We've "scene" it all--The SceneExchange Blog

After auto pulls out, what might save Michigan?

With GM's struggles and plant closings shaking the foundations of what modern Michigan has been built upon, what can take the industry's place?

How about the Motown Motion Picture Studio, housed in a former GM truck plant? Using aggressive incentives, Michigan drew 25 film crews to their state last year--including Clint Eastwood (Gran Torino). Still, a movie studio might equal 3,000 jobs; over 800,000 have been lost in the state since 2000.

They are also courting wind-power, building railroad cars--any industry that could help employ the engineers who have been laid off and can't find similar work.

The state has instituted at 2 year "No Worker Left Behind" free college program--and the colleges are jammed with former autoworkers looking to retrain.

Still, this is the heart of automotive engineering and innovation. There is a concentration of talent--how can Michigan harness these men and women? Imagine what it would look like if a start-up that really changed the game for the auto industry came along. Your thoughts?

--Beth

Saving the environment or needlessly draining the bank account?

As part of our country's push to become more environmentally aware and less fuel dependent President Obama recently announced new fuel emissions standards for vehicles.  However, critics and advocates alike are questioning the overall impact this will have on our country's fuel consumption and environmental impact. 

As a counter to the hybrid vehicle push, VW is promoting their clean diesels as a way for vehicle owners to get the best of both worlds: additional fuel efficiency without losing the fun-to-drive factor.

In general a lot will depend upon consumers. With gas prices once again creeping up there are incentives to "go green", but is the higher price tag associated with hybric vehicles worth it? Sites such as Edmunds.com have fuel consumption calcuators to help consumers figure out if they will actually be saving gas, and therefore money, by purchasing a more fuel efficient vehicle. Many of these same sites help consumers calculate the "real cost" of owning a car, i.e. how will the costs of oil changes or repairs change.

Polk Survey Is a Glimmer of Hope--Maybe

 

As US automakers wring their hands waiting for an auto sales recovery, market firm R.L. Polk and Company says sales in the auto market should be heading up by 2011. The majority of US consumers they surveyed (55%) plan to buy their next vehicle within 2 years. The highest numbers of purchase intenders were in the Plains states and lowest in the Great Lakes region. This is obviously good news for automakers who have excess inventory to move.

On the other hand, here are some other pieces of information from the study that aren't as rosy for automakers.

• The average length of vehicle ownership is increasing (up to 56.3 months now)
• 70% of respondents would consider a used vehicle
• Two-thirds of people are likely to keep their vehicles longer than they would otherwise

If people are willing to hang onto their cars longer and consider used vehicles, the market for new cars is still looking on the weak side. What's your take?

--Beth

Follow up the Toyota parts stock piling post

Recently, I wrote about Toyota's choice to stockpile parts (click here to read it) in case any of their parts suppliers went under.

Interestingly, in a survey released last week by Planning Perspectives, Inc, Toyota has moved from a rating of "Good to Very Good" in terms of supplier relations to "Adequate". Suppliers were ranked in areas such as: willingness to help suppliers cut costs, paying for canceled programs and rewarding top suppliers with new business.

Toyota is still above the industry average--while the Detroit 3 are below it. Could this new ranking reflect Toyota's current stockpiling philosophy. Is it, indeed, sending a lack of confidence vote to suppliers at a critical time?

Oh, and the biggest turnaround in the rankings? Ford. I sense some trends starting here...

--Beth

Rallying behind the Hydrogen Car Road Rally!

What is 1,700 miles long and has 28 stops along the West Coast? The annual Hydrogen Road Tour running from May 26 to June 3rd. The rally was begun to demonstrate the viability of hydrogen-powered cars--at each of the 28 stops, the public is welcome to inspect the cars, which include the Honda FCX Clarity, Hyundai Tucson FCEV, Kia Borrego FCEV, Nissan X-Trail, and Toyota FCHV-adv Highlander. A mobile refueling station is along to power up the cars (ranges average between 200 to 500 miles).

Here's the official website. If any of you are along the route and stop to see the tour, I'd love to hear your impressions.

--Beth

US Cars Built Overseas with Your Tax Dollars

I don't think it's a surprise to anyone that many US cars - GM, Ford, that is - are made in countries other than the United States.  Yes - General Motors imports cars made in other countries to us here.  And these cars aren't built in just our neighbors to the North and South.  Increasingly, they are made in the Far East - China, Korea.  In fact, GM will be INCREASING the number of GM models manufactured in China over the next 5 years,  moving manufacturing of another 50,000 - or 1% - of their total line there. 

I know I expected, and I assume you did as well, that when GM took our money in the form of a government bailout earlier this year, that money would go to preserving jobs for Americans, not to create new jobs in China. 

"GM is getting funding from U.S. taxpayers to help save the company," Senator Sherrod Brown (D-Ohio) said. "Taxpayers deserve more than Chinese imports in return. Taxpayer funds should be used to build the next generation of fuel-efficient vehicles in the U.S., not abroad. This is about creating jobs and rebuilding our economy."

This chart - supplied to the Washington Post by GM - shows that the percentage of GM cars built in China, South Korea, and Mexico will double by 2014. 

Huh? 

As Detroit dies, becoming practically a third world country of poverty, how could GM in good conscience lay off US workers and ship those jobs overseas, with the tax money supplied by the workers they fired?

-- Chrisa

I'd like to buy my next used car at...Costco?!

When I think of Costco, I think of bulk packs of toilet paper and giant boxes of cereal. However, they are actually a giant referral source for new car sales (700,000/year)--and now they are adding used vehicles to the mix.

They plan to have their certified-vehicle program rolled out to all stores by the end of 1st quarter in 2010. They have tested the concept in Denver, Phoenix and San Diego. The price point for used vehicles is based on the lowest price advertised online by the dealer at the time the customer is looking for a vehicle--then Costco customers are offered a price below the lowest posted price. This is usually within $500 of the dealer's invoice.

I'd love to hear from any dealers who participate in this program--and what your experience has been like.

Thanks!

--Beth

Toyota's stockpiling--prudent or lack of confidence?

Toyota is warehousing key parts here in North America just in case their supply chain gets interrupted due to supplier failure.

This is an interesting disruption to their long-standing "just in time" philosophy, which has marked warehousing as a symbol of inefficiency.

So, is this the right thing to do or is it an overreaction?
On one hand, they work with over 250 suppliers that also work with the US Big Three. If one of the Big Three goes into bankruptcy the chain reaction might shut down Toyota. On the flip side, perhaps this should herald a new level of communication and commitment between the suppliers and Toyota. They have, in fact, sent people out to help suppliers work on cutting costs and improving performance.

What else do you think needs to be done? Is Toyota inadvertently sending a lack of confidence message in their suppliers? Opinions?

--Beth

GM Volt - Good. Fuel Cells Built in Korea? Not So Good.

I got a twitter today from GMVolt:

LG Chem Has Begun Battery Plant Construction for Chevy Volt Cells.

Sounds great - the GM Volt, an American car, green, totally electric. 

So why did they award the contract to build the fuel cells for the GM Volt to LG Korea?  According to the post on GM's own Volt blog, GM awarded the contract to LG from a field of 27 applicants.  LG's Korea unit has begun construction on the assembly line to deliver units to GM for the 2010 launch of the Volt. 

Considering the other GM news today, that GM will be shuttering several plants for as much as nine weeks - putting American GM workers out of work and out of pay for that time. 

GM - why not build the plant in Detroit, and move the workers from the plants you're shuttering to build the Volt fuel cells?

-- Chrisa

Should we make like the Europeans?

Unfortunately, I'm not referring to their lengthy vacations, but rather the "cash for clunkers" plan to juice car sales. Nearly one dozen European countries are hoping to spur car owners by subsidizing drivers who get rid of old cars for smaller, more fuel-efficient ones.(average subsidy, 1,000-2,500 euros)

President Obama has endorsed a similar plan--could it work here? In Europe it has exceeded expectations, leading to about 2 million cars rolling off the lots. Still, Americans favor higher-priced, larger cars when compared to the smaller, cheaper cars that the Europeans are driving. And, the plan wouldn't be enough to keep G.M. or Chrysler from bankruptcy, though it would help keep people employed (for now, at least).

France had a program in the nineties and it produced an initial bump, but was followed by a deep plunge. How can we be sure the initial positive impact would not end up back-firing in the long-run?

What do you think would getting extra money off the sticker price be enough to get you to trade in your clunker?

--Beth