The U.S. transportation system is in danger of falling apart, and will take down the economy with it, Bill Shuster, chairman of the House of Representatives Transportation Committee, said today while Reuters was keeping notes:

“If we don’t deal with this issue at some point, as I said, we will reach a tipping point and the transportation system may not recover and we will fall behind the rest of the world.”

According to Shuster, the U.S. transportation system has already “gone from being one of the top three, four (or) five systems in the world to now we’re 23 or 24, so we need to act.”

A recent study from the American Society of Civil Engineers estimated the United States needs to spend $2.75 trillion to maintain and improve its infrastructure by 2020.

The ASCE gave America’s roads a D-

Westport Innovations has just signed a second deal with General Motors to produce light duty natural gas engines, and it’s probably not the last time we’ll be seeing these kind of partnerships forming. Natural gas vehicles have been explored previously on TTAC, but the technology hasn’t been fully explored in-depth, aside from some well-informed comments in various articles.

As a fuel for vehicles (light duty as well as commercial vehicles), natural gas has a number of attributes which fit well with our current political narratives and economic realities

1. Natural gas is 30-50% cheaper than diesel per unit of energy
2. Abundant domestic supply
3. Environmental benefits (lower GHG and tailpipe emissions)
4. Significant reduction in CO₂, CO, UHC, NO_x, SO_x and PM emissions versus conventional gasoline and diesel engines.

Natural gas can be used across the full spectrum of spark ignition (gasoline type) and compression ignition (diesel type) engines with the appropriate enabling technologies. While spark ignition natural gas engines have been available for quite some time (such as the NG powered Honda Civic), compression ignition natural gas engines have required further development. The difficulty is that while natural gas burns cleanly, it is less likely to auto-ignite (octane rating of 120-130), unlike diesel, which has a lower octane number. This quality of natural gas is advantageous for a spark ignition engine as it prevents detonation and allows for higher compression ratios, but makes it detrimental for a compression ignition engine.

Westport has devised a dual-fuel direct injection system to enable natural gas substitution in a compression ignition engine. The fuel injector at the heart of this system is able to inject both liquid diesel and gaseous natural gas in precisely metered quantities directly into the cylinder. In this system, the diesel fuel ignites as a result of compression as it would in a regular diesel engine. The combusting diesel fuel initiates the natural gas combustion. 93-95% diesel substitution is achievable according to public documentation. This innovation is directed at the heavy-duty diesel market which includes everything from transport trucks to locomotives.

One of the main criticisms is the lack of infrastructure surrounding natural gas. Compressed natural gas (CNG) is easier to store and transport than liquefied natural gas (LNG) so it is the optimal choice for light duty applications. LNG has a greater volumetric energy density but is more expensive to store, transport and ultimately use in a vehicle as it must be kept cold and pressurized to remain a liquid.

Vehicles like the Civic Natural Gas have a reduced range relative to a gasoline Civic, but commercial vehicles, like transport trucks, are emerging as one of the prime candidates for natural gas engines. Large transport trucks are a significant contributor to green house gas emissions and are on the road enough to make the conversion cost effective – though LNG, rather than CNG, would be the fuel of choice. A relatively small number of LNG filling stations placed along major transport corridors could meet their fueling needs and present a great way to thoroughly evaluate the technology. Less complex CNG stations could be added if the decision was made to target light duty vehicles.

Going “all in” on CNG/LNG is a little premature at this point, but the adoption of natural gas as a transport fuel is a good first step in reducing our emissions while other alternative technologies reach maturity. More in-depth discussion is always welcome in the comments.

“Ask an Engineer” is hosted by Andrew Bell, a mechanical engineer and car enthusiast. Andrew has his MASc in Mechanical Engineering from the University of Toronto, and has worked on Formula SAE teams, as well as alternative fuel technologies in Denmark and Canada. Andrew’s column will explore engineering topics in the most accessible manner possible.

Regulators are hoping to offer additional incentives and credits to spur sales of the vehicles. Hydrogen re-fueling infrastructure will also be supported, though details of how this would be approached were scant. The new rules would also favor vehicles such as the Chevrolet Volt, as CARB feels that it is closer to an electric vehicle than a conventional plug-in hybrid. The Volt has been dubbed a ”transitional zero-emission vehicle”.

Organizations such as the California New Car Dealers Association say that demand for these types of vehicles has been overestimated, but CARB chair Mary Nichols told a conference call that car manufacturers were in favor of the new rulings. “Probably the most heartening aspect of this whole rulemaking was the level of cooperation that we received from the industry. Overall, the degree of support for the package was just extraordinary.”

After intensive study, the automaker and union-funded think tank, the Center For Automotive Research (CAR),  came to the conclusion that closing down automotive manufacturing sites is not as catastrophic as originally thought. Nearly half of the 267 U.S. automotive manufacturing plants that had been shuttered since 1979 have come back to life.

With generous support from the U.S. Department of Labor, Office of Recovery for Auto Communities and Workers, CAR catalogued 447 sites in 28 states that had operational since 1979. Of those, 60 percent were closed.

Automotive News [sub] read beyond the press release and unearthed that 65 percent of the closed sites belonged to General Motors, 16 percent to Ford, 16 percent to Chrysler and 3 percent to other automakers. Said Jay Williams, Director of the Office of Recovery for Auto Communities and Workers:

“While each community with a closed automotive facility faces unique challenges, this report helps shine a light on how community engagement, a focus on flexibility, and the involvement of the private sector, non-profit groups, and all levels of government can help them recover. The findings will assist our office as we continue to help leaders navigate the local, state, and federal resources available to revitalize former auto communities.”

Most of the new sites received a new job for industrial purposes, others were converted into warehouses, commercial facilities, educational institutions or even for recreational purposes.

Though the idea that there is a “war on cars” appeals to certain segments of society, there’s little evidence for any such effort. On the other hand, it’s pretty clear that there’s a “war on drivers” on, and it’s being led by the automotive industry. On the one hand, cars are being ever-more laden with distracting gizmos and toys, while simultaneously, companies are testing systems that minimize the need for drivers at all. Though Google’s autonomous cars get a lot of media play in this country, another system is moving Europe towards a similar endgame. Known as “Car-To-X,” the system allows cars to swap information like speed and direction, not just with each other but with traffic lights and traffic data collectors. The idea is to avoid traffic and crashes, by warning drivers of oncoming traffic in a left-hand turn scenario, for example. Because who wants to use their eyes to make sure they’re safe when technology can do it for you?

According to Autobild, the first public German test of the system will begin next spring, with 120 vehicles taking part. GM is currently testing a similar system. If all goes according to plan, systems like this and Google’s autonomous technology will fulfill GM’s prediction that autonomous vehicles will be a reality by 2020, and the war on driving will be won. Or lost, depending on your perspective.

According to many news sources, the historic Twin Cities Assembly Plant in St. Paul, Minnesota is headed for a not-so-grand finale.  Come December 19th, the 86-year-old facility that originally built Model Ts will be history.  Ironically, Twin Cities is currently making the T’s spiritual successor: the (somewhat iconic) Ford Ranger compact truck. So shall we, the collective group of automotive journalists, lament the loss of this famous nameplate from Ford’s storied past?

Nah, I am sure there’ll be a new MyFordTouch software update or an updated Lincoln MK-something that will occupy the autoblogosphere in the coming months.  It’s not like anyone loves the Ford Ranger. Or has a funny story to share about one’s time in said Ford Truck. I mean, we all hated it, right? Why else would Ford abandon the tiny truck market–a market they owned–and give us cutting edge stuff like Doug the Focus Spokes-puppet instead?

I’m not a hater, even if I don’t know how to Dougie. There’s no time to start a Panther Love-like campaign, so I am doing one better. I ordered a brand new Ranger from Twin Cities in June, took delivery in August. It has every option I wanted, none that I didn’t. It’s the perfect little city commuter in every way.  Can you see me rollin’ on 15-inch steelies, son?

Yes, this is the vehicle that answered my previous quandary.  Granted it lacks a few things I really wanted: a mild refresh, without resorting to the bulk of the current Toyota Tacoma. Or gadgets like SYNC.  Or an LSX-FTW powertrain. But I love this little truck.  It will help me re-start my life, getting me where I’ve always wanted to be.

I coulda spent more and received diminishing returns…so I got a Ranger. And I coulda bought a Focus or Fiesta. But who wants that when there’s a rear-wheel drive rig with a stick, a revvy DOHC motor and a fun-ish suspension for the same cash?  And FYI, my first tank netted me 26.1 MPG.  Shove it, Ecoboost!

Apparently that’s not enough to bowl over FoMoCo, so remember where you were on December 19th, 2011.

It will be the day the American compact truck dies a sad and lonely death.

A top congressional leader on Wednesday made clear his opposition to President Obama’s idea of spending $10 billion to create a national infrastructure bank (view details). The bank, part of the White House jobs bill, would offer public subsidy for the financing of “public private partnerships” — which most often would take the form of a toll road. The chairman of the US House Transportation Committee said at a hearing the president’s plan would not advance.

“A national infrastructure bank is dead on arrival in the House of Representatives,” Chairman John Mica (R-Florida) said. “If you want a recipe to put off job creation, adopt that national infrastructure bank proposal.”

Opponents called the proposal a “distraction” from the issue of a long-term highway program reauthorization bill which would include funding for state-level toll road banks. Already, thirty-two states have their own infrastructure banks which have financed $6.3 billion in loan agreements along the same lines as the proposed federal bank.

“Many people are skeptical that bureaucrats in Washington would have any idea which transportation projects are most deserving of receiving a federal loan,” Highways and Transit subcommittee Chairman John J. Duncan, Jr (R-Tennessee) said. “This skepticism is why Congress has already established the state infrastructure bank program in SAFETEA-LU.”

In addition, the US Department of Transportation already provides federal credit for transportation projects under the Transportation Infrastructure Finance and Innovation Act (TIFIA), which has offered $8.4 billion in project finance. Dozens of other financing mechanisms are offered by the Federal Highway Administration.

“Why build one when you could build two for twice the price?” Representative Howard Coble (R-North Carolina) said sarcastically.

Democrats offered the only backing for the bank idea.

“Before Wall Street destroyed the economy, I had said, ‘Well, I really don’t see the need for an infrastructure bank — most of the states have good credit and they can go out and borrow on their own at very good rates,” said subcommittee Ranking Member Peter DeFazio (D-Oregon). “But that isn’t the case any more. The states need guarantees, they need help, many are against their borrowing limits, and most of the banks generously bailed out by Congress — not by me, I didn’t vote for it — aren’t lending. Credit and bond markets are tight.”

DeFazio only supports the use of the bank only for water, sewer and energy projects. He does not support tolls on existing interstates.

[Courtesy: Thenewspaper.com]

Toll roads at one point appeared to be unstoppable. Steady growth in traffic yielded rapidly rising profits, especially for pioneers in the field such as Australia’s Macquarie Bank where executives became so rich from deals that included the leasing of US roads that it was dubbed the “millionaires’ factory.” That all changed when the recession took hold and motorists scaled back on the mileage driven each year. Losses began to mount, and as a report released last week by Fitch Ratings argues, the dynamics for tolling may not improve in the near future.

“Fitch tracks data on toll roads, bridges, and tunnels across its ratings portfolio,” Fitch analysts wrote in the report, Downshifting: US Transportation Reacts as GDP Growth Flattens. “Traffic declined year over year as much as 10 percent during the Great Recession. Sustained positive growth in traffic commenced in February 2010. The most recent Fitch data indicates that growth in traffic volumes began slowly declining on tolled facilities, heading to zero growth in second-quarter 2011.”

The US Bureau of Transportation Statistics reported a similar decline in commercial transportation services for both goods and passengers. Despite some recovery, the index remains below pre-recession levels. These transportation statistics mirror figures for consumer spending which began recovering early last year only to falter this March. Growth in consumer spending for the second quarter of 2011 was under 0.1 percent.

The credit ratings agency argues activity in the economy at large and the in the transportation sector are directly linked. When someone gets a job, he generally gets in his car to drive to work. When stores sell goods, the supplies, raw materials and final product are usually transported by truck. When unemployment is high and sales are low, such transportation activity drops.

“Higher oil and other commodity prices account for some of the change in consumer spending,” the analysts explained. “Unlike past downturns, these prices are increasingly influenced by external factors as well as US demand. Consumers are reacting to increased prices and a weak labor market with belt tightening.”

Fitch will not downgrade any existing credit ratings for toll roads because these operations have a monopoly position that enables them to recover from downturns by hiking tolls that many motorists have no choice but to pay.

“Tolled facilities have experienced low and even negative traffic growth since 2007,” the analysts stated. “Revenues have grown at a much higher rate as facility operators reacted to the downturn by raising rates to preserve financial and operational flexibility.”

The ratings agency warned that sustained periods of low economic growth imperils the financing of deals built with healthier traffic and economic forecasts in mind.

“Most public infrastructure facilities should be able to weather little to no growth scenarios over the next three to five years,” Fitch wrote. “However, there are a number of issuers whose escalating debt profiles could pose a problem in the medium term. Newer toll facilities generally have such debt service profiles… Stand-alone, concession-based facilities, originally financed in 2006 – 2008 when expectations for future economic growth were very high, will be more vulnerable.”

[Courtesy: Thenewspaper.com]

Colliers International has come out with its 2011 parking survey results for North America [PDF] and the world [PDF], and you might be surprised by what people pay on average to let their car sit somewhere. The global expensive parking crown (on a monthly basis) goes to London’s West End, which runs a cool $1,014 per month… by comparison, the US average is $155.22 per month. On a daily basis, Copenhagen takes the cake with $73.11, with the highest daily rate in the US coming to $41 per day in Midtown Manhattan. Puts things into perspective, doesn’t it?

Though it doesn’t get the play it deserves in the auto media, Project Better Place is one of the most ambitious, potentially disruptive plays anywhere in the world of cars, uniquely positioning itself to eliminate the biggest shortcomings of electric vehicles. TTAC was on hand when the “end-to-end” EV services firm opened its first battery swap station in Israel, and now the firm has launched its first European swap station in Denmark. Better Place’s single model, the Renault Fluence Z.E won’t be widely available in either of the two initial launch markets until later this year, but having sold over 70,000 of its initial order of 100k units from Renault, Better Place is keeping its foot on the gas… er, juice.

Earlier this year, BP signed a deal with GM’s Australian division Holden and several suppliers, to develop large, rear-drive sedans based on the (Zeta Platform) Commodore. At the time, we noted

This project is highly significant on a number of levels. First, battery-swap-enabled large sedans operating in Australia could show the way forward for the US, by breaking stereotypes about EV size, capability and operating environments. Second, the project marks the first sign of flirtation between General Motors and Project Better Place’s battery-swap-based business.

And that initial challenge, proving that BP’s battery-swap infrastructure can provide “unlimited range” EV motoring at relatively low costs (thanks to its unique battery-leasing arrangement) outside of tiny, densely-populated markets like Israel and Denmark, is one that the firm is eager to conquer. And so BP is building on pilot testing in Canberra, Australia, by announcing that the first Fluence Z.Es will begin arriving Australia in the middle of next year. Cars will first arrive in Canberra, and Australia-wide sales will follow, and according to the firm’s press release

By 2013 Better Place will give Australia the largest electric car charge network in the world, which is expected to outpace current deployment plans in market-leading countries including the US and China.

If Better Place can build momentum and create a viable market for its EV scheme in Australia, there’s no reason it can’t do so in the US. Keep an eye on these guys…

A study released earlier this month by the Cascade Policy Institute questioned whether pricey mass transit options in Portland, Oregon are really being used by the public. The city has been a leader in securing funding for various forms of passenger rail and trolley systems. The Obama administration, for example, pledged $745 million in federal gas tax dollars to pay for the construction of a $1.5 billion, 7.3 mile light rail project connecting Portland to Milwaukie. Transportation Secretary Ray LaHood has singled out the city’s priorities as for praise.

“By adding innovative transit opportunities, Portland has become a model livable community, a city where public transportation brings housing closer to jobs, schools, and essential services,” LaHood wrote in March.

The Cascade Policy Institute wanted to verify the claim that the TriMet transit system was able to move more passengers than a standard bus line. The researchers did so by attending five special events where use of mass transit would make the most sense, including the final playoff game for the Portland Trail Blazers. The events were spread throughout the year to examine the effects of different weather conditions on transit use. City officials have never made a study of this sort.

“This is important because transportation planners at Metro, TriMet, ODOT and other agencies routinely make multi-billion-dollar decisions based on travel surveys, computer models or simply their own personal beliefs about how people should travel,” Cascade President John A. Charles, Jr wrote in his report. “They rarely have any direct knowledge of how people actually travel under specific conditions of time, mode availability, parking pricing and geographic constraints.”

The Cascade team counted a total of 47,666 individual attendees, noting how many headed toward the venue from a light rail station and how many arrived by automobile, bicycle or foot. At best, 21 percent arrived by rail to see the Trail Blazers. At worst, the opening of the Gresham Civic Station saw just 2 percent arrive by rail. On average, rail accounted for just 11 percent of the trips recorded.

“The field research shows that continued use of the phrase ‘high-capacity transit’ by local planners to describe the regional rail program is Orwellian,” Cascade President John A. Charles, Jr. said in a statement. “Light rail is actually a low-capacity system, and the streetcar is simply irrelevant. TriMet’s buses carries two-thirds of all regional transit trips on a daily basis, and that’s the service that should be recognized as high-capacity transit. Unfortunately, bus service is being sacrificed by TriMet in order to build costly new rail lines that carry relatively few people.”

A copy of the report is available in a 1.2mb PDF file at the source link below.

Source: Light Rail, Streetcars and the High Capacity Transit Myth (Cascade Policy Institute, 5/2/2011)

[Courtesy:Thenewspaper.com]

One of President Obama’s signature achievements, passage of $812 billion in stimulus funds at the height of the recession, was labeled a failure by the chairman of the US House Transportation Committee, which had jurisdiction over about eight percent of the projects funded. In a hearing yesterday, Representative John Mica (R-Florida) explained that the money did not end up going to needed infrastructure projects.

“This will go down in history as one of the greatest failures of a government program to stimulate the economy that mankind has ever created,” Mica said. “This is a trillion-dollar lesson.”

Initially, the idea behind the stimulus was to create a $250 billion package with the most of the funding going toward infrastructure projects. The total amount of the package more than tripled, but the funds for infrastructure dwindled to just $64.1 billion. Of that amount, only $27.1 billion went to highways and bridges.

“I could not be more frustrated by the results that I see,” Mica said. “The total stimulus package was $787 billion and that’s been re-evaluated to over $800 billion, and still we have a stagnating economy…. Many of the jobs created were very temporary jobs.”

Committee Democrats defended the stimulus, suggesting the economy would have been in far worse shape had the money not been spent. Mica cited administrative problems with the spending. The Government Accountability Office (GAO) audited how effectively the Department of Transportation (DOT) disbursed grants, particularly for the high-speed rail and “TIGER” grants. Over $9.5 billion was handed out based on vague criteria.

“DOT cannot definitively demonstrate the basis for its award selections, particularly the reasons why recommended projects were selected for half the awards over highly recommended ones,” Phillip R. Herr, director of physical infrastructure for GAO, testified. “Developing internal documentation is a key part of accountability for decisions, and DOT guidance states that officials should explain how discretionary grant projects were selected when projects with the highest priority in a technical review were not funded. The absence of documentation can give rise to challenges to the integrity of the decisions made, and DOT is vulnerable to criticism that projects were selected for reasons other than merit.”

GAO also noted DOT’s failure to measure the potential for long-term benefits when selecting projects.

[Courtesy:Thenewspaper.com]

“This is the worst situation we’ve faced since the war,” a source close to Toyota told the Yomiuri Shimbun. The Japanese car industry is facing post-war-like shortages when it comes to auto parts. Toyota is short 150 parts positions, which can be anything from a bolt to a complete dashboard.

Dealerships are empty – of cars. Test drive cars do double duty as display vehicles. “We get a lot of customers coming in, but we don’t have cars to sell them,” a salesperson told the Tokyo paper.

Major Japanese carmakers have restarted production at the beginning of last week, but plants are only operating at about 50 percent of their normal output. Toyota does not expect to be back to normal before the end of the year.

Japanese automakers have reported a 57.5 percent reduction in production for March – a month that had only its second half affected by the March 11 earthquake and tsunami. April numbers are expected to be worse. What’s more, overseas production is just beginning to be affected. “

In the meantime, Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association, said what many refuse to accept: Japanese automakers simply don’t know what the near future will bring.

“Generally speaking, car makers are in a situation where they can’t fix their production volumes, even though this is an importantelement of their business,” Shiga, who is also COO at Nissan, told The Nikkei [sub]. “We hope (investors) will understand.”

Basically, Toyota will open all its Japanese vehicle-production plants on Monday, April 18, and will run them on half steam until April 27. Then, Toyota will take the annual spring holiday a day earlier and close on April 28^th. Toyota will extend the holiday for another full day and will start working on May 10. One day of these extended holidays was planned, the other was not. Production will then continue at 50 percent capacity through June 3. Which does not mean that all will return to normal in June.

“TMC will decide on production after this period after assessing the situation of its suppliers and other related companies,” the statement says. The “other related companies” do not directly refer to Japan’s teetering power companies, as one may think. “Most of Toyota Motor Corporation’s Japanese production capacity is located outside of the areas serviced by the Tokyo and Tohoku Electric Power companies,” says Toyota spokesman Paul Nolasco. He says the “other companies” could be shipping companies, Tier 2 and 3 suppliers etc.

The power shortage however will impede many of these other companies for months to come. The Nikkei [sub] writes that Japanese “utilities are delaying the restart of nuclear reactors that have been shut down for regular maintenance and inspection, amid rising safety fears among residents.” According to the report, “sixteen reactors have been halted for maintenance, of which eight have postponed their restarts.”

Once June comes around, Toyota will have had lost approximately half of its Japanese production in March, about two thirds in April, and half in May. Overseas shipments of cars and parts needed for overseas production will continue to suffer well into the summer.

In a memo that surprises no-one that has followed TTAC’s extended coverage of the March 11 earthquake and tsunami, Toyota’s U.S. chief  Bob Carter warns dealers that deliveries of parts and cars could be severely restricted for months to come. “What we don’t know are vehicle production levels for May through July,” Bob Carter wrote in a memo. “The potential exists that supply of new vehicles could be significantly impacted this summer.” You have seen this coming.

Most of Toyota’s Japanese production has been down for a month now. As of last week, Toyota – and for that matter the Japanese industry – had no clear picture of the status of many suppliers and their parts. With near daily regularity, Japan is being rocked by huge 6 to 7 magnitude earthquakes that became “normal” only in comparison to the March 11 monster. Japan runs out of everything from bottle caps to cigarette filters, and especially out of electrical power. Renesas, a company that controls about 41 percent of the global market for automotive microcontrollers, is battling outages that will affect strategic supplies for many months. In a land that can only guess how many of its own have died (currently, the confirmed number stands at 13,013, while 14,608 are listed as missing), the only thing that is clear is uncertainty.

Currently, the only car production Toyota has running in Japan is that for the Prius, the Lexus HS 250h and CT 200h, and a just re-opened tired plant in Sagamihara that had been scheduled for decommissioning. In addition, Toyota has been making some parts. Toyota will restart vehicle production at all its Japanese facilities from April 18 to 27 – very carefully. Then, production will be shut down for a holiday week, while parts levels are being assessed.

Add to this a month-long supply line to the Americas and Europe, and you have problems well into June and beyond – from the currently known outages alone. “The memo is Toyota’s clearest statement that the shortage caused by the March 11 earthquake and tsunami in Japan will last into the third quarter,” writes an astonished Wall Street Journal. Only amateurs will be surprised. In the morning after the tsunami we had warned that it will severely disrupt the auto industry around the world.

Last week, we said that it is it is conceivable that the industry in total will have lost a million cars by the end of April – in Japan alone. IHS Automotive ups the ante and says that five million fewer vehicles could be produced globally this year. Michael Robinet, a senior analyst with IHS Automotive said “it would be miraculous if Nissan and Honda were able to circumvent the same pressure that Toyota is feeling,”

Today, The Nikkei [sub] writes that Japan’s major automakers barely begin “restarting production at domestic plants suspended by last month’s earthquake.” Nissan will bring a small-car factory in Yokosuka, Kanagawa Prefecture, back online Monday. Honda has resumed operations at assembly plants in Sayama, Saitama Prefecture, and Suzuka, Mie Prefecture. “Even though their production will remain at about half normal levels for a while,” writes The Nikkei, “the three manufacturers intend to gradually lift facility utilization as they restore supplies of components that have been disrupted since the March 11 disaster.”

Japan has lost a month of production. Production is on half rations until further notice.

Only amateurs will assume that the problems will be limited to Japanese manufacturers. Ford warns in an SEC filing made yesterday that “we now expect that beginning in the last week of April and continuing into May, certain of our operations in the Asia-Pacific region (including certain of our joint venture operations) will be affected by shortages of components and vehicle kits as a result of the events in Japan.” The company does not expect “a material impact on” its overall results from this.

However, the filing continues, “because the situation in Japan continues to develop, supply interruptions related to other materials and components from Japan could manifest themselves in the weeks ahead.  Should the supply of a key material or component from Japan be disrupted and an alternate supply not be available, we could have to reduce or temporarily cease production of vehicles, which could adversely affect our and Ford Motor Credit Company’s financial condition and results of operations.” As a precautionary measure, this is a filing any U.S. listed car company should make.

Lastly, as we have been warning from a few days after the tsunami until yesterday, the limited supply of cars will have a material impact on car prices and car sales. April transaction prices are expected to be the highest in 15 years, when measured as a percentage of MSRP. And as you can see from above, this is also just the beginning.

Our daily run-down of  delays, shut-downs, shortages, and postponements.

• Toyota will delay the introduction of the wagon version of the Prius hybrid in Japan. A launch event was planned for late April. This event is cancelled; a new date has not been set. The Nikkei [sub].
• Toyota will also delay the minivan version of the Prius, Reuters adds.
• Ford is keeping a wary eye on Japan from its Thai facility. “So far, we haven’t been affected, production-wise…we identified some suppliers who have been impacted, but so far we have been able to keep producing,” said President of Ford Asia Pacific and Africa Joe Hinrichs. The company suspended overtime, and is closely monitoring developments in Japan. Ford will debut its new Ford Ranger pick-up truck for the Southeast Asian market at the Bangkok International Motor Show, March 25-April 4. The Nikkei [sub].
• Toyota and Honda car ventures in southern China have enough parts inventory to sustain normal production until the middle of next month, Zeng Qinghong, president of Guangzhou Automobile Group Co (GAC) said today. Just to be on the safe side, GAC and its Japanese partners is thinking about getting help from Japanese suppliers in other markets. Reuters.
• Nissan’s Ghosn said about 40 component suppliers in Japan have difficulties, complicating Nissan’s attempts to restart production. Electronic components, plastics and rubber are in short supply. This will affect automakers in Japan and around the world. “This is serious and it’s still difficult to evaluate,” Ghosn said. Bloomberg.
• Nissan tries to repair the severely damaged Iwaki plant in Fukushima Prefecture. A team from Nissan’s Tochigi factory is en-route. “But with aftershocks still rocking the area surrounding the Iwaki plant, the full restoration of water supply and other infrastructure is expected to take time.” The Nikkei [sub].
• Nissan has dispatched support personnel groups to leading parts manufacturers that have suffered serious damage. The Nikkei [sub].
• Toyota has sent some 60 people from Aichi to Miyagi. They arrived with goods and supplies and will help with inspections at the Miyagi plant. The Nikkei [sub].
• Honda affiliate Keihin has many of its key production sites in Miyagi. With support from Honda, trial runs start at affected sites. The Nikkei [sub].
• Subaru (and all of Fuji Heavy) is out of email for three hours a day, every day. Fuji Heavy is the only Japanese automaker to have its e-mail interrupted. Its global headquarters is in a section of Tokyo unaffected by the blackouts. The e-mail server however is located in the city of Omiya, Saitama prefecture. They get the power turned off  each day. And the mail goes nowhere. Automotive News [sub]

[Google] is working with the National Renewable Energy Laboratory, which is developing a database of available charging stations (known as EVSEs, or electric vehicle supply equipment) around the United States. Installers of EVSEs have the option of having their stations displayed as public. When we were charging the Nissan Leaf at our facility, not a public venue, our chargers showed up on the Leaf’s navigation system; The navi in the Leaf is designed to remember sites at which it had been charged.

The bad news? Well, just look at that map. Unless you live in California, you don’t need Google to tell you where the nearest charging station is, you need a clairvoyant to tell you where one might someday be built. If you’re still struggling to understand why EVs need to be tested on a local level before the federal government spends more money subsidizing them on a national level, look no further.
[UPDATE: The screen grab above is not comprehensive. Surf over Google Maps for a closer look at EV charging stations in your area]

“The ripple effect of the stoppages to supply and production in Japan will be felt in many parts of the world, including the United States, China, and Europe, as many key parts and technology are exported to global operations from Japan, writes IHS Global Insight in a research report. “Disruption to production of parts that are unique and cannot be easily shifted has the potential to hit output badly at several automakers in the near term.”

First to be hit will be Japanese production sites overseas which often import 20 percent or more of their parts from back home.

However, plants owned by U.S. or European companies are not immune.

Japanese plants in the U.S. have already trimmed overtime production to conserve parts, says Automotive News [sub]. “We just don’t know yet what impact we will see,” said Tom Easterday, executive vice president of Subaru of Indiana Automotive Inc. “Right now, it’s production as usual. But it takes about a week for the parts flow to reach us from Japan. So it will be next week before we see any effect.”

“Detroit’s automakers also rely on Japanese suppliers for some critical parts,” says Automotive News. Ford is particularly concerned about the supply of hybrid batteries, made by Sanyo in Japan. GM and Chrysler are “monitoring the situation.”

Even if Japan’s nuclear power plants will be brought under control, even if roads, rails and ports are back up, the Japanese car industry will have to deal with a more serious problem: Blackouts.

On Monday, Tokyo Electric Power, or Tepco, will start turning off the power for three hours each to selected areas. This will happen once, in some areas twice per day. When the schedule was put up on Tepco’s website, the server crashed. That was just the beginning of the problems.

Tepco had to shut down reactors at two nuclear power plants as well as five conventional power plants. Tepco is currently 10 million kilowatts short of demand.

“Japanese manufacturers, already hit by Friday’s earthquake in their own operations, will now have to deal with the rolling blackouts planned for greater Tokyo starting Monday,” writes The Nikkei [sub]. “Combined with the disruption of distribution networks, the outage is set to further hamper the companies’ ability to secure supplies of parts and materials.”

Power outages don’t just mean a three hour stop of work. Electric furnaces, used for castings, have to be brought down before the outage and back up afterwards, a long process. When China had power outages a few years ago, it severely affected the industry.

Steel plants of Nippon Steel & Sumikin Stainless Steel are currently shut down. Even if the facilities come back up, “blackouts would force them to shut down, likely impacting automakers and electronics manufacturers,” says The Nikkei [sub]. Tokyo Steel suspended operations at Tepco’s request and may have to shut their plant down if rolling blackouts continue.

Tepco plans to conduct the rolling blackouts through the end of April. Says the Nikkei:

“But the firm will be unable to meet demand in the summer, when air conditioner use pushes up demand as much as 50% from current levels, even if it receives power from other utilities and brings all its fossil-fuel-burning plants on-stream. The company could thus have to keep rationing in place over a prolonged period, forcing manufacturers to reduce output or move production to other regions.”

When Reuters asked Takuji Okubo, chief Japan economist at Societe Generale, about the biggest problem the Japanese industry faces, Okubo answered: “I would say the biggest risk is power.”

The Japanese auto industry already has been evacuating Japan. The current developments will most likely hasten their departure. Oddly enough, the yen is expected to rise sharply on Monday, and the dollar is expected to drop. “Japanese investors will dump overseas assets on Monday and bring their money home to help finance reconstruction,” writes Reuters. The wire service sees “the dollar plummeting versus the yen on Monday” and expects “a sharp slide in Treasuries since U.S. government bonds are a favorite asset of Japanese investors.” Japan is the second-biggest holder of U.S. government debt and has nearly $900 billion in dollar reserves. Some of these reserves will likely be used for rebuilding.

For most Americans, the appeal of electric vehicles is somewhat blunted by the fact that they tend to be small, European-style hatchbacks rather than large, red-blooded “American-style” sedans. But what if large, rear-drive electric sedans were developed, using battery-swap technology that could allow battery-leasing business models and instant range-extension? Might Americans rethink a few of their long-held stereotypes about EVs?

Well, the United States isn’t the only nation facing this dilemma, and unlike the US, Australia is actually doing something about it. Australian automotive suppliers, Air International, Bosch, Continental and Futuris, have teamed up with Project Better Place to develop seven “proof of concept” Holden Commodore-based rear-drive electric sedans that could be the first of their kind [press release here in PDF] in a joint venture called EV Engineering. The project is part of Australia’s effort to revamp its automotive industry by 2020.

Holden is only peripherally involved in the the $26m JV, providing engineering support and use of its proving grounds, according to drive.com.au, but several former Holden executives are heading the project. And the project is almost entirely privately-funded as well, with a mere $3.5m coming from the Australian government’s now-defunct green car innovation fund. The project has no plans to put EV Commodores into production, but each participating supplier will use the vehicles to develop know-how around large, rear-drive electric vehicles, a segment that does not yet exist in the marketplace. The idea is that, down the road, the research will help Australia become the global auto industry’s source of rear-drive EV technology and experience.

The projects goals, beyond building the seven prototypes, are:

1) Deliver zero emissions motoring when powered by renewable electricity and greater than 30% reduction in CO2 emissions when powered on grid average electricity.

(2) Deliver the same high standards of safety and feature available in this class of vehicle while delivering comparable performance.

(3) Be designed for a manufacturing cost equivalent to top selling petrol vehicles in this class, without battery. (Batteries will be included as part of monthly electric vehicle charge network subscriptions, replacing petrol costs.)

(4) Be capable of accessing both EV charge spots and ‘battery switch’ stations for unlimited range extension. Additionally, the project will help to develop electric vehicle engineering skills and components within the Australian supplier industry for potential export to car makers globally, with opportunities including battery pack design and thermal management systems.

This project is highly significant on a number of levels. First, battery-swap-enabled large sedans operating in Australia could show the way forward for the US, by breaking stereotypes about EV size, capability and operating environments. Second, the project marks the first sign of flirtation between General Motors and Project Better Place’s battery-swap-based business. Though Holden is not an official partner, there’s no doubt that GM will be keeping a very close eye on the project, especially given its possible applicability to the United States. Thus far, only Renault has officially signed on as a Better Place vehicle supplier. Finally, by spurring on development of an EV based on Australia’s best-selling car,  Better Place strengthens its position in the Australian market, which could also inspire more interest from American governments and automakers in the batter-swap business.

Consulting firm Accenture took a look at a number of EV pilot programs in hopes of gaining some insights into how exactly the rise of plug-in vehicles will change the automotive industry, the refueling infrastructure and the customer experience [full PDF here], and came away with some interesting conclusions. First, the study finds that the market models for plug-ins will vary from region to region. That’s good news for the automakers, as it makes it less likely that they will be forced to comply with standards set by a single firm dominating a global market model. On the other hand, the regional variations in market models (more on the models themselves shortly) will worsen one of the major challenges of plug-in proliferation, namely scale. The study finds that scale, along with cost and grid control are the three factors that pilot programs can not provide insight into, and all three require “creative” solutions. And here’s where business-as-usual in the car business gets blown wide-open: the business models, rather than the vehicles themselves, are where the real competition is. So, what are the models?

Accenture identifies three basic models which, with some variations, are being tested around the globe: teh Public charging infrastructure, the private charging infrastructure and the so-called “end-to-end model.” The firm summarizes the pros and cons of each as follows:

In short, the public model is the government-led “investment in the public good” aimed at accelerating EV adoption, a model we’ve seen in a number of the US-based pilots. The private model assumes a return on investment purely on the charging infrastructure. Accenture found that both public and private charging infrastructures tend to have a higher grid impact, and because home recharging is expected to remain the main source of EV power, their impact will likely be limited. The “end-to-end model,” on the other hand seems to be the winning formula, by integrating vehicle, service and infrastructure costs (which frees pricing options), limiting grid impacts, and offering a convenient customer experience that is not dissimilar from the familiar cell phone model. One of the key advantages to this model is that it allows EV “service providers” to disaggregate the cost of the battery, lowering a key barrier to consumer acceptance (battery depreciation), using batteries more efficiently and charging a fixed fee for “mileage plans” not unlike cell phone plans where consumers purchase “minutes.”

Accenture concludes that the public model best addresses scale, while the private model best addresses costs and grid control, while “end-to-end” is the only model that addresses all three. This would seem to be a fairly ringing endorsement for the oft-dismissed (by the auto industry, anyway) Project Better Place, which is the only real player in the “end-to-end” model. Of course, Accenture hedges considerably by saying the models will receive varying levels of support by geography and that all three will continue to evolve, but it’s fairly clear that “end-to-end” shows the most long-term promise.

Unfortunately, the rise of “end-to-end” EV “service providers” would essentially spell the end of the auto industry as we know it. EVs generally present challenges to the product differentiation the industry currently competes on, but an end-to-end solution explodes every traditional value in the industry. After all, automakers will not only need to develop batteries, but infrastructure as well to survive as an “end-to-end service provider.” Dealers won’t be able to stay alive on the backs of their service departments. Consumers will be forced to think rationally about their vehicle usage in order to purchase a service agreement, destroying the prevalent consumer perspective that decades of marketers worked so hard to cultivate.

Electric vehicles are generating a lot of excitement, but the vehicles themselves are actually something of an afterthought. A refined infrastructure business model is what will take EVs from their early-adopter ghetto and into the mainstream, a task Project Better Place is currently launching in Israel. The exciting part: a year from now, we will have some idea of whether or not the “end-to-end” model really works in the real world (well, Israel, anyway). If it does, that infrastructure model could have a greater impact on the world of cars than any actual car. It’s a brave new world…

As one of California’s leading bastions of privileged liberalism (2009 per-capita income: $91,483) , Marin County is probably one of the top counties worldwide in terms of EV market potential. But apparently the local government isn’t ready to tap its unique combination of money and idealism to become a leading market for electric cars. Even as Californian EV activists are being forced to install second power meters to separate EV charging from home electricity use in order to take advantage of lower electricity rates for EV charging, the NYT reports that Marin County has banned the use of “smart meters” which would allow more widespread EV adoption.

Smart meters, which communicate electricity use wirelessly to the power company would allow EV charging to be easily separated from home use, but they also raise a number of issues that Marin County simply doesn’t want to have to deal with. Privacy, health risks from electromagnetic frequency radiation, and radio communication interruptions are all cited in the Marin County ordinance [PDF here] which bans installation of the smart meters in unincorporated areas of the county. The upside for EV enthusiasts is that this affects on 70k of the county’s 260k residents… but again, knowing Marin County, the county’s numerous rural mansions are probably a huge part of its potential base of EV support. And the towns of Fairfax and Watsonville have already banned smart readers, as has Santa Cruz County, another prime EV market. Time to start rethinking those running costs?

The California legislature’s Legislative Analyst’s Office (LAO) blasted a public-private partnership deal between the California Department of Transportation (Caltrans) and investors for the development of Doyle Drive. The plan was to give a private company, Golden Link, a 30-year lease on this vital southern route to the Golden Gate Bridge to perform needed renovation to the route. The state would pay the consortium $173 million for finishing the road, followed by $28.5 million in “availability payments” each year the road is open.

“Overall, our analysis finds that the Golden Link agreement does not meet all the goals Caltrans intended and is not likely to be a good fiscal deal for the state,” Legislative Analyst Mac Taylor wrote. “In light of these findings, we think that the state should consider not signing the contract with Golden Link, and instead build the project with a more traditional approach.”

The total cost of the project is estimated at $594 million on the partnership model, while traditional methods would cost around $490 million — not counting a number of potential cost overruns on the riskier partnership model. In terms of bearing risks, the deal put state taxpayers on the hook if any discoveries of endangered species threatens roadside construction. It offered no guarantee that the companies undertaking the project would finish on time. Because the interest rates that will apply are not yet known, the analyst was unable to estimate the final cost with more certainty.

“Based upon our own analysis, we disagree with Caltrans’ conclusion that the agreement results in a lower lifecycle cost,” Taylor wrote. “As described in detail in another section below, we have concluded that a traditional design-bid-build procurement would be less expensive in this particular case than under the Golden Link agreement.”

The analyst recommended dropping the public-private partnership contract. A copy of the letter is available as a 450k PDF at the source link below.

Source: Public Private Partnership letter (Office of the Legislative Analyst, 12/22/2010)

[Courtesy:Thenewspaper.com]

Due to missing parts, GM, Ford and Chrysler had to shut down plants in the U.S. and Canda, or put them on half shifts for the second day, Reuters reports.

• GM’s Lansing Grand River plant in Michigan is shut down, and six other plants have shortened or suspended shifts
• Ford suspended production early at their Oakville assembly plant in Ontario. Some of their plants in Canada and the U.S. missed production earlier, he said.
• Chrysler factories in Toledo, Ohio, and Brampton, Ontario, were shut down this morning to resume production later in the day.

As reason for the temporary shutdowns, winter storms were cited that stranded trucks and disrupted delivery. However, the true reasons run deeper:

• There is an industry-wide constraint for parts. Carmageddon has left many parts makers bankrupt and closed. Surviving ones had scaled down. Now the survivors are swamped.
• The fragile just-in-time system is easily impacted by force majeure in the best of times. During shortages, a snowflake can cause a crisis.
• Demand for certain car segments and makes is shifting quickly as the market reorients. Sudden demand often outruns supply, especially when lean production has the factory starving for parts.

But hey, missing parts is a better problem than missing customers.

Germany’s auto industry has a huge problem: Way too many customers. “We have that fattest order books of all times,” said Esther Bahne of Audi to Germany’s Spiegel magazine. Result: Customers have to wait months for their cars. Sometimes longer than ever before, says Der Spiegel.

• The German tabloid Bild am Sonntag reports that the buyer of a lowly Audi A3 needs to wait five months until it will finally show up at the dealer.
• Golf plus: Sometimes 5 months wait.
• Mercedes: Two to four months wait.
• Even buyers of an Opel Zafira need a lot of patience: Three months on the average.

Of course it’s not the fault of the automakers. Demand in China, and, surprise, surprise, in the U.S. is to blame. And if that isn’t enough, then fingers point at the suppliers: A year ago, they were faced with imminent bankruptcy, now they are working at full capacity. “There are shortages from raw materials all the way to electronic components,” said Dr. Jürgen Geissinger, VP of the industry organization Verband der Autoindustrie (VDA).