The Auto Industry - The End of the Begining
Written by Michael C   
Tuesday, 11 November 2008

It is with some deliberation that I write about the auto industry.  GM is in bad shape having too big of a waistline and Chrysler having hoped to feed itself to GM (this was no "Merger of Equals")  GM would have tore off the juicy meat and spit out the bones but, for the fact that they have too much already on their plate and not enough money to pay for it.  eGreenAge is coming...

Too many cars lines - competing against each other (except Hummer which competes against no one and whose head is now on the chopping block), too many dealers - ready to sue (or bite) the hand that feeds them, too many suppliers - leaning against GM for support (and they also rope the other auto makers together), too many expensive habits - executives or pensions (take your pick). 

GM also took the liberty to shoot it's own foot by denying anyone with a credit rating of 699 or less from credit buying even the smallest of cat boxes off their lots. I do give GM credit for thinking like the other automakers (especially Toyota) that big trucks and big SUV's would save the day.  Btw, where is Bob Lutz these days, haven't heard from him lately.  Bob should give his own company a bailout - call it an investment.  Maybe he retired.

I haven't even mentioned Ford (because there is so much to talk about with GM and Chrysler)  Ford is in a little better shape with enough (barely) money to make it through a major downturn.

I mean a major downturn - first gas prices are jacked up by commodities buyers fleeing the front of the stock market plane - then fleeing the commodities seating section for the door (parachutes or not) or the bond economy section in back.  So who's flying the stock market?  No one,  the pilot - Alan Greenspan - Took the golden years parachute down.  The co-pilot - Ben Bernanke - has read up on the controls but has not really done much flying, but he has a parachute packed and ready.  You would think that the auto companies would have a parachute too.  Well, I know, lets just ask the government for a parachute. Uncle Bush can we..NO!  Maybe the new king Barack will see fit to trickle down on us, otherwise I don't think we could even pay our taxes.

Ford credit also did not just group everyone with less then millionaire test scores into the credit garbage can.   Alan (Mulally) is doing some right things to try and make Ford work like - stream aligning the executive reporting back to him instead of the eddy currents that get lost in the executive sauce, funding the company by using Blue Ford Oval signs as collateral (who bought those?  Probably the same investors who bought Chrysler signs),  snatching Jim Farley from Toyota (Ford needs more teenage "thought process" executives that remember their dreams before they became rich), keeping quality the name of the game (does wonders for Toyota)

So what can be done about all of this?  GM needs to lose some weight - fast.  They need to admit that they have a major problem and go to bankrupt general hospital where GM's teeth can be wired shut for 6 to 12 months (intravenous feeding only) to remove un-needed car lines, dealers and executives (I am not even going to mention the union, they know what's happening)  If you think that people will stop buying your cars because of the "B" word - your way late - denying credit to your customer base has already sent the flock fleeing.  Ford should advertise to draw some of that flock to them, given the quality of their cars and the availability of credit - that could be easy.  They also need to get similar terms from their dealers and executives (I am not even going to mention the union, they know what's happening)  What to do with Chrysler? Chop shop, that’s about all investors do anyway, take mortgages for instance.

What does all this have to do with Ultra capacitors?  When GM and Ford feel better they need to partner up and with government help (funding) develop the water powered car.  Using Sodium as a catalyst and Ultra capacitors as energy exciter - water can be broken down (internal to the car) and burned in internal combustion engines.  Fuel cells should be fully developed to last longer than 12 thousand miles.  Solar charging should be used to recharge the caps and to provide power for the car while moving.  Cars need to be small since water and caps are a lean diet for monster trucks and SUV's.

What about gas and oil?  It's a dead end street and the whole world is getting close to the guard rail at the end.

Michael C

Readers have left 12 comments.
 No.1  gm
you are right that gm need to lose weight. it is to big now and need to be smaller to be compete with ford and crysler.
Anil (Unregistered) • 2008-11-11 20:00:33
 No.2  Fun
Fun article, wish you would have discussed more on how the unions have torn down the auto-industry for years.

Oh and disagree with you on that oil and gas being dead.
Guest (Unregistered) • 2008-11-12 15:43:50
 No.3  Untitled
Gas prices down! Gear up F150 production! Guzzel guzzel! Just can't burn it fast enough, need a luxury pick up truck to drive to the grocery store! Gotta keep up my urban coyboy image y'know. Way to go Ford!
Guest (Unregistered) • 2008-11-14 19:02:19
 No.4  Don't forget...son's birthday
Don't forget the Mustang your kid wants for his birthday. He'll be sixteen soon.
Michael C (Author) • 2008-11-16 15:05:16
 No.5  Untitled
Read an article where the average gm employee make 150% more than the average engineer in the USA. And like 200% more than the average manufacturer.

The bailouts are the problem not the solution. The solution is to cut GMs pay by 50%.
Guest (Unregistered) • 2008-11-17 13:20:52
 No.6  What about bailout?
Wow, no Why can't we just bail 'em out comments?

We should not give money to gamblers or drunks because they will just spend it, they won't get the help they need. The same is true of the Auto companies.

Gambler Man Rick says, "I only need 25 billion to stay in the game. The market will be better soon". So the gov'mint give lucky Ricky 25 bill's. Then next May comes along and Chrysler goes belly up, Rick sees opportunity and goes to the gov'mint for 5 billion just to "pick up the hand with 2 pair" (Jeep, Minivan). The gov'ment asks about their 25 coins and gets the reply "it's on the table, but I got some union concessions and I closed 3 plants. Oh, an the markets still doin' bad". Next Thanksgiving Rick goes back to the gov'mint and pitches "I need 30 billion to stay in the game. If I don't get it I'm gonna lose it all. All those people out of work. But I can make it work - we have a Volt to sell" The gov'mint reluctantly gives poker face Ricky some MO' money. Then next June Ricky goes back to the gov'ment for more, "look - I just need 30 bill's to stay in the game - if I don't get it, I'll lose it all". But the gov'ment is pretty tapped out and says, "can't". Then Rich Ricky says, "but I got 60 of your money on the table already. I'm not even using any of mine so you gotta keep me in the game". But the gov'ment says no. So Ricky says, "OK, fine, then I'm cashing out!". Rick walks with his pockets full of chips, bankruptcy still happens and the taxpayers pay for a loser company that they don't even buy their cars from.

What is the morale of this story? Bankruptcy is going to happen, sooner or later. The sooner side is cheaper for the poor taxpayer and better for the car company. A bankruptcy will allow the company to collapse that pension balloon, cut the car lines to what the market will bear, reduce union funding, retire their dealers and allow them to re-organize. Will people still buy their cars? Someone bought every Oldsmobile they made to the last one off the line. It did cost them about a billion to close the Olds' car line.

Michael C (Author) • 2008-11-17 14:34:48
 No.7  Untitled
The water thing is just silly, unless you're talking about electrolyzing water using some energy source (solar?). Even then, using energy storage to electrolyze then to burn is terribly inefficient - you'd be much better off using electric energy directly from the Ultracaps to run electric energy.

If instead you're talking about those Internet videos about using water as a fuel - you're dreaming. Energy out must equal energy in, and anyone that tells you different is lying.
Matt the Engineer (Unregistered) • 2008-11-18 18:24:17
 No.8  About Water Power
Your right - electrocuting water is very inefficient. But the Sodium reaction is not electrolysis, it breaks down water without any outside energy source and gives hydrogen in the reaction. The actual chemical reaction is as follows:

2Na + 2H2O --> 2NaOH + 2H

What is left is Hydrogen gas and caustic soda (lye) which WOULD take energy to chemically reform to get the Sodium back. The energy out does not equal energy in but the chemical process is efficient enough that solar energy could "keep up" with power demands of the present fleet of internal combustion engines. This would solve 3 problems:
1 that at present we don't have a Hydrogen infrastructure (but we have water)
2 that present power structures (ICE motors) would not all need replacing or major redesign. (including Backhoes, Bulldozers, Cranes, Steam shovels and Combines)
3 the extremely explosive nature of Hydrogen is kept out of reach of the normal motorists when refilling (even though it has been stated that an explosion would be a "million to one shot" with 200 million vehicles in the US alone that could be 200 explosions a year at least)

I have seen the "water powered car" videos and understand that the actual process is to use high frequency electromagnetic waves (as a sympathetic harmonic) to "break" the atomic bonds of water for "Oxy-Hydrogen" gas. Even I know that you would still use more energy then you would get back but, it is still more efficient then what we have today.

The simple solution would be to use solar energy, Ultracaps and electric motors but we sometimes have to play the (infrastructure) hand we get.
Michael C (Author) • 2008-11-21 10:27:13
 No.9  Untitled
To be fair, Bernanke is more comfortable flying choppers and raining piles of cash down on the people below. :-)
James Anderson Merritt (Unregistered) • 2008-11-23 14:20:32
 No.10  I don't see the rain
...raining piles of cash down on the banks below.

Fixed your typo.
Michael C (Author) • 2008-11-24 10:41:57
 No.11  Sodium Cars? Seriously?
Well lets talk thermodynamics before declaring sodium is the solution. The max energy density of burning sodium is 13.3 MJ\kg, about 1\3 of gas. Far better than batteries or caps, and sodium is cheap. Disposing of the NaOH is probably not a trivial issue. Most of the energy is in the first conversion and not burning the hydrogen, so only 3.2 MJ\kg is from burning H. You can't burn Na in a piston engine, so now you have to switch from a to a heat engine (brayton or organic rankine?). Not cheap or compact.
Silicon is at least renewable if you are going to burn something.
I'm a big fan of fast fission nuke with fuel reprocessing (energy density of 24,000,000 MJ\kg of fuel). Here's hoping batteries and ultra caps can improve and become economical to leverage that for cars!
Guest (Unregistered) • 2008-11-29 12:31:31
 No.12  Untitled
A Modern Parable.

A Japanese company (Toyota) and an American company (Ford Motors) decided to have a canoe race on the Missouri River Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.

Feeling a deeper study was in order; American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid-o ff one rower, halted development of a new canoe, sold all t! he paddle as, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.

The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles,) so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was out-sourced to India.

Sadly, the End.

Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US The last quarter's results:

TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads, and collecting bonuses...

Guest (Unregistered) • 2008-12-02 09:53:51
The author or administrator has closed this item for comments.
Tag it:
Furl it!
Furl it!