Toyota Kills US-Built Prius

December 15, 2008

Even the mighty Toyota Prius has fallen victim to economic chaos and plunging gas prices: Toyota said today it was postponing its plans to build the Prius at a new factory under construction in Blue Springs, near Tupelo, Mississippi—indefinitely.

Just a few months ago, the Prius was on a roll as gasoline prices topped $4 a gallon. As sales soared, Toyota switched the $1.3 billion Mississippi plant’s output to the iconic hybrid from its original product: Highlander sport-utility vehicles. Toyota even announced it would make the battery packs in the US at some point.

Now, reports Automotive News, the Toyota board has decided to halt the project due to a “steep decline” in US sales. The building is almost complete, but the company hadn’t yet begun to fill it with machine tools and manufacturing equipment.

US auto sales have plummeted roughly 30 percent against last year’s numbers, from an annual sales level of roughly 15 million to a mere two-thirds of that level in October and November 2008. And while the Detroit Three have seen sales fall further than their Asian counterparts, Toyota suffered a 32-percent loss in November. With gasoline back under $2 a gallon in many states, Prius sales have fallen further than that, almost 50 percent in November 2008 against the monthly level from a year ago.

The Blue Springs plant was to have manufactured the new, third-generation 2010 Prius that will be formally introduced at the Detroit Auto Show on January 12. The inspiration for the new Prius, Toyota’s Hybrid X concept car, was larger than the current compact-to-midsize model. Internet rumors indicate the 2010 Prius will not only be larger inside, but have a larger and more powerful engine—and significantly higher fuel economy than the current model’s 48 / 45 mpg on the EPA’s city / highway cycles.

There’s a silver lining to every dark cloud, though. The Mississippi plant will remain dedicated to building Priuses, whenever the project is finally restarted.


Posted in Carmakers, Cox, JD Power, News, UsedCars.com
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  • perfectapproach

    Ouch.

  • simon@aus

    Petrol – when its cheap there goes the incentive to do better.

  • Giant

    Well, maybe this says we need other solutions that are less expensive and complex than a parallel/serial hybrid system.

    The lower fuel costs certainly can change people’s buying habits quickly enough…….. we have very short memories.

  • Samuel

    We need to start taxing gas, like europeans do.
    Or maybe, new administration will allow new California emission laws to go ahead and/or force detroit to drop lawsiut against Callifornia and other states.
    in this case automakers will be forced to become efficient, even if gas prices stay low. I prefer both; tax gas and subsidize efficiency.

  • Gerald Shields

    I think the postponement had more to do with the fact that (1) Folks are being laid off (2) Auto financing is next to impossible, rather than lower oil and gas prices. Another reminder that it isn’t JUST the Big Three that’s getting smacked. Bear in mind that the banks aren’t putting out the credit or the loans so it doesn’t matter whether you want a gas guzzler or a green machine.

  • Ram Bunkshish

    First it’s “Toyota kills Prius,” then it’s “postponed indefinitely,” and finally it’s a postponement with a “silver lining.” I agree that this is a disappointing setback, but please, is all the gloom and doom really necessary? It’s not like genuine bad news is hard to find these days. It is what it is: another sign of the economic times.

  • Dan L

    If I remember correctly, sales of the Prius were basically flat this year, making them a runaway success compared to other models. Still, why would you build an additional factory to build the same number of Priuses that you’ve already successfully built two years in a row using existing factories.

  • crut100

    People didn’t stop buying the Prius b/c gas prices dropped! They stopped buying the Prius b/c; #1 they are concerned about their jobs/economy – I mean we haven’t seen a sudden uptick in SUV sales, #2 the Prius was almost impossible to get late in the summer as their were no units available, #3 Greedy Toyota dealers were trying to gouge buyers – - I know because it happened to me and #4 perhaps some are waiting for the insight which is way cheaper and gets significantly better mileage. Everyone knows gas is going to up once all the hedge funds have liquidated their position to generate the cash they need for redemptions. Look what the speculators have done in the last couple of days. Taxing gas in NOT the answer. Once taxed we’ll never get it removed. What are you going to do when gas is $7/gallon. What is that going to do to the price of a gallon of milk or anything else. Talk about inflation. If Toyota pulls back, Honda or another will just take their sales. I don’t think America will go back to buying gas guzzlers any time soon.

  • Picky McPicky

    Gerald Shields is spot on. It’s not just gas prices, it’s the economy. Did anyone see 60 minutes this weekend…If not, go to CBS.com and download the first two segments on the mortgage crisis. We haven’t even seen the worst of it yet according to top economists. This credit crunch may not end until 2013. As I stated last week (before the 60 minutes show I may add), there’s a dangerous loan product out there called the Option Arm that will cause more panic than what we are seeing now. Many of those recast at the end next year and into 2010.

    If I were Toyota, I’d be doing the same thing…and that’s what makes Toyota a better run comany. They are not afraid to kill projects in favor of keeping the company solvent. GM may not have been so wise in a similar situation.

  • Paul Beerkens

    I vote for taxing the gas. When the gas was at $4 we were seeing very exciting things. People who never thought of buying a hybrid were now lining up to buy one.

    Keep gas at at least $4. If you do not care about the planet or our trade deficit then you should pay the price.

  • JJJspawn

    Crut100 is correct…

    Don’t need to worry about gas going up it when iran or whatever other greedy opec dictator cuts oil production significantly it will probably go up. As stupid as americans are we are not going out to buy SUV’s instead priuses right now. We are at dealership asking if they got a spare job right now. Or at worst haggling them a dealer to death on a car.

    I went to a dealership the other day. The salesman told me that every other thursday is cut day. Someone goes home and doesn’t come back. Dealerships are suffering right now and a lot of people know that are attacking until they get the price they want and not what the dealership is asking for.

  • Picky McPicky

    Paul Beerkeg,

    Why do we have to raise gas prices to incentify us to continue our quest for alternative fuels. I like gas at $1.40, but it won’t stay there for long unless demand remains low….and the only way for gas to remain low is to continue the quest to build the perfect hybrid or electric car….and market and sell them as the next gen of cars.

    Lower prices means more demand, less supply and eventually back to where we were last summer. Does America actually have that much of a short term memory? Are we that dependent on short sound bites, instant news and the next new thing that we fail to learn from all of this mess?

    $4.00 gas causes all sorts of other problems…like cash flow. We are cash strapped enough due to lack of equity in our homes, high credit card balances and depleted 401K and retirement balances to have to worry about spending triple the cost in gas again.

    Listen, not everyone is in this position. Some of you that are reading this may think that I am overstating the problem. I am not, I assure you. But it only takes 25% of the population to be in trouble for it to affect the other 75% of the nation one way or the other.

    For instance, when one of those 25% has their house forleclosed upon and it is sold later at a discount in an REO sale, that affects the value of everyones home. Gas consumption went down in the 3rd quarter because those cash strapped 25% sought out alternatives ways to travel to save money. That 25% has a major affect on our economy. If you go back to the 3rd quarter gas prices, the same will happen again. The price of oil can’t be sustained at that amount….simple laws of supply and demand.

    We as Americans need to realize that if we spend $1.40 on gas today…and we continue to develop alternative fuels, we can cut transportation costs down to under $75 a month. That’s a far cry from the $200 + that was spent in the 3rd quarter and provides extra cash flow to ignite other segments of our economy that really need a boost.

  • RKRB

    I’m for a gas tax, too, but there are good gas taxes, and bad ones. The good ones should address current problems without making the pill too bitter to swallow (or vote for). Here’s one way to do this:

    A phased mandated gas tax over several years (say, a 25 cent tax increase each year for two years, then a 50 cent a year hike for another two or three years), would allow individuals to plan for it as they replace equipment or vehicles, and as they decide how to provide goods and services. A sudden gas tax is an unplanned, painful major expense that makes politicians worry (and a worried politician is a more devious one). A gradual, predictable price increase is sort of like working up to a high level aerobic exercise program — if you work up gradually, a little bit more each week, you will have more health benefits than if you suddenly start at a high level and rip a tendon or two. You can also adjust the final price depending on whether the tax is satisfying its goals (like lower carbon emissions or greater efficiency).

    Other advantages of a gradually increasing tax include predictability and stability — unlike letting the market direct prices, with all the resulting price swings, you have a stable increase built in. This makes it easier to decide to buy the efficient car rather than thinking prices will go back down, so hey, let’s splurge on the gas guzzler. It also lets the increased price go to someone other than OPEC, as is the case now.

    Another problem with taxes is regression, where poor people or people in certain industries suffer “disproportionally,” however you define that (and whomever defines it). A graduated tax can adjust for this, say, by directed tax rebates or by providing better services for those most affected. A gradual tax can allow you to more efficiently examine who is actually being affected (assuming intelligent, unbiased folks are doing this).

    Anyway, hope this helps. I sure hope Toyota will continue to add their diversity to hte marketplace and allow American workers to be paid good, realistic wages to build an efficient car that buyers want. The government has to do its part, too, by efficiently spending any increased revenue wisely and not just wasting it on the usual pork that makes people loathe to pay taxes.

  • PW

    I just read a story titled “Chinese Company Introduces World’s First Plug-In Hybrid” I hope it can be sold here in the USA sometime soon. Check out the story at the web address below.
    http://www.foxnews.com/story/0,2933,467025,00.html

  • AP

    Picky-McPicky,

    GM did cancel one car that was not viable: the EV1. You may have heard about it. They lost big money on each one made when California back-tracked on their 10% ZEV requirement (and no other manufacturer – not even Toyota – had responded to the mandate). Some people treated that decision with less sympathy than Toyota is being treated here. Some idiot even made a movie about it.

    Let’s be fair here. Truck sales ARE up, hybrid sales are down, people have short memories (just like after gas crises in the 1970′s and 1980′s, when we also said “never again”), and most Americans are environmentalistic as long as gas is expensive – and no longer. Dealers are saying that fuel-efficient cars are piling up on lots, and trucks are sold out.

    If this isn’t evidence that politicians need a reality check and that the only way to reduce consumption is to tax fuel more heavily (while equally reducing the income tax), then I don’t know what is. The government can’t bribe the consumer with incentives forever – sooner or later more fuel-efficient cars must be profitably sold, or people will not buy.

    If politicians want Detroit to “make cars people (in the government want (you) to buy,” then they need to create the natural demand for them. Avoiding this issue is delusional.

  • Need2Change

    Toyota held back Prius production in my opinion to keep margins large and a waiting list. Most of 2008 Prius production was less than 2007 comparable months even though the demand was far greater.

    I wonder if they’re sorry now. They could have sold many more cars.

    I bet the resale values of Priuses are dropping as well and the current models will take another hit when the 2010 Insight, Prius, and Fusion go on sale in the spring.

    The sales of some vehicles has increased. For example, Ford just added a third shift to its F-150 plant to keep up with demand. The F-150 is once again the best selling motorized vehicle in the U.S. Dodge and GM truck sales are also up.

  • qqRockyBeans

    I kind of agree with RKRB, except that it should be a bit more gradual than that.

    Maybe tax additional 1-2c per week for the next 2-3 years
    People will hardly see it

    With 1c per week for 2 years, the price would’ve increased by $1.04 per gallon.
    2c per week for 2 years raises the tax by $2.08, and 2c per week for 3 years raise the price by $3.12 per gallon

  • JPWin Burnsville

    A tax by the gallon on gas is not the solution. The goal is to get people to *buy* fuel efficient vehicles when they step into the show room. Lots of people (probably including me) never have and maybe never will purchase a new car, but they will be punished by a gas tax anyway, and they will be the least able to afford it. Yes, mass transit may help some, but it isn’t even an option for a lot of people.

    If you just don’t trust the market to work (at least over time) put the pain of low fuel efficiency up front, at the time of purchase. Consider an excise tax imposed on lifetime gasoline consumption for vehicles with less than, say, 30 mpg, and make it more painful as the actual mileage worsens from 30.

    Example: A vehicle that gets 15 mpg, and should last for 150,000 miles, requires someone, somewhere, to come up with 10,000 gallons of gas before it goes to the junk yard. Now, consider an excise tax of 2 cents per lifetime gallon for that 15 mpg vehicle that looks like this, where 30 mpg is the average efficiency desired for all vehicles sold:

    (30 mpg – 15 mpg) x $0.02 x 10,000 = $3000.

    Low fuel efficiency thus costs the purchaser $3000 extra up front, before it rolls off the lot, rather than by nickel and diming them for 15 – 20 years thereafter. The result is that those who can’t afford a new fuel efficient car, or more expensive gasoline, are protected from adverse economic impact, the money is captured at the outset, with minimal administrative overhead, and buyers are obliged to address the issue of fuel efficiency before they sign on the line. If you like — and this would my preference — take the money collected and use it to fund rebates to those purchasing the most fuel efficient vehicles.

    A liittle *too* neat? Maybe. Better than a gas tax? Gotta hope. Can you do better? Then show me.

    JPW

  • Zero X Owner

    Here’s the correct title:

    Toyota plans to use Mississippi plant to produce whatever is selling hot for the next 5 years:

    1) Current plan: Nothing. Vehicle sales of every type, from subcompacts to full size SUVs, have plunged, due to the current worsening global recession and credit freeze.

    2) Previous plan: Prius, due to skyrocketing gasoline prices.

    3) Before that: Hybrid Highlander SUV, due to great profit margins on SUVs and rising gasoline prices.

    So what’s next for the plant?

    After credit gets unfrozen and the global recession ends, what do you think will happen to general demand for goods? It’ll increase, which will send energy prices higher. Notice a cycle there (admittedly extreme this time around)?

    My current bet’s on a blingtastic, pricey Corolla wagon with maybe a light hybrid set up to haul the extra weight of the useless chrome that Americans demand, starting in 2011. Jetta Sportwagen TDI killer, anyone?

    The Prius plant (in Miss. or wherever) will come with the next big run up in gas prices (we’ve had three huge ones in the last 30 years – you think that’s over?) or whenever they figure out how to make a race version of it. High end 2000GT or MR2 or Supra or Celica style, but with massive low end torque and linear acceleration, anyone? Ka-ching!

  • AP

    JPW, I understand your concerns. That’s why I think we should slowly increase the gasoline tax and return all the revenue by dividing it up equally among all income tax filers (whether they owe or not). This gives people who can’t afford a new vehicle some cash to pay the increased gasoline tax, at least until used vehicles with higher MPG hit the used car market. But it also encourages conservation once the vehicle is purchased, since any gas you don’t use is tax you don’t have to kick in.

    As far as getting people to buy the right vehicle in the first place, the tax would be the best way to do that. You can’t really predict how a vehicles would be used. If someone wants to buy a Ferrari that gets 12 MPG, but they drive it 500 miles/year, that’s fine with me. Why penalize him with a big excise tax for buying it just because of what it “could” do? Likewise for someone who wants a Hummer because they’re going off-road.

    Imposing excise taxes and mileage requirements on vehicles based on their size, powertrain, MPG, etc., becomes writing laws that only a lawyer could love, and ends up creating unwanted side-effects (like CAFE creating the SUV). Lord only knows what screwed-up effects the next round of mileage or vehicle requirements will cause.

    On the other hand, shifting taxes from income to gasoline creates the right incentives for the combination of vehicle purchase and driving habits, with no other rules really necessary. Also no new bureaucracy and its transparent (they can’t hide or divert the revenue).

  • Fact Checker

    @ AP

    1. GM recently made a statement that the EV1 did not affect their profitability and GM didn’t properly market them (most people have still never heard of it, despite a recent movie that discusses it) and made it extremely difficult to get their bizarre lease. You are selectively choosing the GM lies that best suits your FUD. That doesn’t make it true.

    2. Let’s be truthful here. Truck sales last month were actually hugely DOWN year over year, but were slighly less down than hybrid sales, mostly on massive discounts on trucks, a powertrain related recall on American mild (weak) hybrids and on news that an American manufacturer was pulling and refusing to support two hybrid models . Everything in autos was hugley down last month, year over year (excepting a couple of new models that were ramping up a year ago), on the national and global recession and on banks not lending much these days (credit crisis).

    3. The topic of the article is the idled Toyota plant in Mississippi due to collapsed automobile demand, primarily from a global recession and the credit freeze crisis, not gasoline tax proposals. You are wildly off topic. Good luck getting a tax increase passed in America. Time for a new article?

  • AP

    “Fact”-Checker, are you serious? GM spent a billion dollars to develop the EV1, using every bit of technology available at the time, to meet California’s arbitrary ZEV mandate. The drag coefficient set a record at 0.19, and the body was all-aluminum. Feel free to check out these “lies,” as they are recorded in the press. Only GM brought out a serious car to meet the requirement, only to have it compete against $1/gallon gas. At a rumored cost of $50,000/vehicle, the more they leased, the more they lost. Including the product development, GM lost about $1,000,000 on each of the vehicles they leased (anybody can divide a billion by a thousand). It could have been a good PR stunt, but the press doesn’t usually give GM the same awe-struck response that they do Toyota, so who knows?

    Getting wildly back to topic, another fact is that Toyota’s Mississippi plant is half-tooled to make Tundras and Sequoias, which, coupled with their Texas plant, would have given them the capacity 500,000 gas-guzzling, smoke-belching, worst-in-class fuel economy commuter trucks. When gas went to $4/gallon, they decided to switch the plant to Priuses, instead of importing 100% of them. Being half-finished with this new line, their Tundra and Sequoia sales dropped so much that they can’t subsidize their Prius sales and make them appear cheap, so they nixed that. Now this plant is halfway tooled to make two different vehicles, but making neither. Yeah, they are definitely smarter than anyone in this country.

    The biggest shame isn’t that they’ve hood-winked the American public, punching their “green card” with the Prius while making their money on the trucks, but that they used the truck profits to make it appear that hybrids are cheap to make. This may have ruined the market for hybrids that are profitable, since customer expectations will be to get the increased technological content (electric motors, battery, cooling system, etc.) for a song.

    My point in going off topic before was to point out the side-effects of our stupid energy policy. No one, including Toyota, knows what the American customer will want one year from now, much less after a 4-year product development cycle. Without higher fuel prices, it will be a while before hybrids make economic sense without 1) subsidies from the government, or 2) subsidies from the manufacturer. Both ways are unsustainable.

  • Fact Checker

    @ AP

    Well done, getting back on topic and sharing some interesting information on the Toyota Mississippi plant, although coupling with Texas is a weird stretch. I agree that the plant was originally intended for hybrid SUVs (not trucks), then hybrids, then what’s for dinner now, nothing.

    I hope the general public is now starting to get the correct idea that it’s expensive and difficult to build cars and that the initial capital barriers for a new material chassis and assembly are daunting and that the market keeps changing, primarily driven by the economy, automakers egos and misunderstandings of consumer preferences and usually no long term profit goals at all.

    Hybrids are not just about fuel savings. Electric drive, due to its massive low end torque and linear acceleration, can make one heck of a muscle car off the line, as the Tesla Roadster (and the Tzero and the Wrightspeed, Current Eliminator V, Venturi Fetish, etc.) robustly show. It’s about great fun and beating Porsches at that level, not the range or long term savings over gas. Soooo… as an automaker, you make an electric gas pincher when energy prices are high and an electric romp ‘em-stomp ‘em off the line supercar when gas prices are low, an electric off road vehicle at all times for pure fun and an electric pickup truck for PR. A family would get one of each for maximum flexibility. Then you just continually tweak your simple global architecture product mix to adjust to the wild energy price swings and consumer image (from DVD players for the kids in the car to extreme fashion accessories for the roadster to solar amber cabtop led lights for the pickup truck – duh). The result – extremely loyal cutomers and profits. Ta-da!

    Using a broad definition, there is not a single product that makes economic sense without 1) subsidies from the government, or 2) subsidies from the manufacturer. Why should hybrids be any different?

    It’s pretty easy to figure out that after the global economy bottoms out and the falling energy prices bottom with it (down to zero at the lower bound), that eventually the economy will recover. As that happens, what direction do you think energy prices will go? The only direction they can from the bottom, up. And we had really strong evidence this past summer what the consumer is going to want then, when energy prices start to go up again. So we already know that hybrids are viable long term for automakers. What we don’t know is how the automakers will survive the recession until then.

  • Fact Checker

    @ AP

    From Blooomberg, this week:

    “Axing the EV1 electric-car program and not putting the right resources into hybrids,” Wagoner [of GM] told Motor Trend magazine, when asked to name his greatest mistake as CEO. “It didn’t affect profitability, but it did affect image.”

    As I said, it just depends which GM lies you want to believe. Just because a PR release ends up recorded in the press doesn’t make it true.

    If you make each product purely stand alone, rather than pursue an integrated product mix strategy linked to your marketing to maximize market domination over time and consumer identification, you end up with something like GM in the 1970s and 1980s. Oh, that’s when they started to have their lunch really eaten hard, wasn’t it? Remember the Honda 600, fun and efficient, though insanely underpowered compared to today’s hybrid mid-size sedans?

    When the facts change, I change my mind. What do you do?

  • AP

    Fact Checker, I’m still not sure what you mean by “which GM lies to believe.” I think what Wagoner meant was that the act of axing it didn’t affect profitability. In the grand scheme of things, losing $50,000 per car may have have been worth the PR (but that’s still only 20 cars per $1 million lost). GM looked at it as not making economic sense for the consumer or for them if it couldn’t be done profitably in itself.

    Toyota has probably gotten more free advertising from the Prius than the money they’ve lost on it, but it’s not likely the same reaction would have awaited GM. When Toyota lost money on Priuses to promote their green image, it was heralded as masterful marketing. If GM had done it, it would be criticized as a publicity stunt. It depends on if you like them or not (someone you like is “persistent” – someone you don’t is “pushy”), i.e., prejudice.

    When push comes to shove, conservation isn’t achieved by a green image, but by the overall conduct of a society. One Tundra consumes enough extra fuel to undo the fuel savings of five Priuses compared to a typical sedan. So when I see their cross-subsidization of fuel-efficient products by (formerly) profitable gas-guzzlers, I see hypocrisy. To me, their approach is a lie. When I see the journalists and environentalists awaiting Toyota’s next “word from on high,” I see fools.

    As far as taking an overall approach to a market, the Japanese are good at that, and are very patient. Remember that GM has to please the NYSE crowd. Ten years ago, they pushed all the domestics to start stock buy-backs with all their “idle cash.” Chrysler tried to save up for bad times with a cash hoard, and the next thing you know, Kerkorian buys a substantial interest and demands a “special dividend” to enhance “shareholder value.” Before that, it would have risked a leveraged buyout. Wall Street has put very little value on being a stable company in the last 20 years, instead demanding growth, even in mature markets. This demand for short-term quarterly result makes long-term planning almost impossible.

  • Fact Checker

    @ AP

    The word “it” usually refers to a noun or object (the EV-1 electric car program) more than to a verb (axing), but that you think that Mr. Wagoner said the opposite of what he said shows the real problem here. The big 3 automakers could not communicate themselves out of a paper bag, let alone to profits, they have no vision, long term goal, strategy or leadership, which is why they have no on the road consumer purchased results, unlike companies such as Tesla and Vectrix. My 4’5″ tall Philipino dragon lady boss could push out fuel efficient, profitable cars way, way faster than the big 3 have over the last 35 years that we’ve been demanding them.

    News flash – short term lies that come true in the long run are what sells and works, and anything that puts more electric drive on the road in any fashion is progress towards increased market share, which is what eventually provides the business power for genuine full scale efficiency gains over the entire product line. Game away, Toyota, game away – you’ve got the end game figured out and its the broad addition of electric drive. Sure, they’re hurting now, like everyone else, but they’ve already got the tooling and relationships in place to get to the next lap for this new century’s success. Same with Nissan, with VW and BMW scrambling in there too. As usual, Honda will lag a tech generation behind and clean up loot like a vacuum cleaner on the second wave. No-one likes being the first – it’s risky and you don’t capture all the benefits – Toyo did it with the Pruis and will mostly grab the v.2 mature (long term) full parallel hybrid spoils (including leasing that tech to other automakers). Honda will get the most out of v.1 weak (always gas assist for moving) hybrid (Insight II and others), with American automakers eating their lunch a little. GM wants to repeat this long term strategy with the v.3 series hybrids (little trains with rubber wheels) and they could be big winners in the transition to v.4 full electrics (they can just drop the generator on some model versions, stuff in more power pack (different amounts based on consumer preference) for price option upgrades). This is the long term end game for autos – no avoiding it, just based on basic vehicle level motive efficiency and real world performance (it’s the first 30 feet from a dead stop at a stop sign or from when the light turns green that’ll really matter to daily drivers). Even hybrid based on hydrogen fuel cells, which currently is a ridiculous non-starter, and natural gas, which is great idea at current prices and hugely expending domestic supply, rely on electric drive.

    Otherwise, I agree with your comments and find your discourse to be increasingly rational and credible.

  • AP

    FYI, Fact Checker: “axing” is a present participle acting as a noun. Using them is common.

  • Fact Checker

    @ AP:

    No, axing is a verb in gerund (tense) form (as in, I ax (a verb) in the time frame to which I refer). Dick runs. Dick was running his mouth. Wagoner was axing the EV1 electric-car program , his admitted biggest mistake as a CEO. The point is that there are two parts in the first sentence to which the “it” in the second sentence could have referred, with completely contradictory results. This is typical for political speech, so that the listener gets to hear what they want and have their pre-conceived notions reinforced.

    Either way you want it, Wagoner states that “Axing the EV1 electric-car program and not putting the right resources into hybrids,” when asked to name his greatest mistake as CEO.”

    How to resolve this non-speak coming from GM? My advice it to completely ignore everything that GM’s management and PR says and instead get involved with the companies that actually produce, sell to customers and get on the road, those vehicles that we are interested in (in my case, those with massive low end torque and linear acceleration, for great performance).