A few years back I made a bet with a former Director of Engineering at General Motors. I bet him five bucks that Americans would fall in love with modern diesel engines and would want them in their cars. Specifically, I predicted that diesel sales in passenger cars would reach 1 million units by 2012. He bet it wouldn't happen.
Last year I ran into him and he ruefully conceded he was probably going to lose the bet. But that was last year. Now I'm pretty sure I'm the one who's going to lose. What a difference a year makes!
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
There's a lot of talk about making the U.S. energy independent. Or getting off oil altogether. I guess anyone who believes it can easily be done has never taken the time to count how many millions of barrels of oil we import every day. Damn do we use a lot of oil!
Some say the country is in trouble because we don't have an energy policy. That's not true. We do have a policy. It doesn't have a grandiose name attached to it, but for decades now, with strong bi-partisan support, the U.S. has maintained very low gasoline taxes, has legislated cleaner fuels (which yields less fuel), and has put strict limits on drilling.
We seem to be saying that we don't want to use oil, but since we don't want to hurt the "little guy," we'll keep it as cheap as possible.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
When Alan Mulally came to the Ford Motor Company two years ago he finally forced the company to face reality. It wasn't going to go anywhere, he told his executive team, unless it put all its resources into resuscitating the Ford brand on a global basis.
So Jaguar and Land Rover were given the heave-ho, and Volvo was put "under review." The decision was made to let Mercury slowly die, and Lincoln's turn-around was put on the back burner until the Ford brand revived.
But as the company formulated its turn-around plan, it slowly dawned on everyone involved that there was a real opportunity to save Mercury. They figured out a way to give the brand a unique line-up of vehicles without breaking the bank. So in April of this year they took their ideas to Mulally, and after extensive studies they got the go-ahead in June to save it.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
Uh-oh. In the pell-mell race to develop lithium-ion batteries for plug-ins, EV's and hybrids, has any automaker taken a hard look at where all that lithium is going to come from? Guess what? Not only are global lithium supplies pretty tight, prices are about to skyrocket.
Today, the United States imports almost all of its lithium. We get most of it from Chile, then Argentina, and a little bit from Canada and Zimbabwe. The only producer in America is actually a German company, Metallgesellschaft, which has a mine in Nevada. Yet, even though we import most of our lithium, the United States is the world's largest processor of the material.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
2010 is shaping up to be a pivotal year in the American auto industry. From a product standpoint there will be a lot of interesting hardware in showrooms, including range-extending EVs, plug-in hybrids, clean diesels, pure electrics, and flex-fuel vehicles running on cellulosic ethanol. But it's also shaping up to be the year when the domestic industry will have to deal with its greatest challenge ever.
In short, the "Big Three" are running out of money, and running out fast. At its present spending rate, General Motors will burn through almost all the cash it has in the next 6 quarters. Ford can hold out a little bit longer. And Chrysler? Well, who the hell knows what's going on there?
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
Every day Chrysler LLC builds Euro-spec versions of the Chrysler 300 at its assembly plant in Canada, bolts a V6 diesel engine into most of them, and ships them off to Europe. That diesel 300 gets better fuel economy, over 30 mpg, than all the other vehicles in Chrysler's U.S. showrooms. But it's against the law for Chrysler to sell that car in America.
Right now Ford and General Motors are trying to figure out how to bring many of their fuel-efficient European models to the U.S. and manufacture them here. They'd love to do it immediately, but it will take them several years to modify, test and validate those designs before they can meet U.S. regulations. Until they do, it's illegal to sell those cars in America.
Anybody else out there agree with me that this is crazy? Let's let automakers bring their fuel efficient European cars over here immediately. As long as a car meets the Euro 5 emission regulations and the latest European NCAP safety standards, we ought to let them build those vehicles in the U.S. with no other modifications.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
As car sales continue to spiral downward, some product planners in the industry are beginning to ask the unthinkable: is the American car market going to shrink permanently?
They are starting to consider the possibility that the days of selling 17 million new vehicles every year are over, and that going forward the American auto market is going to be smaller.
There are a number of reasons why product planners are beginning to contemplate this possibility, but the two biggest causes are the high cost of oil and the skyrocketing costs of regulations. Amazingly, even though raw material costs are soaring at rates never seen in a century, the car companies say that pales in comparison to cost pressures they're grappling with due to CAFE, the California CO2 standard, and upcoming safety standards.
Whatever the cause, if, and I emphasize if, the U.S. car market is indeed going to be smaller in the future, that would have a drastic and painful impact on the manufacturing base in the country.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
A decade ago General Motors put one of the coolest cars of all time on the road, the EV1. While there were a number of hard-core EV enthusiasts who became passionately committed to the car, it never caught on with the masses. But that was then and this is now. GM should seriously consider putting the EV1 back into production.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
With gas prices soaring and SUV sales sinking, General Motors just put its HUMMER brand under "strategic review." That's generally the term used when a company is getting ready to dump a brand. And that begs the question, how many brands does a car company really need?
There are a number of companies that have multiple brands, like GM (Chevrolet, Pontiac, Buick, Cadillac, GMC, Saab, Saturn, Opel, Holden, Vauxhaul), Ford (Ford, Lincoln, Mercury, Volvo), Fiat (Fiat, Alfa Romeo, Lancia, Ferrari, Maserati) and Volkswagen (VW, Audi, Seat, Skoda, Lamborghini, Bentley, Bugatti). Some of these brands are strong and successful. Some are not.
The big, successful automakers these days seem to have only two brands, a mass market brand and a luxury one. That's the model Toyota, Honda, and Nissan are following. And that sure seems to be the business model that will work best for the foreseeable future.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
It could be the most dramatic retooling effort since the early days of World War II, when Detroit earned its nick name as the Arsenal of Democracy. Word leaked out yesterday that Ford is calling its plant managers and top union leaders to the company's headquarters in Dearborn, Michigan to debrief them on an ambitious plan to revamp its manufacturing plants. Ford wants a crash program to change over many of its truck plants to produce fuel-efficient passenger cars.
The urgency conveyed by this development (the company will not yet officially confirm it) is due to the surge in gasoline and diesel prices that have decimated truck sales. Never has there been seen such a dramatic shift in customer demand in such a short period of time. Last month sales for the Detroit Three absolutely collapsed, and when sales are tallied for this month, the carnage is going to be worse.
Realizing that any delay could permanently cripple the company, Ford's CEO Alan Mullaly decided to embark on a bold effort to achieve a rapid change over. Hence, the unprecedented call to bring all the plant managers and top union reps together for an emergency meeting.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
A few years back I made a bet with a former Director of Engineering at General Motors. I bet him five bucks that Americans would fall in love with modern diesel engines and would want them in their cars. Specifically, I predicted that diesel sales in passenger cars would reach 1 million units by 2012. He bet it wouldn't happen.
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