid to save money, I invest in auto and oil companies to make money on the dummies who buy gas guzzlers--and also to vote against the board whenever the opportunity arises.

    Remember: consumers have the ultimate power--we just need to be smart enough to use it.

    (By the way--when was the last time a shareholder got to vote on some important issue on their proxy ballot...? Doesn't happen very often.... So much for being an owner of a company!)

  7. #6

    Laurie David - Misguided logic?

    I'd probably make money shorting GM rather than a "buy and hold." Every time gas goes up for an extended period of time, GM's profit goes down. I'd like to see GM's quater results when they come out, especially after weeks of high gas prices.

    -That is why I would never invest in the American Auto Companies. You'd think after the 1970's they'd learn, but apparently, they didn't.

  8. #7

    Laurie David - Misguided logic?

    I agree. I have sold my auto company stocks--still own the oils though!

  9. #8

    Laurie David - Misguided logic?

    I have read the above exchange and it was interesting. Here are some things to consider. First, as a society, we have three driving factors for change in car buying habits:

    1) we change because we want to
    2) we change because the government mandates it
    3) we change because economics forces it

    It should be clear that number 1 is best because you have a lot of choices. One of those choices is time frame, which may be the most important.

    Number 2 no one ever likes. However, such an approach can save us (i.e., this country & this world) a lot time and money by preventing new, larger problems (if done carefully).

    Number 3 is what everyone complains about, yet it appears to be the most effective, due mainly to its ability to inflict lots of pain.

  10. #9

    Laurie David - Misguided logic?


    Tell me how your hybrid saves you money. Consumer Reports says you won't.


  11. #10

    Laurie David - Misguided logic?

    Actually CR retracted their faulty math in their latest issue.
    Besides, most people I know who drive Prius's traded in their BMW's or other over-prices luxury/status cars for them so they definitely saved $$$.

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