Stop Crying Detroit !
by: sahail
Posted on: Monday, September 8th, 2008 at 3:02 pm by: sahail
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More woes for the American market then, with many manufacturers complaining that companies from the East are much more capable when it comes to making electric car batteries.
At a recent gathering in Michigan, the story was the same across the board, with most of the representatives of US car makers just throwing their hands up and, and complaining that the mounting cost of making electric batteries was prohibiting them from entering the electric market.
The upshot is that in a few years time the industry will lead the US companies behind. The executives from the US car makers made it very clear at the meeting at Traverse City, Michigan, that the losses they would make in manufacturing batteries for electric cars effectively priced them out of the market. The feeling was that the US government would need to provide some kind of incentive for home-grown carmakers, so that the expensive parts for the new generation of cars could be made cost effective.
And they pulled no punches when identifying who had the better deal, either. “For electric vehicles, nearly all major components come from Asia. We don’t want to create another cartel for renewable energy, sustainable mobility,” said MaryAnn Wright, who runs the hybrid business of Johnson Controls Inc.
It is true that Asian companies have the edge when it comes to car making. But they always have. Well, not always, but in recent times whenever a new piece of technology is developed, or a new car that can be mass produced and appeals to families is made, you can bet your bottom (weak) dollar that the guys from the East are responsible.
Now, for a country that pretty much dominated the car world in the past, the United States could, or should, be doing a lot more to get a hold on this new market we are all seeing develop. In the next ten years environmentally friendly cars are going to become more widespread. The new Honda Insight, for example, is sure to retail for less than $20,000, which makes it the first real affordable hybrid.
I know this is not really traditional hybrid related, but the fact that the big carmakers in the US are now crying about having no money for research and not being able to keep up with the Asian manufacturers just starts to smack of early protectionism. By having subsidies slapped on them by the government, these carmakers will be making the biggest kind of mistake.
Why? Well, simple really. Competition breeds excellence. Has been the case for centuries, will always be the case. If you sit there and say that kid is better at Maths than you are and you do nothing about it, what is going to happen? The kid’s going to beat you at algebra every day. Period.
What the US carmakers ought to be doing is getting back on the horse. Many of them made a straight loss over the last five years. We’re talking millions. At the same time, their Asian competitors made huge profits. Why? Well, we know why. US carmakers kept on thinking bigger is better all the time. And when the market became more about zippy city cars rather than huge SUVs, they got toasted.
I guess the whole point of this article is just to ask the US carmakers to sit up and once and for all take control of the situation. If you let the other guys win, that is exactly what they will do.
We know they will get the grants and the subsides, and that the government will even introduce tariffs if necessary. There is nothing wrong, essentially, with looking after our own. But the hybrid issue (or electric issue) is a serious one. To not take action and think about how you could rescue yourself and make a clear impact on the future of the planet because you don’t have the money, isn’t that just a little bit sad?
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