NPR Interview on Detroit

I did not catch the name, but it was a person who writes some well read newsletter in the Auto Industry. His comment was Detroit made the cars Americans wanted to buy. And now with Gas cheap, the small cars are piling up again.

So what did the Japanese make for the US Market?

The best analysis I have read so far is Paul Ingrassia: Wagoner Had to Go explaining the why behind the move.

EPA Waiver Economic Impact

Will the EPA waiver for California have a negative economic impact? Some people think so and my thoughts are BS.

Why? Take SUV's for example. Hyrid SUV's already exist and don't cost that much more than a regular one, but with cheap gas why would anyone want to buy one? Hmm...

And I thought Detroit was already working on lots of hybrids and electric cars already?

References:
Obama directs EPA to reconsider Bush-era auto emission policy Los Angeles Times

Lower gas prices send buyers after big cars again USA Today

Lower gas prices send buyers after big cars againUSA Today What short memories some people have! Of course their may have been some incredible discounting going on. So is Chrysler going to restart the Durango production? What impact will the higher margins have on the health of Chrysler and GM for selling more SUV's?

SUV Plant closes

It’s the End of the Line for S.U.V.’s from the NY Times. Story about GM closing one of their last SUV plants, now the Big 3 each only have one left. I am curious if the price of gas stays low, will people start buying SUV's in the huge amounts they were before? Another story mentioned it was almost like people needed permission to buy things. It's a strange economy. My opinion is SUV's are fine, as long as they are hybrids with meaningful mileage - so up the requirements for CAFE! I still don't understand why nobody in the US has come out with a hybrid Minivan. Toyota has had one in Japan for years. Of course it's not the whale of a minivan they sell here.

Speeding more with cheaper gas

I noticed today when I was going 65 on the local freeway, I was being passed a lot by cars going, my estimate 80 or more. My guess is the cheap price of gas is letting people drive less fuel efficiently. Sad...

GM's Volt - Will it save GM?

Known:

1. Only 10,000 first year will be sold.
2. Volt is due in late 2010
3. Low margins due to development cost
4. Will sell for around $40,000
5. Toyota will have a plug in available by 2010.
6. SUV Hybrids have sold poorly.
7. Conversion kits for a Prius to make it a plug in costs $6000 to $30,000
8. GM has a poor history of introducing new technology.
9. GM is hemorrhaging about a Billion a month
10. Each GM employee is supporting 3 retirees and dependents.
11. GM has tremendous over capacity.
12. GM has poor labor relations.
    

So I don't under how the Volt will save GM?

Excellent oped/article with some ideas that make sense: How Detroit Drove Into a Ditch

Big 3 Bail Out & Environmentalism

The Environmental Motor Company from the WSJ, basically saying congress wants to make the Big 3 as part of the bail out super green as per the Sierra Club.

Interesting editorial with a definite viewpoint.

Known information:
1. Detroit has an over capacity issue.
2. Detroit has a healthcare & pension legacy cost issue.
3. Detroit has to many dealers.
4. Detroit has focused on SUV's with high margins, that do not sell with higher gas prices.
5. Detroit is running out of money because of low sales.
6. Detroit does not have many products in production in the US that are very fuel efficient.
7. Detroit in general is behind in hybrids.
8. Detroit has an adversarial relationship with their workers (ie unions).
9. The Bush administration fear more problems if tax payer money is used and accusations of socialism.
10. The democrats were heavily supported by the unions.
11. The democrats will have a larger majority in the new congress.
12. Bailing out the auto companies is not popular with the public at large. The first bailout of Wall Street was not popular.
13. Republicans's at this time are not backing a bail out of the big 3.
14. Strong supporters of the democratic party is the green lobby.
15. Big 3 currently employ 239,000 people, plus suppliers and dealers is around 3 Million, not counting retirees being supported. And then there is the job banks program.
16. In 2010, a UAW trust will take over retiree health care costs.
17. EU will not be happy about Auto Subsides (WTO complaint possibly).

Given the above information, it's a mess and I am glad I am not making the decision! Looks like political suicide now matter what happens.

I like Thomas Friedman's suggestion in How to Fix a Flat of a non-partisan board to make tough decisions.

$4.50 per Gallon the Tipping Point

Or is it only $4? I just saw gas near my house for $4.03. I am curious if SUV's will all of a sudden come back with the lower price. I have noticed the lines at Coscto for gas are smalle with the decrease.

Why not higher mileage standards faster?

For the US, higher vehicle mileage standards will be gradually phased in. The excuse historically is let the market decide. Now the market has decided SUV's and other low mileage vehicles for the most part are selling poorly. It's possible to build an SUV with higher mileage as a hybrid, but it costs more currently. I would guess if enough production was made the extra cost would come down significantly. So it's a chicken or egg question.

American Energy Policy, Asleep at the Spigot - from the NY Times.

• The focus of the article is how due to politics (Big 3 Auto Makers and Unions), plus some conservative republicans, mileage standards in the US did not increase for many years.
  
• Mileage requirements in Europe are at 43 MPG, Japan 47 MGP, China 35 MPG, and the US 25 MPG.

The problem is change takes time. The argument was the US auto makers were supplying what the market wanted. They thought Toyota was dumb to invest so much in the Prius. And look where Toyota is now...

Lead, or Leave

Op-Ed Columnist Mr. Bush, Lead or Leave by Thomas Friedman

Mr. Friedman's basic point is the current administration has had no policy, only slightly increased mileage standards under pressure, and the Republican congress has not renewed the tax credits for Solar. And what should be done is set a floor for the price of gas and use any extra to invest in alternate energy.

John McCain proposes McCain proposes $300 million to spur car battery innovation which is progress. That's progress and at least doing some thinking outside the box.

A gas tax to set a floor I see a politically impossible at this time. Even after the elections I don't see either candidate as having the guts for this. It would be nice taking out the risk of investment in alternate energy (investors get scared of the idea of the price of oil crashing as happened in the 80's, hurting the alternative energy industry significantly in the US).

At this time, I believe gas mileage requirements should be increased. It's a slam dunk because everybody politically wants to be seen as doing something. Unfortunately we seem to have a do nothing congress and executive branch (which is good and bad).

Change in Cars - How Long

To design a new model takes 3-5 years. So the question is when did automotive manufacturers decide they needed to become much more fuel efficient.

Gas Prices - The Opportunity and Risk

High Gas Prices Will Benefit Auto Industry from the WSJ.

The CEO of Auto Nation makes the point that a lot of new, exciting technology is coming because of higher fuel prices. The danger is if the price of gas crashes again, like it did in the 80's, inefficient vehicles could make a comeback. I remember in the 70's how small cars in the first energy crises were in huge demand. Then the price of oil went down and so did the demand for small cars.

It's amazing to look at over the years how much size and weight have been gained by the Toyota Camry and Honda Accord. Originally they were nice, small cars. And they grew, and grew with every new model change... It would be interesting to see a chart of the growth in weight of select Japanese model for the US market.

Myths about getting better gas mileage debunked

Myths about getting better gas mileage debunked from the LA Times. Which disagrees with this article Here are some tips on how to conserve gasoline this summer.

Per the LA Times article because of the onboard computer, many things such as a dirty fuel filter, air filter, etc. have a limited impact on mileage.