Edmund’ Bill Visnic takes on the latest Harbour report, which finds North American auto plants running at an average of 58 percent capacity (even Europe, the global whipping boy for intractable auto overcapacity operates at an average 81 percent). Despite the recent downsizings across North America, the Harbour Report still estimates that 3.5m units of annual overcapacity remains in the US and Canadian auto manufacturing footprint, equivalent to 14 unneeded assembly plants. A rise in sales levels to the previous 15-16m mark could help the situation according to the report, but increased plant flexibility will be the factor that automakers can actually control. Even so, if 15-16m annual units don’t come soon, North America could be looking at more plant closures and job losses.
Since taking office in June, UAW President Bob King has ramped up the rhetoric level at Solidarity Hall considerably, as he seeks to portray the union as a defender of the American middle class. But, as the old adage goes, actions speak louder than words… and King’s actions this week couldn’t paint a clearer picture of the UAW’s priorities.
For more than a year, I had been on my very own propaganda mission in China (and I’m still here in Beijing to tell it.) I had urged Chinese parts manufacturers to go overseas and to buy parts houses at firesale prices. By moving closer to the customer and up the value chain, by turning from contract manufacturer to marketer, the Chinese manufacturers could realize much higher profits. By turning from contract supplier to systems house, they would be about 5 years ahead of the technology curve: A systems house is tied into the development of a car. The Boschs, Magnas, Federal Moguls of this world harbor more secrets than a Tom Clancy novel. A year ago, I wrote in China’s Gasgoo: “While the idea of buying a foreign car brand for cheap is good, the practicable choices are limited. So it’s back to buying foreign parts companies. There will be many bankrupt foreign parts companies this year to choose from, all quite cheap, most with an established presence and manufacture in China.”
Someone seems to listen, finally. But maybe a little late …
Legislation aimed at improving the transparency of Technical Service Bulletins (TSBs) has passed the Massachusetts state House of Representatives, and awaits approval by the Senate. If approved, Bill 2517 [full text in PDF format here] would require that
The manufacturer of a motor vehicle sold in the commonwealth shall make available for purchase to independent motor vehicle repair facilities and motor vehicle owners in a nondiscriminatory basis and cost as compared to the terms and costs charged to an authorized dealer or authorized motor vehicle repair facility all diagnostic, service and repair information that the manufacturer makes available to its authorized dealers and authorized motor vehicle repair facilities in the same form and the same manner as it is made available to authorized dealers or an authorized motor vehicle repair facility of the motor vehicle.
The Alliance of Automobile Manufacturers is opposing the bill, according to the DetN, because it believes the bill is motivated by parts manufacturers who want access to parts in order to reverse engineer and sell them. Literally. And yes, it is China’s fault.
The simplification of the automobile that’s set to take place with the transition to electric drivetrains is a troubling trend for the industry. As Bertel Schmitt has already explored, switching to electric drive could see component counts cut by as much as 90 percent, meaning the suppliers who build most of the components in modern cars are staring down a steep drop in their business. As Automotive News [sub] reports, even electric motors, which were once thought of as a growth area for suppliers looking to get in on the EV shift, are being largely built by OEMs, freezing suppliers out of potential growth. Toyota, Nissan and GM supply their own electric motors, leaving suppliers like Remy International behind in the dust. So how can suppliers stay competitive as EVs become more popular? Counter-intuitively, the answer may be gas-powered range extenders.
It’s classic tale from the convoluted and mysterious world of the global supply chain. Crain’s Business [via Automotive News [sub]] explains how GM was forced to recall heated windshield washers not once, but twice. And we take a look at why GM took the extraordinary measure of blaming customers and GM technicians for “misdiagnosing” the problem, a strategy that makes for an interesting counterpoint to the recent Toyota recall hoopla. After all, like Toyota’s pedal problems, GM’s heated windshield washer woes are rooted in a complicated relationship with one of its suppliers… and one of its regulators.
Worried about the high MSRPs on most of the electric vehicles scheduled for launch over the next year? Don’t forget to include the cost of buying and installing a home charging station. Nissan reckons the charger for its Leaf will cost about $2,200, including a home electrical inspection [er, that’s a medical marijuana grow…] and installation. Oh, and it won’t be Nissan coming into your home: Aerovironment, a firm otherwise best known for its Unmanned Aerial Vehicles, has the contract to supply and install the Leaf’s charger. Coulomb Technologies supplies the home charger for Ford’s first EV, the Transit Connect EV, and according to Automotive News [sub], they’re partnering with Ford to give chargers away to the first 2,000 buyers of the electric-drive delivery van. But, as usual with good news in the EV sector, the charger giveaway is actually being funded by tax dollars…
Automotive News [sub] reports that GM has made a bold new request of its suppliers: to assume responsibility for 50 percent of all warranty costs. The move comes as GM overhauls its post-bankruptcy supplier relations, which includes previously-announced measures to share cost-savings between GM and its suppliers. The obvious question when that plan was announced was: how do you stop suppliers from cutting all the quality out of GM components? The answer to which is apparently “by making suppliers share warranty costs.” But the solution is by no means a done deal…
Technology Review reports on Levant Power’s “GenShock” technology, which generates electricity by converting the kinetic energy of suspension travel into electricity. And electricity generation isn’t the whole story: the entire suspension is an actively-controlled, dynamic system that improves performance as well as efficiency in a turnkey package.
Levant has developed a modified piston head that includes parts that spin as it moves through the oil, turning a small generator housed within the shock absorber. To improve vehicle handling, the power controller uses information from accelerometers and other sensors to change the resistance from the generators, which stiffens or softens the suspension. For example, if the sensors detect the car starting a turn, the power controller can increase the resistance from the shock absorbers on the outer wheels, improving cornering, says David Diamond, the vice president of business development at Levant.
The AP [via Google] reports that NHTSA’s investigation of the pedals manufactured by CTS that were behind Toyota’s recent unintended acceleration recall has widened to include 2007 model-year Dodge Calibers. Dodge built 161,000 Calibers in the 2007 model-year, but according to Chrysler Group complaints of sticking accelerators only cover about 10,000 vehicles built between March and April of 2006… even though all 2007 model-year vehicles were built with CTS pedals. So what’s the difference between vehicles made in that five-week period and the rest of the 2007 model-year? According to Chrysler spokesfolks:
We have data that is telling us that there were a certain amount of complaints during that time period
Back in February, we took note of Chrysler’s “principled” stand on new-product secrecy, concluding:
Let’s face it: Chrysler needs buzz, hype, awareness, some kind of excitement surrounding its future generally and its forthcoming products in specific (if only in the irritating “teaser” format) almost as much as it needs anything else. Because as things stand right now,the baseline perception of Chrysler is of a dying company with nothing to offer. In this light, Chrysler’s principled rejection of hype is far more likely to be interpreted as keeping rushed semi-refreshes under wraps so they won’t be mocked to death by the time they go on sale. If that’s not the case, Chrysler has nothing to lose and everything to gain by building consumer awareness of new products. If it is, well, the truth will out sooner or later.
And apparently we’re not the only ones who think so. In fact, if the Detroit News is to be believed, literally everyone seems to think that Chrysler needs to start being more open, not only about its forthcoming products, but at every level of its business.
If there’s a single phrase dominating the imaginations of auto executives right now, it’s the infamous neologism of “too big to fail.” Whether executives justify their obsession with consolidation with their fear of a Chinese planet, efficiency-standard ramp-ups, or mere groupthink, there’s no doubt that consolidation is currently the name of the game. And it should be, not only for these reasons, but also because the last several years have proven that the car game is no industry for small companies. Nothing illustrates this quite like the US government’s “bailout” of auto industry supplier firms, which ended on April Fools Day.
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- ToolGuy ToolGuy can't solve all the issues raised here tonight, but this does remind me that I have some very excellent strawberry jam direct from Paris in the fridge.
- ToolGuy Cool.(ToolGuy supports technology advancement, as well as third-person references)
- MaintenanceCosts Oddly enough, I bought a metal-roof convertible for a bit less than $20k last year. But it's not on your list; it's an E93 335i, manual, Sport package. Really really nice car to drive, and (while it's been a short time) it's been flawless so far.
- FreedMike IS350 all the way. The Benz and the BMW are going to be money pits.
- Zipper69 Make the cat an integral part of the underbody, that the exhaust system leads into and out of, keeping it away from the Sawzall.