Category Archives: Auto Industry

Need more info on Delphi's Sale to China

By Lloyd Graff

Just saw on the Internet that Delphi is selling its brakes and suspension businesses to two Chinese companies and the Chinese government. Sale is set to close in fourth quarter. Does anybody know exactly which plants will be affected. Any of you bloggers doing work for this part of Delphi?

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Is It all Wagoner's Fault?

By Noah Graff

Here’s what I keep asking. You all are asking it too I’m sure. Is GM’s plight almost entirely the fault of Wagoner. Would a different person, a super genius, an extraordinary motivator make the company thrive, or would anyone have fallen victim to our awful economy?

I think that it could have been somewhat different. After all, Toyota and Honda (although they are in tough times too) are not on the brink of bankruptcy. But was Wagoner handcuffed to begin with by crappy designs, terrible UAW agreements…etc.?

Could Apple’s Steve Jobs have made GM thrive?

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A Renaissance in Detroit

By Noah Graff

Last week I went to Detroit to shoot a video spot for an advertiser of Today’s Machining World. A melancholy vibe permeated the city that I can only compare with the one I felt when I was last in New Orleans. When I arrived there were only three taxies and two limos sitting outside. Five vehicles to serve the entire Detroit Metro airport? I decided to query the empty rental car buses driving by to see if they had any cars available. I asked Hertz, Avis, and Budget, and every driver claimed that there weren’t any cars. Evidently so few people are traveling to Detroit Metro that the rental car companies have transferred their fleets to other more bustling cities.

Yet amidst all of its depression and desperation, Detroit now has an unexpected grassroots movement, attempting to revitalize the city’s housing market. At this moment, artists from around the world are buying houses in the Detroit ghetto for a few hundred dollars each.

Four years ago, artists Mitch and Gina Cope, bought a broken down house on Detroit’s North side for $1900. The house had been ravaged by scrappers who stole everything from copper plumbing, radiators to electrical lines. But the Copes bought it anyway and decided to turn it into what Mitch Cope calls the “Power House Project.” “Our idea — instead of putting it all back and connecting to the grid, we wanted to keep it off the grid and get enough solar and wind turbines and batteries to power this house and power the next-door house,” Cope says.

He thinks he can make the whole place operate “off the grid” for around $60,000, a cost he hopes to help cover with grants. He plans for the first floor to be a neighborhood art center and the second floor to be a bedroom for traveling artists. Of course, his grand vision is for the entire neighborhood to transform itself into an artist community using dirt cheep real estate as a magnet for new settlers. Cope has already convinced around a dozen artists from countries around the world such as the Netherlands and Germany to buy houses. Jon Brumit, a prominent artist from Chicago just bought a house in the area for $100.

You may find this story uplifting yet then put your nose up when you remember only 12 homes have been bought. But maybe manufacturers can learn from what these artists are doing. The bottom line is that the real estate in Detroit is going for practically nothing, Michigan is going out of its way to give tax incentives for new development, and there is an abundance of laid-off, skilled workers who potentially would jump at the chance to work at a job shop, even for a modest wage. Sounds like an opportunity for some creative types.

Listen to a podcast of the story at NPR.org

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Is our economy a modern day version of "Atlas Shrugged"?

By Noah Graff

A recent column in the Wall Street Journal made a comparison of U.S. government policies in the present economy to those in the classic novel, Atlas Shrugged, written in 1957 by the anti-government, ultra capitalist Ayn Rand. Rand’s dogma which transcends all of her works has the fundamental principle that when government steps in to “bailout” incompetent businesses for the sake of the “common good” it causes a tumultuous domino effect.

Wall Street Journal Columnist Stephen Moore summarizes the book’s moral as the following: “Politicians invariably respond to crises — that in most cases they themselves created — by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs … and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.”

Sound kind of familiar? Tarp? Auto company bailouts? A bunch more “stimulus plans”? I know. It’s scary right now. Desperate times. And I believe the government must step in somehow to stop a catastrophic loss of jobs and halted workflow that a bankruptcy of the Big Three would entail. And yes, it has to create liquid for the banks. But just like in the book, large companies are getting a free pass on their incompetence in management and law breaking. A money infusion gives them an opportunity to change their ways, but there is a definite chance it could create a downward spiral just as Rand envisioned. Does GM have a plan for how to spend the new money, other than to survive the next few months? Do the banks know what to do with their new capital? All of a sudden they have to figure out new ways to lend it, because now we know that the ways they were using it — such as granting sub-prime mortgages and trading recklessly with high leverage won’t work. The economy can only stabilize when these companies get their act together, and then, when the people regain trust in them. I don’t see either one happening soon.

Question: Do you have faith that the U.S. government’s new stimulus plans are going to create economic change for the better in the near future, or will they exacerbate our problems by allowing incompetents and crooks to continue their ways?

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Custom Made Plugin Hyrid Car

It appears that U.S. gasoline prices are headed over $2 again, and before long, Americans will likely again be feeling the urgency for better fuel economy as they did in the summer of 2008. While GM is supposedly trying its damndest to début a saleable plug-in hybrid by 2010, many individuals with ingenuity around the globe have already produced their own custom made plug-in hybrids. Two college kids in Wheaton Illinois, Chris and Andrew Ewert, have constructed a plug-in hybrid by installing a lithium-ion battery in a stock Toyota Prius. The battery works in tandem with the car’s nickel-metal hydride battery already installed in the car.

Many of the established auto industry experts have dismissed car kits like the one created by the Ewerts as impractical solutions for mass production. You be the judge after watching the following video.

You can also read an interview with Chris and Andrew Ewert in the August 2008 issue of Today’s Machining World.

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Has GM given up on its dream?

By Noah Graff

General Motors is suspending work on the $370 million factory slated to build engines for the Chevrolet Volt, but says the plug-in hybrid will appear in showrooms by the end of 2010 as promised. (www.wired.com)

“It’s temporarily on hold as we assess our cash situation,” GM spokeswoman Sharon Basel told the Detroit Free Press. “I don’t think it’s any surprise that we’re studying and reviewing everything, given the position we’re in.”

Come on GM, do you take us all for fools? In all of the current mess going on at the company, having the car released in 2010 already sounded like a stretch, but if no factory exists to build the Volt’s engines the car will never be produced.

GM already does have a plant that builds the engines in Austria, which it claims could ship them here, but if that was a practical option, why wouldn’t it have been the game plan in the first place?

And if there is not enough money to finish the engine plant in Michigan right now, and it’s unknown when there will be enough money, the great Volt is starting to seem like nothing but a failed, desperate dream. Can anybody say Fuel Cell?

The Volt was supposed to be the lifeline that would bring GM back to the forefront of car companies. It was supposed to make GM special – the cutting edge car on the block. That’s why the company was willing to sell them at a loss for the first few years of production.

The project was a huge gamble, but it gave the company hope for a rebirth of success, and now it looks to me like that hope may be gone. Without the Volt, GM is just another ailing car company. It had a fighting chance to rise to the top but now it will likely just stay a loser.

Why did the company make this decision? Is GM thinking that now that gas prices are lower, it can resurrect its old truck and SUV oriented business model to pay the bills?

Pathetic GM. Don’t try to fool us that on a dime you can finish the engine factory and starting popping cars out as soon as you get the money. All of these decisions take time, and putting decisions into action such as halting or resuming work on a factory takes even longer. I wouldn’t be shocked if this decision to halt the construction of the factory was made a month ago, before GM knew what the government would dole out. If GM doesn’t have the money right now to spend on the baby that was supposed to be the company’s savior, my guess is it won’t have it to spend on the “future” when it finally gets its scraps from the government.

Times are tough for everyone right now, but still, future success stories are at this very moment in the making, with individuals risking everything to live out their dreams.
What about the parents who live on food stamps so their child can train to become a professional athlete? What about the future Hollywood star who toils as a waiter while she waits for the big break? What about the restaurant entrepreneur who risks every dime he has to become the next McDonalds? Taking risks is extra scary in this economy, but now its even more vital to success.

I just hope GM has not given up on its dream to become a special car company.

Question: Are you saddened that GM stopped construction of the Volt’s engine plant? Should the company give up on the project? Or has it already?

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American Cars must become the Pretty Girls

By Noah Graff

One of the main criticisms people have of GM and Ford is that their cars are not aesthetically pleasing. Sure, they need to improve their quality on the inside too (don’t we all). But still, have you ever met a girl or guy who was just so damn hot, that no matter how annoying, stupid, or even mean they were, you wanted to give them a chance. The American car manufacturers are trying their damndest to become that hot thing that people just have to give a chance, but right now, aside from some trucks and Buicks in China, they’re still not getting that many suitors.

So why is this? Why can’t the American companies design a car that looks like something that people would want to make love to – er drive? Personally, I think some of the newer American cars do look kind of interesting. They have a certain style and flare, but still just aren’t my thing. I prefer a Lexus or an Audi to a Cadillac or a Lincoln. So beauty really comes down to personal preference doesn’t it? But where does that preference originate from? Does my brain innately like the color red while my friend in Italy innately likes the color black? Or do I like red because I grew up around a lot of people that wear red, and the media makes me think that red is the color of love?

I like how tighter, more fitted clothes look, and my dad always tells me my clothes are too small for me. I didn’t use to like tight clothes, but one day I just saw the light. Or, was it that when I saw everyone at the club wearing tighter clothes and people on MTV wearing tighter clothes that I decided tighter clothes were awesome?

It is easy to condition the brain to see things in a certain way through repetition. Studies show that people are physically attracted to others who look like them and that they often marry people with similar personalities as their parents. Humans respond to repetition and love to emulate each other, especially people who they idealize.

So what can the car companies do to make people think their cars are the pretty girls they want to take for a spin? I see two ways. First, take the “can’t beat ‘em join ‘em” way. People like a car that looks like a Lexus, so design a car that looks similar to the Lexus, but just slightly different. This could get them into trouble though if it looks like they have no originality or identity. And then what happens when the cool Lexus you emulated changes? Are you going to copy the new one too?

No. Instead of just trying to conform to the cool kids, do your own interpretation of the trend but stay hip and unique too. Then, the brainwashing must start. Use as much product placement as possible. Pay movie studios to have all the latest car models placed in films. You want the Chevy Malibu to be the car James Bond is driving. Get all the rappers and basketball players and celebs to drive the cars and flaunt them as much as possible on camera. That’s why the Cadillac Escalade is one of the most successful cars GM sells. The car could be a Yugo, but if P. Diddy, Jay-Z and  Lebron James drive it, the car automatically becomes sexy – and something everyone must have. That’s all it takes to become the pretty girl – I mean car.

Question: Do you think American cars, on the whole, are more attractive or less attractive than foreign models. Why do you think that you feel that way? Can you describe something you would change about American cars?

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Would a new CEO do better than Wagoner?

By Noah Graff

What would a new management team do to change the fortunes of GM if Rick Wagoner and his team were ousted? Can a new management team improve the company significantly, right away? Perhaps a high profile replacement would give a quick jolt to the company’s stock price, but would GM quickly start selling more cars and building better cars?

Since Wagoner became GM’s CEO in 2000, the company has gained big concessions from the UAW, which had handcuffed the company while Toyota, Honda, and the other imports enjoyed freedom from union regulations. GM came out with the award-winning Malibu. Buick became the most coveted car brand in China. The company became leaner, closing plants and laying off workers.

Yet still, today the company is in major debt, pleading for money from the government while even Ford has avoided the utter desperation of its American foe under the leadership of Allan Mulally, former CEO of Boeing.

It’s difficult to know how much of GM’s turmoil is to be blamed on poor decisions by Wagoner. It’s difficult to know what positive influences he has had on the company. Maybe with a different person at the helm the company would already be bankrupt. It’s impossible to know how much impact one person can have in a short time.

The $36 billion question is: what could a new CEO do to improve GM in the short-term and long-term that Wagoner wouldn’t do? Or, would a new CEO make matters worse at the company?

Could former GE CEO, Jack Welsh, be the man for the job?

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The Big Three need to work on PR

By Noah Graff

Thanksgiving and the Friday after is when companies like to release elite news that they don’t want people to pay attention to. For instance, despite begging the U.S. government for a $25 billion bailout, Ford’s CEO Alan Mulally doesn’t want to lower his salary (he made $21 million last year). This stance was a definite public relations gaff after he was asked by congress if he would work for a dollar like the CEO from AIG, Edward Liddy.

Also, news was released that GM doesn’t want public tracking of its private jet, which it had been criticized for using when its CEO, Rick Wagoner, flew to Washington to beg for the bailout. More importantly GM revealed that it was studying a plan to sell or discontinue Saab, Hummer, Pontiac and Saturn, among other brands.

Source: TheStreet.com

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