You heard Obama on TV this morning. He rejected both GM’s and Chrysler’s restructuring plans as “inadequate” and not dealing with the future.
What should each company present (GM in 60 days, Chrysler in 30 Days) with respect to:
1.Product line(s) and brand names
2. New technology (electric, hybrids, etc)
3. Production capacity and plant closings
4. Imports of key technologies
5. Labor contracts and benefits
I’ll repeat what I said in a previous post because it’s what I firmly believe…especially after talking today with Reps at a local Toyota dealership.
ALL auto companies are in the same boat…legacy cost of American brands have brought their woes to the front acutely, so that’s what we are now talking about now. Toyota is in the red also…
The dilemma facing our national security is our dependence upon foreign oil because it’s such a strategic and not a benign commodity. If we don’t get that, we have our head in the sand.
Toyota, let alone GM/Ford/Chrysler, would cease to exist in it’s present form w/o the ICE. Toyota has taken the reluctant lead and still realizes no profir from them, only an advertisement advantage. If we don’t get that, we again have our heads in the sand.
The Bush and all previous administrations got it, and found it too difficult to mandate or even regulate the transition.
The technology is simple. It is here now and has been for some time.
We now have a govt. caught in a security dilemma that requires our auto companies to reluctantly take the lead in a movement that WILL lead to their own demise.
Product lines, and labor contracts all have to be discussed in light of these factors.
I have a neutral stance, but let the debate begin with with a little enlightenment.
"The technology is simple. It is here now and has been for some time. "
What technology is that? Batteries? So we get to pay $100,000 for an electric car?
I don’t buy the ‘capitalist conspiracy theory’. If EVs could be economically produced today (that is, in a way that people could actually afford), they would be. ICEs are used because they are economical and efficient, compared to every other current technology.
The standard lead acid battery in a Jay Leno own EV has a range of over 100 miles nearly 90 years ago. The EV has to cost $100K just to make a profit equal to the ICE and parts and maintenance recovered by the industry over it’s life time to support the industry. The “we don’t have a magic battery” is a hoax. We don’t need a magic battery for commuter cars…
BTW…it’s “unrestrained” capitalism. Modern health care is a business set up to make a profit. And illustrations are absolute fact…
Electric motors are 90% efficient…ICE <30%
We use ICE because the have distinct uses that only they can afford, not because they are efficient…one of those uses is to support the industry…which I’m in favor of, but realistic about/
The old two prong rebuttal…we don’t have the batteries…oh and if we do they’re too expensive. Heck, the first gas chain saw cost more than a car…it quickly dropped.
Facts, please? From Wikipedia regarding Detroit Electric, the major maker of electric cars in the early 1900s: “The cars were advertised as reliably getting 80 miles (130 km) between battery recharging, although in one test a Detroit Electric ran 211.3 miles (340.1 km) on a single charge. Top speed was only about 20 miles per hour (32 km/h), but this was considered adequate for driving within city or town limits at the time.”
Yes, they advertised (and maybe had) an 80 mile range, but at a top speed of 20 mph! Not something comparable to a modern car.
And, that Detroit Electric (as well as the other early electric vehicles) weighed only a fraction of what a modern motor vehicle weighs. Between their light weight and their low top speed, the advertised range of those early vehicles is impressive, but not that remarkable.
By contrast, the actual manufacturing and sale of the Chevy Volt upon which GM is hanging its hat (or at least, its advertised “technological superiority”) depends on battery technology that does not yet exist! It’s fine to talk about the capabilities of the Volt, but when you realize that this is all dependent upon some bits of technology that have not yet been developed, it is more of a “pipe dream” than a reality at this point.
“[T]he first gas chain saw cost more than a car…”
Care to take another run at that?
1 ) I’ve never been a believer in the redundant brands that have resulted over decades of corperate takeovers. They must trim down, they’re not fooling anyone anymore ( I don’t think Ford needs Mercury either.) just offer levels of trim and accessories. The market glut of redundant brands and mass quantaties of product is one thing that got us here.
2 ) Industry wide screeching halt ! change the product, change the infrastructure that services it, and to heck with holding out for a billion bucks ( you’re certainly not making that now ) get these things into the users hands that are eco-LOGICAL, AFFORDABLE, and user friendly.
New technology cannot out pace the servicability of the vehicle when it’s 10 years old and more. They must share the diagnostics with the indy shops and have them more user servicable. Technology’s existance does not mean that you have force feed it to the buyer, sell some that aren’t so dang-blasted complicated. AND that will not leave the driver absolutely stranded at the slightest malfunction.
Get real with parts again. How about just one gas cap, one fuel filter ( actually user changeable !!! ), fixable connections, Guages and radios that don’t need PROGRAMMED, multi year model parts applications, and more. You’re going broke, also, being un-able to produce and inventory all of those different parts, AND incessantly superceding the numbers.
3 ) Just because the advent of the assembly line made it possible to mass-produce mass quantities …does not mean that you MUST ! ssllooww ddoowwnn some. the entire scope of the market has changed. The product lasts longer and the owners are keeping them as long. Yes, this will mean less shifts or less product comming off the line and the employment numbers will reflect this as well as wages and product price. OR get rid of some of those ‘time saving robots’ and put real people back on the job.
4 ) The source of technology is almost un-avoidable. But, again, just because it’s there doesn’t mean you have to slam it into every vehicle next year. Keep it as local as you can but you don’t have to stuff every vehicle with every new toy that comes out. The buying public is in part to blame for this over-teching of automobiles. STOP ! Just buy / sell vehicles for transportation again.
5 ) The unions have served a good purpose in the past ( wife’s grandfather was a union advocate back in the pick & shovel days of coal mining ) and there are still things they can do, but enough is enough. SLOW DOWN a bit. Sure, everyone would like to get rich on just eight hours a day with retirement and medical but if the idea doesn’t fit the industry…
Which brings up the subject of executive pay. This is where the massive waste and excess is that can actually bring the industry into self solvency. This looks like a bigger job than changing every vehicle in america to alt fuels.
I can’t afford health insurance and have little saved for retirement, yet the next car I buy is going to set you up for life ?? wait a minute.
We will have this debate forever I guess…90 years ago a 20 mph car adv. 80 miles per charge…90 years ago !!! Are you Sh…ing me; technology has moved that slow ? We can’t get 80 to 90 at an average of 40 mph ?.
After discussions with two engineers and people who are very close to the Prius and it’s day to day function…here are their statements that I think you will not object to.
First the new generation is capable with a battery upgrade that Toyota already has available at very little additional cost and computer software change to easily go 40 miles at over 40 miles per hour. Check your auto trip odometers and you will see that over an extended period of time you seldom average more than 35 mph. So with a car that could easily surpass 40 miles that if the computer did not force the ICE to engage which it’s easy to surmise during my discussions with them; you now have a car on the market that is a reliable commuter, 5 days a week W/o gasoline intervention. The car is available today…the programming is not. Both GM and Prius have it…it’s really not debatable. What is, is peoples reluctance to accept an 80 mile charge at 35 mph average…where most commuters easily fit and both Toyota and GM not willing to bring the car to market. The regenerative braking, and minimal ICE use make maintenance marginal.
Toyota and GM can’t survive…that should be the discussion…not whether it’s here or not. Cause it is w/o debate according to peole who I think should know.
We will have this debate forever I guess…90 years ago a 20 mph car adv. 80 miles per charge…90 years ago !!! Are you Sh…ing me; technology has moved that slow ? We can’t get 80 to 90 at an average of 40 mph ?.
After discussions with two engineers and people who are very close to the Prius and it’s day to day function…here are their thoughts that I think were reasonable.
First, the new generation is capable with a battery upgrade that Toyota already has available at very little additional cost and computer software change to easily go 40 miles at over 40 miles per hour. Check your auto trip odometers and you will see that over an extended period of time you seldom average more than 35 mph. So with a car that could easily surpass 40 miles that if the computer did not force the ICE to engage which it’s easy to surmise during my discussions with them; you now have a car on the market that is a reliable commuter, 5 days a week W/o gasoline intervention. The car is available today…the programming is not. Both GM and Prius have it…it’s really not debatable. What is, is peoples reluctance to accept an 80 mile charge at 35 mph average…where most commuters easily fit and both Toyota and GM not willing to bring the car to market. The regenerative braking, and minimal ICE use make maintenance marginal.
Toyota and GM can’t survive…that should be the discussion…not whether it’s here or not.
Sure…
“One claim states that a California inventor named Muir was the first person to put a chain on a blade to use for logging purposes, technically inventing the first logging chainsaw. However, Muir’s invention weighed hundreds of pounds and required a crane. This invention was neither a commercial or practical success.”
I think that qualifies
History of Chainsaws or Chain Saws
inventors.about.com/od/cstartinventions/a/Chainsaws.htm - 23k
Thanks Ken; back to basics is certainly a viable solution. Last week Tata unveiled the $2000 Nano in India, and will likely get 500,000 orders the first year. The only car I recall that was as successful was the 1965 Mustang when it was first launched.
We have the capacity in the US to produce over 18 million cars per year; the market needs only 11 million, INCUDING ALL OFFSHORE IMPORTS. So half the plants could actually close in today’s market.
Toyota built a new plant in Canada to produce the RAV4 for North America. Right now it is only running one shift due to low market demand. The plant is flexible, however and could start producing Yaris cars almost immediately if need be.
Agree, almost everyone has been overpaid; the president of Toyota typically made about 1/5 the salary of the GM president.
“By contrast, the actual manufacturing and sale of the Chevy Volt upon which GM is hanging its hat (or at least, its advertised “technological superiority”) depends on battery technology that does not yet exist!”
That depends on what technology you are talking about. If you mean lithium-ion batteries, they exist and are produced in mass quantities. If you mean very large Li-ion batteries, the technology exists for spacecraft and has for almost a decade. But large Li-ion batteries produced in large numbers aren’t available yet. There is hope that the knowledge from today’s production capabilities can be used to take manufacturing them to a new level. The technology exists, but not quite in the form required yet.
I am pretty drastic but here goes
- Merge GMC and Chevrolet
2.Garage sale Pontiac
3.Garage sale Saturn
4.Garage sale Hummer
5.Garage sale Saab - Cadillac Buick merge
7.Potential Opel in U.S.
8.Would like to see U.S. built battery for full electric car
9.Realistic world market goal 15%
10.Longer range alternative hydrogen fuel from oil (we do have plenty of oil) - Realistic view on how many cars need to be produced each year (times are a changing)
- Product line(s) and brand names; GM has too many brands competing with each other. They need to realign brands to compete with other companies. Each brand needs a mission that identifies its core strengths.
Hummer and Saab don’t fit and need to be sold or closed out.
Saturn should be the efficent company researching new technology such as electric cars, hybrids, fuel cell, hydrogen, etc. All Saturn cars should be small to mid sized, basic value priced, full of efficent technology, not frilly gadgets. They are the gas mileage leader of GM cars.
Chevy has the broadest line of standard small, mid-sized, and full sized cars. These are value priced cars, comfortable and efficent but not the leading edge cars. Rather they are the bread and butter cars.
Pontiac takes other GM cars and adds either a sporty flare or “high tech” gadgets to cater to the enthusiast market.
Buick is the “value luxury” car brand with mid-size and full size cars only.
Cadillac is the luxury technological car company offering the lastest in comfort, and convienience features such as radar controlled cruise control.
Light trucks, heavy trucks, work vans, SUV’s are all GMC. If it is built on a truck frame, it carries the GMC name.
Dealers in small markets can carry multiple GM brands as they do now. Dealers in big markets should stick to one brand.
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New technology (electric, hybrids, etc) Hybrids and the Volt need to be marketed ASAP under the Saturn name. Profit should not be the issue. These vehicles should be priced low enough to generate sales volume. The Volt at $40,000 is priced like a Cadillac or Buick. Price the Volt as if it was a high volume car even as it starts at low production. Demand will be driven by affordable pricing.
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Production capacity and plant closings: GM plants need to produce a variety of products to accomodate changing markets. If a plant can only produce one type of vehicle and that vehicle is not selling well, close the plant. One plant should be able to make small, mid, and full sized cars and accomodate a mix of motor types (gas, hybrid). Trucks and Vans can be consolidated in to a light truck, SUV, and Van plant(s) and heavy duty truck plant(s). Production capacity needs to be reduced about 40% overall.
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Imports of key technologies: the world is using diesel cars and GM needs to make small diesel cars. New techology can go on line quickly by licensing technology from competitors. In time GM can replace licensed technology with home grown technology as they learn about them. GM needs to hire to best science minds and introduce the next big propulsion system for basic car transportation. No more letting Japan, or now Korea show us the way on hydrogen, or fuel cell.
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Labor contracts and benefits: I’m not sure I’d label the auto unions as the bad guys. They lead the way on a lot of benefits now enjoyed by average Americans. Where do you think most of the modern health benefits started? Right in Detroit for average workers. They got doctor co-pays, dental, eye, and all the health benefits before even teachers unions and government workers. Yet, the unions have to realize the new reality. Lots of Americans are working harder than they are for much less hourly pay and benefits. The average American has no sympathy for the Auto Worker who claims to be taking such a hit and is still making 2 to 3 times what most working Americans bring home. Sorry, but the gravy train is over. Either labor makes BIG concessions or they are out of work as all the factories close.
If GM and Chrysler fold there will still be cars. Cars will still be made in the US. It is just that other companies will be making them with non union labor that is compensated at rates closer to the going rates for workers in other countries.
We will still have cars, just the names on the hoods and trunks will be different.
- Bond holders
It appears that Rick Wagoner lost his job because he couldn’t get the UAW and the bond holders to contribute to the restructuring effort. We might liken this to firing the coach when the team won’t play as a team.
The bond holders as a group need to accept less than par value on their notes. Maybe 50% to 75% is appropriate. This would reduce GM’s debt obligation substantially and would therefore reduce the cost to sell a car. I’m not sure how much such a large debt reduction would reduce costs, but it seems to me that would be worth 5% to 10% or so.
The UAW must be willing to reduce total compensation and possibly change work rules to streamline production. They must also support the loss of health care benefits for retired workers. These workers are or will soon be eligible for Medicare; there are benefits waiting. Maybe another 5% to 10% cost savings would result.
If GM or Chrysler cars cost 20% less to build, they would sell more and could make enough money to do the research needed for alternative vehicles.
No heater, no defroster no A/C, minimal headlights, no problem. They were golf carts with an 80 mile range…
Very impressive, Uncle Turbo. I have a feeling that the final plans submitted 60 days from now will have many of your proposals.
The only thing that can save our economy and provide money for us to buy cars has nothing to do with auto makers. Gasoline prices hurt us all last year and prices have crept up during the biggest oversupply of oil in history. Control the price of gasoline and we will all recover.
It would also help if SRS, ABS and stability control systems were done away with. Do away with seat belt pre-tensioners and their explosive charges. We don’t need all this safety junk if it is making car ownership too expensive and causing all these malfunctions. You have to replace your seat belt systems after an accident with some cars. It just stinks to maintain a car these days.
If a few laws were changed, golf cart companies could put car companies out of business in a short time. Little four wheelers could rule the roads. We may not recognize our country in a few years.
I think the President’s message is that nothing but good ideas and good luck will save all our car companies. I’m hoping for luck, because of what happened to Saturn. It was a whole new division that is now selling the same GM problems as the rest of the company. It wasn’t worth the effort.