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Bailing out the auto industry and SUV owners

Discussions about the economic and financial ramifications of PEAK OIL

Re: Bailing out the auto industry and SUV owners

Unread postby cube » Sun 10 Aug 2008, 23:00:50

$this->bbcode_second_pass_quote('Ibon', '.').. So how about subsidizing the transition of the auto industry over to manufacturing light rail and electric vehicles? We just have to fire the entire management but keep the laborers. ha ha.
How about doing nothing?

We do NOT have some type of "centralized government bureaucracy" telling farmers how many bushels of broccoli to produce. Yet every time I go to the grocery store there's enough broccoli, apples, and oranges. Amazing isn't it? --> ALL of this gets done without anyone at the top "managing" the system.

Why not just sit back and let gasoline go up to $10 or $15 / gallon and let the chaos "organize" itself. It works for the production of apples and oranges so I see no reason why it can't work cars, light rail, or EV vehicles.
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Re: Bailing out the auto industry and SUV owners

Unread postby Homesteader » Sun 10 Aug 2008, 23:07:50

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('Ibon', '.').. So how about subsidizing the transition of the auto industry over to manufacturing light rail and electric vehicles? We just have to fire the entire management but keep the laborers. ha ha.

How about doing nothing? We do NOT have some type of "centralized government bureaucracy" telling farmers how many bushels of broccoli to produce. Yet every time I go to the grocery store there's enough broccoli, apples, and oranges. Amazing isn't it? --> ALL of this gets done without anyone at the top "managing" the system.
Why not just sit back and let gasoline go up to $10 or $15 / gallon and let the chaos "organize" itself.
It works for the production of apples and oranges so I see no reason why it can't work cars, light rail, or EV vehicles.

Yup. Pretty simple plan. Doomed to never see the light of day of course, but a good plan.
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Re: Bailing out the auto industry and SUV owners

Unread postby Iaato » Sun 10 Aug 2008, 23:09:21

$this->bbcode_second_pass_quote('Ibon', 'S')o how about subsidizing the transition of the auto industry over to manufacturing light rail and electric vehicles? We just have to fire the entire management but keep the laborers. ha ha.

Now you're talking. So why is the topic of autos the one for which your focus narrows in scale?

I am at the point where I see the whole shooting match as fundamentally flawed; private transportation, large scale industrial agriculture, bloated, centralized national government, corporatism, bloated houses, bloated cities, capitalism, globalism, consumption, pollution, the whole bit. Turning off the gas tap fixes most of it. There is so much waste, duplication, and inefficiency, that if we turned off the taps tomorrow, I think we would still be able to find many solutions for the first and second spasms of contractions.

Those Lincoln Navigators would make great dorms. Park them in the parking lots of businesses for week-day dorms for commuters. Ibon, you sound as though you don't think we can come up with mass transit substitutes for private vehicles in the short term--what about using school buses and tour buses massively expand mass transit? I do think that private transportation is the area where there is the most denial and emotional reaction to loss.
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Re: Bailing out the auto industry and SUV owners

Unread postby phaster » Mon 11 Aug 2008, 01:19:35

$this->bbcode_second_pass_quote('Armageddon', 'T')he government should just print all of us one million dollars.

I'm not a hard core doomer, but after dropping in on this site from time to time, I've come to realize that gold is a hard currency so if given an option between one million dollars of a fiat currency and gold, think I'd prefer the US government just give me good old fashioned gold!
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Re: Bailing out the auto industry and SUV owners

Unread postby mgibbons19 » Mon 11 Aug 2008, 08:18:56

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

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

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

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

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

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

Unread postby patience » Mon 11 Aug 2008, 08:45:27

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

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

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

It needs done alright, but please don't underestimate the costs involved.
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Re: Bailing out the auto industry and SUV owners

Unread postby Canuk » Mon 11 Aug 2008, 12:12:21

$this->bbcode_second_pass_quote('patience', 'S')omething that deserves more consideration, I believe, is the cost of changing over any industry to another purpose. The US auto industry in its' present form is a dinosaur, wandering about unaware of its' own demise. It needs to be redone, no doubt.
The cost to retool for a MINOR change in ONE automobile piston, was over $100,000 in 1990. If you want to make something besides pistons in that plant, you'd have to claen it out to the walls, and only have the building and utilities to save. The scrapped equipment originally cost in the 100's of millions of $. Now. Start over with the building to make EV's, or whatever. The first thing to do is cough up $100's of millions of $. Where the hell are you gonna get that in today's credit-crunch world?

The costs of any tooling in automotive are high -we recently built a portion of a machine to add a small counterbalance weight to a flywheel assembly. Our portion was approx. $20K of a $150K system - not including the mazda engineering costs or product testing, etc. Retooling for a new combustion engine car is a multi-billion dollar project (usually many of the parts already exist) - trying to change to an EV or other technology would run significantly higher and would take decades to switch over.

You are right that the only thing left would be the building and these buildings will be left vacant instead of reused - there is little demand for Brownfield car factories (environmental or locational issues) - just look at Detroit for an example of this.

Finally import cars have far less of the "Halo" effect as mentioned by Snowrunner - they buy little of their machinery here, only some of the subcomponents, and do very little of the engineering or design work here. All that they really offer are the assembly jobs (better than nothing I suppose) but do not have the economic multiplier effect that the domestic brands have. I read a few years back that for every dollar spent on a domestic brand there were twice as many spinoff dollars in the economy as compared to a transplant.

Keep in mind I am all for a car free culture and I used to take transit to work and/or ride my bike (12km each way) - but this cannot occur suddenly and needs to be transitioned into. There are 70 years of infrastructure and bad planning to reverse and this could take a long time.
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Re: Bailing out the auto industry and SUV owners

Unread postby patience » Tue 12 Aug 2008, 08:42:18

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

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

The US govt is debt-strapped also, and thus limited in its' options. Looks like a hospital trauma center that is overwhelmed with patients. Time for Triage, I think. Don't waste the limited resources we have on hopeless causes.
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Re: Bailing out the auto industry and SUV owners

Unread postby joelcolorado » Tue 12 Aug 2008, 09:23:39

I am so tired of bailing out everyone from farmers to bankers to home owners to auto industry to whatever. Just a mess.
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Re: Bailing out the auto industry and SUV owners

Unread postby yesplease » Tue 12 Aug 2008, 09:36:30

$this->bbcode_second_pass_quote('patience', 'T')he cost to retool for a MINOR change in ONE automobile piston, was over $100,000 in 1990. If you want to make something besides pistons in that plant, you'd have to claen it out to the walls, and only have the building and utilities to save. The scrapped equipment originally cost in the 100's of millions of $. Now. Start over with the building to make EV's, or whatever. The first thing to do is cough up $100's of millions of $. Where the hell are you gonna get that in today's credit-crunch world?

A second consideration is that we have evelved the worldwide auto industry over a hundred years or so into what it is now, learning all the way. New products of any kind involve a learning curve of years, or decades. If we start producing EV's tomorrow, they won't be nearly as good as they could be 10 years down the road. This does not happen like flicking a switch and it has exorbitant costs, so be aware of that.
But don't EVs need less in the way of tooling? I mean, an ICE/transmission has hundreds, maybe thousands of moving parts that need to be made. Most EVs I'm aware of just outsource the electric motor/controller along w/ some other stuff. Some even go so far as to buy a glider like the Smart car chassis and slap all the stuff in there. EVs kinda have to follow the KISS principle in order to see decent range, and I doubt tooling on a 1,500-2,500lb vehicle that outsources it's entire drivetrain would be as complex as what auto manufacturers do today.
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Re: Bailing out the auto industry and SUV owners

Unread postby joelcolorado » Tue 12 Aug 2008, 09:41:50

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

Unread postby patience » Tue 12 Aug 2008, 14:15:20

yesplease,

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

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

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

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

Unread postby Canuk » Tue 12 Aug 2008, 14:25:32

$this->bbcode_second_pass_quote('yesplease', 'B')ut don't EVs need less in the way of tooling? I mean, an ICE/transmission has hundreds, maybe thousands of moving parts that need to be made. Most EVs I'm aware of just outsource the electric motor/controller along w/ some other stuff. Some even go so far as to buy a glider like the Smart car chassis and slap all the stuff in there. EVs kinda have to follow the KISS principle in order to see decent range, and I doubt tooling on a 1,500-2,500lb vehicle that outsources it's entire drivetrain would be as complex as what auto manufacturers do today.

I agree the mechanical complexity is greatly reduced but there are still many parts that would need to be made and using existing tooling such as for a smart car only works if the tooling and processes were designed with additional capacity in mind. Additionally if something is subcontracted somewhere tooling(machiney) for the motor, etc. has to be made - even cheasy dollar store plastic goods require tooling.

There are threads already on EV's that go into far more detail but they have significant issues beyond the tooling costs such as electricity, infrastructure, material restraints, etc. Switching to EV's would require enourmous investments in infrastructure and would require a significant time frame to implement - it is far simpler to use our existing infrastruture more effciently.
$this->bbcode_second_pass_quote('joecolorado', 'M')y wife has $500,000 in school loans...YES that is right 500k. Can we get a bailout>? PLEASE. She is a doctor and we all know we need more of those. She has 750 patients so a necessary service?

OMG - that is a phenomonal amount of money - have you looked into bankruptcy? Sounds like around the same amount of money as a municipal budget for a village or small town... There must be some accelerated debt repayment programs - have you talked with an accountant?
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Re: Bailing out the auto industry and SUV owners

Unread postby Ibon » Tue 12 Aug 2008, 16:18:58

$this->bbcode_second_pass_quote('Iaato', ' ')Ibon, you sound as though you don't think we can come up with mass transit substitutes for private vehicles in the short term--what about using school buses and tour buses massively expand mass transit?

Not true. I actually think we could and your idea of using private vehicles and old school buses is a great idea. Remember that one big Lincoln Navigator taking 8 people to their jobs is more fuel efficient than 8 Prius cars driving by lone commuters.

I have spent more than 2 decades in the developing world and the creativity of mass transit with limited capitol is phenomenal: motorbikes, tricycles, jeepneys, colectivos, vans, buses, tuk tuk's. rickshaws, etc etc.

You could gut out the insides of an Escalade and put two benches running parellel to eachother with a rear entrance and this could sit up to 12 people. Similar arrangements are currently common in many countries .
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Re: Bailing out the auto industry and SUV owners

Unread postby Iaato » Tue 12 Aug 2008, 16:53:35

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

Unread postby Ibon » Tue 12 Aug 2008, 17:41:03

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

I wish I could tell you why I don't have to see that documentary
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Re: Bailing out the auto industry and SUV owners

Unread postby Javaman » Tue 12 Aug 2008, 20:03:49

$this->bbcode_second_pass_quote('Ibon', '')$this->bbcode_second_pass_quote('Iaato', ' ')Ibon, you sound as though you don't think we can come up with mass transit substitutes for private vehicles in the short term--what about using school buses and tour buses massively expand mass transit?

Not true. I actually think we could and your idea of using private vehicles and old school buses is a great idea. ... You could gut out the insides of an Escalade and put two benches running parellel to eachother with a rear entrance and this could sit up to 12 people. Similar arrangements are currently common in many countries .

Getting eight SUV owners to carpool would save a large amount of fuel. Of course just two carpooling Prius owners would exceed even that passenger-miles-per-gallon. A diesel-powered city bus is rumored to get about 4 mpg. Assuming an overall average of ten riders, the bus is getting about 40 passenger-mpg, not as good as the Prius and not much better than some non-hybrid compacts. The bus would need to carry 40 to 50 passengers to edge out a Prius carrying four people. For those needing to travel during off-peak hours, an SUV might be as efficient as the bus, which might very well be carrying only 3-4 passengers at those times.
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Re: Bailing out the auto industry and SUV owners

Unread postby Ludi » Tue 12 Aug 2008, 20:04:52

$this->bbcode_second_pass_quote('Ibon', 'I') wish I could tell you why I don't have to see that documentary

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Re: Bailing out the auto industry and SUV owners

Unread postby MrBill » Wed 13 Aug 2008, 03:40:25

$this->bbcode_second_pass_quote('Ludi', '')$this->bbcode_second_pass_quote('Ibon', 'I') wish I could tell you why I don't have to see that documentary
Mucho mysterioso..... 8O 8O 8O

I obviously do not know what Ibon is refering to either, but in my humble opinion Cuba is an example of how NOT to run a country. They have limped along economically for 40-years mostly based on having a sponsor in the form of the USSR, then China and now Venezuela. Russia now wants to use Cuba for strategic purposes again.

Those infusions of cash, fuel and technology have kept the Castros and their cronies in power while meanwhile Cubans live a pretty miserable everyday existance, and they're not free to leave anytime they would like. I always wonder about any government that keeps its citizens from leaving?

Well, in anycase, back to putting people in the back of pick-up trucks, hitch-hiking and such adhoc measures. All solutions that have been outlawed and banned in the rest of the western world for safety reasons and/or in response to tort lawyers. I can think of lots of ways to save energy and transport fuel if it includes suspending environmental and safety laws.

Let's compound our energy problems with a race to the bottom on these other issues as well. Let's see if we cannot turn our country(s) into another backward Cuba that is neither free nor prosperous and depends on handouts from 'sponsors'.
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Re: Bailing out the auto industry and SUV owners

Unread postby halcyon » Wed 13 Aug 2008, 06:43:08

$this->bbcode_second_pass_quote('MrBill', 'I') obviously do not know what Ibon is refering to either, but in my humble opinion Cuba is an example of how NOT to run a country.

Personally I find it very easy to agree with you on the 40 year horizon, esp. if I concentrate mostly on economic growth.
However, the story of Cuba since the the oil was cut off from SU in the beginning of 90s is, imho, by all accounts remarkable:
1. Very fast and sustainable rapid rise in food self-sufficiency
2. Extremely rapid response to liquid fuel crisis by efficiency, muscle powered mobility, innovative repurposing of existing vehicles
3. Succesful restructuring of at least part of the higher education, resulting for example in a very successful program to train more nurses and doctors
4. All this without major break down of the social fabric or excessive loss in quality of life, happiness index, nutrition or life expectancy

Granted, the level from which they started was not comparable to many an OECD country. Regardless, the achievement should not be belittled.

I'm not saying that probably mistakes were not made or that it was all hunky-dory. However, considering that USA's response to a mere thread of much smaller liquid fuel availability is to go to war (which does not save liquid fuels!), I must say I'd take the Cuba's model over that of USA any day.

In that regard the example of Cuba from the last 10+ years in regards to liquid fuel crisis is the best model we have. Clearly better than that of USA by a long shot.
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