The icon, Mr. Goodwrench, will be terminated from the job he’s held for close to forty years.  Mr. Goodwrench now symbolizes the thousands of Americans who have been terminated after working for the auto industry for decades instead of representing GM.  Just like its actual employees, GM’s long-time icon is being axed due to the corporation’s attempt to regain its financial viability.  GM has recently closed down several of its brands, trying to “rightsize” the corporation so it can focus on its four top selling brands.

Emphasis on brands rather than corporate images

The only brands GM plans to retain are Cadillac, GMC, Buick, and Chevrolet.  To help counteract the negative images recently acquired by its corporate office, GM is emphasizing that each of its products are a separate brand. To help create the distancing, GM is doing away with its corporate umbrella label of Goodwrench Services.  In September, in lieu of Goodwrench Services, each brand will start marketing its own specific brand service and parts department.  Goodwrench Services will become Cadillac Certified Services, GMC Certified Services, Buick Certified Services, and Chevrolet Certified Services.

GM has also been distancing itself from its specific brands by removing the small GM badges from outside the cars.  The GM badges have also been removed from inside the cars.  The safety-belts and keys also no longer carry the GM badges.  GM is content to let the consumers continue associating customer service and ownership experience with the specific brand rather than with the corporate brand.  According to GM’s research, most consumers haven’t associated the specific brands with GM’s bankruptcy and government bailout.

Mr. Goodwrench is outdated “corporate clutter”

According to GM spokeswoman Pamela Flores, Mr. Goodwrench became too disconnected from the GM brand over the years.  GM wants the customers to associate the repair services with the specific brand customer services being offered.  GM is hoping this will encourage customers to use only the dealers’ repairs services.  GM says this will improve the consumer’s ownership experience.  However, it will also have the benefit of continuously exposing the owner to the dealership’s other marketing promotions.  Thus, a consumer who goes in for a car repair may be talked into buying a nice, newer car instead of fixing up the old one.

More reasons to axe Mr. Goodwrench

Mr. Goodwrench also doesn’t fit the modern technology image GM wants to project for its four remaining brands.  GM wants people to think of the vehicles as being high-tech modern vehicles.  Modern cars don’t require much greasy mechanical work.  It’s usually a computer problem nowadays.  Steve Hill, GM’s vice-president of customer care and after-sales services, says this is a declaration of GM’s commitment to customers.  The company plans to increase service adviser and technician training, as well as improve customer satisfaction.

Joel Ewanick, GM’s head of marketing, referred to Mr. Goodwrench as being corporate clutter.  Mr. Ewanick said the company now wants to make their vehicles the stars of the show.  Numerous advertising and company marketing divisions have commonly used fictional characters to portray companies and their products’ attributes.  Now they are starting to give way to more modern technological campaigns.

We have seen many other iconic “stars of the show” that were a part of this particular marketing trend disappear as well.  We have already said goodbye to Mr. Planter, Mr. Clean, Aunt Jemima, Uncle Ben, and Mrs. Butterworth.  Now we bid a fond farewell to Mr. Goodwrench, as well.  One does have to wonder though what America will become like if all the American icons keep on fading away.   Will it still seem like we’re living in the United States if all the American icons disappear?

Pontiac brand will be missed

The end has finally come for the Pontiac Motor Division after 84 years filled with major strife and occasional success.  General Motors (GM) closed down the division officially on October 31, 2010, once all its contracts with dealers expired.  The Pontiac brand is one of several brands that GM has severed ties with throughout GM’s history.  GM ended the Oakland brand in the early 1900s, shortly after it purchased the merged companies of Oakland Motors and Pontiac Spring and Wagon Works.  GM had decided then to concentrate on its Pontiac Chief of Sixes model after it became popular.  GM also closed down the Oldsmobile brand in 2004, and it Aztek model in 2005.  It plans to officially close off the Saturn brand by 2011.

The Pontiac Motor Division was originally created in 1926, and located in Pontiac, Oakland County, Michigan.  The Pontiac brand was named for the city it was manufactured in, and the city in turn was named after the 18^th century Ottawa Chief Pontiac.  Just as Chief Pontiac may have faded away into the distant past, the Pontiac brand may also fade away.  However, it is just as likely that the Pontiac cars will be remembered with fond memories, just as Chief Pontiac is still remembered 190 years later.

Although not all of the Pontiac models will be remembered or even missed, there are a few that will be remembered and missed.  The Firebird Trans Am has already become immortalized due to the “Smokey and the Bandit” movie starring Burt Reynolds and Sally Fields.  The GTO, which stands for the Italian phrase “Gran Turismo Omolgato,” is one of the most loved muscle cars of the 1960s and 1970s.  Its name means “ready to race” and that is exactly what most of the GTO owners did with their cars.  Ronny and the Daytonas made the GTO even more popular by singing a song named “My Little GTO.”

Yet the GTO was merely a modified Tempest.  The same John DeLorean that designed the DMC-12 gull-winged sports car used in the “Back to the Future” movie trilogy helped to design the GTO.  Mr. DeLorean, as the GTO’s chief engineer, violated a GM policy which limited the maximum size of the car’s engine.  The Pontiac division had put 5,000 GTOs on the market before GM’s corporate office found out about the policy violation.  Due to its’ success, GM changed its engine size limitations.

Causes of Pontiac’s demise

However, over the past few decades, consumers have started preferring the more fuel-efficient compact vehicles to the muscle cars.  GM and especially the Pontiac Motor Division lost the leading edge in selling products to the American market.  As a result, GM reorganized the company in 1984 and started combining Pontiac’s manufacturing, engineering, and design operations with other GM brands.  They started putting the less powerful guts of other GM makes into Pontiac skins.

Most consumers simply were not impressed with the rebadging of the GM/Pontiac products.  Pontiac’s fans were disappointed that the Pontiac models were starting to look and act just like any other GM make and model.  For the most part, GM/Pontiac kept producing cars that just didn’t appeal to the American consumers.  This meant bad business for Pontiac, as it was originally geared towards selling specifically to Americans.  By the time Pontiac started making cars like the G8 and Solstice, which did appeal to American consumers; it was just too late to save the brand.

Pontiac’s sales had dropped down to less than a third of its 1968 sales by 2008.  Between all the inconsistencies in corporate strategy, the unstable economy, and changes in consumers’ preferences, GM itself had to declare bankruptcy in 2009.  As part of the bankruptcy agreement, GM had to close down the Pontiac Motor Division once the dealer contracts expired.

Good time to purchase a new Pontiac

However, now may be a good time to snap up the remaining unsold new Pontiacs that are still at the dealers’ lots.  Due to the brand’s current status with GM, every Pontiac model is now considered to be a used model, even if it’s never been off the dealer’s lot.  This means you can get a fairly new vehicle at close to half the price it would have cost you just a few months ago.  Another good point is that the dealers will continue to service Pontiac models and will still honor any warranties.

Who knows, eventually someone may decide to re-introduce some of the more popular Pontiac models back onto the market sometime in the future.  That’s exactly what happened with DeLorean’s DMC-12 model.  A Texan named Steve Wynn decided to take over the brand and has now started producing new modified DMC-12s. Maybe, just maybe, powerful muscle cars like the GTO will come back into style.  However, don’t hold your breath while you wait for that to happen.  The environmental restrictions keep getting tougher, not more lax.

Nissan North America announced a recall of 2.14 million vehicles on October 28, 2010.  This makes it the third largest recall in Nissan’s history.   However, this is just one of a long list of recalls for the auto industry this year.   There have been dozens of various makes and models recalled by several manufacturers, ranging from school buses and semi-trucks to cars, SUVS, and recreational vehicles.  Toyota and Honda have both announced recalls right after Nissan made its latest announcement.

Reasons for recalls

With all the recalls (approximately 20 this year alone), many people may assume that the vehicles are getting shoddier and unsafe to drive.  However, due to Toyota’s bad experiences, automotive manufacturers are now becoming more proactive in vehicle safety campaigns.  They are trying to catch all the issues before any incidents and injuries are reported by consumers.  Thus, most of the recalls are actually done voluntarily for minor problems and annoyances rather than for major safety issues.  There are numerous recalls simply because the same parts were used for various makes and models, and therefore have to be corrected in every vehicle that uses that type of part.

Most manufacturers don’t like announcing recalls though, because they can tarnish a company’s reputation for a very long time.  So in many instances, they simply notify the owners of a potential hazard or defective part by mail, explaining what the customer should do about the problem.  However, if the manufacturer can’t locate all the vehicles or if the problem presents a major risk to the public, then they must do a public recall of the vehicles.

Thus, Nissan is recalling the 2.14 million vehicles due to an ignition problem, even though no accidents or injuries have been reported yet.  Apparently, Nissan has discovered that the oxidation on the contacts of the ignition relay can cause the car to take longer to start, possibly stall out, and not restart.

Nissan models being recalled

Nissan is recalling nearly 762,000 vehicles sold in North America, 835,000 sold in Japan, and 354,000 sold in Europe.  The vehicles were built from August 2003 through July 2006 in China, Great Britain, Japan, Taiwan, and the United States.  The North American models include:

• 2004-06 Armada SUV
• 2004-06 Titan pickups
• 2004-06 Infiniti QX56 SUV
• 2005-06 Frontier pickups
• 2005-06 Pathfinder SUV
• 2005-06 Xterra SUV

Other models being recalled in other countries include the Cube, March, Mycra, Note, and Tilda.   Nissan will be notifying owners in December, after the dealers get the parts in.  They are expecting the repairs to take about a half hour for each vehicle.  However, if the vehicle begins to run abnormally, the owner should take it to a dealer before receiving a notice.

Other October 2010 recalls

Here is a list of other recalls currently being conducted:

• BMW is recalling 350,000 globally due to potential brake problems.  The recall includes models from the 5, 6, and 7 BMW brand series.
• Rolls-Royce has announced it will be asking 5,800 Phantom owners to bring their cars in for inspection
• Daihatsu Motor Co. is also recalling 883,006 mini vehicles sold in Japan due to problems with the door mirrors possibly falling off.
• Toyota is recalling about 1.66 million vehicles primarily sold in China, Japan, and the U.S. for brake and fuel pump issues.   This recall includes Avalons, non-hybrid Highlanders, and Lexuses.
• Honda has announced it will be recalling some 2005-2007 models of Acura RL sedans and Honda Odyssey minivans due to brake fluid leaks that can cause the brakes to become spongy and too soft over time.

Would you rent a BMW vehicle if you couldn’t buy it for some reason?  For instance, what if you couldn’t afford a monthly payment for the BMW M6 sports coupe, which has a U.S. starting price of $102,350?  Would you be willing to short- term lease it or rent it by the hour whenever you wanted to use a car?  What if you could rent out a BMW compact 1 series for just €16 ($22.29) per hour or a flagship 7 series sedan for just €32 an hour?  Would you choose a BMW model over some other make or model of car?  BMW is assuming that consumers would do so.  Since the BMW Mini Cooper is currently one of Zipcar’s most requested rental cars, BMW may be right.

BMW on Demand

On October 22, 2010, BMW Group announced it would be starting a year-long experiment, called BMW on Demand.  It’s basically BMW’s first effort at breaking into the car-sharing business.  BMW’s decided to enter the car-share/car rental business to help make up for the shrinking profit in the auto-making industry.

During the BMW on Demand experiment, consumers can rent or short-term lease any current BMW model from its product lines.  All you have to do is pick it up and drop it off at the auto maker’s exhibition, event and car delivery center.  The cars can be reserved online, by phone, or at the counter at BMW Welt, which is located next to the BMW headquarters.

Consumers have to pay for their own fuel, plus the rental fee.  However, BMW says it will cover insurance, cleaning, and servicing costs.  Unlike other car-sharing providers such as Zipcar, BMW will only charge the consumer for the actual time the car was used.  Zipcar users have to pay for the full reservation period even if the vehicle is returned early.

Although the program is only available on a small basis now, BMW plans on expanding to other areas of Munich during the experiment’s second phase.  If the experiment succeeds, then BMW will expand this mobile service to other areas of Europe.  Eventually BMW on Demand may arrive in the United States.

Basic Concept of car-sharing/short-term leasing and its benefits

The basic concept is that consumers can just rent whatever car they want to drive for the period of time they actually need the car.  There are numerous benefits to car-sharing.  Some of these benefits are:

• Saves money for consumers due to less ownership costs (taxes, maintenance, annual liability insurance)
• Helps eco-system (fewer cars would have to be made and driven)
• Provides consumers with several choices of vehicles every time they drove, including otherwise unaffordable luxury cars
• Provides more access to private transportation so people who can’t afford a car can still get to places not easily accessible by public transportation
• Permits every consumer to fully test-drive each make and model of vehicle under normal driving conditions before purchasing a similar vehicle

BMW’s car-sharing competition

BMW is not the first auto-manufacturer to experiment with car-sharing.  Numerous other manufacturers have considered offering car-sharing/hourly car rental services due to increasing urban populations and declining purchases by young drivers.  Peugeot, a French auto maker, has been conducting a project called the Mu initiative.  It’s being utilized in various European capitals this year.  The Mu initiative permits drivers to use pre-paid accounts to lease various types of vehicles on a short-term basis.  These vehicles can range from a van to a bicycle.

Daimler AG has been busy testing a Web-based ride-sharing type of program.  Its initiative is called Car2go, and is similar to Zipcar’s car-sharing businesses in the United States and United Kingdom.  For this project, drivers pinpoint and pick up available Daimler Smart-brand cars ad-hoc.  Drivers are linked to the cars through software that permits the drivers to pick-up and drop-off cars whenever and wherever they prefer.  So far, 15% of Ulm, Germany’s registered drivers are signed up to use the Car2go program.  Daimler has extended the program to Austin, Texas and plans to eventually expand it to Hamburg and other locations.

Daimler has also launched a carpooling variation of Car2go, called Car2gether.  Car2gether uses social media outlets to link riders with compatible drivers.  The current system requires passengers to pay a small cash fee to assist with the vehicle maintenance and fuel.  However, Daimler plans to install an automated payment system and take a small cut of the fees as the program progresses.

Car-sharing trends

According to the Frost & Sullivan research firm, car-sharing networks will continue to increase within the next five years.  They expect there to be 4.5 million North American members and 5.5 million European members involved with these types of car-sharing programs by 2016.  According to the firm’s estimations, revenue from car sharing services could reach up to $3.3 billion in North America and €2.6 billion (about $3.2 billion) in Europe.

However, Zipcar thinks the traditional hourly car rental agencies like U-haul, Enterprise, and Hertz will be able to undercut BMW and other car-sharing crop-up businesses in North America.  According to Zipcar’s S-1 filing in June, rental car agencies have better-known brands and better financial, technical, and marketing resources than the newer car-sharing businesses have.  Thus, Zipcar doesn’t expect the Frost & Sullivan estimates to be accurate until around 2020.

Either way, the estimates are helping to attract attention from other industries as well.  In the future, we may see all types of sharing-networks started up.  We may all have to learn how to share nicely with others if we want to drive or use a computer in the future.

The James Bond automaker, Aston Martin, has announced it will be making a car especially designed for city driving.  The idea is to make a sub-compact luxury car that addresses the hassles of driving in congested cities like London, England.  Aston Martin’s CEO, Dr. Ulrich Bez, has announced that its 2009 concept car will be on the market by late spring, 2011.  The sub-compact car will be Aston Martin’s smallest and slowest vehicle to date.

Will Cygnet be worth the price?

Many people are wondering if the British luxury car manufacturer will be able to convince consumers Cygnets are worth a high end luxury car price.  The 2011 Cygnet will be based on imported, factory-ready Toyota iQs from Japan.  The Scion iQ is one of Toyota’s low end models, which sells for about a third of the projected Cygnet base price.

Aston Martin will leave the iQ engineering alone.  Basically the only difference between Toyota’s Scion iQ and the Aston Martin Cygnet will be the cosmetic features.  People are wondering just how much cosmetic luxury Aston Martin plans to pack into the supermini vehicle to bring it from being a low end to high end model.

2011 Cygnet’s primary features

Aston Martin has emphasized that the Cygnet will still be retaining all the high quality standards of the company’s other luxury models.  According to Aston Martin’s CEO, Dr. Ulrich Bez, and Design Director, Marek Reichman, this retention also includes the brand’s associated scents.  According to these two gentlemen, each Cygnet will be a unique vehicle, with no two being identical.

The uniqueness will be due to each customer getting to customize their vehicles to suit their own personal taste.  Each Cygnet will be hand-built in the Gaydon headquarters in Warwickshire, England.  The customer will have a wide selection of interior layouts, such as metal trim, high quality leathers, and wood fascias.  Consumers will also get to choose from a wide spectrum of exterior paint colors.  The Cygnet comes with plush seating for four people.

The 2011 Cygnet will be powered by Toyota’s high efficiency 1.3L gasoline 4-cylinder engine.  This means it will have less than 100 horsepower.  The 1.3L will provide an average 59mpg, with the ability to reach 106mph flat.  It’ll have an 11.8sec in the 0-62mph sprint.  Aston Martin is hoping this will help the company to meet the ever-increasing fleet-emissions and fuel-economy standards that are being placed on auto manufacturers worldwide.  They’re hoping the smaller car with fewer emissions will counterbalance the higher fleet-emissions and fuel-economy of its luxury V8 and V12 vehicles.

Aston Martin’s marketing strategy

CEO Ulrich Bez stated that it’s time for the company to start thinking differently.  He said that “Whatever we do, we do right.”  The company realizes that their customers need a small car for urban and city use, but still want the luxury and performance provided by bigger cars.  Aston Martin thinks the Cygnet can satisfy the demands of emissions and space, without compromising the luxury and performance.  The Cygnet is expected to provide the convenience of a supermini commuter car without compromising the intelligence, artistry, and personality that Aston Martin’s luxury vehicles are well-known for.

The 2011 Cygnet is expected to be offered to existing Aston Martin customers first, with general sales following.  The two-seater luxury sub-compact may also eventually be offered in the North American market.  However, Americans may have to wait until the proposed 2012 purely electric version hits the global market.

Numerous people wonder what it would be like to have driverless cars.  Several people have depicted driverless vehicles in science fiction films, books, and cartoons.  General Motors (GM) planned to be ready to road test a driverless vehicle by 2015.  However, a company not even in the automotive industry has beaten GM to road testing a driverless car.  This company is Google, the internet search engine giant.

On October 9, 2010, Google reported to The New York Times that it has successfully road tested a fleet of driverless cars on a variety of California roads.  Google used its artificial intelligence technology, consisting of sensors, cameras, GPS, and massive computer databanks to convert six Toyota Priuses and one Audi TT into driverless vehicles.  They have been secretly road testing this fleet in normal city and freeway traffic situations.  The vehicles have been tested on San Francisco’s Lombard Street, the Golden Gate Bridge, throughout the city of Mountain View, and on the Pacific Coast Highway.

Altogether, the fleet has already logged in 140,000 miles between the seven vehicles, with little interference from human drivers.  They logged in 1,000 miles with no human driver interference at all.  So far, the only accident that has occurred was due to human error, when someone rear-ended one of the vehicles while it was stopped at a stoplight.

Is Google wasting its resources?

Google stated that their driverless car technology wouldn’t be ready for mass production for at least another eight years.  Some people think that consumers wouldn’t buy them even if the cars were available on the market today.  These people think that Google is wasting resources on a useless product.  One argument is that most humans don’t trust machines to do their thinking for them.

However, there are already ample examples of how humans constantly use machines on a daily basis, even though they distrust those same machines.  For instance, millions of people use cars with cruise controls.  Thousands of humans use airplanes with “auto-pilot” controls. Some governments already use driverless vehicles for various purposes. Thousands of other robotic machines and tools are used daily, despite human distrust and fears.

Another argument is that the driverless car technology heavily relies on computers, which currently have a tendency to get glitches, security issues, and viruses.  Thus, the driverless car technology could also be susceptible to these problems.  It could create potential safety hazards which may result in large amounts of fatalities, serious injuries, and property damage. Therefore, consumers wouldn’t want this type of transportation system.

However, we already have a transportation system that creates large amounts of potential safety hazards, with all the same outcomes.   More than 37,000 people died in the U.S. in 2008, and 2,222 were killed in the UK in 2009 due to car accidents.  There were 24,690 serious injuries in the UK alone in 2009 due to car accidents.  The majority of these accidents were due to human error in some format, with the rest of them being due to vehicles malfunctioning.  Moreover, most modern vehicles already do use computers and some type of sensors to maintain the vehicle’s operational systems.

The third argument is that many people just enjoy doing the driving themselves.  Therefore, they wouldn’t want a machine doing the driving for them.  Google has the perfect solution.  Google’s system is designed so that the human driver decides when to drive or when to use the automated driving system.  If the driver wants the pleasure of doing the driving, all he or she has to do is push a button or step on the brake.  It really wouldn’t be much different than what it’s like to use cruise control, which is very common nowadays.  Moreover, Google’s system allows the driver’s personal driving style to be programmed into the system.  The automated driver can drive offensively (more aggressively) or defensively (more timidly).

Google’s reasoning

Google is basing their ideas and technology off of the current driving habits and attitudes of consumers.  Recent driving surveys and market research indicate that consumers would approve of this type of technology.  People have indicated they’d love to have transportation they could rely on to get them home safely when they were incapacitated.

Consumers have also indicated that they would continue doing things that could possibly endanger themselves and others while driving.  People can easily become very distracted while driving.  Yet, despite the distractions and the knowledge of knowing it’s unsafe for them to drive, some keep driving anyways.

Google’s theory is that it’s easier to just change the current car technology to fit consumers’ driving habits than it would be to change those bad driving habits.  Their belief is that you’re always going to have humans being distracted while they’re driving.  Therefore, you’re always going to have accidents caused by human errors and poor judgment.  Google decided that the best way to get everyone home safely was to create vehicles that will do the driving when the driver is too distracted or incapacitated for some reason.

Current obstacles

One of the biggest obstacles to Google’s driverless technology becoming massed produced any time soon are the legal issues.  Basically, all the driving laws and regulations have been created with the idea that there would be a human driver controlling the vehicle.  All the insurance policies have been designed for human drivers.  So it becomes a serious matter of who should be held accountable for damages if there ever is an accident involving a driverless vehicle.

This especially becomes complex if the technology advances to the point where it truly is driverless and no humans are involved with the actual driving.  Thus, consumers will just have to wait until the legal system and financial industry catches up to the driverless vehicle industry.  It should be interesting to see what happens with this kind of automotive technology in the next few years.

Toyota recently held their annual U.S. dealership meeting in Las Vegas. At this meeting, CEO Akio Toyoda announced plans to turn Prius into a sub-brand of Toyota by the end of 2012. A sub-brand is usually a product or service brand that has its own name and visual identity to differentiate it from its parent’s brand.

Toyota used sub-branding when marketing its Scion lineup. The primary reason for sub-branding the Scion was so Toyota could reach the youth-oriented market better. Although the Scion has done well in the past, its sales have been slumping lately.

The primary purpose of sub-branding the Prius is to help Toyota with growing its “green” credibility. The company desires to become the world leader in the manufacturing of top quality, low cost, yet eco-friendly vehicles. Toyota currently has a tarnished reputation due to recalling over eight million vehicles worldwide. The recall was due to sudden-acceleration incidents, anti-lock braking failures, and slipping floor mats.

Toyota will be facing some stiff competition, especially in the U.S. market. Due to the federal fuel-energy regulations, most auto manufacturers are racing to dominate the U.S. hybrid and electric vehicle market. The popularity of the Prius has been well-established since its introduction in 1997. This gives Toyota some leverage in the U.S. hybrid market, but Toyota still has a long way to go to dominate the market.

Expanding Prius and other eco-friendly product lines

To capture more of the hybrid market, Toyota plans on expanding its lineup of hybrids, plug-ins, battery electric cars, and fuel cell vehicles. The company will be adding two more hybrid models to the Prius line by the end of 2012. One will be a plug-in model while the other one will be more like an SUV or station wagon model.

The plug-in Prius model will be made using Tesla battery technology. It’ll be capable of able to go 13 miles before the gasoline engine kicking in and will be easy to recharge. Numerous people believe the smaller of the two vehicles will be the concept called the FT-CH, which Toyota demonstrated at the Detroit auto show last January. The other new 2012 Prius hybrid model will be a sub-compact about the size of the Yaris. However, it will be smaller than the current Prius hatchback.

The larger new Prius model will be a roomy, sport-utility type vehicle. According to some of the Toyota dealers, this larger model will have 50% more interior space than the 2011 Prius sedan, and may be a 7-seater. According to the senior editor of GreenCarAdvisor.com, John O’Dell, the larger model will be Camry-sized but more wagon-like. Other people think it will be more MPV-like, perhaps similar to the Mazda5.

Toyota’s strategy

Toyota’s strategy is to try to appeal to various customers by offering a wider variety of eco-friendly vehicles. Takeshi Uchiyamada, Toyota’s executive vice president, has previously stated that the company will introduce six new gasoline-electric hybrid models worldwide by the end of 2012. The hybrids will be spread across its other brands, excluding the Scion.

Another part of the strategy includes using Tesla battery technology to build the RAV-4 electric car. Yet another part of the plan includes assisting Toyota dealers to boost their annual U.S. sales up to two million vehicles by 2013. Toyota will be purchasing additional advertisement for the Prius lineup.

Toyota also plans on improving the quality of service by making the “Toyota Care” standard to all its models. This is a 2-year free maintenance program, which helps to make the cars more affordable. Moreover, to help improve the quality of the products sold in North America, Toyota is committing to giving the U.S. plants more autonomy. Toyota intends to manufacture its hybrid vehicles in the southern United States.

References:

Freep
USA Today
Wall Street Journal

Visteon, a former parts unit of Ford Motor Company, used to be the world’s second largest auto parts supplier. Then in 2000, Visteon separated from Ford. In 2005, the company took a downhill turn due to the decline in automotive production and other factors. In May 2009, Visteon filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court, District of Delaware. It’s recorded as in re Visteon Corp., No. 09-11786. On October 1, 2010, just 16 months later, Visteon has emerged from bankruptcy protection.

Reasons Visteon entered bankruptcy

Visteon decided to enter bankruptcy protection due to several reasons.   For one, it had a consolidated debt of $2.7 billion.   For another, the decline in automotive production, especially by Ford Motor Company, caused a major loss of profits.  Visteon also had a $310 million liability due to employees’ benefits and pensions.   By May 2009, Visteon claimed it was struggling for its very survival.

Trend in filing for bankruptcy protection

Visteon followed a trend when it filed for Chapter 11 bankruptcy protection.  In the past ten years, 87 other automotive industry companies have filed for bankruptcy.   Some of the largest companies, like GM Chrysler, General Motors, Delphi Corp., and Lear Corp., have filed for bankruptcy in order to alleviate crushing debts.   They have also used bankruptcy to compel changes in labor union standards and rid themselves of onerous obligations to their employees.

These companies have used the benefits of bankruptcy protection to reorganize and restructure themselves.   During the reorganizing and restructuring process, the companies usually close down any under-utilized plants, and sell off any unnecessary assets.   Companies under Chapter 11 bankruptcy have the options of renegotiating all their debts and legal contracts.  However, they must settle with their lenders, creditors, stockholders, and bondholders.   If they choose not to be liquidated, they must also find new financing for business operations. In many cases, theses bankrupted companies terminate or reduce employment, employees’ benefits, and employees’ pensions, either temporarily or permanently.   The company may stay under bankruptcy protection for years, or emerge after just a few weeks.

How Visteon managed to survive bankruptcy

Visteon started closing down under-utilized facilities way before filing for bankruptcy.  Visteon, while still maintaining facilities in 26 countries, closed 50 facilities worldwide from 2005 to present.   It reduced its global labor force from 80,000 employees to 26,000.   However, to reduce its $310 million liability due to employee benefits, Visteon permanently terminated or reduced employees’ benefits and pensions, whenever it was allowable.

Although the bankruptcy judge, Christopher Sontchi, had originally let Visteon terminate the health benefits and life insurance for 6,500 American employees, he later reversed the decision.  Visteon took a $201 million loss despite making $1.9 billion in the 2010 second quarter.  They claimed $75 million of the $201 million was due to charges connected to retiree benefit plans.  Visteon has previously stated that it will again terminate these employee benefits and pensions once they are out of bankruptcy procedures.

More ways Visteon reduced its $2.7 billion debt

Visteon reduced its $2.7 billion debt in several ways during the reorganization and restructuring bankruptcy process.  Visteon has eliminated some of its product line.  Although the company sold numerous assets, it maintained its 70% ownership of Halle.  Halle is a South Korean company that produces automotive heating and cooling systems for Hyundai-Kia.  By maintaining this ownership, Visteon was able to reduce its dependency on orders from the Ford Motor Company and to increase its presence in the Asian market.

Visteon also renegotiated with Ford, its former parent company.  Now instead of Visteon paying Ford for $268 million in pension and retiree claims, Ford is going to pay Visteon $29 million.   Plus, Ford is committing to providing Visteon with $600 million in contracts to supply parts until 2013.  Additionally, instead of paying $1.5 billion to stockholders and bondholders, Visteon convinced a group of 40 bondholders to pay $1.25 billion in exchange for 95% control of the company.  These bondholders included Goldman Sachs, and hedge funds Oak Hill Advisors and Silver Point Capital.   The group agreed to buy back $300 million of old stocks and raise another $950 million to back a stock rights offering.   Moreover, Visteon has to replace its 9-member board of directors.   Five new members are to be appointed on the day of exit, October 1, 2010.

In order to obtain approval for the bankruptcy exit, Visteon reached a settlement with a group of objecting shareholders.  The agreement calls for Visteon to provide $4.25 million to cover the shareholders’ costs and expenses, and offering them the right to take part in the direct purchase commitment for 144,156 shares.   The agreement was to be carried out on the date of Visteon’s bankruptcy exit.  Visteon also borrowed an additional $700 million to pay off other debts and to fund its post bankruptcy operations.

Affects of reorganization, restructuring, and bankruptcy

Some people think Visteon’s exit is a milestone for the entire automotive industry, proving the global economy and industry is improving.  According to Donald Stebbins, Visteon’s chairman, CEO, and president, the emergence marks a new beginning for Visteon.  Mr. Stebbins stated that the bankruptcy emergence gives Visteon the opportunity to truly capitalize on the numerous operational and financial improvements the company has made.  This includes focusing on its production and engineering presence in the fast-growing markets in Asia, Eastern Europe and Brazil.  Visteon maintains corporate offices in Van Buren TWP, Michigan; Shanghai, China; and Chelmsford, United Kingdom in order to better serve these markets.

Visteon now has a much healthier balance sheet.  Its production capacity is much more in line with demand, as they will only be producing climate control, electronic, lighting, and interior products now.  The company is far less reliant on Ford Motor Company, due to Hyundai-Kia contracts.  Visteon can now be very competitive in the Tier 1 automotive supplier industry since it has been relieved of its major financial burdens and employee obligations.  Although the company is much smaller, it is considered to be much stronger.

Apparently, the Chapter 11 rules that apply to consumers don’t apply to businesses.  It doesn’t take businesses 7-10 years to restore their credit ratings after declaring bankruptcy like it does consumers.  Numerous people expect Visteon will now become a very profitable business.

References:

ABC News
Bankruptcy Home
Fox Business
Freep.com
Real Clear Market
Market Watch
Visteon Corporation
Wall Street Journal
YouTube, Visteon Debate Part 1
YouTube, Visteon Debate Part 2

Similar to the immortal warriors in Gregory Widen’s story, The Highlander, Toyota’s Highlander has undergone numerous changes over the past decade.  This has included using an alternative name at times.  Due to Hyundai’s Terracan SUV trademarked trim line, Toyota had to use the name Toyota Kluger instead of Highlander in Japan and Australia.  Recently, Toyota has announced that the Highlander line will be undergoing more revisions for the 2011 models.

Over the past ten years Toyota has made changes in what was standard and what was optional, and has expanded the Highlander line of models.  From the onset, Toyota has offered almost every model with a choice of engine size, 5 or 7 passenger seating, and either front-wheel drive or all-wheel drive.  Most of the revisions that have taken place mostly have simply been changing what was optional one year on some models to being standard features the next year.

The models all came with independent rear suspension and a uni-body.  Toyota tends to use the exterior and interior trims, as well as wheel designs, to distinguish the various models in a product line.  Therefore, most of the alterations over the past ten years have been in the grilles, headlights, taillights, and colors of mats.  For instance, in the first generation of Highlanders, Toyota used a distinctively designed grille to distinguish the Sports model from non-Sports models.  In the 2011 models, a distinctive grille will separate the hybrid models from the non-hybrid models.

First Generation Models

The first generation of Toyota Highlanders was introduced at the New York Auto Show in early 2000.  The first generation is considered to be all the 2001-2007 Highlander models.  At first, the Highlander was only available in the Base and Limited models in the United States.  The Sport model wasn’t introduced until March 2006.

The options usually varied from country to country, as well as from model to model. For instance, in addition to the 3.3 liter engine, the 2004 V-6 powered models were equipped with new five-speed automatic transmissions.  However, all the 4-cylinder models continued to use only the old four-speed automatic transmissions.  In 2006, only the 3.3 liter V-6 powered Highlanders were available in Canada.  Yet, the Highlander Hybrid and other models with other engines sizes were being sold in the United States and elsewhere.

Second Generation Models

Toyota introduced the second generation Highlander line at the 2007 Chicago Auto show.  These include all the 2007-present models. One of the major changes made is that the second-generation Highlander and Highlander Hybrid are no longer being sold in Japan. Another change was that the 4-cylinder model had been discontinued.  However, the 4-cylinder was added in again in 2009.

Toyota again offered the same three trim levels of Base, Sport, and Limited with the second generation Highlander models.  However, in early 2010, Toyota replaced the Sport model with the SE model.  The consumers are still given a choice between front-drive and all-wheel drive on the V6 platforms.  The options offered now include leather seats, heated seats, a new Smart Key system, and upgraded JBL Synthesis stereo, touch-screen navigation, and a rear-seat DVD entertainment system.

2011 Models

Basically, the major changes for the 2004 mid-cycle were rounded out by subtle changes in the front and rear bumpers, front grille, and headlights.  Toyota is mostly doing the same thing for the 2011 mid-cycle revisions. The engines in the Highlander Hybrid models are being upgraded to give them a bit more power while maintaining good fuel economy. However, Toyota again will merely be making some of the 2010 options into standard features on some of the models, and changing the front and rear fascia, grilles, and wheels on others.

All Highlander models now have more standard features, especially more safety features.  The Base model features front and rear climate control, power locks/windows, cruise control, and a multi-function keyless entry control. The SE model has the option of having a 2.7 liter 4-cylinder engine that was previously only available on the Base model.  The Highlander’s front end will feature new headlights, a black with chrome accent rocker panel, and a new front grille.

All the Highlander models will come with enhanced Vehicle Stability Control and traction control, while the hybrids will have Vehicle Dynamics Integrated Management. Anti-lock brakes, brake assist and electronic brakeforce distribution are also now standard on all Highlander models. Additionally, a tire pressure monitor, a driver’s knee airbag, front seat-mounted side torso airbags, and side curtain airbags which include a rollover sensor for all three rows of seating are going to be standard in all the 2011 models.  Moreover, active front headrests, Hill Start Assist Control will be standard features for all models, while the Downhill Assist Control will be standard on all all-wheel drive models.

Toyota is hoping that these changes  and the new price range will help the Highlander and Toyota brand to become as popular as it was before all the massive recalls of 2009-2010.  The new MSRP range will be from $27, 390 for the basic Highlander up to $42,945 for the Hybrid Limited.  During 2008-2009, the Toyota Highlander outsold Mazda’s CX-9 by 4-1.  Up until 2006, the Highlander was Toyota’s best-selling vehicle, and it has been previously rated as one of the safest SUV crossovers on the road.  Some consumers felt the heavy fines and large media coverage of the recall was due more to the U.S. government’s partial ownership of the GM and Chrysler companies more so than to the safety issues of the Toyota vehicles.

References:

Consumer Report Car Blogs
HybridCars
Motor Trend Magazine
Toyota USA Newsroom
Truck Trend
Wikipedia

Brammo and Flextronics announced their new partnership on September 15, 2010.  Brammo is an Ashland, Oregon based company that is known for its plug-in electric motorcycles.   Flextronics, which is based in Singapore, is an international manufacturing company well-known in the consumer electronics industry.

Flextronics’ automotive segment will take over the manufacturing of Brammo’s motorcycles and electronics components.  Brammo is hoping this will help to make its newest electric motorcycle, the Empulsive, more affordable to consumers.  The current price ranges from $9.995 to $13,995, depending on the model purchased.

Brammo, a small company, is also hoping to use Flextronics’ footing as a multi-billion dollar international company to launch into the global electric motorcycle market.  By partnering with Flextronics, Brammo will be able to produce more motorcycles, thus meeting an internationally growing demand at a much faster pace.  Brammo has been manufacturing the motorcycles in Ashland, Oregon, but it’s not certain if this will continue or not.

Brammo’s CEO and founder, Craig Bramscher, stated that Flextronics will be manufacturing the motorcycles in Asia, Europe, and North America.  He also stated that the same vendors would continue to be used, so there shouldn’t be any change in the high quality of the components.  Flextronics owns thirty offices on four continents.  The company will be manufacturing the components in various places, and then assembling the motorcycles nearest to the point of consumption.  Brammo has recently been working on creating a dealership and distributorship network across Europe and North America.  However, the biggest demand for the motorcycles is expected to be in Asia and Europe.

Flextronics, as a leading electronic manufacturing service, is quite capable of providing Brammo with complete designing, engineering, logistics, and manufacturing services.  Basically, Flextronics assists its customers with every phase from creating a design to delivering the actual product.

Flextronics is very well-experienced with providing outsourced electronics manufacturing resources.  The company has provided high quality end-to-end solutions for customers such as Microsoft, Apple, Hewlett-Packard, Johnson & Johnson, and Cisco Systems.  With Flextronics taking over the production operations, Brammo will be able to focus more on the product design and development aspects of the business.

Brammo’s current product line is the Empulse, the Enertia, and the Brammo Digital Drivetrain systems they supply to OEM’s.  The Empulse is expected to become the company’s flagship product.  However, the Enertia was recently voted as the electric motorcycle of 2010 by Motorcycle.com.  Both models are well-liked by the consumers who own them.  Hopefully, this partnership with help Flextronics meet their goals of expanding further into the green technology automotive market and battery powered vehicles.  If this partnership succeeds, then we may very well see many more superb electric motorcycles added to Brammo’s already fine product line.

If you own a 1997-2001 F-150 Ford pickup, you might wonder if the fuel tank is about to fall off.  Why would you be wondering this?  Perhaps you’d be wondering this because of the recent announcement made by the National Highway Traffic Safety Administration (NHTSA).

On September 13, 2010, NHTSA announced it will be investigating this hazard.  The probe was opened on September 7, 2010.  NHTSA is attempting to determine whether 1.4 million Ford F-150 pickups should be recalled due to the potential rusting of the straps that hold the fuel tank in place.

According to NHTSA, one or both  mounting straps have broken due to rust in 28 of the 32 cases it has reviewed.   The broken straps caused the fuel tank to drop from the frame, allowing the tank to be either dragged or completely detached from the vehicle.  Six of the thirty-two cases involved complaints of fuel spilling when the tank dropped or detached.  So far, no injuries or fires have been alleged in these incidents.

Importance of investigation

You may be wondering why NHTSA is spending money and time on investigating rusting mounting straps on older models of the F-150.  After all, it’s only logical to expect some rusting on older vehicles, isn’t it?  For example, it’s quite natural for vehicles exposed to salt to rust quickly.  So any vehicles exposed to sea breezes, salt water, or salt used to thaw icy roads will most likely rust more quickly than those not exposed.

Since the probe is for 1997-2001 models, the vehicles certainly could be considered to be older vehicles, ranging from 9-13 years old.  The report didn’t say how many of these had been exposed to natural conditions that could cause corrosion.  However, NHTSA is concerned because they don’t want the Ford F-150 to turn into another Toyota-type fiasco, in case there is a defect in the straps.

Like the Toyota models that have been recalled in recent years, the F-150 pickup is one of the longtime best-selling vehicles in the United States.  It’s the vehicle Ford promoted as one of the company’s finest vehicles, and still is a very popular vehicle to own.  Most of the 1.4 million vehicles that were sold between 1997-2001 are still in use.

Cautionary warning

It’s important to remember that these vehicles are not actually being recalled at this time.  NHTSA and Ford Motor Company are only in the investigation stage of determining whether there’s actually a need for a recall.  According to NHTSA’s spokesman, Wes Sherwood, the Ford Motor Company is completely cooperating with NHTSA and helping with the investigation voluntarily.  However, if you do happen to own a Ford F-150 pickup truck, you may want to check the fuel tank mounting straps yourself.  It would be a very bad experience to have the tank fall off while driving down the road, especially if fuel spilled.  It would also be a bad experience to have one fall  on the road in front of you while you were driving closely behind a F-150 pickup.  Of course, it would also be a bad experience if the fuel tank fell on you while working underneath the truck.

If you find that the fuel tank mounting straps have rusted out on your 1997-2001 Ford F-150 pickup, you should report it to NHTSA right away.  You should also contact the Ford Motor Company to see if they will replace them for you.  Although NHTSA hasn’t determined a need for a recall yet, the company may be willing to spring for the cost of replacement in order to avoid further embarassment.

References:

ABC News
National Highway Traffic Safety Administration
USA Today
WXYZ News

General Motor’s (GM) Chevy Volt’s stunning price tag has stirred up numerous conversations this week. Everyone is wondering if the $41,000 starting retail price and low-volume sales tactics will doom the car before it even has a chance to prove its worthiness. Even with the $7,500 tax credit added in, the price is still higher than most other cars, including other eco-friendly cars like the Nissan Leaf and Toyota Prius.

Everyone is comparing the Volt to the Leaf since both are plug-in electric vehicles that are being introduced into limited areas of the U.S. market in December, 2010. They are also comparing the Volt and Leaf to the Toyota Prius because it is currently the most popular hybrid car on the market. Although GM claims to be unfazed by the comparison, one GM spokesman says the comparison isn’t really fair.

According to GM spokesman Dave Darovitz, the Volt and Leaf are actually in two separate categories. Mr. Darovitz claims the Leaf is limited to a short range while the Volt isn’t. Because of the range limit, the Leaf is more likely to only be utilized as a secondary commuter car while the Volt will likely be used as a primary vehicle. Also, they are technologically in two different categories. The Leaf is a pure electric vehicle while the Volt is an electric with gasoline generator hybrid. There are also several other technological differences between the Volt, Leaf, and Prius.

Consumer Reports’ director of automobile testing, David Champion, also agrees it’s not a fair comparison. He stated that the Volt and Leaf are two different vehicles which will be competing in two different markets. The Toyota Prius also isn’t really in the same market category, even though it’s a hybrid just like the Volt. However, the main difference in markets is the launching locations for Volt and Leaf.

The Leaf will start off being sold in Arizona, California, Oregon, Tennessee, and Washington in December, and then add Texas and other states in January. The Volt is starting off in California, Connecticut, Michigan, and New York in December. The Volt will also start off in Austin, Texas and Washington, D.C. in December, and will spread to the rest of Texas and other areas in January. Both cars are expected to be sold on a nationwide level within the next two to three years. However, GM only plans on making 10,000 Volts through the end of 2011, with only an additional 30,000 by the end of 2012.

GM Chairman and Chief Executive Edward Whitacre, Jr. vowed to make the Volt into a moneymaker. So GM has chosen to start out by selling fewer Volts at a higher price range in order to recoup some of the development cost. Then, after the Volt’s development costs are lowered, the volume will go up and the price will go down. On the other hand, Toyota Motor Corporation chose to start off by taking a money-loss on the Prius in order to sell a higher volume of cars. GM cannot afford to take a money-loss like Toyota did. GM is now majority-owned by the U.S. government, and it’s spending is under close scrutiny by the public and politicians. If GM started losing money again, everyone would be outraged.

However, the Volt will be facing stiff competition when it is introduced to the U.S. market in December, and again once the Leaf and Volt are being sold nationwide. Despite some differences in the starting markets, the Volt and Leaf will share some common markets. For instance, they will both be launching low-volume sales in California and Austin, Texas in December and to other areas of Texas in early 2011.

The Nissan Leaf will have two extra advantages over the Chevy Volt in the California market. One of the advantages will lower the price of the Leaf by another $5,000, bringing it into the $20,000 price range. Apparently, California regulators have decided that the Leaf is eligible for a $5,000 tax credit and usage of the carpool lanes even when there’s only a single occupant. They decided the Volt isn’t eligible for either benefit because it isn’t strictly electric. The Leaf already had the advantage of having a retail starting price of $32,500, and it also qualifies for the $7,500 federal tax credit.

However, GM is setting up an attractive three-year (36-month) leasing option to offset the high selling price. The lease will cost the consumer a $2,500 down payment, and $350 per month afterwards. GM claims the low lease payment includes the $7,500 tax credit, whose value will be transferred from the lessee to the lessor.
So is the Chevy Volt worth $41,000? In GM.,s opinion, it’s worth more than that amount. However, only time and consumer testing will prove the car’s worthiness to consumers and potential buyers.

References:

ABC News
Chevrolet Volt official web site
Newsweek
The New York Times
San Francisco Chronicle
The Wall Street Journal

Vislab, a University of Parma systems lab researching artificial vision and intelligence, recently announced a proposed road trip test for two robotic alternative-fueled vans they have designed. The vans were originally scheduled to leave Parma, Italy on July 20, 2010 and arrive in Shanghai, China around the end of October, 2010. However, due to unexpected scheduling delays, the vans will now officially start the trip from Belgrade on July 29, 2010. Alberto Broggi, Vislab’s director, and Massimo Bertozzi, the project manager, are leading this expedition. About thirty other people are also involved in the project.

Vislab’s project is being funded by a $2.3 million grant from the European Commission’s European Research Council. Vislab’s technical sponsors, which include Plaggio, have provided some of the equipment, such as the Plaggio Porter vans. To avoid legal problems, Vislab has obtained special permission to conduct the experiment from every country along the route prior to the trip. They have also arranged to conduct several demonstrations of the vehicles and its new technology along the way. Vislab has also arranged for live video feeds of the trip to be viewed by anyone interested in the project. You simply log onto their website to view the progress.

The 8,000-mile (13,000 kilometers) road test will be the longest known journey made by driverless vehicles, as well as by electric vehicles. Vislab is hoping to gather or fine-tune approximately 100 terabytes of information regarding the issues of integrating drone vehicles into normal, everyday traffic. They are also testing the technology for possible use in war zones, on farm equipment, and mining equipment, especially for those used in remote, hard to access areas.

Nonetheless, Mr. Broggi is not expecting commercialized drone vehicles to be widely utilized for at least another 10 years. If you are hoping to let your car do the driving for you while you just sit back and relax, you may have to wait another 20 years. However, if you’re a farmer who wants a tractor to plow and seed a field at night, you may not have to wait much longer. Vislab is in the process of testing scanners that will allow tractors to be programmed to work throughout the night.

Vislab and Caterpillar, Inc. are currently working together to develop drone vehicle technology to work in extreme environments for purposes such as mining. Some automated drone technology is already available on the market and is currently being used in various applications such as unmanned flights in war zones, space exploration, and marine exploration.

The proposed road test, which is expected to reveal flaws in the technology, is being used to test how well the vehicles can adapt to extreme temperatures, congested traffic, diverse terrains, and various road conditions. Although the vans will be used to test driverless technology, they will not be completely left to their own intelligence and control. There will actually be four vans, with each of the two drone vans being paired up with one of the two lead vans.

The manned lead vans will be sending data to the drone vans, but it will be up to the drone vans to actually interpret and respond to the information being fed in from the surrounding environment. The vehicles have been equipped with four laser scanners and seven video cameras that work as an integrated system to detect and avoid obstacles.

Two technicians will be riding in each one of the two test vans. In order to reduce liability, one technician will be in the front seat, in case there is an emergency reason to manually take control of the vehicle. The other technician will be riding in the back seat to monitor the systems’ performances.

Actually, both test drones will not be utilized simultaneously throughout the entire 8,000 miles road test. The two test vehicles are expected to be used for about four hours each day, taking turns at being experimented with. The two vehicles are set up to test different sets of circumstances. One pair of vehicles will ride on a truck while the other pair of vehicles is in use.

Since all four vans are electrically powered, they will only travel approximately 30-37 miles per hour. All four vehicles will need to be recharged for a full eight hours after every two to three hours of driving. To ensure there will be a way to recharge the vehicles in the areas where electricity may not be readily available, the convoy will be carrying gasoline-powered generators.

Some analysts think the driverless technology is feasible, but not exceptionally useful in the near future. They figure humans have already resolved some of the issues the technology is designed to resolve. Goods are already being transported in some remote areas simply by connecting three or four trailers to one large truck. The only requirement is a truck, one driver, and a few pieces of steel.

References:

Gasgoo Automotive News
Physorg
Popular Science (PopSci)
VisLab
The Washington Post

President Barrack Obama is currently encouraging Americans to take up the challenges of succeeding in the automotive green technology’s global market competition. One element of this competition is the market for advanced lithium-ion batteries and other components for electric vehicles. Other elements of the competition are manufacturing electric vehicles and charging stations for those vehicles.

President Obama wants the United States to become more competitive in the global green technology market for several reasons, but it’s partly to save America’s failing automotive industry. According to IHS Global Insight, approximately 20% of the 2030 global market for light vehicles will be made up of electric vehicles. Numerous analysts believe that whoever has the leading edge on manufacturing the batteries for these vehicles will control the entire automotive industry. According to statistics, the United States is only producing 2% of the batteries for this market, which is way lower than China, India, Korea, and Japan. These countries got ahead in the global market by borrowing U.S. lithium-ion battery technology for cell phones and personal appliances.

The basic concept is that manufacturing electric vehicles, their batteries and other components, and their charging stations will resolve several problems for the United States. For one, it is expected to help reduce unemployment as battery plants and charging stations are constructed and operated, thus helping to boost the construction industry as well as the automotive industry. Manufacturing electric vehicles and their components would either increase employment or save current jobs, and greatly help the automotive industry regain its leading edge in the global market. Secondly, the increased revenue from the sale of the batteries and electric vehicles will help to stabilize the American economy. Thirdly, producing the batteries and electric vehicles in the U.S. will reduce the cost for consumers utilizing them here.

Using more green technology will help reduce the planet’s environmental problems. Additionally, it will help to reduce the United States’ reliance on oil imported from politically or economically unstable, anti-American countries. The United States currently spends approximately $150 billion annually to import around 1.5 billion barrels of oil, most of which is imported from countries that are on the U.S. State Department’s “warning list” of countries that pose a danger to traveling Americans.

Most of all, manufacturing the batteries, components, and electric vehicles here will help the U.S. avoid becoming reliant on foreign batteries and electric vehicles for our personal and goods transportation. If we don’t step up to the challenge, we will become just as dependent on imported batteries as we currently are on imported crude oil.

According to various analysts, the next two to five years are very critical to the success of this plan. In order for the plan to be successful, four things need to occur simultaneously, or within a short time frame of each other. First, Americans need to step up researching and manufacturing advanced batteries and electric vehicle components.

Secondly, automobile manufacturers need to increase production of electric vehicles to create a demand for those batteries and components. Although over 108,000 Americans have signed up on waiting lists for electric vehicles, automotive manufacturers are only planning on producing approximately 13,000 within the next couple of years. Plus, they are only being released in five states for now.

Thirdly, the U.S. energy grid and easy access to recharging stations for the electric vehicles need to be increased and become more affordable so electric cars can be considered feasible options. Lastly, a large portion of the American public will have to be willing to change from using conventional fossil-fueled to electric or plug-in hybrid vehicles. The success of the plan is already at high risk due to various divisive political agendas, personal greed, and people in general’s fear of changes.

Currently, most of these projects are being supported by the $787 billion which was generated by the American Recovery and Reinvestment Act (ARRA) of 2009. However, with the existing outrage over diverse bailouts and government spending, the funding and political backing for these projects may be revoked. If that happens, the U.S. will likely return or fall deeper into the crippling recession that has already harmed most Americans for the past decade.

To show his own support for these programs, President Obama attended the groundbreaking of a new $303 million automotive battery plant in Holland, Michigan on July 15, 2010. He also recently visited Smith Electric Vehicles in Kansas City, Missouri. Smith Electric Vehicles converts delivery trucks from diesel to electric power. Numerous companies are now converting their fleets to electric or plug-in hybrids due to the oil industry’s instability and the rising business costs. New York City already uses a fleet of 6,000 plug-in electric vehicles.

The battery plant President Obama visited, Compact Power, is a subsidiary of South Korean-owned LG Chem. The plant, which is expected to employ around 400 people when it opens in 2012, received $151.4 million in federal grants and loans under ARRA. This plant will be making lithium-ion batteries and other components for the Chevrolet Volt and Ford Focus electric cars. Eight other lithium-ion battery plants have also been funded by ARRA. The plant is one of the nine plants which have been funded through matching government funding. Out of nine plants, four are expected to be producing batteries by the end of 2010.

Altogether, there are now 30 electric vehicle battery and component plants under construction, including the 9 lithium-ion battery plants. Of these plants, 26 have received government funding assistance. The 30 factories are expected to have the capacity to produce 20% of the global advanced vehicle batteries by 2012, and possibly around 40% by 2015. Now we need for the automobile manufacturers to meet President Obama’s challenge of building a million plug-in and hybrid vehicles by 2015. Numerous recharging stations are already being constructed across the United States.

References:

The Christian Science Monitor
Freep/Detroit Free Press
HIS Global Insight
New York Times

According to a press release submitted by CEO Don Runkle, EcoMotors International has now obtained the necessary financing to complete the engineering and testing of its OPOC (Opposed Piston, Opposed Cylinder) engine technology. In an announcement made July 12, 2010, Mr. Runkle stated that Bill Gates and Khosla Ventures are now exclusive investors in the company. They have invested $23.5 million in Series B funding for the development and global commercialization of EcoMotors’ OPOC engine technology.

Series B funding usually means that a business has been successfully launched and has proven its feasibility. Series B funding stages are used by companies that are past or nearly past the start-up stages of business, but need to find outside investors to finance the further development and marketing of their products. In this case, EcoMotors International has proven its viability by staying in business for two years before seeking outside investors.

The company was established in Troy, Michigan, in early 2008 and is led by CEO Don Runkle and Prof. Peter Hofbauer. Mr. Hofbauer is the Chairman and Chief Technical Officer. Since its establishment, EcoMotors has been rapidly achieving notoriety in the field of internal combustion power and clean energy technology.

EcoMotors claims the unique OPOC engine Prof. Hofbauer designed can be used for a wide variety of purposes, such as automotive, aerospace, agriculture, and marine applications. According to EcoMotors, the OPOC engine can be used in both, private and commercial vehicles. It can also be utilized in auxiliary power units and generators. Basically, the engine can be used anywhere conventional gas and diesel engines are currently being utilized.

Vinod Khosla, who established Khosla Ventures in 2004, stated the opoc technology was the kind of disruptive, environmentally friendly innovations his company was passionate about. Khosla Ventures, which is located in Menlo Park, California, assists entrepreneurs with broadening the potential of their scientific work. The firm supports entrepreneurs in the green technology areas, as well as in more traditional venture areas. Mr. Khosla believes the EcoMotors engine will provide quick payback while being beneficial to large segments of the global population, and that it will not require subsidies or massive infrastructure investments.

Bill Gates, who is widely known as a technology billionaire and philanthropist, believes the EcoMotors engine could be an important step in providing affordable, low-emission transportation, especially in developing countries. Both men think the OPOC engine represents a less dramatic approach to green automotive technology problems because it relies on improving the combustion engine rather than introducing new technology. Integrating new technology, such as solar power or hydrogen, frequently involves altering the current infrastructures. This alteration then makes the product too expensive to be feasible.

The alterations also increase the amount of time it takes to get the market ready for the new product. Since the OPOC engine is suited to the current infrastructure, it will be quicker and less expensive to integrate. Thus, it can be helping to reduce greenhouse emissions during the time it takes for alternative technology to be developed and put into place on the open market.

The OPOC engine design utilizes two cylinders, each with two opposed pistons connected to a common crankshaft. EcoMotors says it delivers up to 50% greater fuel efficiency with a corresponding greenhouse gas emissions reduction. The two-stroke engine is half the size and weight of the conventional four-stroke engines, and is cheaper to produce. The OPOC engine also eliminates several parts currently used by internal combustion engines, such as the cylinder-head and valve-train components.

The OPOC engine provides more flexibility in automobile and truck designing, as well as in other engine applications. Now that EcoMotors has the Series B funding, it plans to complete a 100mpg 5-passenger car prototype based on the OPOC engine this year. However, CEO Runkle expects EcoMotors will make most of its money through licensing its technology to existing engine manufacturers, as well as selling its own engines rather than manufacturing this type of car.

Considering the people involved in this venture, it should be highly successful. Prof. Hofbauer used to be the head of the powertrain development for Volkswagen. He is the man who is behind the original Clean Diesel engine used as a foundation in the Volkswagen Jetta Clean Diesel. The Jetta Clean Diesel won Green Car of the Year honors in 2009.

EcoMotors CEO Don Runkle is the former General Motors vice president of N.A. Engineering who spearheaded the GM EV1 electric car, along with numerous other innovations. Bill Gates founded Microsoft Corporation and the Gates Foundation, and Vinod Khosla was formerly a General Partner at Kleiner Perkins. He also was the co-founder of Sun Microsystems. With these four men working as a team, failure does not seem too likely. They certainly have the necessary inside industrial knowledge and financial management skills needed for success.

References:

Detroit News
EcoMotors International
Entrepreneur
The Independent
TechCrunch