NDN Backgrounder: The GM Bankruptcy and the Future of the Auto Industry
With General Motors filing for bankruptcy this morning, and the federal government taking a 60 percent stake in the company, NDN offers some recent thinking on the American automobile industry.
- Fuel Economy in Context by Michael Moynihan, 5/19/2009 - Moynihan welcomes the Administration's steps on fuel economy, but points out that CAFE standards are imprecise tools that must be viewed as part of a larger series of complex policies.
- Here in the Real World They're Shutting Detroit Down by Morely Winograd and Mike Hais, 4/30/2009 - NDN Fellow Winograd and Hais pont out that GM's problems come at a time when the inherent tension between the investor class and the country's manufacturing sector have never been greater.
- Should We Try to Save the Damaged Brands? by Simon Rosenberg, 4/30/2009 - Rosenberg asks if these mainstay, now troubled American brands - AIG, Chrysler, Citi, GM - can be saved by being propped up by the government or if their brands are permanently insolvent.
- The Administration Goes Out on a Limb for GM -- and the Rest of Us by Robert Shapiro, 4/29/2009 - Shapiro says that the Obama Administration's plans for General Motors are a dismal idea, except for all the alternatives.
- China, the World's Largest Car Market and the Future of the Electric Car by Michael Moynihan, 4/10/2009 - Moynihan argues that a robust American auto industry is crucial for the US to compete with China in the growing electric car market.
- Carbonomics by Michael Moynihan, 4/2/2009 - Moynihan looks at the connection between pricing carbon and the future of the American automobile industry.
- Cars, Banks and the Future of the Clean Economy by Michael Moynihan, 3/31/2009 - Moynihan argues that to rebuild the economy we need more engineering and less financial engineering.
- Lessons from Detroit: 10 Years Later, the Overhaul of the Domestic Auto Industry and Its Parallels with the Republicans' Problem by Morely Winograd and Mike Hais, 3/30/2009 - Winograd and Hais find the similarities between Detroit's failure to change and the Republican Party's woes.
- Sympathy for the Car Guys by Michael Moynihan, 12/5/2008 - Moynihan compares Capitol Hill's treatment of Wall Street CEOs to that of the automakers.
- If Detroit Goes Down, Will It Take the Economy -- and the GOP -- With It? by Robert Shapiro, 11/19/2008 - Shapiro argues that the Bush Administration's mismanagement of the economic crisis has driven the auto industry into an impossible situation.
- Jake Berliner's blog
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Comments
Focusing on Software, On Demand Service and Energy Systems
All solid posts-- thank you for the recap. I'm particularly drawn towards Michael's focus on seeing this transition for the auto industry as a manufacturing/engineering challenge- and his emphasis of a future that is globally integrated.
I'd love to see NDN leading the introduction of truly transformational mobility concepts that break from the past. Push Obama's team and Congress to imagine a future that is not an extension of today's conversation, but something different.
The most near term opportunities deal with Mobiilty Software and IT infrastructure that improve vehicle safety and driver decision making. There is a mantra 'grow with flow' which refers to IT and mobile device enabled systems that lead to fewer phantom traffic jams, accidents (et al) and make drivers 'smarter' (or more aware of real-time conditions on the road ahead-- e.g. Imagine your OnStar says 'Stay in your lane, drive 42 mph and you will arive in 22 minutes!) The US could be a global leader in mobility software solutions for private and public transit systems.
The other transformational idea is looking at Mobility as a Service (e.g. 'on demand' model). The recently demonstrated GM-Segway PUMA vehicle is far from a gimmick concept car-- but a platform for 'mobilty on demand' that could play a critical role in closing the 'last mile' on transit nodes to where people live/work and enable cities to transform business and pedestrian districtsl.
Why not push GM, Ford and Chrysler to create new categories of vehicles and mobility experiences instead of mere extensions of the past?
Beyond Software and Service, I think our main focus should be on retiring the combustion engine.
I've long said that the auto industry's problem is its Manufacturing Footprint, not its Carbon Footprint (Power Generation/Industrial processes are the real CO2 culprits) The problem for Detroit is the cost-complexity of building cars around the combustion engine and the product depreciation associated with a 'new car sales' model that puts expensive assets on a dealership lot w/o a real buyer. It doesn't matter how many miles per gallon that vehicle gets-- it's still a failed business model for this century.
Electric vehicles using wheel-based motors powered by a combination of batteries, hydrogen fuel cells and capacitors offer a lower cost manufacturing platform. Next generation platforms will enable automakers to decouple the propulsion system chassis from the 'rider's chassis' (see GM's Autonomy vehicle). And transfer their revenue model to 'after market' sales in which customers upgrade pieces of their car without having to buy a new propulsion system. So imagine those vast networks of Car Dealerships looking more like Best Buy stores than showrooms of complete new cars.
Where are we likely to be most competitive in this post combustion engine world? Certainly not in first generation plug in battery cars. Asia rules the battery supply chain and it's unlikely that we can compete there. Instead many argue that the US should capitalize on new energy systems - namely fuel cells and solid hydrogen storage which are both polymer based platforms that tap the historical industry legacies of Ohio, Indiana, and Michigan. What makes it different is our current capacity in developing nanostructured materials that elegantly manipulate carbon, hydrogen, oxygen and metals to make new energy systems increasingly viable. I say partner with Asia on these first generation battery cars, and push the US into a next generation platform that integrates fuel cells as a lower cost platform.
But I digress...!! It's a lot to cover in a Comment Section!! Just my two cents for the conversation!!! Thanks again for the recap of posts!!
Garry Golden
Editor
The Energy Roadmap
http://www.theenergyroadmap.com