The Truth About Cars » development The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 27 Jul 2014 20:45:49 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » development Lawsuit Settlement Highlights Incentive Pitfalls Thu, 08 May 2014 11:00:36 +0000 Hyundai_Motor_Manufacturing_Alabama_Highsmith_01

A long-running lawsuit over the value of the land on which Hyundai’s Montgomery, Alabama plant is located has been settled. The Montgomery Industrial Development Board will pay former landowners $3.45 million to settle their claims. The particulars of the case illustrate the potential hazards faced by advocacy groups when they attempt to incentivize industrial development.

According to the story in the Montgomery Advertiser, the nearly decade-long lawsuit came to a head last November, when a jury awarded the plaintiffs $4.87 million in damages. The plaintiffs are a group of landowners whose acres were purchased by the Industrial Development Board (IDB) for the development of the Hyundai plant. The IDB is a quasi-public body whose members are appointed by the Montgomery City Council. In Alabama, these development boards are the bodies through which industrial incentive money is typically disbursed.

The landowners initially agreed to accept a price of $4,500 an acre for their land after negotiations with the IDB. This price was structured as part of an “option” deal: the land would only be purchased if it was found to be absolutely necessary to construct the plant. A conflict arose when a lone holdout, realizing the value of their position, negotiated a price of $12,000 an acre. This triggered a lawsuit by the other landowners, who had a clause in their contracts forbidding any one owner to receive more compensation than another. After a lengthy procession through the courts, the IDB has agreed to a settlement rather than prolonging the case. It’s still unclear where the money to pay for the settlement will come from. The Board’s website lists land sales, member fees, and certificates of deposit as some of the ways that it raises revenue; it’s also empowered to issue bonds, under the terms of state law.

There’s no question that Hyundai’s arrival has been a major boon to Montgomery, and to Alabama in general. The state and local government incentives offered to the company were instrumental in getting the new plant built. Even so, this lawsuit attests to the fact that incentive packages often carry hidden costs, especially in the legal arena. Caught between the promises made to Hyundai and the need to fairly compensate landowners, the Board got stuck in a bad negotiating position. Now it will have to cough up much more money than originally planned.

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Toyota Teams With BMW to Deliver Ultimate Hybrid Supercar Thu, 07 Nov 2013 11:00:00 +0000 2014 BMW i8

When Toyota teamed with General Motors, they gave us the Vibe/Matrix twins. With Subaru, a trio of rear-driven sports cars with boxer power up front. So, what will Toyota deliver in its partnership with BMW? How about the ultimate hybrid supercar based off the bones of the Lexus LFA, for starters.

In an effort to join the ranks of Ferrari, Porsche, McLaren and even Mercedes-AMG in the eco-friendly supercar sweepstakes, Toyota will jointly develop a halo car with BMW that aims to take the ideas behind the LFA, swap its V10 for a hybrid powertrain, and package the deal for around $300,000.

For Toyota, that means teaching the Germans how to weave carbon fiber and offering its expertise in chassis craftsmanship, as well as its research in high-performance hybrid technology. On the other side, BMW offers mass production capabilities to make as many plastic and carbon fiber baskets as desired, as well as an array of engines that offer the same amount of power as the LFA’s V10, but with less cylinders, a smaller size, fewer emissions, and better mileage, such as the M5′s 4.4-liter 552-horsepower turbo V8.

No matter what happens, Toyota is wasting little time getting started (it took a decade to bring the LFA from the light table to the showroom); the word on the street is that a BMW i8 is residing in the automaker’s testing grounds near Mt. Fuji, undergoing stress tests in regards to its carbon fiber frame and emissions trials on the plug-in hybrid’s engine.

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What’s Wrong With This Picture: I Believe I Asked For A Small Mokka Edition Thu, 22 Dec 2011 14:22:05 +0000

Editor’s Note: The image above is from Autobild (and is posted elsewhere in the German media), and is not labeled as a rendering, a spy shot or an official image. An anonymous tipster who has seen the upcoming Buick “Encore” (which GM has shown to select fans and journos under embargo for years now) says the vehicle shown here is “basically the same design” as the Encore. 

At first glance, it’s fairly obvious that there’s something not quite right with this picture. Better than most photoshops or renderings, but not quite convincing as a real picture, this car seems trapped in the Uncanny Valley, as if it were photographed undergoing winter testing on the set of the film The Polar Express. In any case, this little Corsa-based CUV (allegedly to be named “Mokka”) will debut at the Geneva Auto Show, and will take on such B-segment crossovers as the Nissan Juke, Suzuki SX4 and Ford’s forthcoming new Ecosport.

Meanwhile, GM’s American-market interpretation of a B-segment CUV is likely to be quite different from these little rough-and-ready softroaders [Ed: Or, not]. Buick is slow-strip-teasing its forthcoming Encore on Facebook, and it’s already looking like the Baby Enclave rumors were well-founded in terms of its exterior design. On the other hand, this isn’t a wildly detailed photo, so who knows? Either way, both the Mokka and the Encore are based on a jacked-up version of the Gamma II subcompact platform, and based on a video of what appears to be some relatively early chassis testing, the short-wheelbase and tall suspension took a little taming. Hit the jump to see for yourself…

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Bob Lutz: “I’ll Take The Blame For GM’s Weight Problem” Thu, 08 Sep 2011 01:03:11 +0000

The theme that’s emerged most clearly from my interview with Bob Lutz was, somewhat counterintuitively, compromise. Every vehicle that’s developed and built is the product of nearly countless compromises, on everything from performance to efficiency, and from weight and materials to cost. The question isn’t so much if you compromise when developing a new car, but how you compromise… as was demonstrated in our last Lutzian anecdote. And even during my interview, as the conversation bounced from GM to Chrysler, from mass-market products to niche halo cars, I was thrilled that this issue kept coming up. Why? Because this theme played perfectly into the question that was at the top of my list of prepared questions. After all, there has been a mystery haunting GM followers for some time now… a mystery that I’d never seen a journalist ever ask about. And there I was, sitting with one of the few people who was even capable of fully answering it. So I just waited for a pause, opened my mouth and asked:

Why do GM cars weigh more than other cars?

I had no idea what kind of answer to expect… but I definitely wasn’t expecting the answer I got.

To be perfectly honest, I half-expected an angry denial or a brush-off… possibly even a signal that the interview was over. In the car world, weight is extremely important to engineering cultures and enthusiasts alike. The former see low weights as the achievement of engineering excellence in the abstract, while enthusiasts enjoy a low mass vehicle’s inherent advantages in handling, acceleration and efficiency. Ever since Colin Chapman built Lotus around the philosophy “simplify and add lightness,” curb weight has been the measure to look at for in-the-know-enthusiasts. And there I was asking a guy who was still informally advising GM, and would be officially back at the company a week later, why his cars were fatties.

Of course he couldn’t exactly deny the fact. Chevy, for example, won’t let you use its online “competitive comparison” system to compare weights, but if you go through the comparisons by hand you’ll find the weight of every GM car is at least a little heavier than the competition. Sometimes the extra weight isn’t much: for example, a base, four-cylinder Camry weighs 3,307 lbs to the four-pot Malibu’s 3,421. But go to the C-segment and you’ll find that a Cruze with automatic transmission weighs 3,102 to the Corolla’s 2,800 and the Civic’s 2,672. Similarly, a base Equinox is four hundred pounds heavier than a comparable CR-V. No wonder then, that Chevy struggled so long with fuel economy and the perception that it “couldn’t make a good small car.”

But if Lutz thought through all this before answering, he didn’t let it show. There was only the briefest pause as he considered the question, before the answer came:

Um, I’ll take part of the blame for that…

Huh? Really?

I said look guys, these vehicles are going to be robust, strong, I want a great ride, an absence of any noise, vibration and harshness, I want these things to be super-silent. So the guys put in heavy-duty components… also, Ed Welburne and I like big wheels, and the minute you say the minimum wheel size is 18 inches, you’ve automatically  bought yourself an extra 50 lbs of weight. We willingly and knowingly made decisions in favor of design and appearance and noise, vibration and harshness… all the things that make a vehicle feel substantial. You know, everybody cries and moans that the Buick Enclave is 400 lbs too heavy, but it’s the last thing on the customer’s list. They don’t worry if it’s 400 lbs overweight or not, they love the way it rides and drives.

And, you know, we did a lot of programs very fast, so there wasn’t always time to go back and say “gee, could we make this part out of something else?” So I will cheerfully admit that making weight reduction targets was my lowest priority… and it shows. But other than the automotive press, nobody cares about it.

And there you have it: if Lutz were simply a “car guy” in the mold of the most fanatical enthusiasts, there’s no way he would have run GM’s product development that way. But, beneath his “true-believer,” “engineers-first,” “car-guys-versus-bean-counters” image, Lutz is still a corporate executive first… a species more closely related to the “bean counters” than the “car guys” we all know from outside of the industry.  For all the passion he puts into his cars, he’s not developing them for himself. And for all of his public contempt for finance and “running a business by the numbers,” he’s always got an eye on what the majority of car buyers, not the aficionados, are looking for. In fact, it’s quite likely that most self-identified “car guys” who don’t work inside the industry would argue that Lutz’s priorities are as anti-car-guy as possible. After all, how can you truly claim to love a car in which you’ve concentrated all of its compromises into extra weight, the enemy of fun and efficiency? Since when do “car guys” trade hundreds of pounds of extra weight for a quieter ride?

Lutz didn’t provide too much more insight into this issue, sticking with his assertion that consumers simply don’t care about extra weight. And if asked in the abstract, it’s hard to imagine many “average consumers” placing “low weight” high on a list of priorities. But it’s clear that Lutz’s absolute emphasis on ride and refinement won’t last at GM, because weight simply isn’t abstract. Even if consumers don’t care about its effects on handling, as gas prices rise, they’re starting to care more about its effects on efficiency. And Hyundai certainly doesn’t seem to have compromised style, the all-important priority in the Lutz approach to product development, in order to bring down weight and achieve leading  fuel economy. So, is weight reduction going to become more important for GM? According to Lutz

Is it something that is being addressed? The answer is “you bet it is,” because it’s going to be harder to make fuel economy regulations with a heavy car. The guys are already doubling back on it. In the next generations they’ll get the weight out and hopefully still maintain the structural rigidity.

And on that note, Lutz whip-cracks back into “car guy” mode, singing the praises of beaming and torsional rigidity, saying “if you get that right, you’re 90% of the way to a great car.” Then, as I’m still struggling to remember a time when someone said “I love this car, but next time I’m going to buy one with more beaming rigidity,” the subject shifts again to CAFE regulation. I’m hardly an experienced interviewer, and my head is still spinning trying to make sense of what I’ve just heard, so the conversation flows on. I’m still not sure I understand why GM’s cars had to be so much heavier, but at least I know who to blame for it… if anyone actually cares.

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Cars Only Bob Lutz Remembers: The 1983 Ford Ghia Barchetta Concept Wed, 07 Sep 2011 18:13:50 +0000

Bob Lutz admitted in his book Guts that he “possesses a certain duality of mind,” and he ain’t kidding. After all, how could someone spend a career in an industry built on “the industrial logic of scale” (to borrow a phrase from Sergio Marchionne) while trying to connect new vehicles with the lust centers of the human brain without developing a certain amount of creative schizophrenia? But, as anyone who has ever driven a Pontiac Solstice knows, sometimes compromises are made between the conflicting pulls of lust and practicality… and when those compromises must be made, Lutz tends to err on the side of lust. I confronted him about this tendency in our recent conversation, and rather than accept the criticism, he doubled down on his premise that lust-worthy design is more important than practicality. And he illustrated his point by telling the tale of a long-forgotten concept and its troubled path to production.

The story began, almost inevitably, when I asked Lutz if he had any regrets about the Solstice/Sky “Kappa” program. Did he ever second-guess himself on design decisions made in that program, I wondered. Was practicality unnecessarily sacrificed? Would more usability have had any effect on sales of the Solstice or Sky? After the briefest moment of reflection, Lutz answered with a fairly emphatic negative. But rather than leave it at a simple “no,” Lutz unfolded a parable about product development that began the year after I was born.

Do you remember, we did a two-seat Fiesta roadster at Ford of Europe one time? I forget what it was called… we didn’t call it a Speedster, but it was… I guess it was kind of like a Porsche Speedster. If you Google it… it had a unique body… I think we showed it at the Geneva show… 84 I think.

It was a really neat looking car with a very fast front end. It kind of reminds me of the BMW Z3 because the hood had to stay level for a while to clear the engine and then it dropped off sharply. It was a two-seat roadster with a very short back end… the wheels were all the way in the back. It was cute as all get-out… but the functionality was probably close to zero. No back seat, no trunk, nothing… just a very basic, low-cost, two-place roadster.

Lutz remembered the car, he just couldn’t remember the name. With a little Google wizardry and a lucky stumble across this blog item, I found the name: the Ford Ghia Barchetta. And he was only off by one year… apparently the Barchetta debuted in 1983. He was also right about the looks: in many ways it seems like the inspiration for Fiat’s wildly-successful (and gorgeous) front-drive Barchetta, which was built from 1995 until 2005 with only a brief pause. But now we’re getting sidetracked… back to our story, already in progress, with the first compromise made to the concept:

I wouldn’t let them change the engine placement. I said “if we have a chance of putting this into production,” (which I really badly wanted to do), “we have to keep the Fiesta underpinnings.”

So far, so good. But here’s where the story becomes a parable.

I needed some volume to make a viable program out of it, so I figured we could probably do eight or nine thousand of them in Europe, and we gave it to Ford NAO (North American Operations) and said “what can you do with it?”. They did some Supermarket parking lot surveys and they asked women coming out of the grocery store “what do you think of this?” They said “oh, it’s cute. What would it cost?”. “About eight thousand dollars.” “Oh, that’s a lot of money.” And then [the Ford NAO people] said “aaand, you can have this four-cylinder Mustang convertible for $7,800.” “Oooh,” they said, “well I’ll take that.” So they concluded there was no volume potential in the United States… and of course there was, they were just asking all the wrong people.

This encapsulates why Lutz deserves at least some grudging praise from even his toughest critics: lust is difficult to make a case for in the auto business. Simply trying to convince Ford’s US-market fiefdom that they would benefit from such an unusual vehicle in their lineup was an insurmountable task that he tackled anyway. As the romance and enthusiasm slowly drains away from the world of cars, very few executives risk their careers for exciting products that might not make immediate business sense. Sure, this risk-taking seems less laudable in the aftermath of the bailout, but it’s integral to the cultural power of the automobile. And, as the story continues, we’ll find that if you’re going to take a risk on a niche product, you better really take a risk on it.

Then Alex Troutman at [Ford Asia-Pacific] got interested in it for Asia-Pacific, and went and talked to Mazda. Mazda said “no, we don’t like that one because it’s front-wheel-drive, but we’re actually thinking of doing something like that with rear-wheel drive. And Alex said no, ours has got to be off a Ford architecture.

If Lutz had any regrets about not involving Ford in the creation of the Miata, he didn’t let them show. On the other hand, the missed opportunity had to sting at least a little. After all, if you’re taking a risk on an impractical two-seater, why not go all the way with RWD? And with the benefit of hindsight, involvement in a modern icon like the MX-5 would be a point of pride for any “product guy.”  But Lutz only had control over Ford of Europe, and by this point he had even lost control of the Barchetta project. It was about to become everything it wasn’t ever supposed to be.

When Alex went back to the states, he got [the program] going again. It was carefully researched, so it was decided that front wheel drive is OK, but we don’t like the front end. So, OK, the front end got more conventional. Then, “it’s no good with no back seat. People won’t buy a car with no back seat.” Well, OK, we can add a back seat. And then, “oh, there’s no trunk space.” Alright, add a trunk. And so it became that misbegotten little Mercury [Capri], remember that? What a horrible thing. That started out as the Fiesta.

That started out as a beautiful, slick, highly desirable little roadster that would have done well. Functionalizing it wrecked it. And I’ll tell you what: Solstice owners had no problem with that top at all. When you’re into emotional cars, it’s about appearance and how cool is it… it’s the same thing as sports motorcycles. Not necessarily comfortable, not suitable to saddlebags… but they look like track bikes and they’re fun to ride.

I know that not all of TTAC’s B&B will agree wholesale with Lutz’s vision, but the tale of the Barchetta’s transformation into the Capri is instructive. When you have a successful design, and cites Ford press releases saying the German “Barchetta Club” alone had 10k members at one point, you keep it as pure as possible or you don’t build it all. It’s easy to criticize Lutz as being too uncompromising, but in an intensely collaborative process like car development, the ability to say “no dammit, we aren’t going to compromise on this” is a rare thing. If the world were full of cars that are as practical as they are fun, his approach might be dismissible. Since that’s not the case, this is an object lesson in the trade-offs that create crap like the Capri out of a tiny jewel like the Barchetta.

Zemanta Related Posts Thumbnail Ick! fordbarchetta6 fordbarchetta4 fordbarchetta3 fordbarchetta2 fordbarchetta1 fordbarchetta 1983 sends its greetings! ]]> 58
AN: McAuliffe’s Chinese EV Factory “Dead On Arrival” Tue, 06 Sep 2011 16:04:48 +0000

Remember Bertels’ stranger-than-fiction write-up of former DNC Chair Terry McAuliffe’s Mongolian EV /Visa plant? Charles Child at Automotive News [sub] has looked at McAuliffe’s scheme and comes away less than entirely impressed, noting that

even casual scrutiny of his vision reveals overwhelming obstacles. Let’s be plain: His plan is dead on arrival.

You won’t find a zinger like that in Bertel’s piece, but only because he keeps his head down detailing the entire bizarre history of McAuliffe’s venture, its roots as the “Hybrid Kinetic Motors” visa scheme, its ties to a couple of notorious former Brilliance boys and its money-first, product-later approach. Child’s takedown isn’t as well researched (nor does it contain anecdotes about former a Ambassador driving a lawnmower into a swimming pool), but the few remaining folks out there who think the former Democrat fundraiser might be on to something big should probably read on. After all, McAuliffe has put so much hype out there, this story is something of a target-rich environment for truth-tellers.

Child quickly identifies McAuliffe’s major contribution to the project: hype.

What keeps the vision alive is McAuliffe’s audacity. With confidence and verve, he spells out his job-creating optimism on friendly national cable shows such as “The Daily Rundown” and “The Ed Show,” also on MSNBC… Bold auto visions are fine. But they require staggering amounts of money and manpower. And there’s no tangible indication that McAuliffe has either.

But not all the hype has been good: conservatives dislike McAuliffe for obvious reasons, but even parts of the left wing seems to be shunning the Clintonite hustler. And speaking of manpower, do you want to guess how many employees GreenTech has?

About 50 employees, says Alan Himelfarb, executive vice president for strategic planning. Not even 50 engineers. Fifty total employees.

Consider that GM has added around 2,000 engineers in recent years, just for its hybrid and electric development efforts, and you get a sense of how outgunned GreenTech is. Still, a startup could theoretically catch the OEMs napping… but that’s where the “staggering amounts of money” come in. And, reports Child,

The Chinese partner is Shengyang Zhong-Rui Investment Co., which GreenTech says has investments in banking, commercial real estate and Chinese airlines. But no investments in automotive operations are listed in the GreenTech press release.

And without investment, McAuliffe’s staged “cornerstone laying” of the plant in Ordos, Inner Mongolia was just that: the laying of one stone, no more, no less. And absent the billions needed to make this kind of startup take off, plans to sell EPA and DOT-certified cars in the 2013-2014 timeframe appear to be… on hold.

the Web site of the Ordos provincial government in China says GreenTech pledged to start production of hybrids and electrics at its plant in 2013.

But last week the company scaled back those estimates.

“Our expanding product portfolio, including hybrid and electric full-speed vehicle will come in due time and we have not yet set a timetable for the next product introduction” after this year’s neighborhood electric vehicle, the company said in a statement. “We fully understand the challenges in time, money, and technical expertise to produce a quality hybrid or electric vehicle.”

In other words, it could easily be another five years before GreenTech, which hopes to have 100 employees by year’s end, even starts production of hybrid or electric cars. At least cars that are capable of driving on freeways. In the meantime, the venture is leaping into the mainstay of EV hucksterism: neighborhood electric vehicles. Like Zap, Miles and many more before them, GreenTech’s “world-changing” automobiles will be limited to 30 MPH and banned from streets with a speed limit above 45 MPH. According to a GreenTech presser, this NEV (called the “MyCar”) will be built in Mississippi and,

We will make the first 100,000 U.S.-built MyCars available to consumers for $10,000 apiece.

But even at those low prices, GreenTech will be waiting to sell its first 100k cars. Child cites market research from International Market Solutions showing that the US market for NEVs last year was a little over 26k units (for comparison, the Toyota Camry sold 30k units in August alone). GreenTech’s response?

neighborhood electrics “are a small market for sure, at least right now. We have a few ideas on how to create some awareness and build that market. Our goal of 100,000 units is a cumulative sales figure over time. We look forward to achieving that.”

I’ve only been blogging about the car industry for about three and a half years, but I’ve seen this movie way too many times before. If you’ve missed out on the ZAP saga, to cite the most infamous example of the “NEV today, domination tomorrow” scam, read this, this, this and this for a primer on how this game works. It’s not pretty, and I hoped it was left behind in 2008, when it still fooled a few people. Today there’s no excuse for anyone to be taken in by such an unimaginative, played-out scam.

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Will Morgan Build The First-Ever Multi-Gear EV? Wed, 17 Aug 2011 17:36:06 +0000
Rattle off a list of the buzzworthy EV makers that seem likely to achieve the “holy grail of EV development,” a multi-gear electric car, and chances are that firms like Tesla, Fisker, Th!nk or even a major OEM like Nissan will make the cut. You probably wouldn’t consider the ultra-conservative British sportscar maker Morgan to be in the running, as they still build body substructures out of wood… surely the brand that’s most stuck in the early 20th Century seems an unlikely candidate for EV technical leadership. Think again…

GreenCarCongress reports that Morgan is working on something called the +E, an electrified version of its Aero 8 sportscar, with prototype production scheduled for early 2012. And believe it or not, the plan is to send 221+ lb-ft of zero-rpm torque through a “conventional manual transmission.” That’s right all you Silicon Valley hotshots and US DOE grant-receivers: the most advanced EV may just be developed by a firm that was long said to be “stuck in the 1930s.”

Part-funded by a $166k R&D grant from the Niche Vehicle Network CR&D Program, the +E will be made by replacing an Aero 8′s BMW V8 and replacing it with a variation of Zytek’s innovative electric drivetrain. The Zytek drivetrain, which is known for its extremely compact packaging, is also being used for GOrdon Murray’s T.27 electric city car (click here for more on the drivetrain). Featuring lithium-ion batteries, the rear-drive +E will take advantage of Zytek’s extensive research into hybrid and KERs technology (the firm supplied technology for the first Grand Prix-winning KERS system).

But the most important development is the use of a manual transmission in an EV application. From the sound of it, Morgan will use the 6-speed Getrag transmission that’s normally mated to the BMW V8… but because it’s not clear how much power the +E will produce, it’s possible that another solution will be used. But the man-tran will definitely make an appearance, as Zytek’s Neil Cheeseman explains

Keeping the motor in its sweet spot will help it use energy more efficiently, which will increase the vehicle’s range. It also allows us to provide lower gearing for rapid acceleration from pull-away and higher gearing for top speed. It should also make the car more engaging for keen drivers.

EVs will make better progress with hard-core gearheads when shiftable multi-speed transmissions are made part of the package, but as Tesla has proved, engineering a reliable multi-gear EV ain’t easy. If Morgan is the first firm to bring one to market, it could radically alter the retro sportscar maker’s position in the industry.

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Carquestions: Where Is The Jeep Grand Cherokee’s Battery Charge Monitor? Wed, 10 Aug 2011 17:35:32 +0000

Our buddy Mark Whinton from Carquestions, who always manages to find the obscure problems with today’s complex automobiles, wonders: why can’t the new Jeep Grand Cherokee tell if it’s battery isn’t being charged? As he points out, this omission could leave drivers stranded if their accessory belt were to break, without ever warning them of the problem. Is Mark nit-picking? Possibly, but in this business, one lesson gets learned again and again: you gotta sweat the details. In light of Mark’s research we’re as curious as he is: did Chrysler simply overlook this, or is this a case of conscious decontenting? Over to you, ChryCo…

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Quote Of The Day: The Ultimate Data Machine Edition Tue, 09 Aug 2011 23:47:17 +0000

The source of today’s Quote Of The Day, a BMW M Division engineer, is clearly not a native English speaker, but he reveals just where performance cars like the new M5 are going when he says:

More and more demand is from our test engineers from the referring(?) departments and they come over and 80%, 90% are only working on the electronic systems. The other 10, 20 percent are working at the car, under the car….

Of course, the M engineers aren’t developing a car from the ground up here, but it’s still amazing that the workload is so unevenly weighted towards electronic rather than, for lack of a better term, “greasy hands” work.

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Mazda Halts Rotary Engine Development: Is 2011 Your Last Chance To Wankel? Mon, 08 Aug 2011 15:05:13 +0000

Though the next-generation of Mazda’s rotary engine has been in development since 2007, and has been the subject of several TTAC Wild-Ass Rumors, WardsAuto reports that the unique engine design could well be reaching the end of its life.

Kiyoshi Fujiwara, Mazda executive officer-product planning and powertrain development, says there is “huge discussion” within the Hiroshima, Japan-based company whether to continue on with a rotary engine.

Fujiwara says economic hardship has some top brass looking for programs to cut, and that the engine program is on the list.

Continuing development of the rotary has been halted for now, but he hopes it will resume in the future, noting the technology is a part of Mazda’s DNA.

Without identifying what exactly they are, Fujiwara says three major problems were identified with the current generation of rotary engine, but that two of the three have been overcome. Still, Mazda says that only one thing will save the rotary engine at this point: success with Mazda’s new suite of SKYACTIV technologies. If these fuel-saving measures spark new interest in the Mazda brand, says Fujiwara, then Mazda might have enough cash to invest in its rotary engine. Alternatively, a Mazda-developed Wankel engine could be used as an electric range-extender. In any case, don’t expect a new Mazda rotary before 2017… if ever. Here’s hoping Mazda is able to keep this unique, distinctive drivetrain alive for future generations of enthusiast drivers.

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Fisker: With An EV Transmission, All Things Are Possible Thu, 21 Jul 2011 14:53:34 +0000

In my review of the VW Golf blue-e-motion on Tuesday, I noted that “the holy grail of EV development is a multi-speed transmission,” but that nobody has been able to build one that can reliably handle the 100% torque at zero RPM characteristics of an electric drivetrain. Tesla tried two different multi-speed transmissions (from X-Trac and Magna), before giving up and going with the single-speed setup that every production EV now uses. Nobody has even talked about a multi-gear EV since… until now. With Fisker’s Karma about to go to market, CEO Henrik Fisker tells Autocar that his firm is developing a multi-speed EV gearbox, and that it would improve performance in EVs like the Karma, saying

With the torque at the wheels increased by the use of a gearbox, Veyron levels of performance should be possible.

We’re as excited as anyone else by the idea of an EV with shiftable gears, but this sounds more like Fisker trying to drum up some hype for the Karma launch. After all, the Karma launches to 60 MPH in a leisurely 7.9 seconds in “stealth” (EV) mode and 5.9 seconds in “sport” mode with gas power to up the wattage… a far cry from Veyron performance. As C&D puts it:

The Karma’s initial surge is sufficiently potent to avoid damnation as a slug. But the physics conspire against it keeping pace with other $100K sports sedans.

Lugging over 4,000 lbs is certainly easier with a multi-gear transmission, but given the reliability challenge, we’d be more likely to trust an EV transmission from a reliable supplier rather than a boutique luxury PHEV maker. And until Fisker can back up the Veyron reference with some hard evidence, we’re filing this one under “intriguing but unlikely.” Still, it’s exciting to know that this technical challenge is still out there, unconquered by major manufacturer or feisty startup… in a world where cars are becoming increasingly mundane, the multi-gear EV transmission challenge is a throwback to the golden years of automotive development.

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Toyota To Pay Tesla $100m For 2012-2014 Electric RAV4 Wed, 20 Jul 2011 21:51:00 +0000

Tesla will begin supplying Toyota with components for its electric RAV4 a year earlier than previously planned, reports Bloomberg, a move that will have Toyota paying $100m for the drivetrains rather than the previously-agreed-upon $60m. According to a Tesla SEC filing, the EV specialist firm will supply Toyota with

a validated electric powertrain system, including a battery, charging system, inverter, motor, gearbox and associated software which will be integrated into an electric vehicle version of the Toyota RAV4. Additionally, Tesla will provide TMC with certain services related to the supply of the Tesla Battery and Powertrain.

There’s still no word about how many of these RAV4s is Toyota planning on selling over those two years, or where will they be assembled, but it sounds like Toyota isn’t trying to launch quite the EV offensive that some green car blogs seem to be hoping for. As one analyst puts it to Bloomberg, $100 million “isn’t a huge amount for Toyota, so this allows them, with only modest downside risk, to participate in what Tesla is doing.” That sounds about right…

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Tesla Model S Customer Blog: Regenerative Braking And Its Discontents Mon, 18 Jul 2011 21:05:07 +0000

It’s been 27 months since I wrote a check for $5,000 to Tesla Motors, my deposit on a Model S sedan. As owner number P717, I’ve gotten some modest bennies to keep me interested till the expected delivery date of mid-2012: a test drive in the Roadster, an invitation to the opening of the New York Tesla store, and some nice promotional swag (T-shirt, coffee mug, and, most recently, a cool little remote-control toy Roadster) .

Last week I was invited to an owners-only preview before a Model S promotional event in Greenwich, Ct. Set in the posh clothing store Richards, just across the street from an Apple store, the event featured a sinuous dark red early proof-of-concept prototype of the Model S. Unfortunately, we weren’t allowed to drive, sit in, or even touch the car (“It cost more than $2 million to build,” we were told). But the black-clad Tesla reps on hand offered some intriguing technical info about the car that, to my knowledge, had not been previously revealed. Among the more interesting tidbits:

  • The Model S will not have the blended regenerative/friction braking that is standard in the Nissan Leaf, Chevy Volt, Toyota Prius and virtually all other mainstream electric and hybrid cars. Like the Tesla Roadster, the brake pedal in the Model S will operate only standard friction brakes. Regen braking, which turns the electric motor into a generator and sends power back into the battery, will occur only when the driver backs off the accelerator. From the driver’s point of view, the feeling is precisely the same as engine braking in a standard car.The question is, how much regen? Hopefully not as much as the Roadster. Back off the gas pedal at 60 mph in that high-performance two-seater, and you’ll be thrown against your shoulder harness by the aprupt deceleration. The feeling is like driving a high-revving gas-powered sports car stuck in first gear. That may be fine for racing or high-performance driving on twisty roads, but in my opinion it’s highly annoying in normal everyday driving.Tesla is currently mulling over whether to include driver-adjustable trailing-throttle regen on the Model S, and if so, what form it should take. There’s currently no industry consensus about driver-adjustable regen. Nissan doesn’t include it on the Leaf, but the Volt has a simple and very effective system: the driver can increase regen by shifting to “Low” on the gear selector. (There’s no actual change of gear, of course; it just feels like it when you back off the gas pedal.) Volkswagen’s Golf Blue e-motion goes a step further with a paddle shifter on the steering wheel that offers three levels of trailing-throttle regen, plus a “coast” mode.

    According to a Tesla rep in Greenwich, the current Model S Alpha prototypes have infinitely adjustable driver regen. Perfect! I fervently hope production cars retain this feature. But I got the feeling that the company may be leaning toward no driver-adjustability at all for the Model S, along with jarringly strong built-in regen like that of the Roadster. “You’ll get used to it,” the rep told me.

    Bad move. Instead of telling us what we’ll have to get used to, Tesla should be asking us, “What would you prefer?” I , for one, would prefer blended pedal braking and infinitely adjustable trailing-throttle regen.

  • Longer-range versions of the Model S will have better battery chemistry, not just more cells. Tesla’s battery packs are arrays of thousands of standard Model 18650 laptop computer batteries. (The Roadster battery pack, for example, has about 6,800 18650 cells.) The Model S will come with three available battery packs offering nominal ranges of 160, 230, and 300 miles. But instead of merely adding more cells to increase capacity, the longer-range versions will also have more advanced cells being developed by Sanyo. As a result, the longer-range versions will weigh only a few pounds more than the basic 160-mile model. But each jump in battery capacity will cost an additional $10,000 or so. “The more advanced chemistry is expensive,” the Tesla rep said.Actual everyday range numbers will be about 20 percent less than the quoted numbers. According to the Tesla rep, the 160, 230, and 300-mile numbers assume the use of 100 percent of the battery capacity. In practice, however, the batteries will be charged only up to 90 percent. And when the battery charge drops to 10 percent, it will revert to a limited “limp-home” mode to conserve power. Thus for normal driving, the range options of the Model S will be 128, 184, and 240 miles, plus a small limp-home reserve..
  • Those killer 21-inch wheels that we’ve drooled over in all the Model S photos and displays will be extra-cost options. The standard car will come equipped with 19-inch wheels and low-rolling-resistance all-season tires.
  • Beta prototypes of the Model S, virtually identical to the production cars, will be available for test drives by owners (and presumably the press) beginning this fall. Where do I get in line?
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The Curse Of The Theta Plug-In: Cadillac SRX PHEV Dies Fri, 27 May 2011 19:27:42 +0000

Three times now, GM has planned to build a plug-in hybrid (PHEV) version of its Theta-platform crossovers, once with the Saturn Vue, once with the Buick “Vuick” and now, according to Reuters

General Motors Co has canceled plans to develop a plug-in hybrid vehicle based on the current Cadillac SRX crossover platform, deciding the project was not financially viable, three people with direct knowledge of the project said.

While two of the sources said the plans could still be revived on a future platform, they and two others familiar with the matter said engineers involved had been reassigned to other projects.

Back in early days of the program, the plan was to bring a Vue PHEV to market as soon as 2010, but the death of Saturn (and other difficult-to-identify issues) forced a change of plans. The Buick version was literally laughed out of consideration in what was the first-ever Twitter-based future product killing. But given that hand-picked members of the public were driving mules nearly two years ago (see video), we figured enough development had been done that GM essentially had no choice but bring the troubled Theta PHEV to market. Today’s cancellation of the SRX version is therefore just a little confusing…

So, what’s the deal? According to Reuters:

The plug-in would have been based on the current SRX platform, which is two years old. In the auto industry, the life cycle of a platform, which dictates the size and body construction of a vehicle, is typically about five years.

By the time the Cadillac plug-in was ready for production, the platform would have been nearing the end of its life, adding to the costs of developing the vehicle, two sources said.

The costs of the program were already high, and the vehicle was expected to lose money, two people with direct knowledge of the program said.

GM has made engineering advances since the program was initiated, so it made more sense to focus on the next platform with the improved, more cost-efficient technologies, one source said.

Having torn through three brands and multiple launch date targets, the Theta plugin has lead a rich development life… which does make one wonder how much money was written off with this cancellation of a product GM has been hyping for at least three years now. And it’s also another black eye for GM’s hybrid development program, which, between the first-gen BAS “mild” hybrids, the Two-Mode V8 hybrid and this plug-in two-mode hybrid, has yet to record any significant successes (still). But with a Volt-based MPV likely planned, it’s time for The General to move onto the next big thing…

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Mission Creep, Weight Problems, Compromise Haunt GM Alpha Platform Tue, 17 May 2011 14:52:21 +0000

Yesterday we gave GM kudos for addressing its lingering vehicle weight issues by redesigning the head of its popular 3.6 liter V6, and shedding 13 lbs in the process. It was, we noted, the kind of news that showed GM is staying focused on the nitty-gritty of product development, sweating the details. But, according to a fascinating piece by GMInsideNews, new-product development at GM still has its issues. Specifically, Cadillac’s development of a new BMW 3-Series fighter, known as ATS after its “Alpha” Platform, has faced more than its fair share of what GMI calls “drama.”

Turf battles, unnecessary “wants” on checklists and ultimately a severe case of “Mission Creep” have created a vehicle that now needs a crash diet, according to GMI’s sources both within GM and at suppliers working on the Alpha/ATS program. For a vehicle that’s taking on an institution like the BMW Dreier (not to mention costing a billion dollars to develop), these are troubling signs indeed.

GMI starts with some history of the Apha program, it’s roots as “Kappa II” which Holden showed as the TT36 Torana Concept back in 2004, before development took a long hiatus. As originally intended, Alpha was to be lightweight and enthusiast-oriented, built only for four-cylinder engines. No wonder it went nowhere inside the RenCen until Cadillac adopted the platform as the basis of a forthcoming small sports sedan. But, as it turns out, Cadillac’s “wish list” for Alpha sowed the roots of its runaway complexity and bloat issues. Cadillac may have saved “Kappa II,” but it also killed off its original promise. Here’s how GMI tells the story:

…as Cadillac became involved with the Alpha program, a sense of deja vu came with it. Much like Cadillac’s initial involvement with the Sigma platform, Cadillac had a long wish-list for the new Alpha platform. This long list quickly turned a light, sporty platform on it’s head, including stops on development several times over the last few years.

Initially Alpha was going to be a four-cylinder only chassis for small premium cars, so naturally development focused on optimizing the Alpha platform for four-cylinder mills in a very light package. Well, Cadillac’s first condition was that Alpha be re-engineered to package a naturally aspirated V-6 engine – and that was non-negotiable. This about-face on engine selection would become the first of at least two engine requests that led to a re-engineering of the Alpha chassis to accommodate the new requirements. More changes (read: more mass and cost) were required for the addition of all-wheel drive.

What started out as a great handling, small RWD program, began it’s mission creep from being very focused to being all things to all people. And as it evolved, certain “hard-points” from previous development were locked in, even though the base program had transformed itself. For example, Alpha was designed with a very sophisticated multi-link front suspension with near perfect geometry for the car as it was developed at that point. That geometry was “locked in”. As the car grew and became heavier with more features and content, that original geometry was no longer optimal. Our sources tell us that GM is now attempting to mask this sub-optimal geometry with chassis tuning rather than doing the right thing and actually fix it.

Now, class, if you were developing a BMW 3-Series competitor, how important would the issues of weight and front suspension geometry be? Very important? Sort of important? Existentially important? Meanwhile, what about AWD? How important would that be? GMI may be reminded of the Sigma’s development, but GM’s history is rife with vehicles that started with a bold, simple vision, only to be re-engineered into mediocrity. A line of driver-oriented, four-cylinder-only, rear-drive small luxury cars is an intimidating step to make… but it could have been distinct, downright unique. And it would have easily handled the CAFE issue that Lutz worried about as ATS development was beginning in earnest in 2008. Heck, BMW is putting a three-banger in its next-gen Dreier… so why was Cadillac so worried about bigger engines and AWD, while glossing over the “locked-in” sub-optimal front suspension?

Regardless of why ATS development has taken the turn that it has, the effects are already clear.

According to sources familiar with the Alpha program both internally at GM and the supplier level, GM has made several other additions to the requirement list of Alpha beyond engines. Among the additions were: a new electronics system and aerodynamic shutters (similar to the Volt).

Each addition has caused another issue to engineer around, thus causing the Alpha program to exceed GM’s mass requirements for the car by nearly 500-pounds. It is unclear how heavy Alpha products will be, but every independent Alpha source GMI has communicated with has indicated that the final curb weight could push 4,000-pounds unless GM puts the program on a mass reduction plan before launch.

So, never mind about all that “GM is focused on weight gain” praise we were lavishing around yesterday. A BMW 335ix with AWD and an autobox only weighs 3,824 lbs… if Cadillac’s ATS comes in “pushing 4,000 lbs” it won’t be a Dreier-fighter, it will be a CTS with less interior room. Which, it turns out, is actually part of the problem.

Another issue the Alpha program has been strapped with is the addition of Alpha+ about halfway through development. The Alpha+ chassis is a larger variant of Alpha, intended for use with the next-generation Cadillac CTS. Naturally, Cadillac has another list of requirements for Alpha+, including the need to accommodate twin-turbo V-6 engines. This has added another layer of complexity to the Alpha program, driving up both costs and mass.

Maybe, just maybe, GM has worked some kind of magic with this Alpha platform that will yield equally exciting Camaros, ATS’s and CTS’s… but that’s a lot of work for one platform. Compromise is almost inevitable. As I wrote on the Alpha prorgam over a year ago now,

Weight and expense problems? Trying to develop a single platform that’s capable of competitively executing every RWD application across several brands? Compromising mainstream variants in order to justify the insane engine requirements of low-volume halo versions? Does any of this sound like a new day for GM’s RWD reputation to you?

Don’t get me wrong: a sub-Zeta RWD platform is a great idea (in Cadillac’s case, probably an existentially necessary one), and my inner enthusiast thrills at the idea of both budget RWD treats and tiny, loony supersedans. But the last thing I want to see is GM spending taxpayer money developing a platform that tries to fill too many niches, only to end up a dud of a compromised-to-death mess.

But it seems that the “all things to all enthusiasts” approach has ruled Alpha platform development, and as a result, well… we’ve got signs of “not good” everywhere. GMI concludes:

Recently GMI has spoken with sources–both internal and supplier–that are working on the Alpha program. According to those sources the Alpha program has been a near constant stream of drama and problems for GM, all of which were compounded by the company’s June 2009 bankruptcy. Even today, as the program nears its final stages of development, problems are still being worked out of the Alpha cars.

GM is now struggling to reduce Alpha’s mass by a quarter-ton. One source indicated that GM is willing to throw all sorts of new composite technologies at the body, structure and powertrain to achieve that goal. Those materials are being thrown at both the Cadillac Alpha cars and the sixth-generation Camaro.

At last report the Cadillac ATS is still slated to launch in mid to late 2012 as a 2013 model-year vehicle.

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GM’s Post-Lutz Planning Reshuffle: Fewer Reviews, More Market Research Mon, 14 Jun 2010 14:54:53 +0000

Doubtless somewhat shocked and surprised about GM Chairman/CEO/Non-Car-Guy Ed Whitacre’s decision to take over product planning responsibilities, Automotive News [sub] did some digging into the decision, and offers a full report. According to AN’s GM sources, the decision comes down to one fundamental goal: holding lower-tier executives accountable for decision making. By reducing executive reviews of forthcoming vehicles by one third, or about four times per development cycle, lower-level executives and engineers will have more freedom to make decisions, and will spend more time developing and less time preparing data for executive reviews. And lest you think this decision doesn’t merit your attention, consider this: though GM’s bureaucracy had created incredibly long lead times, most automakers hold about ten executive reviews per new product. By cutting to four, GM is taking something of a step into the unknown.

They’re trusting the troops below to do the right thing and check in less often

So says former mid- and full-size sedan (currently compact car) supremo Jim Federico, who is clearly a poster boy for this reform. Having spent years in Opel’s headquarters developing the Epsilon II chassis and its various applications, Federico has the kind of hands-on development experience that the new reform seeks to leverage. But, as examples from the Chrysler Airflow to the VW Phaeton prove, simply giving engineers free reign doesn’t always yield vehicles that sell well. And with executives in charge of GM’s business plan checking in on new vehicles less often, how are the newly-empowered engineers and development leads supposed to check their work against the market?

The answer, in a nutshell: Market Research. Having binged on market research-driven development during the Zarella era, GM had moved away from relying on focus groups and survey results under the leadership of Bob Lutz. Lutz was notoriously dismissive of market research, for the simple reason that Lutz knew a good car when he saw one. And if you’re never wrong, who needs to listen to the consumers? Besides, the Lutz school of thought was that a designer’s instincts produced better cars than all the market research in the world. As AN [sub] details, all that is changing now that Lutz is gone.

The now-retired vice chairman brought product planning, which includes market research, under the purview of product development.

In contrast, Whitacre has added new-product planning head Steve Carlisle to his list of direct reports, which raises questions about the role of research in product decisions.

In short, Whitacre trusts GM’s engineers to execute new products more than he trusts GM’s designers to dream up the cars that the market doesn’t know it wants yet. Whitacre will arm himself with a steady flow of market research and guide planning from a distance, instead of getting personally involved in the technical aspects of development the way Lutz would. The major worry here: GM’s cars were undeniably improved by Lutz’s hands-on approach, which was itself a reaction to the intensely mediocre products created by Zarella’s market research-driven development process. With a non-car guy calling the planning shots based on the latest focus group numbers, GM runs the risk of devolving into Malibu Maxx-era dissipation. On the other hand, engineers like Federico have experienced the successes (and failures) of the Lutz Way, and are, in theory, acting like hundreds of mini-Lutzes, obsessing over the details and execution of every new product.

Lutz’s influence on GM’s recent products helped set the stage for a reborn General Motors, but one generation of vehicles can’t undo decades of decline. GM’s new product development approach will have to build relentlessly on recent improvements if it wants its consumer reputation to eventually match the quality of its products.

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Ed “Not A Car Guy” Whitacre Takes Control Of GM Global Product Planning Sat, 05 Jun 2010 15:14:00 +0000

The executive shake-ups show no signs of stopping at GM, as Ed Whitacre ended the week with yet another re-shuffle. And this time Whitacre himself is the big winner. Automotive News [sub] reports that Whitacre has assumed control of GM’s global product planning, leaving former planning boss Tom Stephens with the more prosaic responsibility of overseeing new product development. Whitacre will be assisted by new VP for product planning Steve Carlisle, who, unlike Whitacre, actually has some experience in product planning. Carlisle replaces Jon Lauckner, who will head up GM’s new venture capital unit. But the big news here is that a man who only just learned the term “segment” about five and a half months ago, is now in charge of GM’s global product planning. Quick learner or egomaniac?

An interesting perspective into the planning and development reshuffle is revealed in a the internal announcement obtained by AN [sub].

Stephens said GM is also seeking to simplify its product-development process. So GM is reducing the number of reviews each vehicle gets by GM’s Global Product Development Council, which includes Stephens, his direct reports and top executives from the global region that will get the vehicle.

That committee will now only review each product four times during its development. That’s “about a third” fewer times than before, spokeswoman McBride said. The intention is to hold lower-tier executives accountable for decision-making, she said.

Devolving development decisions down the food chain is probably a good idea, especially when the upper tiers of management are being taken over by a mad Texan with no industry experience. And a look at some of the changes in engineering and vehicle development staff point to The General’s future direction.

GM’s former mid- and full-size sedan engineering boss Jim Federico has been taken off sedans, and will now serve as group vehicle line executive and chief engineer for global compact, small, mini and electric vehicles. Federico had led the international engineering team that developed the Epsilon II architecture out of Opel, and his reassignment seems to hint at a new emphasis on compact vehicles at GM.

Randy Schwarz will take over as chief engineer and group VLE for mid- and full-size cars, as well as RWD cars. Jim Dolot and Mark Moussa will work under him as chief engineer and VLE for mid- and full-size cars, while Bill Shaw will take over as global VLE for performance and RWD vehicles.

Jeff Luke will become group VLE and chief engineer for global trucks, vans and crossovers, while Jully Burau will become global chief engineer for full-sized trucks.

AN [sub] summarizes some of the other engineering changes:

• John Calabrese, to executive director of body, exterior, interior, safety and HVAC. Changes under him include:

1. Jim Hentschel, to executive director of body, exterior and dimensional engineering;

2. Jeff Boyer, to executive director of interior and safety;

3. Ray Bierzynski, to executive director of HVAC / powertrain cooling.

• Micky Bly adds responsibility for infotainment and OnStar engineering to his role as executive director for electrical systems, hybrids, electric vehicles and batteries. Changes under him are:

1. Tim Nixon, to executive director of infotainment and OnStar engineering; and

2. Kristen Siemen, to executive director for electrical systems.

• Ken Kelzer adds responsibility for induction controls and exhaust and the Canadian engineering center to his role as executive director of chassis.

And apparently the shake-ups will continue. GM’s internal announcement of these changes promises that “other organizational changes” would be announced in the future.

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Honda Breaks Stride, Delays Civic Redesign Tue, 18 May 2010 00:39:04 +0000

Honda hasn’t always replaced its bread-and-butter compact, the Civic, every five years. The Mk.1 Civic soldiered from 1972 until 1979. The second through fifth generations were replaced on a regular four-year schedule, before Honda settled into a five-year product cadence with the sixth generation (1996-2000). If it were to keep with that cadence, we’d be seeing a ninth-generation Civic sometime this year, replacing the Mk.VIII, which debuted in late 2005. According to Automotive News [sub], however, Honda is holding off on releasing a new Civic until 2011. What gives?

American Honda’s Executive VP John Mendel explains… sort of:

In general, we are not changing cycles. We change vehicles as need be. The ability to do something based on more current information is better than waiting a full model cycle. Some of that is being able to have the opportunity to change [based on] what you see happening in the marketplace.

But behind the confused corporate jibber-jabber lies a far more reassuring sign: according to Honda’s COO Tsuneo Tanai, the Mk.IX Civic was supposed to be larger than the current model, but was redesigned to be close to the current model’s size “mid-stream,” causing the delay. Breaking product cadence might seem a bit un-Honda, but its vehicles were also growing to distinctly un-Honda-like sizes as well. Sometimes you have to break one tradition to bring back another.

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Quote Of The Day: Maximum EVolution Edition Fri, 07 May 2010 22:15:35 +0000

Bob Lutz may have left GM, but TTAC’s not through with the man of Maximum just yet. One quote in particular, from an “exit interview” with, exemplifies the kind of candor that seems likely to disappear from GM along with Lutz. Possibly for good reasons. Well, good PR reasons, anyway. After all, with Lutz unable to deny that GM will lose money and/or battle sticker shock with its forthcoming Volt EREV, he’s the kind of guy who will tell the unspeakable truth instead of playing coy like a good PR man. To wit:

How do we get the cost down without in any way diminishing the value of the car in the eyes of the customer? By just doing some more elegant engineering than we did the first time around where we inadvertently did some belt and suspenders stuff because we wanted to move fast. Now as we look back at the car we say ‘gee I wish we’d done his different,’ …’ gee I wish we’d done that different’ because this is a very expensive solution and we could have done that for a lot less money.

That faint sound you just heard was Ed Whitacre expelling fillet of rattlesnake out his nose after reading that little nugget. Meanwhile, you’ve heard it from the horse’s mouth: the Mk.1 Volt will be expensive, unprofitable, and unpolished. Or, to use a PR term, “belt and suspenders.”

But don’t worry, there’s more. But hell, this Bob Lutz we’re talking about… you knew there was more:

Gen two will have all these intelligent cost saving things built in. Ultimately there’s no question that we will make some money on the Volt.

On pricing, its going to be higher than people would normally expect to pay for a car of that size, but on the other hand there’s a federal credit of $7500. Many states are now talking about credits, some cities are talking about credits, and some employers are offering credits, like Google.

So that at the end of the day if somebody has a federal credit, a California credit or whatever state, a major urban credit, and she works for Google, she’ll wind up writing a five thousand dollar check and getting a Volt.

Can you see the ad now? “Do you have a job? Do you have five thousand dollars? Well, come on down to Maximum Bob’s House of Volts, where you don’t buy a car… the government does.” And, in typical GM fashion, though the marketing come-on has already been committed to memory, there are still a few things to work out. Specifically, the “some restrictions may apply” part.

Without committing to [a] ten year or 150,000 [battery] warranty basically we are very very confident in the capability and the life of this battery in all but the hottest climates. So it could be that in certain very hot climates where people leave this thing in a baking supermarket parking lot all day, these lithium ion batteries, if they get much over 95 or 100 degrees Fahrenheit, they quickly start losing life. So we may have to adjust warrantees, but we really haven’t decided how to do that yet.

Too bad GM didn’t have time to do its two years of “customer experience optimization” testing until after the Volt goes on sale in California. At least it never gets too hot in California, right? But, as Lutz himself told Newsweek back in December of 2007

If some Silicon Valley start-up can solve this equation, no one is going to tell me anymore that it’s unfeasible.

You know, eventually.

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Too Good To Be True: How Toyota’s Success Caused Killer Decontenting Thu, 28 Jan 2010 22:26:44 +0000

The ongoing kerfluffle over Toyota’s recall of over 2m vehicles for a gas pedal defect which (allegedly) caused unintended acceleration has caught much of the automotive media flat-footed. How could it be, many have wondered, that the automaker most associated in the US market with the concept of quality has slipped so badly? As TTAC’s Steve Lang recently discussed, Toyota has been on a decontenting binge since the mid-to-late-1990s, putting profit above the quality obsession that had defined its operations up to that point. As a result, the current generation of decontented Toyotas and accompanying quality issues and recalls can be seen as the culmination of a long-term trend. But why did that transition take place? Though it’s easy to blame greed and mismanagement for the decline in Toyota’s quality, the decline in standards was actually a natural progression of Toyota’s constantly-evolving, efficiency-obsessed production system.

Since the 50s, Toyota had been introducing management techniques such as kanban (just-in-time inventory management), shusa (heavyweight product managers), and kaizen (continuous improvement at all levels of production, including assembly-line problem solving). In the 1960s, what is now known as the “Toyota Production System” came into its own, as Toyota integrated suppliers into its product development and established Total Quality Control over every area of its operation. These developments led to huge efficiency gains, allowing Toyota to launch its full-scale assault on the US market in the 1970s.

By the 1980s, the principles of the Toyota Production System were well-established, and the global auto industry began to take notice of Toyota as the automaker made increasing gains in the US market and elsewhere. The first half of the 80s saw the introduction of export limits in the US, which limited production expansion but kept Toyota’s profitability high thanks to artificially inflated prices. In 1985 however, a sharp jump in the value of the yen put major pressure on the Toyota system and reduced its competitive advantage relative to US manufacturers.

In the short term, this challenge was masked by bubble-driven Japanese economy, which added another 2m units of annual demand in the late 80s, but as Takahiro Fujimoto writes in The Evolution Of A Manufacturing System At Toyota,

as appreciation of the yen eroded their cost competitiveness, Japanese firms had to increasingly rely on the quality side of their strength. Real-term productivity growth had been slowing since the early 1980s, but total quality continued to increase.

The Japanese market took back its volume gains in the early 1990s as it entered recession, and the yen rose again in 1993-94, putting even more pressure on Toyota’s Japanese production. Though the rise of transplant production is the best-known result of these challenges, it’s no coincidence that Toyota made major changes to its product development philosophy in this turbulent period.

These changes were a response to the emerging concept of “fat product design,” a term that consciously clashes with the “lean” ideals of the Toyota system. The “fat product” critique held that Toyota’s increasing reliance on quality advantages resulted in product “overquality” in terms of design “overquality,” relatively lower component sharing, frequent model changes and product variety run amok. In short, a weakening Japanese market and upward pressure on the yen created conditions in which Toyotas strengths with its customers were systematically turned into a concept that was anathema to the Toyota system: the “problem” of “fat product.”

Fujimoto explains the subtle rise of the “fat product problem” thusly:

…these problems didn’t emerge because the Japanese makers built a wrong set of capabilities in the first place. To the contrary… “overbuilding” of the same capability that created new competitive advantages in the 1980s has been the source of new problems in the 1990s. Overall, the dilemma of fat product designs provides us with new insights about the subtle nature of the capability-building dynamics: effective manufacturing routines are difficult for a firm to acquire, but once it gains momentum to build them, it is also difficult to avoid overrun.

Fujimoto illustrates this dynamic in a number of areas. First, he argues that high product development efficiency aided by supplier integration into the design process (heretofore a competitive advantage) resulted in too much product variety. This efficiency was also measured in terms of shortened development lead times as facilitated by standardized development processes, a phenomenon that Fujimoto maintains was a contributing factor in fat product design as it prevented improvements in design efficiency by emphasizing routine practice. “Heavyweight product managers,” another Toyota innovation that allowed high levels of product integrity (and therefore success in the market) also became overemphasized, creating more unique components and requiring an accompanying increase in prices that could not be sustained when the Yen’s value took off in the mid-80s and early-90s.

Another area of product development “fatness” that is especially resonant in light of recent developments, is Toyota’s emphasis on the consumer satisfaction index (CSI) as a measure of customer satisfaction. The use of CSI results in product development was problematic in the sense that it emphasized the elimination of points of customer dissatisfaction. Fujimoto writes:

elimination of customer dissatisfaction does not automatically mean higher customer satisfaction, as the two are often different dimensions. As a result, the pursuit of the CS technique based on the dissatisfaction list may create high-cost [i.e. "fat"] products that have no problems– but no fun built in, either.

What did “fat product” mean in real terms? Around 1990 Toyota’s global output was about 300k units per month, comprised of no fewer than 60k product variations, 25k of which were assembled only once per month. The worst-selling half of these variations made up only five percent of total sales. This variation proliferation was caused by Toyota’s ability to respond to the market’s demand for product differentiation, but in the cutthroat global car business, this was not a sustainable state of affairs.

In addition to overbuilding variety in response to consumer demand, there is evidence that Japanese firms also overbuilt for quality in this period as well (although this is often difficult to objectively quantify). Fujimoto notes:

When I interviewed a product engineer at a German car maker in the late 1980s, he commented that one of the leading Japanese models was about $500 more expensive that the equivalent German model owing to overquality and excessive designs, other things being equal.

Whether this phenomenon existed across Toyota’s product range is nearly impossible to prove, but one thing is certain: in the early to mid 1990s, Toyota’s managers clearly believed that it suffered from “fat product” and moved aggressively to limit its effects.

In 1993-94, Toyota lost about 100b yen due to currency fluctuation alone, making lean product design a jarring necessity. Over those two years, Toyota saved about the same amount in cost-cutting alone, preventing the need for right-sizing capacity or cutting jobs. Instead, Toyota reduced product varieties, increased component-sharing and generally introduced more “value engineering” into its designs. Again, this was not obviously a product of  cynicism on the part of Toyota’s management, but a realization that reforming Toyota’s super-lean manufacturing system would not yield the kind of savings the firm needed. In Fujimoto’s words, the focus of competition had changed, and Toyota’s response was to de-emphasize individual, product-focused development in favor of multiple project development which would allow greater component-sharing across models, and fewer variations of each individual model.

In theory, this sea change in Toyota’s culture could have been effectively managed to prevent the steady decontenting of products and declining quality. And, in the interest of fairness, it could also have led to even more dramatic drops in quality and content. Fujimoto’s analysis of Toyota was published in 1999, when Toyota was still (if only by reputation) the king of quality in the automotive world, a fact that at the time was still attributed to its manufacturing, rather than its product-development system. However, Fujimoto does leave the reader with a warning that should probably have been posted on every bulletin board in Toyota City:

Achieving product integrity and product simplicity at the same time is not an easy job. As of the mid-1990s, there have been some cases in which excessive simplification of the Japanese new models, which apparently resulted in loss of product integrity, lack of product differentiation and perceived deterioration of design quality, have created customer dissatisfaction and loss in market share, despite their competitive prices. This seems to indicate that lean designs actually involve a subtle balancing and that there is always a risk of overshooting– or oversimplifying product design.

Obviously, we need to know a lot more about the specifics of Toyota’s recent quality woes before we can establish causal links between the rise of lean product design in the 1990s and the current rash of bad news. The fact that Denso-built pedals do not appear to suffer from the same problem as CTS-supplied pedals indicates that this might be a supplier-specific problem, rather than the result of a systemic de-emphasis on quality at Toyota. Still, the Toyota practice of working closely with suppliers in the development process indicates that there’s more than enough blame to go around.

The real extent of this cost-cutting, decontenting and “design leaning” won’t be easy to quantify, but the fact that it’s been taking place since the early nineties and is only now yielding negative effects suggests that it’s been relatively well-managed. But Toyota’s reputation was built on those “fat” products of the mid-80s to early-90s, and it won’t be returning to the old practices that created them anytime soon due to their competitive disadvantages. This seems to suggest that, once damaged, Toyota is unlikely to ever recover its former quality halo.

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Volt Birth Watch 178: Splashdown Thu, 10 Dec 2009 20:54:56 +0000

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Ford, Mazda Parting Ways On Product Development? Thu, 03 Dec 2009 20:54:45 +0000 There can be only one! (

For most of the last 20 years, Ford and Mazda have enjoyed a symbiotic relationship which worked quite well. Ford needed Mazda’s engineering and Mazda needed Ford’s volume to keep their profit margins. In short, everyone was happy. Then came the recession. Ford needed money and it needed it fast, so they mortgaged their logo, cut staff and closed factories. But curiously, Ford divested a huge chunk of Mazda which netted them, in the auto world, very little money. Ford reduced their 33.4% stake in Mazda to 13.4%, netting $540 million, but effectively losing Mazda. Not that Ford’s Mark Fields is worried.

Bloomberg reports that everyone’s favourite wideboy is Ford-focused. “For a lot of designing and engineering, we’re going to be focused on Ford,” Mark Fields said, “Our efforts will be focused on the Ford system, as opposed to relying on others such as Mazda.”. In other words, we’re on our own.

Trouble is, it needn’t be like this. Mazda CEO, Takashi Yamanouchi, has left the door wide open for Ford. “Right now, it seems both companies are going their separate ways, but in the future there is the possibility of both coming together again,” Yamanouchi said. “We’re sure there will come a time when we will need each other’s technology.”. In other words, we welcome Ford’s help. And they’re not the only people who know that.

“The reality is Mazda is too small to do it on their own,” said Aaron Bragman, auto analyst for IHS Global Insight, “Ford may have other options. They’ve got a European organization that is very good at developing small cars.” In other words, Mazda might want to start looking around for another partner.

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GM-Daewoo: No Bailout Needed. For Now. Maybe. Fri, 30 Oct 2009 15:01:19 +0000 Hmm... seems more like a different kind of storm (

It’s not that GM’s Korean Daewoo division doesn’t need more money. The problem is that the only bank willing to lend a dime, the Korean Development Bank, wants strings attached. Since GM came up with the cash to buy up Daewoo’s $413m rights offering, it says Daewoo is out of trouble for two more years. Or 18 months… depending on that troublesome global car market. Meanwhile, GM-Daewoo’s $5b worth of forward contracts will burn up $300m in cash every month, as the debt matures. Although KDB and GM-Daewoo’s other lenders refuse to roll any of that debt forward and have been firm about enacting safeguards before loaning the automaker more money, GM’s Nick Reilly says Daewoo can now negotiate from a position of relative strength. Emphasis on relative.

“Even though we may not need any cash, we would still like to have a credit line for the long term…KDB is one candidate for that,”  Reilly tells The Wall Street Journal. “We will be still in talks with KDB for no urgency.” Because in the meantime GM can keep covering up Daewoo’s $3.6b annual cash burn with non-US bailout funds? Because this time Daewoo has the winning currency hedge numbers? (Daewoo previously lost $2.3b hedging). Or because GM will simply bear any burden to not lose control of its growth-market division? Either way, it’s hard to see how a $413m rights offering makes any difference at all when maturing debt alone slurps down $300m per month.

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