The French haven’t had much influence on the car world for some time. Up until the last decade or so, their automobiles have been goofy little nuts-on-wheels from outer space– especially compared to machines from neighboring Germany, Italy or Japan, not to mention Detroit. But now we’ve got a Frog who’s in play worldwide. You want to talk about an internationalist? Carlos Ghosn was born in Brazil to Lebanese parents. The CEO who rescued both Nissan and Renault speaks six languages fluently and divides his time between Tokyo and Paris. If anybody understands the worldwide car biz, it’s Carlos Ghosn.
Ghosn doesn’t sell his Renaults in the USA. But Nissan is a strong player here and that gives him a major say in what goes on in Detroit— which he claims is in deep shit. During a recent interview with the Wall Street Journal, Ghosn said that GM, Ford and Chrysler may very well collapse as the imports seize more and more of their home turf. Ghosn slammed Detroiters, asserting that Motown’s ongoing reliance on pickups, SUVs and large luxury cars will dump them into this ditch.
Ghosn thinks that the little econo-boxes his companies sell elsewhere in the world are the future. He claims that one or all of Detroit’s Big Three will fail as the world switches to tiny machines powered by something other than aged but efficient petroleum-powered internal combustion engines. Without that kind of machine to sell in its home market, someone domestic’s going down.
Of course a lot of the guys in Detroit think he’s nuts. And I’m inclined to agree. Yeah, The Big Three are losing market share. But there are still some very smart guys in the Motor City. You never know what smart people can do when they have their backs up against a wall. And Detroit may be truck heavy in gas-conscious times, but SUVs and trucks still account for around half of the US market.
Anyway, so what if one of the Big Three goes belly-up?
No matter who wins the race for president, you can be sure the powers in Washington aren’t going to sit around while our auto industry collapses. The industry is too essential not only to the state of Michigan, but all of the other states. Millions of jobs and billions of dollars are at stake. No one at any level of government is going to let Detroit disappear. A federal bailout is a done deal.
And yet Carlos’ prediction of doom and gloom will please the lefties and environmentalist nutcases who hate cars and the domestic auto industry and don’t mind if Detroit falls down— just as long as they force everyone to drive electric-powered cars.
Trust me: as long as bottom line thinkers like Carlos Ghosn remain in power, the world of conventionally-powered automobiles will be a part of our landscape for a long time. That’s where the money is.
That’s not to say Ghosn isn’t serious about developing electric cars. He’s signed-up with NEC to develop a lithium-ion battery for mass market automobiles. Nissan/Renault has also allied themselves with battery maker A123. And they’ve formed a partnership with Israeli entrepreneur Shai Agassi to test the waters for commercial EVs.
Many people say these li-ion-powered electric cars will be good enough for Americans and their short commutes. That remains to be seen, both in terms of actual practice and consumer acceptance.
But even if Nissan develops an electric car with sufficient range, even if America takes to battery-powered zero-emissions automobiles, it’s doubtful our overwrought power grid could cope. Expand the grid? Easier said than done.
Meanwhile, millions of modern automobiles and trucks are linked to a massive petroleum system that is not only efficient, but sustains our economy. Switching away from this system and developing other sources of power for modern vehicles is a huge concept that only a few people (including Ghosn) are prepared to suggest– never mind assault.
No matter. Mr. Ghosn and many others both inside and outside the car industry are working hard to make their electric dreams come true. Based on Ghosn’s success with two companies, divided half-way around the world, one has to take his efforts seriously.
At best, EVs are a long term prospect. For the near future, this is all chatter aimed at shareholders, regulators and the media. Ghosn has to be smart enough to know that the current automobile— four rubber tires, a steel or aluminum body and the aforementioned gas-powered engine– is here to stay. (Yes, you can add batteries, but it’s still gas-powered.)
If Carlos is right and one of The Big Three files for bankruptcy, it won’t be because they didn’t “go green” and make small, electric-powered cars. It'll be down to the fact that they didn’t make the reliable, comfortable, stylish, reasonably fuel-efficient, gas-powered cars that Americans prefer.
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"Millions of jobs and billions of dollars are at stake. No one at any level of government is going to let Detroit disappear."
They seem to be doing it now. Or at least they're allowing the transfer of the NA auto business from Americans to the Japanese. Detroit's already lost half their market in the US.
I think Brock’s analysis is spot on.
My family bought a Dodge Aspen in 1977 when Chrysler should have sunk. That car was a piece of junk. In spite the lemons that they were selling, they were bailed out by the US govt. This situation is likely to happen again. But that will not change the buying habits of your american suburbanite. Only high priced oil will.
Funny after the Aspen, our next two cars were Renaults (Alliance), which surprisingly ran fine. French cars will not make a comeback in the US. Their reputation is shot for several generations. However, you will be buying Renaults by proxy as Nissans. Don’t worry, the quality is fine…
The petroleum system is robust, but not all that efficient. I forget the numbers but much of the energy is lost as heat.
The auto industry relies on cheap, available oil, and all the major oil producers are exporting less oil than they were before. The gas-powered engine may stay, but it will continue to get more expensive.
The American auto industry needs electric cars and foreign competition stimuli otherwise it is content to produce crap.
Internal combustion engine powered vehicles need competition not because they are inefficient, but rather because the way we package them (too large, too powerful) is an environmental nightmare. We need to starting thinking differently. As I have said before, the only real solution to this problem is much, much higher gas taxes.
Battery powered vehicles (from the full life cycle perspective) are currently an environmental nightmare. Also we haven’t seen how long the current crop of batteries will last yet. However, in the future, other high tech industries will solve some of these problems.
Fortunately, our gas prices are going to rise substantially in the future, it just depends on whether we raise taxes on gas (to subsidize R&D for Detroit?…would the morons in Detroit even support this?) or through the traditional supply and demand curve. Our friends in China and India are guaranteeing increased demand in the future for oil. This will only increase the transfer of American wealth to middle eastern countries and Canada and Mexico. The US trade deficit is already a nightmare. Policy makers in Washington think that the US can defy economic logic forever I guess.
Using electric cars for commuting would be ideal, but like Brock said there’s no way our power grid could take that kind of load. Plus, I suspect that in the end the price of electricity would sky rocket.
Now don’t get me wrong (A statement like that is ALWAYS asking for trouble!), I have great respect for Mr Ghosn as a turnaround artiste and as a manager. Mr Ghosn, turned Nissan and Renault around beautifully and keeps his managment in check (Recently, Nissan’s management missed a sales target. Mr Ghosn’s response? “Forget about your bonuses!”. Or the time he put his job on the line if he couldn’t turn Nissan around.). If I had a business which needed turning around, Mr Ghosn would be a manager to whom I would turn to. But as a visionary leader? Sorry, but I disagree.
Firstly, under Mr Ghosn’s continued leadership, Nissan has dropped from Japan’s number 2 automaker to number 3 (Honda overtook them whilst maintaining healthy profits) and Renault is losing marketshare in France at a “Detroit rate”!
Secondly, Mr Ghosn dismissed hybrids as a “fad” and that they aren’t a sustainable form of growth or a short term answer. Much like Detroit dismissed hybrids. He preferred to concentrate on Renault and Nissan’s “lovely” diesel engines which were “just as efficient as hybrids”. Eventually, Nissan asked for a licence for Toyota’s Hybrid Synergy Drive.
Thirdly, Mr Ghosn said that Detroit are in deep trouble and that they have an over reliance on pick ups and SUV’s. Two things about this statement:
1. If proclaiming that Detroit are in deep trouble and that they have an over reliance on picks ups and SUV’s makes one a “visionary” leader, then TTAC and its commentators are visionaries who would put Cassandra to shame!
2. Nissan are just as guilty of selling stupid amounts of SUV/CUV’s and pick ups. In the UK, Nissan’s line up has totally lost the plot. In the UK, you have the choice of:
Micra: Small city car.
Note: Small CUV.
Qashqai: Big CUV
X-trail: Big SUV
Murano: Medium SUV
Pathfinder: Big SUV.
350Z: Sports cars.
If you were in the market for small hatchback (Chevy Cobalt or Toyota Corolla) or a Family sedan (Chevy Malibu or Toyota Camry), Nissan doesn’t offer you a thing.
Conversely, I agree that GM and Ford (not so sure about Chrysler) do have some World class engineers. One only has to look to the Cadillac CTS and CTS-V (Which “Top Gear” the supposedly “anti-american” show proved that the CTS-V was better handling and faster than an Audi S4) and the Ford Mondeo (3rd Generation) for evidence of this. No-one doubts their technical prowess, it’s the bean counters and managers which we doubt. In their pursuit of profits, they forgot to build a car which will bring them those profits which they sought. And Mr Ghosn is in serious danger of replicating that mistake if the Nissan UK line up is anything to go by. If Mr Ghosn could give any advice to Detroit on how to survive, he should give them some ideas on how to cull or rein in the influence of the managers and accounts and let the engineers flourish and build more cars like the CTS and CTS-V. Just like he did at Nissan and Renault.
Detroit is a ghost city. Starting in the late 60’s after the riots, exacerbated by the oil embargoes of the 70’s, pressured by the imports in the 80’s and 90’s, it has withered and rotted to what it is now:
32.5% of individuals live in poverty
23% of all housing units are vacant
Median earnings for workers older than 25 is $24,904.
(I lived briefly in Warren. Data taken from factfinder.census.gov, based on latest census and 2006 American Community Survey.)
Certainly, it is not solely the fault of industry. Corruption, incompetence, and laziness in government contributed to a lack of diversification, investment in infrastructure, and civic resources.
But to suggest that [a] federal bailout is a done deal is perplexing. Where is the money going to come from? Me. The stretched taxpayer whose dollar is worth less every month. I’m already on the hook for the “War on Terrorism”, national debt interest, social security and who knows where else my tax dollars go.
I’ll be damned if I allow without a fight my government to bail out a company that has failed me (2 POS GM cars), its workers and retirees, and its hometown. I would approve, however, of economic investment in taking care of the workers: free education, money to raze and rebuild their neighborhoods, money and jobs to improve infrastructure, attraction of other industries: R&D, Green Chemistry, etc.
You never know what smart people can do when they have their backs up against a wall. – Brock Yates
The Detroit-3’s really smart people wear golden parachutes. Their backs can’t touch the wall.
Interesting editorial. The way this is going, I would say we can look forward to many intriguing pieces by BY.
The reference to amphibians is poorly chosen, but it is good that Brock recognises that Ghosn has some strong points.
I have a few questions / comments. Firstly, does anybody have a link to the WSJ interview Brock refers to?
Secondly, I am surprised that there is no mention of Renault’s quite advanced Diesel technology. I have driven two recently – the 2L dcti FAP and the 1.5 L — and both were industry-leading in terms of smoothness, thrust, quietness and economy. Upon introduction of ultra-low sulfer Diesel fuel in the U.S. in coming years, I think this will be a pretty strong competitive advantage for Ghosn’s company (assuming the days of low-price fuel are over).
Thirdly, Ghosn is to be commended for establishing Dacia. A breakthrough low-cost, high-value brand for high-growth countries like those in Eastern Europe, as well as in Russia and India.
The next government bailout will come with environmental strings attached as lobby groups get to dictate to the auto industry what to build in return for tax dollars. Once again the consumer will be told what they want to buy with disastrous results.
Reality is that hybrids that offer significant mileage improvements over similar sized cars have sold very well. The Big 3’s offerings in this category are a joke. No real increase in fuel economy and no real design difference from the petrol stablemate.
GM, Ford and Chrysler all have such levels of corporate arrogance that they won’t admit they have a problem. They allow their internal fiefdoms and turf protection to supersede the customer/market demand. They deserve to die, or better yet, get bought by smarter competitors and get fixed.
They are the proverbial blind squirrels and they’re just not finding any nuts.
While Mr. Yates’ editorial is an interesting read, there are a few points that should be clarified:
1. French automakers have indeed incluced the industry lately. I would suggest that one of the two most influential vehicles of the last decade (the Logan and the Prius) is French. And long before the Mini and Smart were around, the Twingo jump started the hip but small car trend.
2. Millions of jobs are no longer at stake if a Detroit automaker goes down. Far fewer work at Chrysler (the most likely prospect in the near term), and now that they have passed from German to Private Equity hands, I don’t think Washington will even notice when they do die.
3. The scaremongering about America’s ability to absorb switching to electric vehicles has already been de-bunked. We can absorb some 160M vehicles recharging at night, when power requirements are low.
@Martin S:
http://online.wsj.com/article/SB120148183603521043.html
It didn’t seem like much of an interview for someone who actually went to the WSJ offices.
John
The Detroit-3’s really smart people wear golden parachutes. Their backs can’t touch the wall.
Beautiful.
And I agree a government bailout of GM or Ford could happen. Chrysler? I am not so sure. It is privately held, and I think that the gov would have little stomach for bailing them out, especially as they never wanted to keep the company in the long run anyway.
“No matter who wins the race for president, you can be sure the powers in Washington aren’t going to sit around while our auto industry collapses.”
Are these the same powers who “helped” the big 2.3 by legislating tax breaks for >6000 lb GVW behemoths at a time they had cash and needed to be putting development money into their basic business? Perhaps they’re the same powers who didn’t sit around while our highways and bridges deteriorated into the worst among developed nations. These are the same powers who debated such national security gems as gay marriage, flag burning and prayer in schools while most of our industries were hot-footing it to cheaper climes.
If we have to rely on “the powers in Washington”, Remocrat or Depublican, to save us or our jobs, or to promote technologies which are truly in the national interest, I suspect we’re lost. These are the same “powers” who watch once again as capital was looted from our system by white collar crooks, and who are once again wringing their hands at the results.
And if they do “help” as they did with Chrysler, can we look forward to the kind of automotive renaissance Mr. Iacocca demonstrated with the technological wizardry of the K car? Yates may hope for help from Washington, but I’m hoping they stay out of the picture; the only leadership we get out of Washington these days is in advancing poll-taking technology.
Dynamic88, I’m not exactly Mr. Grammar Person here, but “they’re” looked correct to me.
GS650G: “The next government bailout will come with environmental strings attached as lobby groups get to dictate to the auto industry what to build in return for tax dollars. Once again the consumer will be told what they want to buy with disastrous results.”
We could give that a try. It might be an improvement. After all, if Detroit knew what people wanted, I imagine they wouldn’t be blessed with large inventories of unsold vehicles. The nearby Chevy dealer is well stocked with “anniversary specials.” That is, vehicles that have sat on his lot for a year.
And, of course, how terrible it is that there are lobbying groups composed of people who want clean air and water and a liveable planet.
Apropos of nothing in particular, I read two articles this weekend about newly discovered groundwater pollution problems.
And I was thinking about the two rivers that I lived near as a boy; terribly polluted in my youth, they’re both far cleaner now. Industry developed a conscience? Somehow I doubt it. My money’s on meddlesome environmentalists.
Whale oil, railroads, steel – the backbone of American industry changes every half-century or so. Each change seemed unthinkable at the time.
I want an electric car. mwybe with a gas motor for backup. I drive 17 miles to work, easily within even current battery technology.
I HATE commuting. i LOVE cars. Id rather not commute at all with a car- dammit but i have to because there are no bike paths between here and work. 17 miles twice a day would be perfect for me. Can u say painless weight loss -AND blood pressure and colestral control. BUT NOOOOO –
I want to use my car for pleasure only – god forbid. In the meantime a mainly electric car would fit the bill nicely.
Brock Yates and Jordan Tenenbaum : about the power grid being overwhelmed – that so much bullshit propagated by those who want u to beleive that you NEED petroleum in your car. I dont beleive it for a second.
Federal bailout? With what money? They’ve been blowing all our money on wars… wars on drugs, wars on terror, wars on two-bit dictators who pose no threat. Brock I love ya but you are wrong on that.
Smart guys in Detroit? If they were so damn smart why did they keep on building trucks and SUV’s after 9/11? After Katrina? If they were so smart why can’t they build a car that is suitable only for rental fleets? (and barely that!)
Short Commutes?? Strike three. I know very few people with short commutes.
One thing I do agree with Brock on is that electric cars are not the answer. The laws of unintended consequences say that moving an expense from one place to another does not eliminate the expense. Get ready for stresses, upgrades, and pricey power bills as the grid takes the load from the petroleum industry.
–chuck
http://chuck.goolsbee.org
I also don’t buy the inevitability of a government bailout. IIRC, John McCain refused to commit to government help of the auto industry, which partly explains why he lost the Michigan primary. Yet, he’s the likely GOP nominee. Also, will the millions of American taxpayers who either switched from domestic to foreign cars, or who never owned a domestic car at all, support bailing out companies whose products they won’t purchase, or even look at? Why would they? Should the government bail out Sears?
The Federal government loves to reward incompetent corporate management in the form of multi $Billion bail outs.
Just look what they did for the “deregulated” airline industry after 9/11. Over $15B in combined loans and gifts to companies who were in deep doo-doo way before the 9/11 attacks, thanks to the breath taking mismanagement and outright greed of their top execs. The result of the Federal airline welfare program? United, Delta, USAirways and NorthWest all filed CH11, over half the total seat capacity of the industry.
“Let’s give a bunch of mismanaged companies a lot of money, then let them file CH 11 and continue operating without paying their bills or their employees. They can use the free money and the court system to price their product low enough to hurt the few well run competitors they have, and then the WHOLE industry can be a mess. What a brilliant idea. Now let’s tackle that whole Global Warming thingy!”
There are a lot of parallels between the failure of the Big 3’s management to adopt to foreign competition and the airline industry’s managements’ failure to adopt to the competition from low cost carriers and the shift in consumer preference to lower priced, but often superior products from “new” players. (Honda, Toyota, Southwest, jetBlue)
When the government decides to ‘rescue’ the domestic auto industry, $15B will be a drop in the bucket. And nothing will change except the size of the executives’ bonus checks.
SWA737: “And nothing will change except the size of the executives’ bonus checks.”
These are the guys the “powers in Washington” are most efficient at bailing out, because they’re the people who “buy” government. After all, imagine what it would do to our economy if they had to take a second mortgage out on the Gulfstream…
Yates: “But even if Nissan develops an electric car with sufficient range, even if America takes to battery-powered zero-emissions automobiles, it’s doubtful our overwrought power grid could cope.”
DoE
Summary: We could support a switch to a 73% electric vehicle fleet with the current grid (spot issues might arise).
It took me about 15 seconds to find that. If some random yahoo had written what Yates wrote, it wouldn’t have bothered me much and my response would have been “I’ve seen a link somewhere…”
However, Yates’ voice carries some weight and for him to say things that are flat wrong, then I have to go and find something with a little authority.
Never mind the common sense angle; anybody who’s the slightest bit familiar with electricity would have noticed that A/C loads are reduced at night, people don’t typically cook after 8:00pm, don’t typically use lights, TV, radios, power tools, etc, when sleeping and that the demand on the grid consquently slackens at night (so we could do something else with it if we liked, like charge cars at off-peak rates). In fact, electric utilities would be delighted to amortize the capital expense of the current grid by working it more extensively at night.
And I think it’s a little bit annoying that I find such egregious – and easily researched and corrected – errors in something for which TTAC paid a premium.
So, my decision on Yates is this, I didn’t read him in “Car and Driver” and I don’t need to read him here. I hope I’m not forced to read him for fact-checking purposes.
Chuckgoolsbee, very short commutes are rare. Sub-40 mile commutes are less so. With an extended EV-range Prius (coming) or a Volt-like vehicle with on-board generator (coming?), the electric benefit is a matter of degree, not an absolute. This will happen gradually and there will be some time to adapt. If Detroit and Japan switched to 100% pure EV production, it would still take 20 years to change the fleet over. That ain’t gonna happen.
Speaking as a “leftie environmental nutcase” who happens to love cars, I personally don’t gloat on Detroit’s decline. I’d love to buy American, if only they’d make a car I wanted to buy.
I think a bailout is likely based on the leading candidates for president. I’m not a big fan of corporate bailouts but I believe that the economy would be much better off if we did than if we didn’t, as the auto industry does still account for a significant portion of the GDP (directly + indirectly). Of course this assumes that the bailout would work.
I also have to agree with Mr. Yates. The ICE is here for a long time. It is still by far the most efficient and cost effective mode of powering vehicles. While taxing the bejesus out of gas could change this, I don’t see that as realistic. It would be far too politically unpopular as the people who would suffer most under these taxes would be the poor.
While the national power grid may or may not currently be sufficient to support projected energy requirements if there were to be a major change in the way we power our vehicles (from dino juice to coal and nuclear energy) the fact is that oil is plentiful, cheap and available.
Yes it is.
The switch cannot be that easy, and would give foreign entities who don’t make a similar change a huge competitive advantage in terms of the costs of industrial output over North America (and presumably Europe) which would directly affect overall development for the next half century.
That doesn’t mean we shouldn’t do it. As a true-blue American, I say we take up this challenge and reduce the national reliance on inefficient internal combustion technology and the machiavellian nations whom we rely upon to provide the means to power our gas burning rides. But I also think we need to be honest with ourselves about the timeframes and costs involved in making such a monumental change – GM may or may not be able to produce an electric vehicle for the masses in a short timeframe, but even if they do I personally believe that it will be decades before such technology would have a meaningful impact on our reliance on foreign oil producing nations.
Nice op-ed piece, BTW. I like BY’s writing style.
guyincognito : While taxing the bejesus out of gas could change this, I don’t see that as realistic. It would be far too politically unpopular as the people who would suffer most under these taxes would be the poor.
Give the poor a tax credit to offset the gas tax. Stop giving all the tax credits to multi-millionaires. People should not have a “right” to drive. Driving is a privilege to those that work hard and can afford it.
Besides, as I said before, the price of gas is going up anyway. Oil futures are priced high right now partly because nobody sees America making an effort to change bad energy policy. If America did make an effort and send a clear message, oil prices would ease.
Exxon makes record profits because of misaligned American foreign policy should be the outrage. Since when did America give a shit about the poor anyway? I’ve driven through too many US cities where the poor live in third world conditions to buy that one.
I’ll put aside the issue of electric cars for the moment, and address this point about the bailout. I agree with Mr. Yates that a bailout would be forthcoming. But that bailout won’t do any good, so ultimately, the issue is moot.
I seriously doubt that the Feds would infuse cash into the Big 2.8, but that hasn’t been the style in Washington for the last few decades. Instead, you could expect to some regulatory relief (a relaxation of CAFE, for example), combined with some loan guarantees and some cooperation with the major banks to float more credit. The automakers still hold enough power to pull off those sorts of stunts, and the pols would call in a few favors with their banking buddies to get it done. (And truth be told, the banks would want to do it, lest all of the paper already provided to the Big 2.8 default on them in one disastrous fell swoop.)
Be that as it may, the automakers will ultimately still need income to survive. Income comes from revenue, and revenue comes from selling cars. So ultimately, it leads back to the same old problem — Americans increasingly prefer other products, which they go and buy, which does not help to generate that revenue.
When the feds bailed out Chrysler, the market was much different, with the domestics still having the upper hand with the buying public. Today, there is far more competition, and the gap in desirability between the transplants and domestics has widened, not narrowed, in favor of the transplants. If Chrysler tried to sell updated K-cars today, not only would they fail, but they would be ruthlessly mocked six ways to Sunday.
So a bailout will be tried, sure, but it will fail. It will only delay the inevitable, not prevent it. The only hope is that in buying time that Detroit will use that time to initiate a renaissance that leads to a sales-driven turnaround.
But if history means much, then I suppose that it will be viewed as a well-earned breather that will effectively subsidize more bad habits and bad products. These guys are failure junkies, and they never seem to stop craving their fix.
And where is Detroit’s answer to the Honda Fit, The Mini and the Nissan Versa? Nowhere to be found.
How about Detroit’s answer to the super efficient small box Honda Element and Scion xB? I guess the Chevy HHR is close ?????
Where are the credible Detroit alternatives to a Corolla, Civic or Sentra?
Ghosn is right. Detroit got fat on the truck/SUV boom and is now in the process of trying to play catch up to the cars it ignored for so long.
Chrysler looks to be the first to go down for the count. After helping to push a supplier into bankruptcy (Plastech) and sicking the lawyers on them Chrysler is now faced with massive factory closures. Boy those GE/Home Depot/Hedge Fund guys sure know how to run a company!
http://biz.yahoo.com/rb/080204/chrysler.html?.v=2
Perhaps they’re the same powers who didn’t sit around while our highways and bridges deteriorated into the worst among developed nations. These are the same powers who debated such national security gems as gay marriage, flag burning and prayer in schools.
Edgett, you left out investigating steroid use in baseball.
Heathroi – I’m guilty as charged. I also forgot spending half a trillion dollars in the middle east while failing to find the one guy we went there to get.
On that one, I’d guess the Russian mob would’ve taken him out for $25 million or so, and if we asked them to just wipe out al Qaeda, would’ve done the whole bunch for under $100 million complete with heads-on-sticks.
Maybe “we the people” could tick off a little box on our tax returns to start a “None Of The Above” political contribution which would send the whole bunch packing; they might be useful on roadgangs to rebuild our infrastructure.
“Give the poor a tax credit to offset the gas tax. Stop giving all the tax credits to multi-millionaires. People should not have a “right” to drive. Driving is a privilege to those that work hard and can afford it. ”
I don’t think a strategy like this would work either. The likelihood of a tax rebate (many poor peole don’t even pay taxes to begin with) effectively offsetting higher gas prices is slim. First of all, the variability in driving needs would make the refund calculation complex and prone to abuse. Second, making sure the refund was allocated to fuel purchases would be impossible and without any such regulation it would be unlikely that the money would be spent that way, ref Katrina FEMA checks.
I also don’t think it would be good for the economy to take lower income drivers off the roads and thus make them less able to maintain employment and thus more dependent on government subsidies.
The fact is we could take a huge percentage of drivers off the roads right now by increasing incentives and/or requirements for telecommuting and we would do that simple and immediate thing if people really were concerned about this issue and not about pushing some other political agenda…
Government bailout? It depends on which automaker goes belly up first.
If it’s GM or Ford, I can see the government taking some sort of action. Whether such action does any good in the long term remains to be seen.
If it’s Chrysler…the government may not be so inclined to mount a rescue effort.
Realistically, if Chrysler goes under, it helps GM and Ford, as a certain number of people will only “buy American,” and if Chrysler goes out of business, their available choices were just reduced by 1/3.
My concern is that all sorts of groups will start weighing in on what ails Detroit, and their pet root cause usually has more to do with pushing a particular agenda than actually curing the problem.
Detroit’s problem isn’t that it doesn’t offer enough hybrids, or has failed to produce a viable electric car, or that it offers V-8 engines.
Does anyone think that bureaucrats are going to demand that, say, GM close down unncessary divisions and thin out its dealer ranks? (Fat chance – dealers will lobby heavily to stay in business.)
Can Washington correct the sort of executive suite thinking that led Ford to launch the Five Hundred with dull styling and an uncompetitive engine, then fix the drivetrain but not give it enough of a thorough restyling, then let the revamped car rot on the vine through lack of advertising? (This would assume that any of the current crop of presidential candidates has enough management savvy to spot the problem. Not from what I see.)
Once again I feel like a broken record, but, much as I love my internal combustion straight–no stinkin’ hybrids or electrics for me–as a policy matter, we need more efficient vehicles, whatever the technology, so that we quit sending billions (or is it trillions) of dollars to nasty dictatorships, and keep the money in the USA.
The notion that it will hurt our economy to switch energy sources–especially to domestic ones–is laughable, although I suppose it could hurt the Halliburtons and the rest of the Daddy Warbucks crowd.
And as another poster already stated, we can certainly handle refueling a full fleet of electric cars at night. In fact, that would make our electrical generation much more efficient, which is why the Electric Power Research Institute favors electric cars.
And as for references to French cars, the ‘65 Peugeot 404 in which I took my first legal drive was far better than anything American that was available at that time, and Citroen has been incredibly innovative, if perhaps in the sense of Cugnot, the Frenchman who build the world’s first automobile in 1969. (It was steam powered.)
Where are we going to plug in these electric cars? I don’t think my landlord woud like me hanging extension cords out the window.
Brock’s last paragraph is certainly true. We can argue all day about why, but it is true.
And while Gardiner’s point about parachutes was quite funny, I don’t think Mr. Yates was referring to upper management when he said “smart people.”
I hope that unions, government, and lousy management has not found a way to rid all the companies of people who can fix the problem. If not, then it’s just a matter of whether or not the management will get out of the way in time to let the “smart people” build the products and get them to market before the cash is gone.
Also, it is looking like the political bent in this country will allow bailouts. It’s wrong, stupid, and damaging to the country, but we will need a NY over NE style upset to stop it.
Brock Yates and Jordan Tenenbaum : about the power grid being overwhelmed – that so much bullshit propagated by those who want u to beleive that you NEED petroleum in your car. I dont beleive it for a second.
Possibly, but I still cannot wrap my head around electric being the sole reliable source for powering our cars in the future. Still too many variables in the equation. Could vandals easily disconnect the cord charging up the car while it’s parked on the street? I mean, how would you explain that to your boss? What about long term power outages? Maybe I’m just splitting hairs here, but in the end I believe the answer is not in one option for powering cars, but multiple. Electric cars with little gas or propane engines in case of dead batteries, etc. Ideally, all electric would be wonderful, but I don’t think it’s feasible; not yet anyway.
I think EVs will work fine for short trips in moderate climates, but in those conditions pedaling a very light vehicle would be the cheaper, and more eco-friendly option for able-bodied folk.
I think plug in hybrids make a lot of sense. Use electric for short hauls and gasoline for whenever you run out of juice. But while small outfits like Calcars and Lion will do conversions to PHEV, the big companies seem reluctant.
Electricity doesn’t go on trees. It must be generated first before it can be used to power everything from you TV to you EV.
To everyone advocating that move to EV will reduce oil consumption — get your heads out of the sand! Oil is used for electricity generation and many, many powerplants. Your car may not be dyno-powered directly, but indirectly. Moreover, these batteries are an environmental nightmare if not properly, and expensively recycled. There is no free lunch.
As a society we need to move away from fossil fuels as the energy of choice to fuel our automobility.
If electric vehicles are not the answer, the continued reliance on fossil fuels is not the answer either.
But wait, China and India will take care of that, as they progress towards automobility for the masses, accompanied by increased competition for fossil fuels. We in North America will see the price of gas inexorably rise.
Who is going to bail out North American society, automobility, suburbia?
Yates’ ideas are old and worn out. We need to invest in new technology and alternative fuels as well as public transportation alternatives. Petrol and personal vehicle dependence will decrease as these alternatives become cheaper and more popular. At the end of the day, every new vehicle is a failure if it fails to increase gas mileage or offer an alternative to petroleum.
KixStart is completely right in his post.
Average commuting distances came up. I didn’t spend much time on this, I just grabbed the first readable thing I cam accross. The data is 3 years old.
Looks like the average distance is 16 miles. Avg time, 26 minutes.
” Life for commuters can be heaven or hell. They report an average one-way commute time of 26 minutes (over an average distance of 16 miles). But the variance is huge: On the best days, the average commute is 19 minutes; on the worst days, 46 minutes. That means traffic, at its worst, can double the average commute time, adding 27 minutes each way.”
http://abcnews.go.com/Technology/Traffic/story?id=485098
@Jordan Tenenbaum
I don’t expect to see an all electric fleet any time in the next 15 years, if ever. But I could imagine half electric some time in the next 15 years. And we may never again have an all anything fleet. And I don’t know how soon electrics will really be feasible.
@maxspivak
It’s far more efficient to use the oil to generate electricity to power the car than to power the car directly. My recollection is 2-3x as efficient.
As for intelligence in Detroit, I’ve met the top people on the Volt and they seem VERY intelligent.
I’m inclined to agree w/ Brock’s last paragraph, except that it may ultimately be green upstarts that deliver the killer blow to one or more of the Big 3. But Brock is certainly correct about what has so weakened them.
David Holzman: As for intelligence in Detroit, I’ve met the top people on the Volt and they seem VERY intelligent.
The problem does not lie with any lack of talent or intelligence in Detroit. If you look behind the SUV/Pickup curtain, you won’t find a single engineer or scientist who was pushing to retain the old technology, old safety standards and old powertrains. You WILL find a dedicated accountant who was working to maximize short-term profits, fully believing that the “product” of GM, Ford and Chrysler was money. The engineers, the scientists, the dedicated folks on the line all know that the product is personal transportation in the form of (reasonably) light vehicles. And in the pecking order, as with most of American business, the people who actually DO something (like produce a product) are not the ones who make decisions.
And to the idea that electric vehicles will not make a serious dent in our transportation scenario, the same argument was posed at the dawn of the automobile and the dawn of the computer. “Interesting toys”, but impractical for mass consumption. In 1950 the futurists said that a few computers would be sufficient for the entire world, and it is likely that Yates was there nodding in agreement.
We need to rebuild our public transport infrastructure and resdesign our living areas. It may be uneconomical now, but if gas prices continue going up, the oil economy will wither. It’s going to hurt very, very badly, but if the price goes up then the “uneconomical” alternatives will start making sense.
Mr.Yates, you seem to think that it will keep going as is forever. However, a look at the past shows that wood was once the fuel of choice. Now it’s oil. Tomorrow it may be something else – in fact, probably will be (what with all the negatives of an oil economy). It may take 30 years or it may take 100, depending on those prices.
The Prius and the popularity of cars like the Yaris, Versa and Fit show that times are changing. We got a brief reprieve with the 90’s oil boom but now things are back to normal. With China and India together competing with the West for oil, there’s no chance of the same old, same old working out.
No amount of bailout will help companies that can’t make the machines needed for the future.
@edgett
I agree completely
@Adamatari
I don’t think, given current development patterns, that we could possibly ever be very dependent on public transit. (by that I mean more than, say, 5-6% of the population, if that.) We’d need at least 50 years of very stringent zoning requirements to make public transit a viable option for most people.
Having said that, I still support maintaining what we have, and maybe even expanding it some, because some people need it, because they can’t drive, and because without it, traffic would be that much worse.
kixstart, before lambasting someone over your “in-depth “research”, it helps to actually READ what you posted. There are so many caveats in that paper that it is unrealistic to say the least.
It assumes that those regions that are underutilizing their power will transfer it to regions that are in need. The Pacific Northwest and California/Nevada comprise 19% of the vehicles in the US, yet they have far lower available power and would require these transfers.
Before you go off about “egregious – and easily researched and corrected – errors” it helps to be rright yourself.
ktm,
I read it. Some of the assumptions are extremely conservative. It has been quite some time since I worked in the electric power industry but this is all familiar to me and seems quite reasonable. Electric power will follow money and it will take decades to move to a largely electric fleet.
I stand by what I wrote. Yates is spouting uninformed and erroneous hyperbole.