Will GM Pay Us Back?

This is a big question these days, and many observers say "no".  According to Rasmussen, most Americans don't expect GM to be able to pay back the loans.  I think the taxpayer is basically screwed here.  Even if there is a successful IPO, there is no way that the new GM will be worth as much in stock as the Old GM at its peak. 

What could a valuation of the New GM be?  According to Dartmouth's Anant Sundaram, the government share could about $26 billion.  You can see his analysis here.

So if there is an IPO, and the government gets $26 billion for GM, the U.S. Government will get a return of about 0.60 on the dollar ($50.7B loaned, $8.8B remains as debt, so $42.7B put in as equity)

Mosler For Pres? Heh.

Warren Mosler, hedge fund manager and supercar builder, may be running for President.  One of Mosler's proposals is a national 30mph speed limit, to save fuel and reduce accidents.  Yes, that's 30mph.  Read it here.

Good luck with that.

Gettelfinger On Marchionne

This morning on Paul W. Smith's morning talk show (AM760), Ron Gettelfinger was a guest.  Paul W. tried to extract comments from Gettelfinger about Fiat's leaked plans to kill off some badly noncompetitive Chrysler and Dodge products, and the risk that this plan may hold for UAW employment.  Gettelfinger, as carefully spoken as ever, did not take the bait, and openly praised Sergio Marchionne instead.   Approximately:

"We have a close working relationship with Sergio Marchionne.  He has his arms around the car industry.  He understands what the buying public wants."

Gettelfinger then went on to say, as he often does, that he won't comment on "rumors and speculation".  "The newspapers, they want to sell their product.  And you know how they have been doing lately". 

Besides a resistance to attack Fiat based on an unpublished plan, Gettelfinger's response may indicate that there is less danger to UAW interests in Fiat's plan than the media is inferring.  For example, perhaps Fiat plans to build more Fiat/Alfa cars here using UAW labor, and that the plants will be re-tooled rather than shut down.

Paper: LEDs Not As Cool As You Think

According to a paper published in an IEEE journal, LED lamps can run hotter than equivalent fluorescent lamps.  Where florescents may dissipate 73-77% of their output as heat, the LEDs tested wasted 87-90% of their output!  Source here.

LED lighting has a long way to go. 

Car Buying Advice

A friend of mine is working on a purchase of a new vehicle.  She called me in terror the other day and said "they told me I should get paint protection, and rust proofing, and an extended warranty, and I wasn't sure so I said 'ok' let me think about it".  I told her to call the salesman back and cancel all of it.

• You don't need rust proofing.  Cars today are designed to survive 150,000 miles or more, including salty road winters.  Just make sure to wash your undercarriage once in a while, you'll be fine.
• You don't need paint sealant.  The car is clearcoated at the factory.  If you park it outside a lot, put on some Rain-X or Turtle wax, that will do the trick.
• You don't need an extended warranty.  Today's cars are as reliable as ever. These are really just insurance policies, which means that mathematically, you will on average save money by self insuring.  That's because the cost of the policy is the average pay-out per customer + profit margin. 
• You don't need a pre-paid service contract.  Your car won't need much more than oil and tire rotations for the first 30,000 miles, and after that, you should be taking it to your neighborhood service shop (I like my local Midas,myself, and Firestone has been good to me also).  Dealer service rates are substantially higher, on average, than independent shops.

The one item I told her to consider, if it would maker he sleep better, was the road hazard warranty,which is insurance against wheel damage.  At $350, it was cheap compared to the price of a new wheel/tire, and Michigan's pothole roads are wheel destroyers. I myself have trashed 2 wheels in the last 3 years. 

Tell the dealer to keep the locking wheel nuts, the scotch guard, and everything else that didn't come from the factory (unless you like overpaying).  Learn the phrase, "No thanks, I want just the car". 

Video: OnStar Calls Hennessey

Tuner Hennessey Performance was testing a 700HP Cadillac CTS-V, and after pulling 0.99g, got a call from OnStar. "Vehicle Event Detected, Connecting To OnStar Emergency"

Internet COTY Voting

The "Internet Car Of The Year" awards are open for the final voting, here.

My picks:

Car: Camaro SS.  The return of a muscle car icon, with sharp styling (though poor rear visibility) and vicious performance.  Yes, the Taurus SHO is good, but it is a $40,000 Taurus.  The Shelby is also a wicked muscle car, and faster than the SS, but also quite a bit more expensive.  Bang for the buck, Camaro is the winner.

Truck: Ford Raptor.  One. Bad. Ass. Truck.  The Chevrolet Equinox is a well executed product, but it doesn't inspire lust.  Same goes for the Audi.  If you drive on of these two down Woodward Ave, no one will notice.  Drive a Raptor, and little kids will point and jump up and down.