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buyacargetacheck

GM is Making a Big Mistake

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As I write this light sweet crude oil has topped $75 a barrel. Hear me out. As I've said before Global Peak Oil Production is going to hit the industrialized world like a ton of bricks in the face. It's already begun. The smallest rumors in petroleum or gasoline disruption magnify themselves many times in price increases. Gasoline will be over $5 a gallon nationwide soon.

Meanwhile, GM is making investments in large SUVs, crossovers, V-8 powered RWD sedans and mending its "performance" and "luxury" nameplates because that's where the profit is. For now.

Soon, these vehicles will be languishing on the lots with HEAVY incentives despite their goodness. GM would do well to think ahead a few more years and start positioning Pontiac as another value brand much as it was (and actually has been) for many years. Same with Saturn. Dealers will soon be screaming for 4 door and wagon versions of a "Pontiac" Cobalt and/or Aveo. A G5 sporty coupe is not enough. GM should also think about installing a 1.8 L or smaller engine in the Deltas.

Folks, performance is dead. Long live performance.

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Peak Oil is just a friggin conspiracy driven by liberal hippy scientists and people whose interest it serves. We're no where NEAR peak oil production, its just that God-damned Iran is freaking everyone out.

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Here's what Dick Cheney (talk about a liberal:) said in a speech while he was still CEO of Halliburton http://www.peakoil.net/Publications/Cheney_PeakOil_FCD.pdf:

By some estimates, there will be an average of two-percent

annual growth in global oil demand over the years ahead,

along with, conservatively, a three-percent natural decline

in production from existing reserves.That means by 2010 we

will need on the order of an additional 50 million barrels a

day.

GW Bush advisor Matthew Simmons agrees and has further stated that he believes Saudi Arabia's reserves are much lower than publicly stated.

Peak is real. Ford seems to understand this as Mark Fields has made some public reference to it. Surely someone at GM understands as well, but this understanding isn't reflected in their product strategy.

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Here's what Dick Cheney (talk about a liberal:) said in a speech while he was still CEO of Halliburton http://www.peakoil.net/Publications/Cheney_PeakOil_FCD.pdf:

By some estimates, there will be an average of two-percent

annual growth in global oil demand over the years ahead,

along with, conservatively, a three-percent natural decline

in production from existing reserves.That means by 2010 we

will need on the order of an additional 50 million barrels a

day.

GW Bush advisor Matthew Simmons agrees and has further stated that he believes Saudi Arabia's reserves are much lower than publicly stated.

Peak is real.  Ford seems to understand this as Mark Fields has made some public reference to it.  Surely someone at GM understands as well, but this understanding isn't reflected in their product strategy.

Its still a theory based on hypotheticals and guesses. The current market high for oil is artificial, and gas prices are still inflated even above what $75 a barrel would cause. Otherwise Exxon wouldn't be raking in record profits year after year.

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By the way, the whole "liberal" versus "conservative" thing is a distraction.  It's not real.

I'm neither liberal nor conservative (libertarian, thank you). Doesn't change the fact of who, by and large, supports the theory vs who, by and large, doesn't.

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Its still a theory based on hypotheticals and guesses. The current market high for oil is artificial, and gas prices are still inflated even above what $75 a barrel would cause. Otherwise Exxon wouldn't be raking in record profits year after year.

No doubt there are guesses involved. But there are also guesses used to support the official line. That's why OPEC hasn't changed its reserve figures since at least 1986 when it was agreed that the individual OPEC nations would export the same percentage of total production as each had in total reserves. In other words, "reserves" suddenly spiked so members could export more.

As far as Exxon is concerned, the big global oil companies' reserves are falling big time. That's because the reserves lie mostly in countries where peak production has already occurred (e.g., lower 48 USA in 1971). Their own reserves are shrinking and they are becoming more and more buyers of OPEC crude and finished products. Exxon (and the rest) don't set the price of either oil or gasoline; the global market does. The huge consolidation in companies over the last 20 years (Exxon-Mobil, Chevron-Gulf-Texaco-Unocal, Conoco-Phillips, BP-Amoco-Arco, Total-Elf-Fina) has been an effort to keep reserves up and costs down. But the politicians will milk this for all it's worth.

The science behind peak oil is real. The proof is in the fact that the formulas are reproduceable and the peak curves are easily observable in countries where its already happened (USA and North Sea to name two).

Iran is but a political symptom of a bigger depletion problem. Remember, crude was around $25/barrel in 2000, way before there was any talk of invading Iraq or stopping a nuclear Iran. You ain't seen nothing yet.

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By the way, GM isn't the only automaker with their heads in the sand. Toyota is set to pump out big pickups and SUVs like rabbits. They're just a little better positioned because of the Corolla, Matrix, Prius, xA and Yaris, all fuel economy champs. Their factories can easily switch production if necessary.

Edited by buyacargetacheck

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Trucks, SUVs, and crossovers may sell in lower numbers, but they will still sell in pretty big numbers.

Trucks are needed by many people for work, so I'd say that market is pretty safe.

SUVs are the only market here I see losing many sales, and mostly because the sales will be going to crossovers. People are still going to need something other than a car to go on family trips, so they have the choice between an SUV, crossover, or minivan.

Crossovers are the new thing, and they'll still rise in sales for quite a while. GM having class-leading crossovers in the Lambdas is going to help them a ton. Again, people need something to move the family around, and currently lots of them are switching to crossovers.

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It is pathetic that we haven't developed any of the following into viable alternatives. It should have been started in the 70s and in place by the end of the 80s.

Propane

ethanol

natural gas

Hydrogen (non-fuel cell)

Bio diesel

A diversified fuel supply could do so many good things for the world (other than OPEC). The developed world has been damn lazy about this for decades too long.

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Uh...GM and Ford are the only manufacturers that offer full sized trucks and some SUVs that can run on an alternative to petrol.

Guess what... Toyota doesn't. You can have as many hybrids as you want, but at this point they still ALL run on petrol.

Ford could have a super trump card if they made the Escape Hybrid a FFV.

I'm really hoping GM is smart enough to make the Hybrid GMT-900s FFV.

An E85 burning, active fuel management, hybrid Avalanche could really take the wind out of Toyota's hybrid sales.

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If we could put a man on the moon, we can make a cost efficient, publicly acceptable fuel. I always have thought about how oil is made. From crushed up rocks, dead animals, leaves and the like, correct? Could we not speed up that process in ovens or something? Use our landfills to make some sort of oil cousin? Brazil made a law in the 1970's, I believe, that stated all cars by XXXX will run on sugar-based ethanol. It recently stated it is no longer dealing with OPEC.

By the way, Toyota has a new Highlander, RX, Sequoia, LX and Tundra in the future, a far cry from the GMT900 program.

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the old brooklyn union or keyspan whatever the hell they call themselves...the gas company over here had their fleet cars run on natural gas.

it just never became widespread...kinda fishy in a way.

all these alternatives have decent prospects although biodiesel supposedly isnt any cheaper than the highest ga prices weve seen.

the saddest part is places like china or "third world" nations will probably never see these advances. as it is they burn coal and contribute to more of the worlds pollution than the US ever will. the point, they will wind up using the rest of the oil even if we can wean ourselves.

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Bio-diesel isn't cheaper then gas per gallon because the infrastructure isn't up to speed yet.

Bio-diesel *is* cheaper per mile of use though since you get much better mileage then gasoline.

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It is pathetic that we haven't developed any of the following into viable alternatives. It should have been started in the 70s and in place by the end of the 80s.

Propane

ethanol

natural gas

Hydrogen (non-fuel cell)

Bio diesel

A diversified fuel supply could do so many good things for the world (other than OPEC). The developed world has been damn lazy about this for decades too long.

None of these "alternatives" alone will make up the difference in petroleum depletion. And, in fact, all of them require fossil fuel inputs to make them work. Natural gas is in decline in the US. We'll soon need to import Liquified Natural Gas which will be earmarked for all the power plants we've built in the last 20 years that run on the stuff. Not gonna be used for cars in a big way.

Hydrogen is a pipe dream. An energy loser.

Think about it. Oil is highly energy rich. The stuff comes out of the ground and is highly flammable. Corn isn't. Corn requires lots of top soil, lots of diesel for the tractors, lots of petroleum-based fertilizer and pesticide, factories to shuck the corn, petro-based chemicals to make the ethanol. The ethanol PR program GM is running isn't a real solution for anything other than to get people thinking that GM is a leader in alternative fuels.

The future does not include driving around. It does mean doing less with less. We need to get used to a future with fewer cars, less college education, fewer "careers," less tv, less fast food. The sooner we accept this and understand that our "leaders" have no control over the situation (other than miltarizing and securitizing our lives) the better off we'll be. This car fetish we all have is ok for now. Just know it isn't long for the world.

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they say oil needs to top 100 a barrel before it gets really nuts.

they also say if we reduce consumption by 3% wed have them by the balls. (for a change)

the market sets the prices. they stick to those guns unflinching.

the only solution is to have many more options than 2 or 3. oil companies dont want that becuase the prices will drop off again. like it or not theyrre holding the cards and were just watching from the side.

no one has the balls to really change things. for whatever reason.

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Hydrogen is viable right now with existing engine technology if an infrastructure is created.

My main point is that greater diversification is the answer, not a wholesale conversion to a single alternative fuel.

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Another aspect of the problem is the sad state of public transportation in this country. And our failure to move toward tele-commuting in a meaningful way even though a huge number of jobs require only a computer and internet access.

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The key is to reduce fuel consumption... ethanol and biodiesel vehicles still contribute to greenhouse gas emissions.

but they are much closer to a "Net 0" then regular petrolium.

The CO2 that comes from Ethanol is just the CO2 that was absorbed by the plant in the first place.

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