Wednesday, September 23, 2009
GM vs Ford for America Auto Leader
by Ron Spangler
The race is on for the hearts and minds of Americans looking for the car of the future. For Americans looking to support American Auto Manufacturing the choice has come down GM and Ford. Historically these two American giants have always been number 1 and 2 in the hearts of American Auto enthusiast. With the taxpayer bailout and government take over of General Motors you would think GM has the clear advantage and could possibly mean the end of Ford. However it may be premature for GM to dance a victory dance for the predicted fall of Ford.
With the GM announcement of calling back 2400 hourly employees to plants in Michigan, Indiana and Kansas you would think GM could already claim the winner's position over Ford. Before we do, we must first look at what the economy and what it will look like next year. We also must consider what type of vehicle GM offer in their bid to win the hearts and minds of Americans.
Remember it was only a year ago that everyone was predicting GM would run away from every other auto manufacturer with the announcement of the new Chevy Volt scheduled to be released in late 2010. A year ago when the cost of gas was rising at incredible amounts, the impression was the Volt would be ready at the beginning of the 2010 GM inventory. Now according to GM Vice-Chairman Bob Lutz "The Volt technology is very exciting, but costs will have to come down before it can become generalized,” he added “And US fuel prices will have to rise to world levels, meaning $5 or $6 per gallon.”
Does it sound like they are waffling on their earlier promises?
Larry Burns, who will retire this year explained it this way:
"It is important to recognize that first generation technology in the auto industry, or industry in general, is usually costly verses the mature alternatives that it competes with. The key is to kick off a generation-by-generation learning cycle that allows the new technology to reach its mature, high-volume potential. GM believes that Lithium Ion batteries at maturity and in high volume will be cost competitive for personal mobility. This is why we are launching the Volt, to kick off the commercialization dynamic."
The problem with this statement is Volt will not be the 1st generation of electric autos in the auto industry. GM has been here before and it was a dismal failure. Now they are relying on the Lithium Ion batteries to revise this past failure and vindicate them from all of the unfulfilled promises of the past. If recent events are a predictor they may see the Volt go down like the failed US Vectrix business. They are still hanging on by a thread but have cut production of their larger Maxi Scooter and will concentrate on smaller European style scooters for next year.
With all the hype about technology and green jobs one thing is clear, there must be a market for these types of vehicles. There is no US market today or in the foreseeable future large enough to sustain the sale and manufacturing of electric vehicles. GM was counting on the bottomless wallet of the American taxpayer to allow them to produce the Volt in large numbers and corner the market on the electric 'green' vehicle of the future. With news from GM that production volumes are expected to remain relatively low, somewhere around 10 thousand the 1st year, they have decided to drastically cut their production to match the expected sales.
With so many companies jumping in trying to build a sustainable market, the opportunity to fail is huge. The problems that plagued the Vectrix Maxi Scooter are the same that plague all electric vehicles. Americans expect and demand performance, low maintenance, reliability and long term endurance from their vehicles. With today's technology totally electric vehicles will not meet these standards when compared to gasoline or diesel powered vehicles. The main drawback for any electric powered vehicle is there are too many variables to determine the true range and reliability of the vehicle. Like Vectrix found out here in the United States the demand we place on our vehicles is too much for electric vehicles. The number of passengers, the terrain, the weather conditions, amount of time we spend in our vehicles, miles we drive daily and the miles driven on vacations or just visiting relatives are all too much to make any electric vehicle reliable.
Ford has not accepted bailouts or government intrusion but they are working on a new all electric Fusion for 2011 and 4 other electric vehicles by 2012. By going a little slower in production they will have the advantage of finding out who will be the first to fail and how it will effect the market for EVs.
Reading this you will gather that I am not a fan of EVs and you would be right. They may have their place in certain parts of the world but I just don't see a large US market evolving in the near future. Due to the fact that electric motors are constantly drawing amperage from the battery and the amount of amperage is increased by not only speed, terrain (climbing and descending hills), weight (number of passengers), and weather conditions batteries cannot meet the ever changing demand. Another problem we will encounter is the high level of heat the electric motor will produce from long continuous use. This continuous use and production of internal heat will cause premature failure of the internal parts of the motor and a reduction in the life of the motor. Another major problem will be the life of the battery cannot be honesty and predictably forecast. If you think there are a lot of variables to consider when trying to determine the reliability of the EV, then consider the variables determining the life expectancy of the battery. How many times the battery is recharged plus the environment and individual use will determine the life of the battery. Since the demands placed on our vehicles and how we treat our vehicles varies so much there is no possible way of making a accurate determination of the life of a particular battery. If you run out of gas in today's car just toss in a gallon and drive to the nearest service station. If your battery dies in a EV, call a tow truck you are just stranded.
Only time will tell who will come out on top. One thing that may determine the winner between GM and Ford will be if the American taxpayer becomes the ultimate loser in the rush to EVs. If GM receives more bailout money because they fail in their promises they will find themselves joining so many others under the wheels of the Obamabus of losers.