I think shortages are more likely and dangerous than backsliding. I had a more detailed explanation, but TypePad blocked it for some reason.

Hi Guys

Do you know how many hydrids GM sold this year ? 800, yes 800 despite all the hype about their Tahoe Hybrid, there is such a sticker price, plus they don't deliver when you try to buy one. GM has no intention to massively produce fuel efficient. You think they will change that with the Volt ? think again, there is rumor that the volts is going to cost them 48 000$ how can they possibly massively sell it ? if they wanted to make a plug-in they would have designed a prius type of car and they would have target a 9kWhrs battery, instead they designed an extremely heavy vehicle that will require a 18KWhrs battery which weight is 400 Pounds and cost 10.000$. Plus they selected the series architecture, the pertinence of which is still highly controversial and debatable on a medium car, in clear they took the maximum risk with non proven technology agaisnt the proven parallel architecture. Plus they chose to make it through an hyper mediatic communication. I think they will hit a wall, because their Volt will be unsoldable. In the same time a Prius retrofitted with a 8KWhrs A123 kit will get the big share of the emerging plug-in market.

Warrn Buffet is quite a smart guy, and he has a reputation of anticipating and seeing cleraly in the futur where the money will be, in particular he avoided the trap of the techno bubble in 2000. So in clear we can trust its judgment, by the way I saw an interview of him recently where he made clear that he was "peak oil" aware, so that probably help him to see more clearly the future of the american car industry. The problem of the industry today is that they focus on high margin product which makes sense, and fuel efficiency is certainly not a high margin type of product but in the same time there is no other choice if we want to to keep our mobility in the future.

sorry about the triple post... CPU hiccup

Excess consumption isn't a strategic weapon so much as an own goal.  It's what the Saudis have been using against us.

You guys obviously don't understand much about the car buisness. The reason why the big 3 spent all their money on developing trucks/SUVs and neglecting small cars is because that's where the profits are. For the big 3, partly because their astronomical labor costs, small cars are often sold for a loss. That meant that little attention was paid to quality (nobody wants to raise production costs on vehicles with non-existant profit margins) and little R&D and marketing budgets. The situation is even worse for hybrids--the prius was sold at a loss for years, and it's only in the last couple of years that toyota has said that they've made a profit on the prius, and it's probably miniscule. The only way that the prius was a sucess for toyota financially is from the PR value. Meanwhile, SUVs/pickups have quite healthy profit margins. As Jim Cramer so aptly put it, US car companies for the last few decades were financing companies with nice truck divisions.

I think most of us understand the structure. We understand the high margin motivation and if you have read the posts over the months, you will see that.

It used to be that CAFE caused car companies to make small low margin cars to offset their averages. With the E85 loophole and light truck classifications, they can work around that.

I do not think that it was a good idea to social engineer the cars available. That is, the rich buy the high margin cars that pay for the low margin cars. I do not know if that was the intent, but that was a lot of the outcome.

Do people really want big SUVs or was that an effect of marketing? It was both I would say. Now dealers do not like to take them in trade and people that have them drive them less. I think that if we use 10% more oil as a nation because of pickup trucks and large SUVs that is bad. It drives the price of fuel up and can create scarcity.

sic

you mean we use 50% more oil because of SUV and Truck, US consume 3 times more energy per capita than europea, US sucks 25% of the world oil production for only 5 % of the world population

I understand, but I was just comparing the U.S. now with a U.S. where instead of those people driving pickup trucks and large SUVs, they drove vehicles that got average mileage. My car averages almost twice the mileage of a huge SUV, so as far as I am concerned they are using fuel for two. They are using someones share of gasoline.

treehugger;

Another stat you could use:

1) Japan produces (GDP 2006) $3611/gallon of fuel

2) California produces (GDP 2006) $1382/gallon of fuel

Note: Japan and California have the same land area.

The main difference is individual behavior.

Californians have enjoyed very cheap gas and have been convinced that bigger is better, the outcome is 3x fuel consumption for the same unit of production. That's hard to take, because we have been told for decades, that our very high fuel consumption was justified by our high GDP/per gallon. That's was not realy true but we liked to believe that it was. We have been had for years.

Here's is another one. Our Big-3 can't economically build good small vehicles in USA? Why are US built Toyotas & Hondas doing so well and are good profit makers? Is this another untruth from our national car manufacturers and auto-unions?

It seems that the reasons may be more with poor Big-3 management (at all levels) and poor contract negotiators etc.

If GM, Ford & Chrysler can't do it right any more, the time may have come to transfer their design, management and production responsabilities to others.

"Here's is another one. Our Big-3 can't economically build good small vehicles in USA? Why are US built Toyotas & Hondas doing so well and are good profit makers?"

Or what makes small car profit makers when they are made and used in other counties? In Japan they have something called Kei cars. European car makers don't have a problem selling more cars than trucks in Europe.

Harvey:
The big-3 couldn't (or more accurately didn't/didn't have the incentive to) build quality cars because they weren't profitable because they had almost or over double the labor costs of the Japanese car companies. Even Japanese transplant factories use non-unionized labor. So in effect, the UAW was more at fault for the big 3's lack of foccus on small cars. You couldn't expect the big 3 managment to sink massive R&D and marketing resources into unprofitable vehicles.

It is said that the non union workers at Toyota, Honda and other plants benefit from the union contracts elsewhere. If the unions were gone, there would be no reason for any of that. The 40 work week, vacation and sick pay all came from union efforts and everyone else benefits from them. Do you think non union employers do this out of the goodness of their hearts?

I personally would pay $1000 more for a $20,000 car if we could keep a good standard of living and job security in the U.S. There are people that buy Toyota vehicles and I think they are traitors. They are the ones ruining the country, not the unions. Unions have brought us all a decent standard of living and the WalMartizing of America will bring about its ruin.

sic

Your comment is pointless, people buy Toyota because american automakers are not capable of making decent small or even medium cars. The Union sytem is a failure because they obtained social benefit that apply to a given company only, if the country was fighting to get social benefit at a national level (like in Europe) then GM could compete with Toyota.

treehugger:

I have to agree with you.

Do not buy a union made small car. Make sure that your next compact-small car in not made by UAW union members. If you do, you may regret it.

If you have the choice, buy a compact or hybrid car made in Japan. It is definately better built.

Sorry for UAW members and sjc, but those are hard (unpublished) facts.

Treehugger,

Don't forget that while the US sucks down 25% of the world's oil with roughly 5% of the worlds population the Mid-East uses more than we do but with around 3.5% of the world's population (almost even in the total amount of oil use but they edged us out in 2007).

My comments definitely have a point. We are not preserving a good standard of living in the U.S. It has been based on borrowed money and no amount of retraining has turned things around. I am not saying Unions are the answer. They may have helped 100 years ago, but not so much now.

I have not heard a solution to losing manufacturing and good paying jobs in 30 years. Perhaps you would like to suggest something that can keep the standard of living for all people at a high level without debt. I would sure like to hear it. You can say the new green jobs will build wind mills. There is no investment capital and most of them are bought from Denmark and other countries. Before you go on about optimistic scenarios, put some proposals on the table that might make that a reality.

SJC,

Don't forget that China is losing manufacturing jobs too. It's part of the changing world economy. US manufacturing output is higher now than ever, but productivity is higher so fewer workers are needed. The same thing happened in agriculture; 2% of our people produce more food than 90% of the population did 100 years ago.

The problem is that our education system and our mentality haven't yet adapted to the new reality. There are no longer high-paying jobs ($50-100k/yr) for people with high school educations. Contrary to political promises, those jobs are never coming back. But there are plenty of good-paying jobs that go unfilled for lack of trained workers. Anyone who believes that you can drop out of school and still make a good living is delusional.

"But there are plenty of good-paying jobs that go unfilled for lack of trained workers..."

I would like to know what those jobs are and where they are at.

I know many degreed engineers in Silicon Valley that go unemployed because their jobs are taken by people from China and India on H1B visas. You can have a masters degree and still be on the unemployment line.

SJC,

I've spent over 20 years as a Silicon Valley engineer. There are shortages of many skill sets, here and elsewhere. Having a degree is just the start. Learning is a lifetime activity, and much more learning happens after graduation than before. Virtually all of the unemployed engineers that I have known were either between jobs, i.e., short-term unemployed, or they were people who never refreshed their skills.

BTW, if you want to know what jobs are available, and where, try two approaches. Search monster.com for engineering jobs in San Jose, CA (or wherever). Or go to the websites of virtually any company mentioned in a GCC article. On their "job opportunities" page you'll pretty much always find openings for skilled people.

The USA needs to get serious about preparing minds for the new century, and people have to lose the attitude that a job is some kind of entitlement. Everybody has to compete with workers in China, India, Mexico, Brazil, etc. OK, there are some exceptions -- teachers, firefighters, police, lawyers, and politicians.

I just want to know where those plentiful jobs are that go unfilled due to lack of ability. You never addressed the H1 visa issue.

SJC,

The direct answer to your question is "lots of places." Look on monster.com; certainly in Silicon Valley there are lots of jobs. H1B visas? Congress has severely limited their number -- 65,000 now vs 195,000 in fiscal 2003. That's for all industries in the entire US. The quota gets filled very early in the year. After that the "foreigners" certainly cannot be competing for "our jobs."

You post on GCC a lot, and you obviously know a lot about many subjects. So you're probably an avid reader. An interesting book is Thomas Friedman's "The World is Flat." His thesis is that it used to be more important where you were born, as far as your potential in life is concerned. Now it matters more how intelligent you are, and how much you develop your intelligence. Many still think a rich lifestyle is a birthright. Those good ol' days are gone.

I believe we aren't developing our intelligence in this country. Watch any TV sitcom. Who does everybody make fun of? Nerds, people who like to read or study! It's cool to be athletic, funny, cute, etc; it's not so cool to be smart. So kids try NOT to look too smart. What a self-destructive behavior for a society.

Monster.com has lots of listings. But how many people respond to one listing? I would guess very many. Do they every fill those positions, maybe. Sometimes they are just fishing to see what is out there. Sometimes they are looking for the bargain, the vastly over qualified person willing to work for nothing.

Back in 1984 when the economy was booming and everyone was employed we listed with recruiters to fill one engineering position. We got 100s of resumes from qualified engineers looking for a job. That told me that even in good times there are lots of people needing work.

Do not be fooled by the appearance of prosperity or the wish that it were so to make your self feel better. Everyone would like to think that they have job security, they can not handle thinking otherwise. It is in times like the ones we are facing now that people really find out if their illusions are true.

SJC:

Here are a few excellent opportunities to introduce USA to the new electrical energy economy:

1) Retrofit (locally-nationally) 5 to 10 million gas guzzlers (including school and city buses) a year into PHEVs (see MIRA).

2) Convert 10 to 20 existing empty factories into competitive highly automated high performance modular battery packs factories, with very large government investment programs in the form of interest free loans, shares, bonds and/or handouts etc.

3) Actively promote the introduction of PHEVs and BEVs with a progressive liquid fuel tax (5 cents/gal/month) + a meaningful incentive program to accelerate transistion from ICE to electrified vehicles with 75%+ USA content.

4) Actively promote R&D + installation of wind and solar farms with a 75%+ USA content.

5) Aggressively promote the production of biofuel from non-food feed stocks.

6) Timely promote the conversion of most existing corn ethanol plants into non-food ethanol-butanol-biofuel plants to reduce the use of corn-grain by 50%.

7) etc etc.

PS: The above could be financed by stopping oil wars and redirecting $200B to $300B a year + the new progressive liquid fuel tax.

SJC posted:

"Do not be fooled by the appearance of prosperity or the wish that it were so to make your self [sic] feel better. Everyone would like to think that they have job security, they can not handle thinking otherwise. It is in times like the ones we are facing now that people really find out if their illusions are true."

SJC, I hope you're just in a bad mood today. Are you really that pessimistic? All the time? It's spring. I can hear the birds chirping, unemployment is about 5%, inflation is still about 4%, the libraries are full of good books, and we get to read about the ongoing revolution in transportation technology on the internet every day. Cheer up dude!