WSJ: Keeping the Chevy Volt alive doesn't make sense for Government Motors

With bankruptcy for GM pretty much certain for next week, the Wall Street Journal has taken a look at whether or not the Chevy Volt is a good thing for the government to be spending so much money on. Interestingly, the U.S. government will play a role in both sides of the keep-it-or-lose-it argument.

One the one hand, there is new government pressure to increase fuel economy and for automakers to design green cars with wide appeal. The Volt manages this in spades. So, it's a good idea to keep it. On the other, it's looking like the government will own about 70 percent of GM after bankruptcy reorganization and will want the company to get into the black as soon as possible. There's no way the expensive, non-"rent-paying" Volt helps GM make money - at least in the short term. So, it's a good idea to ditch it.

What this might mean, and this is something the Journal doesn't get into but just a bit of speculation, is that perhaps the Government will seriously consider an increase in the gas tax. After all, higher fuel prices will drive up demand for plug-in cars like the Volt, and GM has already said they'll tie the price of the car to the price of gas when the vehicle is launched in late 2010. Higher gas taxes could also raise money for the government, which at least some would approve of. This just calls for a poll.

[Source: WSJ]