Bailing out the auto industry and SUV owners

mgibbons19 · Light Sweet Crude Joined: Aug 20, 2004 Posts: 1093

This is a great thread, and thanks Ibon for starting it.

1) We do indeed get a little myopic and over the top here. We are trying to think about issues so complex and interconnected that we cannot really hold them all in our minds. Unless Stephen Hawking is on the board. And full collapse is one "solution" (ie logical - not desired outcome) to these interconnected problems.

2) I too have a wide libertarian streak that says keep the gov't out of this entirely. Rising fuel prices will force individuals to make different decisions which will hopefully transition us into whatever is next. It will be painful, but it's going to be painful no matter what. Ppl will use their trucks less and more truck-ishly. They will begin to live lives with fewer miles travelled per day, ride bikes, and so on.

3) Manufacturing - like yours - is going to be important no matter what. Long before we are walking barefoot with bones through our noses we will necessarily need more local manufacturing. I don't know what it is at this point. Trains, wagons, high efficiency motors for work, bikes, sailboats, all the parts that make up those things, etc, etc, etc.

4) infrastructure - and one of the earlier posts mentioned this. Our (US) infrastructure is completely geared toward the car at this point. Any switch over is going to be painful. I don't know what the answer to this is, or even if there is an answer. Cities built around light rail are vastly different than cities built around freeways. I don't know yet how to make the latter into the former. Perhaps fuel will get to a point where bikes, quadrunners, segways, and golf carts will all be street legal soon. I don't know. Maybe freeway meridians can be relayed with new rail.

It all remains to be seen, and the petulant dismissal of all the "sheeple" (which really ought to be spelled sheople) for having different sources of information or points of view is just juvenile.

patience · Expert Joined: Jan 04, 2008 Posts: 1761

Something that deserves more consideration, I believe, is the cost of changing over any industry to another purpose. The US auto industry in its' present form is a dinosaur, wandering about unaware of its' own demise. It needs to be redone, no doubt.

The cost to retool for a MINOR change in ONE automobile piston, was over $100,000 in 1990. If you want to make something besides pistons in that plant, you'd have to claen it out to the walls, and only have the building and utilities to save. The scrapped equipment originally cost in the 100's of millions of $. Now. Start over with the building to make EV's, or whatever. The first thing to do is cough up $100's of millions of $. Where the hell are you gonna get that in today's credit-crunch world?

A second consideration is that we have evelved the worldwide auto industry over a hundred years or so into what it is now, learning all the way. New products of any kind involve a learning curve of years, or decades. If we start producing EV's tomorrow, they won't be nearly as good as they could be 10 years down the road. This does not happen like flicking a switch and it has exorbitant costs, so be aware of that.

It needs done alright, but please don't underestimate the costs involved.
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Canuk

patience · Expert Joined: Jan 04, 2008 Posts: 1761

Canuck, Yes, we NEED to transition to become car-free. But I don't see it happening. I saw the paralysis in the auto industry in the1970's, and see it repeated again today. The management is basically a bunch of accountants who can only think short term. They cannot conceive of a paradigm change, or they would have implemented it 35 years ago.

If I'm correct, then the US auto industry are dead corps walking, and a lot of the imports are going to suffer mightily. That means the US, then the world economy takes a hit to the solar plexus. They are going down, and they are not going to get up again. Governments can, and may, pour money down that rat hole, to no avail. The US economy does not have the (petroleum) energy to emerge from this, IMHO. It's going to look like the 30's in auto towns soon, as dying banks withold credit that is the lifeblood of auto sales, and tapped out consumers cut spending to the bone to try to stay afloat in a sea of debt.

The US govt is debt-strapped also, and thus limited in its' options. Looks like a hospital trauma center that is overwhelmed with patients. Time for Triage, I think. Don't waste the limited resources we have on hopeless causes.
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joelcolorado · Intermediate Crude Joined: May 25, 2008 Posts: 683

I am so tired of bailing out everyone from farmers to bankers to home owners to auto industry to whatever. Just a mess.

yesplease · Fission Joined: Oct 03, 2006 Posts: 2568

joelcolorado · Intermediate Crude Joined: May 25, 2008 Posts: 683

My wife has $500,000 in school loans...YES that is right 500k. Can we get a bailout>? PLEASE. She is a doctor and we all know we need more of those. She has 750 patients so a necessary service?

patience · Expert Joined: Jan 04, 2008 Posts: 1761

yesplease,

Yeah, there are a lot less parts in an EV. The tooling costs depend to a great degree on the volume you intend to produce per unit time. I can build one in my garage with almost no tooling cost. If you want to produce a couple million a year, that's a different matter, and outsourced suppliers will also have to tool up for the added volume.

Most of the examples I've seen use molded plastic bodies, which may change if you want to make millions of them, since plastic may not be the best material choice, and if it was, the equipment to turn out huge quantities of molded stuff isn't on the shelf waiting to be bought. That stuff is always made to order, with long lead times. Custom made special equipment never works as received and typically takes a few weeks or months to debug and get it up to rate. Whatever electrical components and controls are to be used would require major volume increases over current production, that is, nobody is making 2 million EV's/year now, so what are being made are scavenging components from other uses, such as maybe electric forklift motors, whose present production volume is comparatively small.

Tooling costs are spread out over the number of units sold before a model change, and go into the unit price. If you tool up for 2 million and only sell 200,000 you have a loss. If you tool up for 200,000 and the demand turns out to be 2 million, nobody is happy for different reasons, since quality inevitably falls trying to meet big demand. New production lines are usually reinvented a number of times before they function properly, adding to tooling costs of a new product.

All of the problems can be solved, given enough time and money. There lies the rub in the whole works, since people always, always, underestimate the time and money required for a startup. I've been involved in a few of those. A thorough discussion of starting up new high volume production for any product involves a lot of experts on each aspect of the business, and takes months to plan, far beyond the scope of this thread.
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Local fix-it guy..

Canuk

Ibon

Iaato

I just finished watching "The Power of Community" about Cuba's transition to post-peak in the 1990s, Ibon. If you haven't watched it, I recommend it highly. There is a section in the film on transportation and how they adapted. Creative ideas included semis with "bus-trailers" that could carry ~ 300 people. Hitching became popular, and government cars were required to stop and pick people up. Pick up trucks were retooled with seats in the flatbed and steps up over the bumper and a cover. Industries retooled to make bikes. And so on.
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"When fascism comes to America it will be wrapped in a flag and carrying a cross." --Sinclair Lewis