Tag Archive
Hillary Clinton proposes cut our addiction in half by 2025
Senator Hillary Clinton is pushing for a major reform with dependence on foreign oil; she proposes that we cut our dependence in half. That would be 8million less barrels a day, and she proposes that we should be at that point by 2025.
Now, there are two ways to interpret this “reform” of hers. We could say she is legitimately concerned about our dependence on foreign oil, or she’s making a political stab at George Bush. There is a small chance that she wants people to see that she has a date that we can look ahead to and marvel at and then realizes that not much has happened since GW announced his concern. And, do remember that she is one of the leading candidates for the Democratic nomination.
Nevertheless, she thinks that tax credits, private investment, and new research will push our country into a heavenly bliss when it comes to being dependent on foreign oil. She hopes that these incentives will help auto makers to bring more fuel efficient cars to the U.S. and help scientist make ethanol more useful.
The “new research” that she wants to occur would be in ethanol. Ethanol defiantly has a future in the U.S., but it’s taking a long time to become popular. Clinton wants ethanol gasoline or E85 to be in at least 50% of America’s gas stations by 2015. While this is a good goal, E85 currently is only at 1% of all America’s gas stations. If E85 was at 50% of all gestations in a few years, I can almost see this goal being met.
"Senator Clinton’s energy policy consists of a unique balancing act involving partisanship, political pandering and yesterday’s mistakes," said Tracey Schmitt, press secretary for the Republican National Committee. "Voting against meaningful legislation that would increase domestic production is harmful enough, but adopting the energy policies of the 1970s is a price Americans cannot afford."
Clinton also begged automakers to migrate toward higher fuel standards and incorporate more fuel flex vehicles. We have to realize, most of the technology is out there. Brazil already has a large majority of their vehicles running on ethanol. Why is it taking America so long to catch on?
See Also
Ford to offer more all-wheel drive vehicles.
The Ford Motor Company lost $1.2 billion in the first quarter of this year but they don’t plan on staying down for long. They have big plans to make a splash in the AWD market. Right now Subaru is king of the hill when it comes to all-wheel-drive cars but Ford could challenge them for dominance.
Ford’s goal is to sell half a million by next year. This would definitely make them a major player in this area because the total sold for this year was only 1.5 million. Ford’s aim will be to capture the middle market. BMW and Audi, among others, offer AWD luxury models while Subaru has catered to the other end of the market.
The plan will bring all-wheel-drive to the company’s Ford Fusion, Mercury Milan and Lincoln MKZ mid-sized sedans in August and to the new Ford Edge and Lincoln MKX crossovers this fall. Ford already offers it as an option in other vehicles, such as the Freestyle crossover and the Five Hundred full-sized sedan.
Many drivers value AWD vehicles for their stability in harsh conditions and off-road terrain. Currently, most AWD vehicles are trucks or SUVs. Ford is hoping to attract these SUV buyers as some are turning to crossover SUVs based on car designs.
Ford is not the only automaker getting into this field. GM and Chrysler will offer new AWD options soon, although on a smaller scale than Ford. You might expect Subaru to feel some pressure now, but they seem to welcome the help to convert the masses to all-wheel-drive passenger cars.
See Also
High gas prices are not scaring drivers as much as has been expected.
The so called experts have been expecting hybrids and smaller cars to knock SUVs off the throne ever since gas hit $3.00 a gallon. However, it is going to take more than that to dethrone the current rulers of the rode. After all, they are very big.
The SUV is alive and well today. In fact, it seems to be thriving. For example, Escalade sales were up 127% last month. These statistics do not show a nation of drivers fleeing from big vehicles into the arms of the hybrids.
This is a very different situation from 25 years ago. During the late 70’s early 80’s gas prices rose dramatically and there were shortages. This propelled people towards more fuel efficient cars. Apparently, today’s motorists aren’t as easily scared.
This can be attributed to a couple of reasons. First, the average household spends about half as much on gas, based on percentage of income, than in 1981. Basically, there are plenty of people out there with the means to pay for a lot of gas. Second, we have become a nation of SUV and truck drivers. It is going to take more than $3.00 a gallon to change this. Now, the experts are saying it will take $4.00 a gallon for a prolonged period of time to bring change, but as we are finding out, they have been wrong before.
The reign of the hybrids might have to wait a little while longer. For now, it is still long live the SUV.
See Also
Honda jump starts its plans for the future.
Honda is currently over half-way toward the deadline of its “2010 Vision.” This vision was first stated in 1998, and with only four years left the Japanese auto maker recently announced its plans to complete the process.
Honda’s 2010 Vision is a long-term corporate initiative "to become a company that society wants to exist." Initiated in 1998, this three-part 2010 Vision calls for the expansion of Honda’s global operations through the year 2010 through "creating new value" for the customer, expanding local operations through "glocalization" and advancing environmental and safety technologies through a "commitment for the future."
Honda has two main points of focus during the next four years. They will increase their presence in North America and further lower emissions.
To accomplish the first goal they will build new plants in the U.S. and Canada starting in 2008. Honda already produces 1. 4 million units in North America. These proposed expansions will bump that number up to 1.6 million. Even at this time almost 8 out of 10 Hondas and Acuras sold in North America are made here.
The other focus will be to lower emissions across the board on all of their vehicles. Honda already has the current lowest Corporate Average Fuel Economy (CAFÉ) but they are not satisfied. Their goal is to lower emission by 5% by 2010.
Honda has increased its North American sales for 9 straight years and it doesn’t look like they plan on breaking that trend any time soon.
See Also
Could ethanol be in NASCAR’s future.
If you pay close attention to auto news or have read this blog
in the recent past, you know about ethanol and it’s E85 blend. There are many reasons for consumers to jump on the ethanol band wagon. These include high gas prices, environment reasons, and the need to decrease our dependence on foreign oil. Sadly, only the first reason I mentioned holds any bearing over most consumers, and that may not be enough to see ethanol flourish in the near future.
Don’t get me wrong, Ethanol has been gaining supporters and popularity. In Brazil most passenger cars run on ethanol. Automakers are beginning to promote it more too. GM already sales flex-fuel vehicles that can run on gas or E85. However, it is still hard to find stations that offer E85.
Ethanol might be the way of the future but what it needs right now to help boost awareness is a celebrity spokesperson. How about spokes persons? As in the NASCAR drivers.
GM and Senator Tom Harkin have already asked NASCAR officials to consider the alternate fuel. The move would not be without precedent either. The Indy Racing League is currently moving towards ethanol. The move could also be very good for NASCAR’s image.
However, a switch to ethanol might not be in the near future for the popular racing league. NASCAR is just now moving away from leaded gasoline to unleaded. So, ethanol might have to wait a little longer for the spotlight.
See Also
Will a Delphi strike take down GM?
Once upon a time, GM’s parts making branch split off and became Delphi. Today Delphi is the worlds largest auto parts maker. They sell parts to everyone including GM’s top foreign rival Toyota. Delphi is currently in bankruptcy and a possible strike is looming. Many have claimed that a Delphi strike would cripple GM and send the top North American auto maker into bankruptcy its self.
However, not everyone thinks this will happen. Jerry Flint, former Forbes senior editor, calls it a case of the media just playing up a negative story. We all now that bad news is more entertaining that good news.
He concedes that this may happen but is very unlikely. There are several factors that support him. A strike would not happen until mid to late summer. This gives Delphi and the auto makers time to store up parts for later. Also by this time GM’s peak production will be over.
On top of this, the United Auto Workers union does not want to destroy 100,000 GM jobs. A crippling strike at Delphi by their members could do that. And, as I mentioned earlier, Delphi supplies many automakers so this would not only affect GM. The union would have national pressure on them.
So, a Delphi strike would not be in GM’s best interests but if it happens that does not mean certain doom either.
See Also
After their first quarter profit how will GM fair?
On Thursday, I blogged about GM’s first quarter profit this year. They had initially reported a loss of $323 million, but after an accounting change, GM reported a $445 million profit during that time period. This was is a good sign for the struggling company, but does it mean they are back on the right track for good?
Rick Wagoner, Chairman and CEO, calls the first quarter an “important milestone.” However, he is still cautious and maintains that profits are not the only important step needed for the auto maker right now. He is mainly interested in restructuring the company and offering new cars. The redesign of the Saturn brand is a central part of the new plan.
All of this suggests that the company may be back on the right track but there are also negative signs as well. Eric Noble, the President of The CarLab, points out that GM is still heavily dependent on its trucks and SUVs. They make great large vehicles, but they are weak in the mid size and smaller car areas. This could hurt if gas prices drive car buyers to the smaller vehicles.
GM will also lose revenue when the 51% sale of GMAC is complete at the end of this year. They will gain $14 billion from its sale but they will miss out on the steady income it used to provide. Hopefully by the end of the year, when they lose the GMAC revenue, they will be on their way to being profitable without it.
See Also
Criticism from some Ford shareholders.
This country’s second leading auto maker has had a tough time over the last few years. Ford lost over $2.5 billion in the first quarter of this year. As with most companies, when things are going wrong you look to the person at the top. In this case it is Bill Ford.
He may have seen this coming or he might just be a generous guy because last year he pledged not to earn a salary or accept a bonus until Ford was profitable again. However, that move did not silence the critics for long.
"Mr. Ford is a failure. He has put shareholders and the company at bankruptcy’s door," said Sam Joanette, a Ford retiree and shareholder from Miami Beach, Fla., who said he has lost more than $1 million since investing most of his retirement money in Ford in 1999.
"Mr. Ford knows he is not qualified, that he is in over his head."
There are plenty of critics, but he has supporters as well. There are many shareholders standing behind him.
"He’s been a chairman who’s very responsive to small shareholders," Davis said.
Ford hopes that the restructuring plan and a move away from a more bureaucratic setting will help the company get back on the profitable side. I’m sure he loves this company and has many reasons why he wants it to become profitable again, but I’m sure the resumption of his salary has to be one of those reasons.
See Also
An accounting change turns loss into profit.
The recent struggles of North America’s leading auto maker have been well documented. From the period of January to March of 2005 GM experienced a $1.3 billion loss. Earlier it was reported that for that same period this year they loss $323 million. That is much better than last year but still a loss is a loss.
The good news for GM is that the loss for this year’s first quarter is now a gain. An accounting change made the difference. When the initial loss was reported, GM was still working through a deal that requires retired workers to pay more for health care.
GM must pay $3 billion into a trust for retirees between now and 2011. In its preliminary results, GM included a one-time, pretax charge of $1 billion to cover that contribution. The revised earnings remove that charge, which GM will now take over a seven-year period beginning in the third quarter of this year.
Other factors in GM’s first quarter profit were its sale of Suzuki Motor Corp. and the finalization of its sale of GMAC Commercial Mortgage. The last quarterly profit GM had came in 2004. They hope to shorten that time between the next one this time.
GM expects to eliminate $4.5 billion in structural costs this year.
See Also
The future of powering our automobiles.
Just yesterday I wrote about the need for hybrid cars to become cheaper if they are going to take hold in the auto market. As of now, the cost of upgrading to a hybrid off sets the gas you will save. However, this may change soon.
Right now, the great hope of the auto industry is the hydrogen fuel-cell powered vehicle. However, that is still far away. It may be 20 years before that technology arrives. This means that the hybrid has a chance to rule right now. Many auto makers are focusing on helping it achieve that status.
Toyota is leading the hybrid wave at the moment and it plans to stay at its fore front.
Toyota is practically the lone player in the hybrid car business. In 2005, the company sold about 250,000 hybrid cars, taking up some 80% market share. Currently, only such luxury cars made by Toyota as the Alfard, Prius, Estima and Harrier are equipped with the hybrid system. By reducing the production cost, however, the company plans to install the system on such popular cars as the Carolla and Vitz.
As I said, the key to Toyota’s plans is to make the hybrid cheaper. They hope to accomplish this with further development of the lithium cell battery.
The lithium ion battery is a type of the secondary battery that can be charged and used repeatedly. Compared with the nickel-cadmium and nickel-hydrogen cells, lithium ion battery is lighter in weight and its voltage is three times higher. It can be charged and store more electricity and thus it is more suitable for producing smaller and lighter batteries.
Toyota hopes to drastically cut the costs of producing hybrid models over the next three years. And it looks like several others are looking to get in the hybrid game as well. Hydrogen fuel-cells may be the way of the future but it looks like the next two decades will belong to the hybrids.
See Also
