Category Archives: Auto Industry

A Gas Guzzler May Save You Money

A Gas Guzzler May Save You Money

With ridiculous gas prices sweeping across the U.S., it might seem intuitive for a car buyer to look for something fuel efficient like a Smart Car, Prius, or Honda Civic. But with dealers struggling to get rid of trucks and SUVs (domestic brands in particular) some unprecedented deals for gas guzzlers are appearing which may actually make sense for buyers to jump on.

Manufacturers are offering between $2,000 and $5,000 in discounts on once popular models like the Ford Explorer and Chevrolet Suburban, and dealers say there’s room for negotiation after that. Used SUVs and trucks often have even greater discounts, with some selling at roughly one-third the price they would have fetched new four years ago.

Among the better bargains are Ford’s SUVs, the Expedition and the Explorer. An Expedition with four-wheel drive has a sticker price of about $35,000, but in many areas, consumers can get one for $30,000 after discounts and negotiations. The all-wheel-drive Explorer with V-8 engine lists for about $31,000, but can be had for $25,000.

These deals only make sense if your driving routine is local or you simply want a truck or SUV. If you only drive five or 10 miles a day it will take years for even $4.00 gas to surpass the value of many discounts, and by that time your lease may have ended.

Source: Wall Street Journal

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The 100 mpg Gas Guzzler

The 100 mpg Gas Guzzler

Jonathan Goodwin dropped out of seventh grade to help pay the bills and follow his passion for cars and engines. Today the automotive world bows to his genius and wonders if this car nut might actually win the 10 million dollar X PRIZE for producing a low emission, competitively priced, 100 mile per gallon car.

His partner in this venture is Neil Young, rock legend, who contributed his 1960, Lincoln Continental “boat” as Goodwin’s test car.

Goodwin works out of a garage where he specializes in converting Hummers into fuel sipping diesels while boosting their power. He also likes to run his thug cars on fried chicken grease contributed by the local KFC outlet.

The fact that the prestigious X PRIZE contest committee has allowed Goodwin and Young to apply to join the elite, well financed, automotive companies from around the world gives him credibility.

Goodwin is negotiating with DHL to convert 800 vehicles to super efficient systems which cut fuel costs by 50 percent.

It appears that his approach is unique because he does not want to build a new vehicle and engine. His devious plan is to make inexpensive conversion packages for existing vehicles turning them into biodiesel burning plug-in hybrids.

Proving his point on Neil Young’s 40 foot “boat” may not win the X PRIZE, but that’s what they said about the crazy bike mechanics Wilbur and Orville Wright in 1903.

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Jim Graff of Graff-Pinkert & Co. Reports on Delphi auction

Machinery dealer Jim Graff just got back from a Delphi auction in Kettering Ohio. He reported that most machines there were selling very cheaply and that many were leaving the country. The two biggest buyers at the auction were from India and Peru, who primarily bought small production machines such as milling machines, Bridgeports, and Dennison Presses. Most of the Acme multi spindles and Acme repair parts were baught by dealers. Jim also observed that there was a strong presence of online bidders.

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What it Takes to Change the World

This day on March 18, 1662, the first bus service began in France. Blaise Pascal, most famous for his mathematics, physics and philosophical genius, conceived the idea. The system started with seven horse-drawn vehicles running along regular routes. Each coach could carry six or eight passengers. King Louis XIV granted a royal monopoly: Try to compete, and your horses and vehicles would be taken away.

The fundamental problem of the bus service’s business model was that in the feudal society of seventeenth century France only the nobility and gentry were allowed to ride, which they did purely for amusement. The common folks that the service could really benefit, the soldiers and peasants, weren’t allowed to ride, so when the novelty of the new invention wore off, bus service ended in 1695.

The bus concept did not reappear in France, along with New York City and London until early Nineteenth Century – post feudalism.

Most great inventions follow a similar pattern as the bus’s. They start out as a novelty only accessible to the elite. Not until they finally become accessible to the masses do they have the power to change the world. When the first computers were invented only a select group of scientists could use them. People dismissed the idea that they could be useful to the common man. Not until personal computers became affordable to the world’s middle class and easy enough for an average person to operate, did they revolutionize how people communicate and find information. Yesterday, March 17, Tesla Motors began production on its Tesla Roadster, which will sell for a base price of 98,000 dollars. It will look cool, it will be better for the environment than cars with internal combustion engines, it will eliminate the need for its owner to buy gasoline, but until the masses can afford one and reap its benefits the electric car will not change the world.

Tesla Roadster

Sources, Wired Magazine, www.teslamotors.com

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A Different Kind of Strike

American Axle has finally sat down at the bargaining table with the UAW since its members went on strike Feb. 26. Since the strike, 10 plants have been shut down and about 20 percent of GM’s workforce has been affected. What makes this strike different from other recent UAW strikes is that GM has so much inventory in its truck divisions that it is not under such urgency to get a deal hammered out quickly. Also, unlike other recent UAW strikes, the company trying to cut wages is not in bankruptcy. American Axle made 37 million dollars last year. It’s hard to convince a union to allow wage cuts for a company which has been so profitable.

In this video Eric Merkle, Vice President of forecasting for consulting firm IRN Inc., discusses the effects of the American Axle strike.

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Tata Motors $2,500 car unveiled. “The People’s Car”

On Jan. 10, 2008, Tata Motors unveiled its revolutionary $2500 car, the Tata Nano, also being called “The People’s Car” by its maker.

The vehicle measures 3.1 meters in length, 1.5 meters in width and 1.6 meters in height. It has a mono-volume design, with wheels at the corners and the power-train at the rear in order to provide both maneuverability and space on the inside to accommodate families.

The Nano has a rear-wheel drive, all-aluminum, two-cylinder, 623 cc, 33 PS, multi point fuel injection petrol engine. It’s the first time that a two-cylinder gasoline engine is being used in a car with single balancer shaft. That might seem pathetic compared to industry standards but in a country in which millions use motor scooters to transport families it will revolutionize the lifestyle of India’s masses. According to Forbs.com, $2,500 is three times higher than India’s per capita income, and the average pay for a Tata Motors factory worker is $5,500 a year.

Read the “Next” feature in Today’s Machining World’s December issue for further insight on the $2,500 car from auto industry experts.

In this video of the car’s unveiling, Mr. Ratan N. Tata, Chairman of the Tata Group and Tata Motors compares the innovation of “The People’s Car” with the moon landing, the invention of the bicycle and the evolution of today’s personal computer.

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The $100 Computer

The $100 computer and the $2500 car are the hottest products on the planet today. Neither one is yet a reality, but the intense interest in developing these mass produced items for potentially a billion new customers in Asia, Africa, and South America is driving a mega battle in electronics and autos.

Video of $100 Computer

A few years ago, the personal computer push built the Microsoft and Intel fortunes. But in 2005, Nicholas Negroponte, of MIT, postulated that the $100 dollar computer was doable and set out to build the market and design the product. In the Nov. 24, 2007, issue of the Wall Street Journal, a front page article denotes the competitive struggle he has had as Intel attempts to co-opt his idea. The essential fact is that national governments will buy the production in the millions of units, and prices of Negro Ponte’s and Intel’s computers are now circa $200 and falling. Intel is scared of the product, which uses $3 software of Linux variety, but they are more scared that arch foe AMD will get the processor business, so they are pushing their low cost Classmate version all over the globe.

In cars, Tata Motors of India is rushing to develop a $2500 car for the new middle class of India in the hope that young people everywhere will covet one. Today we have over production in cars in the U.S. and Europe, but the potential market for cheap vehicles is absolutely enormous.

The big Japanese builders; Toyota, Nissan, and Honda, are ardently developing a $6000 car which could also reach a huge audience in Eastern Europe and China. For the suppliers of automotive, this offers a gigantic new market for brakes and tires and transmissions. It will be fascinating to see who will be able to serve this next great market.

On the computer front it seems likely that Silicon Valley will be the center of development of the $100 computer. It is less clear where the $2500 car will emerge. India and China have the cheap production capability, but I am skeptical about technical breakthroughs. Yet it is certain that the inexpensive, serviceable car will come soon because the demand will be insatiable, and it will be a lot more sophisticated than the Yugo.

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Daimler-Chrysler Wants a Divorce. Shocking.

We now have the news that Daimler-Chrysler wants a divorce. Shocking.

One more stupid merger falls apart because the people couldn’t get along. The Germans thought Detroit built crappy cars, and the Chrysler folk thought the Mercedes men dissed them. The hapless Dr. Z commercials were so discordant with American sensibilities even Beyoncé hood ornaments could not have saved the lines.

About the only way GM could buy Chrysler would be to trade its interest in Delphi for it. Marrying Ford and Chrysler would be a match between Alzheimer patients. Toyota needs Chrysler like it needs a UAW contract, and Carlos Ghosn now has a toothache at Renault.

Chrysler is as sick as a metropolitan newspaper, which means that there are buyers on Wall Street who smell blood and money, but not in Autoland. Kirk Kerkorian might resurface for a Chrysler redux, but at 90-years-old with his slots at MGM just spewing money, what does he need Chrysler’s misery for?

If Dieter Zietsche and his comrades are willing to take the hit, Chrysler will be sold to a hedge fund willing to stare down the UAW in the upcoming contract negotiations. This could mean a long strike like Goodyear recently weathered. I think Daimler has no stomach for this kind of war, so they will probably bail out quickly.

Some shrewd and gutsy people will step up for the minivan, Jeep and Dodge truck franchises. Chrysler is not a basket case yet, but the sooner the Daimler Dandies head back to Stuttgart the better.

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