A good article from the NY Times about the 2005 Auto Show and how the Big 3 are draping themselves over concept cars running in some kind of alternative fashion: hydrogen fuel cells or gasoline-electric engines.

http://www.nytimes.com/2005/10/20/bu.../20hybrid.html

Auto Exec's pass the buck...
Not everone thinks Hybrids are the answer...

 

Bleed GM Bleed!!!! Hope Fords in bad shape also. They have been building junk for way to many years. Burn Baby Burn!!!!

 

For the record, I don't own an American car.

Yet, I also don't wish for the demise of American car companies either. The ripple effects through our economy would be devastating.

 

Many of you are probably sports fans and at one time or another got frustrated with a bad owner or coach. Currently, the Minnesota "Love Boat" Vikings are an excellent example of a bad team. Do the Viking fans want their team to go away? No - just get a coach and/or manager that can turn them around. Granted some of the players are also suspect....

I see GM the same way: kill the cancer - not the patient. Some of you may say that cancer has spread throughout their organization, which I can't disagree.

I can't entirely blame GM for their problems. The American public has had this appetite for large vehicles for so long, the subcompact/compact choices have shrunk until very recently. Remember the Ford Escort and Honda CRX? American sedans have also suffered as the once popular Oldsmobile is history, about to be followed by the Tarus.

One thing I'd really like to have been added on the recent Energy Bill is closing the gap between the EPA requirements between light trucks and passenger vehicles. If this gap had been closed, Detroit would have had a more balanced offering of vehicles. If Escalades had to meet the passenger car safety standards, get better fuel economy, GM would not have been as eager to build them.

 

Good post. Here's my OPINION of where domestic (and most import) automakers missed the boat wrt hybrids.

If you look at hybrid technology as purely a fuel saving technology, it only takes an hour or two of analysis to look at the cost to develop the technology, the f/e and performance benefits of the technology, and the price that consumers are willing to pay for the technology to decide that it might not be the most brightly lit path you could travel down. The hidden factor is proving to be some of the peripheral benefits. People like the improvements in Noise Vibration & Harshness (NVH in industry lingo) that off at idle and electric boost provide. That has been an eye-opening surprise in the past year or so. There is no doubt that there are also ecological benefits wrt lowered emissions, but what is not yet readily apparent to the car-buying public is that there are a number of emissions reducing technologies being developed and introduced by a number of automakers that will significantly reduce emissions produced by non-hybrid vehicles. There are also significant technological advances being developed that when applied to modern Internal Combustion Engines (ICE) will significantly improve f/e. So, if the end game is fuel economy and improved emissions, there are a number of exciting paths to getting there. None of them singularly provides the impact that hybrid technology provides. Also, since they are technologies and features contained within improved ICE and transmissions, none are as clearly visible to the car buying public as the hybrid technology. These same innovations will, of course, now also be applied to hybrid vehicles, so low emissions will be even lower and improved f/e will be further improved.

Most businesses, huge auto companies included, have only so much capital to spend on product development, so lots of hard choices must be made. Do I invest in developing / manufacturing Product A or Product B? Most every automaker on the globe, doing the same level of analysis, looked at hybrid technology and either passed on it or chose to delay implementation in order to apply capital to programs that stood a chance to make money. Toyota and Honda are the exceptions. Toyota, in fact, appears to have been counting on a business model that would have them chin the cost of developing the product, then recouping the cost by selling the hardware to other automakers unwilling to invest in the heavy up front costs.

Back on point......GM in particular has displayed hybrid, electric and fuel cell vehicles at numerous auto shows, not just 2005. Development priority was, however, placed on fuel cell technology. The AUTOnomy fuel cell vehicle was a driveable prototype at either the 2000 or 2001 auto show.



Peace,

James

 

Personally, I would welcome ANY kind of technology that reduces emissions - IMHO CO2 is the most important one to reduce. While many technologies may be visible on the horizon, hybrid technology is available now, and exhibits phenomenal results. I don't see any other practical cars out there on the market being gobbled up by customers, that combine the performance, mileage and emissions of HSD and IMA cars. Sure, the future will bring more imrpovements, but we need to do something now, and I thank Honda and Toyota for having had the Insight and Synergy to push this technology onto the market.
Frankly I find the continuing apologism of other automakers disappointing, if not pathetic. I hear lots of arguments that hybrid technology is too expensive and does not make economic sense. At the same time, other automakers state that they cannot compete with companies such as Toyota that can throw so much money at developing such economically non-sensible technology. In my mind, all that says is that other automakers have not only missed the boat on this functional and practical technology, they must also being doing lots of additional stuff wrong, if they can't make enough profit even with the huge profit margins of SUVs, and without selling money losing hybrids, to develop future technologies. If hybrid technology is money losing to manufacturers, I would expect Toyota to post a loss and GM a profit. So what gives? What matters in todays market is an integrated strategy. If you can use profits from one division to develop technologies for another, kudos to you! If Toyota and Honda have the cash and smarts to develop this stuff and still make a profit, hats off to them!

 

It's interesting to hear a reputable engineer such as Helmut Panke state that hybrid technology will remain a niche solution, and that the real task is to improve the efficiency of the ICE. Well, AFAIK that is exactly what HSD is all about, making the ICE run at a higher thermodynamic efficiency.

 

From a consumer stand point and a logical stand point, this is certainly true. Problem is, international business is not always logical. There are several significant advantages that Toyota and Honda have in dealings / subsidies with the Japanese governments, protectionist trade policies and tariff policies in Japan that minimize imports from Europe & US automakers, and lack of requirement to support legacy costs that GM, Ford, and DCX have to deal with. None of these things does or should matter to the consumer, so you rarely hear the Big 3 whine about them. It wouldn't get 'em anywhere. Doesn't mean they don't exist.

If the US government treated Toyota the way the Japanese government treats the Big 3, Toyota would not have a significant presence in the North American market.

The legacy cost issue is a different issue and one that Toyota, and Honda to a lesser degree, are wise to take advantage of. Because the Big 3 have been operating in the US for far longer than Toyota or Honda, they are operating with an older average workforce and a much larger retiree base. Actually, I'd be surprised if Toyota has very many US retirees at all. With retirees come pensions, which must be fully funded and insured, and health benefits, which your local news will tell you have been spiraling out of control for the past 5 - 10 years. The soundbite number is that domestic automakers have to allocate $1,500 for every vehicle built to cover employee and retiree health care costs. In other words, if GM, Ford and Toyota all sold the same type vehicle at the same price, Toyota would get to put an additional $1,500, maybe a little less, in their pockets as compared to Ford and GM. That's just health care. I don't have a good number for the pension cost per vehicle. Toyota and Honda get to keep more of their operating profit per car sold than do the Big 3. That's just reality and it has NOTHING to do with the quality of the product or the quality of decision making by any of the companies involved. It's just a factor of the cost of doing bidness in the US of A.

Peace,

James

btw - I think we have history of similar types of industry dynamics in the television manufacturing industry and the steel manufacturing industry. The steel manufacturing industry also suffered from US companies being slower to react to known manufacturing efficiency gaps. Not sure if that was the case with televisions, but maybe someone familiar with RCA, Zenith, or Curtis Mathis can provide some clarity.

 

I'll readily admit that it's not easy for foreign companies to do business in Japan, but protectionism is not the whole story, and I wonder to what extent it is an excuse. For years most US cars were not even offered in RHD version in Japan. I certainly would never buy a car in the US that was not offered in LHD version. To my knowledge, most US cars are still not offered in RHD version, in countries that drive on the other side of the road. How can you expect to do business like that? The US is certainly not devoid of protectionism, but foreign car makers were more proactive about responding to that, and have plants in the US now. I don't see any plans or even discussions for US car manufacturers to have plants in Japan. Plus, I think the bottom line is, quality or not, RHD or not, most US models are likely singularly unappealing to Japanese consumers - though there are exceptions. They are too big, and guzzle too much gas. Most European countries don't have the level of protectionism that Japan has, they are more at the US level, and most drive on the right, yet still US made cars don't sell well over there. Now, cars that are manufactured over there by e.g. Opel and Ford sell well, but often these are not the same vehicles offered here in the US. What those markets demand is very different, and unless a company is willing to provide what the market demands, they simply won't sell. That's just my 2c, am I totally off in this assessment?

 

I am familiar with Israel. All cars are imported, and are subject to the same tariff scale. I vividly remember seeing *one* US car. It provoked the same kind of admiration/derision depending who was speaking, as the hummer does here -- and for the same reasons.