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“I don’t know that we’ve seen anything like this since the government told the automakers what kind of tanks to make during World War II” - Yale Professor (http://www.nytimes.com/2008/12/09/business/economy/09nationalize.html?_r=2&hp)

http://www.cleanmpg.com/photos/data/501/nocompete.jpgDavid E Sanger - New York Times - Dec 8, 2008

Opening up a Pandora's Box? -- Ed.

When President-elect Barack Obama (http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per) talked on Sunday about realigning the American automobile industry he was quick to offer a caution, lest he sound more like the incoming leader of France, or perhaps Japan.

“We don’t want government to run companies,” Mr. Obama told Tom Brokaw (http://topics.nytimes.com/top/reference/timestopics/people/b/tom_brokaw/index.html?inline=nyt-per) on “Meet the Press.” “Generally, government historically hasn’t done that very well.”

But what Mr. Obama went on to describe was a long-term bailout that would be conditioned on federal oversight. It could mean that the government would mandate, or at least heavily influence, what kind of cars companies make, what mileage and environmental standards they must meet and what large investments they are permitted to make — to recreate an industry that Mr. Obama said “actually works, that actually functions.” … http://www.nytimes.com/2008/12/09/business/economy/09nationalize.html?_r=2&hp

Its not so bad, but also not very effective for saving the Big Three if they offer it to all the American arms of the "import" companies.

But if all the car companies in the US qualify and submit themselves to the strings nessasary to get the money, we may see some US built imports to get excited about, how about an all electric Honda or Toyota built in US factories, going head to head with a newly revamped and upgraded Volt?

Ford and GM already have cool, high-efficiency compact cars -- in Europe. They just adamantly refuse to sell any of these 50 MPG gems here since they's in cahoots with Big Oil.

I'm not a big fan of government intrusion, but maybe one of the "strings attached" will be that some of the European models will get sold in the USA.

They had also developed a number of high FE concept cars (Ford Probe, GM Ultralite, etc.) that they never put into production.

Ford and GM already have cool, high-efficiency compact cars -- in Europe. They just adamantly refuse to sell any of these 50 MPG gems here since they's in cahoots with Big Oil.

I'm not a big fan of government intrusion, but maybe one of the "strings attached" will be that some of the European models will get sold in the USA.

I'd like to see Euro models here too, but I wonder to what extent the problem with bringing Euro cars here is differing emissions and safety standards in Europe vs the US? Is anybody here familiar with the standards and how big the differences are?

Of course other problems may include getting enough production volume to satisfy US needs, and setting up shipping, either of assembled cars or of parts to assemble here.

Perhaps the Car Czar might be able to leverage modifications to US safety and emissions standards to bring them closer to Euro standards, if that would help?

And of course the huge GULP is whether US consumers (not just the folks here!) will buy smaller and less powerful vehicles in volume.

John, as I understand it the diesels are too dirty but the gas burners are pretty much what is needed over here. Crash standards aren't all that different but there are some that have to do with pedestrian impact and I believe bumper height? The main issue is that international standards are not accepted in the US -- all vehicles sold here have to be tested here. Apparently, even swapping the engine out in a car requires the whole vehicle to be crash tested again. As you can imagine, this is quite expensive.

Now if a manufacturer is going to introduce a new vehicle which has to go through testing anyway, I think it shouldn't be so hard to design one that meets the most stringent of tests across the board. I'm sure there are a few requirements that are incompatible but I'd be very surprised if the majority were not. That's why I think it is ridiculous that the industry has been fighting higher emissions standards in select states. Why not just make every car meet those requirements and have done with it? Why insist on maintaining a dirtier variant with special vehicles configured for cleaner running?

As Wayne M. and I discussed, "Saving those pennies"

John, as I understand it the diesels are too dirty but the gas burners are pretty much what is needed over here. Crash standards aren't all that different but there are some that have to do with pedestrian impact and I believe bumper height? The main issue is that international standards are not accepted in the US -- all vehicles sold here have to be tested here. Apparently, even swapping the engine out in a car requires the whole vehicle to be crash tested again. As you can imagine, this is quite expensive.

Now if a manufacturer is going to introduce a new vehicle which has to go through testing anyway, I think it shouldn't be so hard to design one that meets the most stringent of tests across the board. I'm sure there are a few requirements that are incompatible but I'd be very surprised if the majority were not. That's why I think it is ridiculous that the industry has been fighting higher emissions standards in select states. Why not just make every car meet those requirements and have done with it? Why insist on maintaining a dirtier variant with special vehicles configured for cleaner running?

The emphasis in Europe is on diesels, though gas variants of the same models are available. One thing the Car Czar might do is work to get the US diesel standards brought closer to the European ones? Or vice versa in some regards?

The rationale for retesting with different motors might be that the mass and mounts may be different, and I think one of the problems in crash safety is handling the momentum of the large mass of the engine.

I wonder if the rationale for different emissions models is being able to quote higher performance/economy numbers for the dirtier variants? OTOH, having multiple versions increases parts and service headaches. Again, requiring single nationwide models is something the Car Czar might have the power to negotiate.

But what Mr. Obama went on to describe was a long-term bailout that would be conditioned on federal oversight. It could mean that the government would mandate, or at least heavily influence, what kind of cars companies make, what mileage and environmental standards they must meet and what large investments they are permitted to make — to recreate an industry that Mr. Obama said “actually works, that actually functions.”

They were already doing that, that is one of the things that got them in trouble in the first place!
It is really sad to see the big three kissing up to their own destroyers for a tiny little life extension! :(
A "car czar" ?:rolleyes:
R.I.P. Capitalism

Guess this is a manageable take on Detroit:

Middle-aged guy never exercises, eats mostly fast food, ignores the doctor, ignores his wife, ignores body signs like fatigue, and suddenly collapses. Now diagnosed with Stage Three or Four Colon Cancer, seeks any cure under the Sun, no matter how dubious.

Ford and GM already have cool, high-efficiency compact cars -- in Europe. They just adamantly refuse to sell any of these 50 MPG gems here since they's in cahoots with Big Oil.

I'm not a big fan of government intrusion, but maybe one of the "strings attached" will be that some of the European models will get sold in the USA.

If they are in cahoots with "big oil" then why are they in washington begging for their lives?
They would have loved to sell the FE cars over here, they would have been really profitable this summer, but they couldn't because of government mandated emissions and safety standards.

This all sounds like a communist wet dream.

However, it is a good idea in principle. If it ever came down to a vote, I would vote in favor of nationalization. And I would love to see some European cars over on this side of the pond. Especially some Seat and European KIA models, they are simply gorgeous.

If they are in cahoots with "big oil" then why are they in washington begging for their lives?What may be at play in the "In Bed With Big Oil" bit is that GM sold the patents for the EV1 to Chevron. Now Chevron won't sell them back to GM (or anyone else). So less than 5 years after selling the result of a decade of research and product development, GM has to go back to the drawing board and remake the EV1 from scratch making sure that they don't do it in a way that would land them in a Patent court with Chevron. Not only do they have to rebuild it, they have to rebuild it in a way that doesn't use any of the tech they put in the EV1.
They would have loved to sell the FE cars over here, they would have been really profitable this summer, but they couldn't because of government mandated emissions and safety standards.They actually have pretty good FE cars, they just complained that they can't make enough profit off of the small cars since they sell for a lower price point. This isn't an Engineering problem it's an OpEx (business) problem. Basically the more FE cars they sell the more their profit erodes since they are pretty close to loosing money on each sale.

reference: http://en.wikipedia.org/wiki/Cobasys

11011011

Just think: GM could stand for "Government Motors"

Fortunately it isn't all of the components of the EV1 -- just the batteries. That's a huge chunk of the viability, though. :(

They actually have pretty good FE cars, they just complained that they can't make enough profit off of the small cars since they sell for a lower price point. This isn't an Engineering problem it's an OpEx (business) problem. Basically the more FE cars they sell the more their profit erodes since they are pretty close to loosing money on each sale.

reference: http://en.wikipedia.org/wiki/Cobasys

11011011

Thanks for your reply Dan
That is interesting. I wonder why that is?
Mabye it is a combination of things, like all the government safety standards they have to meet make them too expensive to build, plus all the extra labor costs for the the unions, and they are unprofitable to make.

mabye the government can solve this problem.... and pigs will fly;)

reference: http://en.wikipedia.org/wiki/Cobasys


Reading this, it seems like Cobasys's primary product is lawsuits.

You mean like SCO?

:p

Thanks for your reply Dan
That is interesting. I wonder why that is?
Mabye it is a combination of things, like all the government safety standards they have to meet make them too expensive to build, plus all the extra labor costs for the the unions, and they are unprofitable to make.

mabye the government can solve this problem.... and pigs will fly;)

Here's one of the things I don't really understand. GM makes a profit in Europe, which is much more labor-friendly, has more government intrustion, is much less car-friendly, and is certainly much less big-car-friendly. It seems like all the complaints and reasons for why they aren't profitable domestically are turned on their head overseas, yet they are still viable there.

This is not a glib, rhetorical question (for once), I'm honestly curious; what are they doing there that they aren't doing here, and why can't they do it here?

Excellent question - Peter

Part of the answer may be the benefits is paid by the government - not GM in Europe.

Another piece of the puzzle is Europeans simply want a sedan over an SUV or pickup - market demand

Excellent question - Peter

Part of the answer may be the benefits is paid by the government - not GM in Europe.


This certainly is a big factor. The recent "talking point" about the big difference between Big 3 labor costs vs. competitors relied almost entirely on the legacy costs of corporate benefits in Detroit that are to be found not on Toyota/BMW's books but rather in Tokyo/Berlin.

Which leads to the puzzling question. Why aren't executives (auto or otherwise) pushing for such a similar change in order to get their own balance sheet relief?

One possible answer is that such a push would be personally disadvantageous for executive compensation, as it might result in higher and more progressive taxation seen in Europe. Executives are more motivated by their personal income status than the company's bottom line.

The counter argument is that their personal income status is harmed by poor performance of the company bottom line. And the counter to that is......

Really?

With more than two decades of OUTRAGEOUSLY expanding compensation not tied to profitability or stock price appreciation, is there really any downside anymore to being a corporate executive? If there is not, then the status quo may look just fine. Not fine for GM, but fine for Lutz.

Adding...........and I long for the day when the government basically says "we'll relieve this health care burden, you go make good cars.........", and shareholders say "...........or else".