November 29, 2010

Shocking way to run a company - Chevy Volt

Some interesting news from the New York Times:
Steven Rattner Dishes on the Chevrolet Volt
Steven L. Rattner, as President Obama’s former auto bailout chief, worked with General Motors as it struggled to find its footing amid a bankruptcy reorganization in 2008. During that time, the company was also developing the Chevrolet Volt, an innovative plug-in hybrid car that is going on sale soon.

In his new book, “Overhaul,” Mr. Rattner, who faces legal troubles unrelated to his work on the auto task force, writes that the Volt, which is priced at $41,000, is costing around $40,000 apiece to build. “At least in the early years, each Volt would cost around $40,000 to manufacture (development costs not included),” he writes.

In an interview a couple of weeks ago, Mr. Rattner said he had learned of the Volt’s costs in the course of due diligence during the G.M. bankruptcy process. “I don’t know the precise number,” he said. G.M. was nonetheless “right to do it,” he added, even in the absence of profit, because the program helped quiet critics “who’ve said for many years that the company was behind the curve.”
Yes I know that manufacturing costs will come down once the car is in production but still, that is a hell of a number to deal with. Not the way I would run a company... Posted by DaveH at November 29, 2010 10:22 PM
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