http://www.usatoday.com/money/autos/2010-10-28-toyota-lawsuits_N.htm
Toyota faces new claims in defects case
10-28-10
Greg Risling, Associated Press
LOS ANGELES — Toyota Motor bought back vehicles from car owners who said the vehicles had unintended acceleration defects and the carmaker failed to report the problem to federal regulators, according to court documents filed in the sprawling litigation against the automaker.
Plaintiffs' lawyers contend the Japanese company compelled the owners to sign confidentiality agreements that prevented them from speaking publicly about the problems they encountered.
In some cases, Toyota's own technicians experienced the vehicles speeding up without pressing the gas pedal, according to the documents filed Wednesday in U.S. District Court.
"The deeper we dig into the facts that surround Toyota, the more damning the evidence that Toyota was aware of the issue and failed to act responsibly," plaintiffs' attorney Steve Berman said. "The revelation that they bought up the cars in question and prevented the owners from talking about their experience is curious at best, nefarious at worst."
A Toyota spokesman said the company is preparing a response.
Hundreds of lawsuits were filed against Toyota after the automaker began recalling millions of vehicles because of acceleration problems in several models and brake glitches with the Prius hybrid.
All of the federal cases were consolidated and assigned to a judge in Southern California.
Toyota has sought to dismiss the lawsuits, arguing drivers haven't identified any defects in the vehicles. In some of the instances, the automaker has said driver error was causing the problem.
Showing posts with label Toyota. Show all posts
Showing posts with label Toyota. Show all posts
Saturday, November 6, 2010
Sunday, July 25, 2010
Toyota Cites Driver Errors in Acceleration Cases
http://www.businessweek.com/news/2010-07-13/toyota-cites-driver-errors-in-acceleration-cases.html
Toyota Cites Driver Errors in Acceleration Cases
July 13, 2010
(Bloomberg) -- Toyota Motor Corp.’s investigation of accidents involving unintended acceleration where motorists said they pressed on the brake pedal show that “virtually all” involved drivers who pushed the accelerator instead, a company spokesman said.
Toyota, the world’s largest automaker, is looking into causes of unintended acceleration in its cars and trucks and has recalled more than 8 million worldwide in the past year for defects such as pedals that stuck or snagged on floor mats. U.S. auto-safety regulators are also probing the causes and haven’t released their findings.
The Toyota City, Japan-based company has reviewed about 2,000 reports of unintended acceleration since March, including analyses of information from event-data recorders when the incidents involved crashes, said Mike Michels, a Toyota spokesman in Torrance, California.
“There are a variety of causes -- pedal entrapment, sticky pedal, other foreign objects in the car” and “pedal misapplication,” Michels said yesterday in a telephone interview. Asked how many crashes were linked to pushing the accelerator when motorists thought they were pushing the brake pedal, he said, “virtually all.”
The company has yet to find evidence of electronic malfunctions, he said.
Toyota rose 135 yen, or 4.3 percent, to 3,260 yen at 9:45 a.m. in Tokyo trading.
‘Totally Ludicrous’
Auto-safety advocates including Joan Claybrook, a former administrator of the National Highway Traffic Safety Administration and president of the advocacy group Public Citizen, have questioned driver error as a cause. They have said automakers and regulators should take more seriously possibilities such as the failure of electronic controls.
“That is totally ludicrous,” Claybrook said of Toyota’s findings in a phone interview yesterday. “They should be looking at the electronics in their cars and everyone knows it.”
The Wall Street Journal reported yesterday that NHTSA’s analysis of Toyota data recorders found cases in which throttles were open and brakes hadn’t been deployed.
NHTSA spokeswomen declined to comment on that report. The auto-safety agency said in May that Toyota vehicles involved in unintended-acceleration crashes may be linked to 89 deaths in 71 crashes since 2000.
Brake-Override Technology
The agency is working with a National Academy of Sciences panel and NASA, the U.S. space agency, to investigate reports of unintended acceleration and whether there may be electronics- related causes in vehicles including those made by Toyota.
NHTSA previously investigated reports of unintended acceleration in Audi 5000 sedans and in a 1989 report concluded that human error was often the cause.
In the two decades since that report, more vehicles have been equipped with brake-override technology, designed to stop a car if the brakes and accelerator are applied simultaneously. Toyota has said it will install brake-override software in all new vehicles by model year 2011.
Toyota is facing more than 325 lawsuits in state and federal courts related to unintended acceleration, which has also been probed by U.S. lawmakers.
Toyota’s Tests
Company engineers last week showed Toyota’s main engineering facilities in Toyota City and Higashi-Fuji, Japan. Toyota demonstrated tests being run aimed at finding any potential cause of sudden acceleration arising from the electronic throttle control system and other components.
Tests include bombarding vehicles with electromagnetic interference at more than twice the level that would occur in real-world conditions, line-by-line evaluation of system software and testing of vehicles in laboratories that replicate hurricane-level rain and excessive heat and cold.
Toyota has yet to find further defects linked to unintended acceleration beyond problems with floor mats and sticky accelerator components, Dino Triantafyllos, Toyota’s U.S. vice president for vehicle quality, told reporters last week in Toyota City.
--With assistance from Alan Ohnsman in Tokyo, Margaret Cronin Fisk and Theo Keith in Southfield, Michigan and John Hughes in Washington. Editors: Larry Liebert, Terje Langeland
To contact the reporters on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net
To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net
Toyota Cites Driver Errors in Acceleration Cases
July 13, 2010
(Bloomberg) -- Toyota Motor Corp.’s investigation of accidents involving unintended acceleration where motorists said they pressed on the brake pedal show that “virtually all” involved drivers who pushed the accelerator instead, a company spokesman said.
Toyota, the world’s largest automaker, is looking into causes of unintended acceleration in its cars and trucks and has recalled more than 8 million worldwide in the past year for defects such as pedals that stuck or snagged on floor mats. U.S. auto-safety regulators are also probing the causes and haven’t released their findings.
The Toyota City, Japan-based company has reviewed about 2,000 reports of unintended acceleration since March, including analyses of information from event-data recorders when the incidents involved crashes, said Mike Michels, a Toyota spokesman in Torrance, California.
“There are a variety of causes -- pedal entrapment, sticky pedal, other foreign objects in the car” and “pedal misapplication,” Michels said yesterday in a telephone interview. Asked how many crashes were linked to pushing the accelerator when motorists thought they were pushing the brake pedal, he said, “virtually all.”
The company has yet to find evidence of electronic malfunctions, he said.
Toyota rose 135 yen, or 4.3 percent, to 3,260 yen at 9:45 a.m. in Tokyo trading.
‘Totally Ludicrous’
Auto-safety advocates including Joan Claybrook, a former administrator of the National Highway Traffic Safety Administration and president of the advocacy group Public Citizen, have questioned driver error as a cause. They have said automakers and regulators should take more seriously possibilities such as the failure of electronic controls.
“That is totally ludicrous,” Claybrook said of Toyota’s findings in a phone interview yesterday. “They should be looking at the electronics in their cars and everyone knows it.”
The Wall Street Journal reported yesterday that NHTSA’s analysis of Toyota data recorders found cases in which throttles were open and brakes hadn’t been deployed.
NHTSA spokeswomen declined to comment on that report. The auto-safety agency said in May that Toyota vehicles involved in unintended-acceleration crashes may be linked to 89 deaths in 71 crashes since 2000.
Brake-Override Technology
The agency is working with a National Academy of Sciences panel and NASA, the U.S. space agency, to investigate reports of unintended acceleration and whether there may be electronics- related causes in vehicles including those made by Toyota.
NHTSA previously investigated reports of unintended acceleration in Audi 5000 sedans and in a 1989 report concluded that human error was often the cause.
In the two decades since that report, more vehicles have been equipped with brake-override technology, designed to stop a car if the brakes and accelerator are applied simultaneously. Toyota has said it will install brake-override software in all new vehicles by model year 2011.
Toyota is facing more than 325 lawsuits in state and federal courts related to unintended acceleration, which has also been probed by U.S. lawmakers.
Toyota’s Tests
Company engineers last week showed Toyota’s main engineering facilities in Toyota City and Higashi-Fuji, Japan. Toyota demonstrated tests being run aimed at finding any potential cause of sudden acceleration arising from the electronic throttle control system and other components.
Tests include bombarding vehicles with electromagnetic interference at more than twice the level that would occur in real-world conditions, line-by-line evaluation of system software and testing of vehicles in laboratories that replicate hurricane-level rain and excessive heat and cold.
Toyota has yet to find further defects linked to unintended acceleration beyond problems with floor mats and sticky accelerator components, Dino Triantafyllos, Toyota’s U.S. vice president for vehicle quality, told reporters last week in Toyota City.
--With assistance from Alan Ohnsman in Tokyo, Margaret Cronin Fisk and Theo Keith in Southfield, Michigan and John Hughes in Washington. Editors: Larry Liebert, Terje Langeland
To contact the reporters on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net
To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net
Sunday, May 30, 2010
Nationalize BP and Other Criminal Corporations
http://www.commondreams.org/view/2010/05/20-10
Thursday, May 20, 2010 by Ted Rall
Nationalize BP and Other Criminal Corporations
by Ted Rall
The Supreme Court says that corporations have the same rights as individuals. When they misbehave, shouldn't they face consequences as serious as those imposed upon an individual?
It goes without saying that a person who commits a crime ought to face punishment proportional to the offense. Large and midsize corporations, which employ thousands of employees, have far vaster reach and power than even the wealthiest ordinary citizens. So their crimes can be breathtaking in scope. The 1984 industrial catastrophe at a pesticide plant in Bhopal, India killed 15,000 people. An additional 200,000 have since suffered serious injuries. Compared to the boards of directors of Union Carbide and Dow Chemical, which bought the company in 2001, Ted Bundy was small potatoes.
Unlike small-time serial killers, however, corporations get away with murder. For at least a year, management of the Toyota auto company knew that brakes in millions of its cars might fail. A 2009 ABC News investigation found that at least 16 people had died. "Safety analysts found an estimated 2000 cases in which owners of Toyota cars including Camry, Prius and Lexus, reported that their cars surged without warning up to speeds of 100 miles per hour," reported the network. Yet Toyota did nothing. Instead they blamed their customers, saying they were resting their floormats on the gas pedals.
On May 18th, Toyota finally faced the wrath of the federal government. Its "punishment": a paltry $16.5 million fine, not one cent of which went to the victims or their families. The fine, which amounted to a ridiculous 5.5 percent of its 2009 profit, went into the U.S. Treasury's general fund--in other words, to kill Afghans and Iraqis.
Available to Congress and the President is a far more appropriate punishment: nationalization without compensation. Toyota's American operations ought to be seized and operated by the federal government. The top officials of the parent company in Japan, whose willful negligence murdered at least 16 American citizens, ought to be extradited and face trial in U.S. federal court.
Extreme? Expropriating private property is commonplace--when the target is Joe and Jane Sixpack. Just ask hundreds of homeowners of New London, Connecticut. When the city destroyed an entire neighborhood to build a luxury office development, the U.S. Supreme Court backed them up, radically expanding the concept of eminent domain. Unlike a lot of evil corporations, those homeowners didn't do anything wrong.
The U.S. government has not only the right but the duty to take over criminal corporations.
A 5.5 percent fine is a slap on the wrist. Nationalizing a company, on the other hand, protects the public interest. Hitting corporations in the balance sheet is a genuine deterrent to the managers of other companies contemplating lawless behavior. It brings in significant cash assets that can be used to compensate the victims of the company's criminal activities.
Nationalization can also serve the interest of public safety. The mine explosion that left at least 25 coal miners dead in West Virginia earlier this year left members of the public feeling helpless and frustrated at the slow and inept rescue attempt by Massey Energy, the site's owner and operator. Setting aside the obvious argument that natural resources ought to be exploited for the benefit of the American people rather than private businesspeople, the rescue operation would have benefited from the involvement of top experts at such government agencies as the Army Corps of Engineers.
In 2009 the Upper Big Branch mine received 450 safety violations. Massey Energy paid the U.S. Mine Safety and Health Administration less than $1 million total. That's less than one percent of its annual profits. That's roughly $2,000 per violation.
If you get caught speeding in Virginia, you'll pay more than what Massey Energy pays for deliberately risking the lives of its employees.
British Petroleum is spending $6 million a day on its response to the explosion at its Deepwater Horizon oil drilling platform in the Gulf of Mexico. But that's a drop in the bucket next to the cost that will be borne by the people of Louisiana, Alabama, Mississippi and Florida. The disaster is spilling the equivalent of one Exxon Valdez wreck into the Gulf every four days--and it's been three weeks. Thousands of fishermen will be ruined. The tourism industry, already in trouble due to the economic collapse, will be devastated. The full extent of the ecological damage--dead animals and aquatic plants, huge dead zones devoid of oxygen--won't be understood for years.
BP failed to ensure that a "blowout preventer" at the Deepwater Horizon would work in the event of an emergency. But their real crime was drilling for oil 5,000 feet down in the first place.
Here again, it's easy to see how nationalization might help. Rather than wait for the clueless execs at BP to come up with a solution, a BP seized by the federal government (its American operations, anyway) would come under the jurisdiction of an organization that could assign experts from NOAA and the U.S. Navy, among other agencies, to stop the leak. After the leak is plugged, the publicly-owned former BP's profits would help defray the costs of the cleanup and extend benefits to fisherman and other victims.
Imagine the possibilities. What if Too Big to Fail had been turned into Too Big to Resist?
As a nationalized asset Citibank, which received $306 billion in bailouts, would be worth $152 trillion to taxpayers. Goldman Sachs got $15 billion; they're worth $70 trillion. Sell them off and no one would ever pay college tuition again. Or to see a doctor. Or we could give everyone a 50 percent tax cut. We're a rich country--the problem is that out-of-control corporations are hogging the wealth.
Businessmen charter corporations for the express purpose of avoiding individual legal liability. Isn't it high time we started holding criminal businessmen accountable?
© 2010 Ted Rall
Ted Rall is the author of the new book "Silk Road to Ruin: Is Central Asia the New Middle East?," an in-depth prose and graphic novel analysis of America's next big foreign policy challenge.
Thursday, May 20, 2010 by Ted Rall
Nationalize BP and Other Criminal Corporations
by Ted Rall
The Supreme Court says that corporations have the same rights as individuals. When they misbehave, shouldn't they face consequences as serious as those imposed upon an individual?
It goes without saying that a person who commits a crime ought to face punishment proportional to the offense. Large and midsize corporations, which employ thousands of employees, have far vaster reach and power than even the wealthiest ordinary citizens. So their crimes can be breathtaking in scope. The 1984 industrial catastrophe at a pesticide plant in Bhopal, India killed 15,000 people. An additional 200,000 have since suffered serious injuries. Compared to the boards of directors of Union Carbide and Dow Chemical, which bought the company in 2001, Ted Bundy was small potatoes.
Unlike small-time serial killers, however, corporations get away with murder. For at least a year, management of the Toyota auto company knew that brakes in millions of its cars might fail. A 2009 ABC News investigation found that at least 16 people had died. "Safety analysts found an estimated 2000 cases in which owners of Toyota cars including Camry, Prius and Lexus, reported that their cars surged without warning up to speeds of 100 miles per hour," reported the network. Yet Toyota did nothing. Instead they blamed their customers, saying they were resting their floormats on the gas pedals.
On May 18th, Toyota finally faced the wrath of the federal government. Its "punishment": a paltry $16.5 million fine, not one cent of which went to the victims or their families. The fine, which amounted to a ridiculous 5.5 percent of its 2009 profit, went into the U.S. Treasury's general fund--in other words, to kill Afghans and Iraqis.
Available to Congress and the President is a far more appropriate punishment: nationalization without compensation. Toyota's American operations ought to be seized and operated by the federal government. The top officials of the parent company in Japan, whose willful negligence murdered at least 16 American citizens, ought to be extradited and face trial in U.S. federal court.
Extreme? Expropriating private property is commonplace--when the target is Joe and Jane Sixpack. Just ask hundreds of homeowners of New London, Connecticut. When the city destroyed an entire neighborhood to build a luxury office development, the U.S. Supreme Court backed them up, radically expanding the concept of eminent domain. Unlike a lot of evil corporations, those homeowners didn't do anything wrong.
The U.S. government has not only the right but the duty to take over criminal corporations.
A 5.5 percent fine is a slap on the wrist. Nationalizing a company, on the other hand, protects the public interest. Hitting corporations in the balance sheet is a genuine deterrent to the managers of other companies contemplating lawless behavior. It brings in significant cash assets that can be used to compensate the victims of the company's criminal activities.
Nationalization can also serve the interest of public safety. The mine explosion that left at least 25 coal miners dead in West Virginia earlier this year left members of the public feeling helpless and frustrated at the slow and inept rescue attempt by Massey Energy, the site's owner and operator. Setting aside the obvious argument that natural resources ought to be exploited for the benefit of the American people rather than private businesspeople, the rescue operation would have benefited from the involvement of top experts at such government agencies as the Army Corps of Engineers.
In 2009 the Upper Big Branch mine received 450 safety violations. Massey Energy paid the U.S. Mine Safety and Health Administration less than $1 million total. That's less than one percent of its annual profits. That's roughly $2,000 per violation.
If you get caught speeding in Virginia, you'll pay more than what Massey Energy pays for deliberately risking the lives of its employees.
British Petroleum is spending $6 million a day on its response to the explosion at its Deepwater Horizon oil drilling platform in the Gulf of Mexico. But that's a drop in the bucket next to the cost that will be borne by the people of Louisiana, Alabama, Mississippi and Florida. The disaster is spilling the equivalent of one Exxon Valdez wreck into the Gulf every four days--and it's been three weeks. Thousands of fishermen will be ruined. The tourism industry, already in trouble due to the economic collapse, will be devastated. The full extent of the ecological damage--dead animals and aquatic plants, huge dead zones devoid of oxygen--won't be understood for years.
BP failed to ensure that a "blowout preventer" at the Deepwater Horizon would work in the event of an emergency. But their real crime was drilling for oil 5,000 feet down in the first place.
Here again, it's easy to see how nationalization might help. Rather than wait for the clueless execs at BP to come up with a solution, a BP seized by the federal government (its American operations, anyway) would come under the jurisdiction of an organization that could assign experts from NOAA and the U.S. Navy, among other agencies, to stop the leak. After the leak is plugged, the publicly-owned former BP's profits would help defray the costs of the cleanup and extend benefits to fisherman and other victims.
Imagine the possibilities. What if Too Big to Fail had been turned into Too Big to Resist?
As a nationalized asset Citibank, which received $306 billion in bailouts, would be worth $152 trillion to taxpayers. Goldman Sachs got $15 billion; they're worth $70 trillion. Sell them off and no one would ever pay college tuition again. Or to see a doctor. Or we could give everyone a 50 percent tax cut. We're a rich country--the problem is that out-of-control corporations are hogging the wealth.
Businessmen charter corporations for the express purpose of avoiding individual legal liability. Isn't it high time we started holding criminal businessmen accountable?
© 2010 Ted Rall
Ted Rall is the author of the new book "Silk Road to Ruin: Is Central Asia the New Middle East?," an in-depth prose and graphic novel analysis of America's next big foreign policy challenge.
Toyota Buys Tesla Stake for Electric Car Tie-Up
http://www.businessweek.com/news/2010-05-21/toyota-buys-tesla-stake-for-electric-car-tie-up-update4-.html
Toyota Buys Tesla Stake for Electric Car Tie-Up
May 21, 2010
By Alan Ohnsman
(Bloomberg) -- Toyota Motor Corp., the world’s largest automaker, is buying a $50 million stake in electric-car producer Tesla Motors Inc. as the companies seek to offer low- polluting models.
Tesla also will buy a closed Toyota joint-venture plant in California to build its Model S and other vehicles, Tesla Chief Executive Officer Elon Musk said yesterday. The companies plan to cooperate in developing electric cars, parts, production systems and engineering.
The deal may help Toyota compete with Nissan Motor Co. and General Motors Co. in selling electric cars in the U.S., where regulations on greenhouse gas emissions and fuel efficiency are pushing them to offer advanced vehicles. It may also help Toyota’s image, battered by recalls, by reviving the New United Motor Manufacturing Inc. plant, known as Nummi, an analyst said.
“This seems like a good deal for both parties, especially Toyota, from being able to avoid the political fallout from shutting Nummi down to being able to offer a new electric vehicle with just a low initial investment cost,” said Jeremy Anwyl, chief executive officer at auto-industry researcher Edmunds.com in Santa Monica, California.
Toyota, based in Toyota City, Japan, is the world’s biggest seller of hybrid autos, and Palo Alto, California-based Tesla is the only company selling U.S. highway-legal battery-powered cars. The size of Toyota’s stake in Tesla hasn’t been fixed, Musk said in an interview.
‘Infinite Possibility’
“I’ve felt an infinite possibility about Tesla’s technology,” said Akio Toyoda, chief executive officer of Toyota, founded by his grandfather. “By partnering with Tesla, my hope is that all Toyota employees will recall that ‘venture business’ spirit.”
Daimler AG, the world’s second-biggest maker of luxury vehicles, in May 2009 invested about $50 million in Tesla, which is supplying the company with battery packs for a test fleet of electric Smart minicars.
Daimler reduced its stake in Tesla to about 5 percent in July by selling a portion of the investment to Aabar Investments PJSC, the German automaker’s largest shareholder. Tesla told Stuttgart, Germany-based Daimler about the Toyota partnership on May 19, Musk said.
The Toyota-Tesla partnership doesn’t impede Daimler’s cooperation with the California automaker, said Brigitte Bertram, a Daimler spokeswoman.
Nummi Purchase
The revival of Nummi, for 25 years a joint venture between Toyota and the former General Motors Corp., will create 1,000 jobs, California Governor Arnold Schwarzenegger said.
Musk declined to say how much his company is spending to purchase Nummi, which was shut down in April. Tesla has hired back about 90 former Nummi workers and expects to add about 50 a month, Musk said.
Nummi, in Fremont, California, had 4,700 workers and was the only factory where employees building Toyota vehicles were represented by the United Auto Workers union.
The plant’s restart “is welcome news for the state’s economy and workers after the closing of this highly productive plant,” UAW President Ron Gettelfinger said in a statement today.
Electric-car technology has been supported by U.S. policy makers including President Barack Obama as a way to reduce the nation’s oil use and dependence on foreign energy sources. Obama set a goal of getting 1 million plug-in hybrids and electric cars on U.S. roads by 2015.
Toyota Plug-In
Toyota intends to offer a short-range electric car in the U.S. and begin retail sales of a plug-in Prius hybrid in 2012.
Toyota’s American depositary receipts, each representing two ordinary shares, rose $1.59, or 2.1 percent, to $75.59 at 4:15 p.m. in New York Stock Exchange composite trading. The regular shares fell 65 yen, or 1.9 percent, to 3,355 yen in Tokyo.
Nissan is preparing to introduce its Leaf electric hatchback in Japan and the U.S. this year. Nissan Chief Executive Officer Carlos Ghosn has set a goal of leading sales of rechargeable vehicles, which he estimates may make up 10 percent of global auto demand by 2020, and is spending more than 500 billion yen ($5.54 billion) developing electric cars.
GM plans to introduce its Volt plug-in vehicle late this year. The car will initially be marketed to drivers in California, which requires large automakers to offer some vehicles with little or no tailpipe pollution.
Share Sale
Tesla, which hasn’t posted a profit in the six years since it was founded, is planning to raise $100 million in an initial share sale and has said it may spend the proceeds on acquisitions and for factories and equipment that may cost as much as $125 million this year.
The company was approved to receive a $465 million government loan to help produce the Model S sedan, which the company says will cost less than $50,000 after a federal tax credit.
Tesla has 2,000 reservations for the Model S and intends to begin higher-volume production in 2012, with a projected output of as many as 20,000 a year. The company has delivered about 1,000 of its $109,000 Roadster electric sports cars.
The company’s investors include Google Inc. co-founders Larry Page and Sergey Brin, and the government of Abu Dhabi.
--With assistance from Makiko Kitamura and Yuki Hagiwara in Tokyo and Chris Reiter in Berlin. Editors: Kevin Orland, Jamie Butters.
To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net
To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net
Toyota Buys Tesla Stake for Electric Car Tie-Up
May 21, 2010
By Alan Ohnsman
(Bloomberg) -- Toyota Motor Corp., the world’s largest automaker, is buying a $50 million stake in electric-car producer Tesla Motors Inc. as the companies seek to offer low- polluting models.
Tesla also will buy a closed Toyota joint-venture plant in California to build its Model S and other vehicles, Tesla Chief Executive Officer Elon Musk said yesterday. The companies plan to cooperate in developing electric cars, parts, production systems and engineering.
The deal may help Toyota compete with Nissan Motor Co. and General Motors Co. in selling electric cars in the U.S., where regulations on greenhouse gas emissions and fuel efficiency are pushing them to offer advanced vehicles. It may also help Toyota’s image, battered by recalls, by reviving the New United Motor Manufacturing Inc. plant, known as Nummi, an analyst said.
“This seems like a good deal for both parties, especially Toyota, from being able to avoid the political fallout from shutting Nummi down to being able to offer a new electric vehicle with just a low initial investment cost,” said Jeremy Anwyl, chief executive officer at auto-industry researcher Edmunds.com in Santa Monica, California.
Toyota, based in Toyota City, Japan, is the world’s biggest seller of hybrid autos, and Palo Alto, California-based Tesla is the only company selling U.S. highway-legal battery-powered cars. The size of Toyota’s stake in Tesla hasn’t been fixed, Musk said in an interview.
‘Infinite Possibility’
“I’ve felt an infinite possibility about Tesla’s technology,” said Akio Toyoda, chief executive officer of Toyota, founded by his grandfather. “By partnering with Tesla, my hope is that all Toyota employees will recall that ‘venture business’ spirit.”
Daimler AG, the world’s second-biggest maker of luxury vehicles, in May 2009 invested about $50 million in Tesla, which is supplying the company with battery packs for a test fleet of electric Smart minicars.
Daimler reduced its stake in Tesla to about 5 percent in July by selling a portion of the investment to Aabar Investments PJSC, the German automaker’s largest shareholder. Tesla told Stuttgart, Germany-based Daimler about the Toyota partnership on May 19, Musk said.
The Toyota-Tesla partnership doesn’t impede Daimler’s cooperation with the California automaker, said Brigitte Bertram, a Daimler spokeswoman.
Nummi Purchase
The revival of Nummi, for 25 years a joint venture between Toyota and the former General Motors Corp., will create 1,000 jobs, California Governor Arnold Schwarzenegger said.
Musk declined to say how much his company is spending to purchase Nummi, which was shut down in April. Tesla has hired back about 90 former Nummi workers and expects to add about 50 a month, Musk said.
Nummi, in Fremont, California, had 4,700 workers and was the only factory where employees building Toyota vehicles were represented by the United Auto Workers union.
The plant’s restart “is welcome news for the state’s economy and workers after the closing of this highly productive plant,” UAW President Ron Gettelfinger said in a statement today.
Electric-car technology has been supported by U.S. policy makers including President Barack Obama as a way to reduce the nation’s oil use and dependence on foreign energy sources. Obama set a goal of getting 1 million plug-in hybrids and electric cars on U.S. roads by 2015.
Toyota Plug-In
Toyota intends to offer a short-range electric car in the U.S. and begin retail sales of a plug-in Prius hybrid in 2012.
Toyota’s American depositary receipts, each representing two ordinary shares, rose $1.59, or 2.1 percent, to $75.59 at 4:15 p.m. in New York Stock Exchange composite trading. The regular shares fell 65 yen, or 1.9 percent, to 3,355 yen in Tokyo.
Nissan is preparing to introduce its Leaf electric hatchback in Japan and the U.S. this year. Nissan Chief Executive Officer Carlos Ghosn has set a goal of leading sales of rechargeable vehicles, which he estimates may make up 10 percent of global auto demand by 2020, and is spending more than 500 billion yen ($5.54 billion) developing electric cars.
GM plans to introduce its Volt plug-in vehicle late this year. The car will initially be marketed to drivers in California, which requires large automakers to offer some vehicles with little or no tailpipe pollution.
Share Sale
Tesla, which hasn’t posted a profit in the six years since it was founded, is planning to raise $100 million in an initial share sale and has said it may spend the proceeds on acquisitions and for factories and equipment that may cost as much as $125 million this year.
The company was approved to receive a $465 million government loan to help produce the Model S sedan, which the company says will cost less than $50,000 after a federal tax credit.
Tesla has 2,000 reservations for the Model S and intends to begin higher-volume production in 2012, with a projected output of as many as 20,000 a year. The company has delivered about 1,000 of its $109,000 Roadster electric sports cars.
The company’s investors include Google Inc. co-founders Larry Page and Sergey Brin, and the government of Abu Dhabi.
--With assistance from Makiko Kitamura and Yuki Hagiwara in Tokyo and Chris Reiter in Berlin. Editors: Kevin Orland, Jamie Butters.
To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net
To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net
Thursday, April 29, 2010
E. Rex Is a 3-Wheeled Electric Hooligan
E. Rex Is a 3-Wheeled Electric Hooligan
By Chuck Squatriglia April 22, 2010
The E. Rex is the three-wheeled, electric equivalent of … well, we’re not quite sure. Something absurdly fast, ridiculously fun and more than a little impractical. But then that describes just about any vehicle capable of zero to 60 in less than 5 seconds.
Silicon Valley startup OptaMotive is building the E. Rex for the Progressive Automotive X Prize. It is essentially an electrified Campagna Motors T-Rex, which is itself a 144-mph exercise in vehicular overkill. OptaMotive says the E. Rex is three times more efficient than a Toyota Prius, delivers a range of 100 miles and has a top speed well into three digits.
Why build something so extreme?
“We wanted to focus on the driving experience,” OptaMotive founder Micheal Worry says. “We wanted a car that is exciting and fun to drive.”
Tiny, isn't it?
Worry and the rest of the crew got the idea for the car about a year ago and spent two months planning the build. They decided early on to start with a T-Rex — a three-wheeled two-seater powered by a motorcycle engine — because it provided a ready-made chassis with good brakes and suspension components.
“We didn’t want to reinvent the wheel,” says computer engineer Murat Ozkan.
Campagna gave the team a deal on a T-Rex sans engine, and OptaMotive set to work in a garage in a suburban neighborhood in Campbell, California. Tinkering around with electronics and batteries is nothing new for the team. It has won the RoboGames four times with Ziggy, a robot capable of, among other things, making field goals from the 40-yard line.
“We view this as basically a big robot,” Ozkan says.
E. Rex sports a water-cooled permanent-magnet DC brushless motor made by UQM. It produces 45 kilowatts (60 horsepower) continuous and 125 kilowatts (167 horsepower) peak. That might not sound like much, but the E. Rex produces 220 pound feet of torque and will weigh less than 2,000 pounds when done.
The team built the battery pack using 96 lithium–iron phosphate cells from Thunder Sky Battery. The 13.6–kilowatt-hour pack has a claimed range of 100 miles and a claimed recharge time of 2.5 hours at 220 volts and 20 amps.
The air-cooled battery pack weighs 400 pounds and cost about $10,000. OptaMotive also built the battery-management system, which monitors each cell’s temperature and voltage while ensuring even charging of cells.
Of course the E. Rex has regenerative braking to return energy to the battery, and Mazat says the regen system has 80 percent efficiency. He is confident the drivetrain should be about 90 percent efficient.
Most of the rest of the E. Rex is just as it was when it left Campagna. The chassis features triangulated side walls, a reinforced roll cage and three-point safety belts. The team is working on an enclosed body with proper doors and a windshield.
“It will be a combination of eye-catching and streamlined,” says engineer Eliot Barker.
Just how streamlined remains to be seen because the team isn’t shooting for a particular drag coefficient. They want to make sure it’s as aerodynamic as possible while still looking normal. Well, as normal as a three-wheeled car can look, anyway. The T-Rex has small frontal area and a teardrop shape, Ozkan says, so aerodynamic efficiency shouldn’t be a problem.
So what’s it like on the road?
Worry wouldn’t let us drive it — something about insurance, liability and it being the only one — so we had to ride shotgun. The first thing you notice about the E. Rex is it’s tiny. At just 138 inches long and 42 inches tall, it’s smaller than a first-generation Honda CR-X. Getting in is a challenge, as you snake through the roll cage. Once inside things are very tight. The E. Rex makes the Tesla Roadster feel roomy.
Comfort aside, the E. Rex is impressively quick. Stomp on it, and it will push you, quite hard, back in your seat. The fact there’s no windshield and you’re sitting just inches off the ground makes it feel faster still. OptaMotive is shooting for a zero-to-60 time of less than five seconds, which would make it about a second slower than the T-Rex and Tesla Roadster. The E. Rex, like the T-Rex, uses a chain — a very noisy one — to drive the 10.5-inch wide rear wheel. With the current gearing, the team says E. Rex should be capable of 160 mph.
“We haven’t actually tested that,” Mazat said.
The ride is firm but not harsh, and Worry says the E. Rex handles like it’s on rails. We’ll have to take his word for it because Worry couldn’t properly wring the car out on city streets. But the T-Rex is capable of 1.3-g lateral acceleration — in other words, it sticks to the road like gum on a taxicab floor — so it’s a safe bet the E. Rex would be fun on a winding road.
“It’s like an open-wheel race car, but it handles like a normal car,” he says.
It won’t be priced like one, if it ever sees production. The T-Rex starts at $51,999, and “we think the electric would command a premium initially,” Worry says. That would come down over time, he said, but how quickly remains to be seen. But Worry says Campagna is ready to work with Optamotive should the company decide to build the E. Rex.
Monday, April 19, 2010
Toyota Hid Defect in Violation of Law, LaHood Says
http://www.businessweek.com/news/2010-04-05/toyota-hid-pedal-defect-in-violation-of-u-s-law-lahood-says.html
Toyota Hid Defect in Violation of Law, LaHood Says
April 05, 2010
By Angela Greiling Keane and Alan Ohnsman
April 6 (Bloomberg) -- Toyota Motor Corp. “knowingly hid a dangerous defect” that caused its vehicles to accelerate unexpectedly, the U.S. said, for the first time accusing the world’s largest automaker of breaking the law.
Transportation Secretary Ray LaHood proposed a record civil penalty of $16.4 million, the most the government can impose. The fine recommended yesterday escalates the confrontation between Toyota and LaHood, who initially praised the carmaker for its handling of recalls the company attributed to faulty accelerator pedals.
The fine was announced the week after Toyota reported U.S. sales rose 41 percent in March with the help of no-interest loans and discount leases, signaling the Toyota City, Japan- based company may be recovering from recalls of more than 8 million vehicles worldwide.
The Transportation Department’s action showed “safety matters and they’re going to be tough as nails,” Joan Claybrook, a former head of the National Highway Traffic Safety Administration, said in an interview. “That’s very appropriate. They caught Toyota red-handed.”
The Japanese automaker waited at least four months before telling the agency that accelerator pedals might stick, LaHood said in a statement yesterday. Companies have five business days to report safety defects, the agency said.
Toyota fell 45 yen, or 1.2 percent, to 3,770 yen at 10:36 a.m. in Tokyo Stock Exchange trading. The shares have declined 2.8 percent this year.
‘We Now Have Proof’
“We now have proof that Toyota failed to live up to its legal obligations,” LaHood said in the statement. “Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families.”
Toyota hadn’t received NHTSA’s letter on the fine, according to an e-mailed statement yesterday from the company’s North American sales unit.
“We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance,” the company said, without saying whether it will exercise its right to dispute the fine.
‘They Screwed Up’
LaHood has increasingly faulted Toyota’s response since Jan. 28, when he said he had “no criticism” of the company and Toyota “did what they’re supposed to do.”
Toyota in January recalled about 2.3 million U.S. cars and trucks for sticky accelerator pedals.
The penalty could “very possibly” be the first of multiple fines, said Claybrook, who is former president of Public Citizen, a Washington-based consumer advocacy group.
NHTSA cited documents obtained from Toyota in saying the company knew about the pedal defect since at least Sept. 29, the day it told distributors in 31 European countries and Canada to make repairs to resolve sticky-pedal complaints.
“NHTSA wants to make it clear that it was Toyota that was at fault and the agency did its best within the system,” said Alan Baum, an auto industry analyst at Baum & Associates in West Bloomfield, Michigan. He said Toyota probably won’t contest the fine, “since they’ve essentially said they screwed up.”
‘Firepower to Attorneys’
At a February congressional hearing, Toyota’s U.S. sales chief Jim Lentz told lawmakers “we failed to promptly analyze and respond to information emerging from Europe and in the United States” about the sticky pedals.
Toyota has two weeks to accept or contest the proposed fine, Olivia Alair, a Transportation Department spokeswoman, said in an e-mail. If Toyota contests the penalty and a settlement isn’t reached, “it would go to court,” she said.
“One of the biggest reasons to fight the fine would be to defend themselves from the language used by the Department of Transportation,” Ed Kim, an industry analyst for forecaster AutoPacific Inc. in Tustin, California, said in an interview. “That would seem to provide some firepower to attorneys that are suing the company.”
NHTSA’s largest civil penalty was $1 million against General Motors Corp. in 2004 to settle charges that the company failed to conduct a timely recall involving windshield-wiper failures in about 581,000 vehicles.
‘Free Publicity’
“Both industry and government failed the test of putting the safety of America’s drivers first” in the Toyota recalls, Representative Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, one of three panels that has held hearings on Toyota actions, said in a statement yesterday.
The proposed NHTSA fine may help consumers suing Toyota over sudden acceleration, said Houston attorney W. Mark Lanier, who has filed class-action and individual lawsuits related to the claims.
“Toyota is spending millions of dollars on public relations right now to sway consumers or a potential jury pool,” Lanier said in a phone interview. The fine “is free publicity that counters Toyota.” The penalty probably couldn’t be introduced in court because “it’s not like a criminal finding in that there was due process,” he said.
Toyota is facing at least 177 consumer and shareholder lawsuits seeking class-action status and at least 56 suits claiming personal injuries or deaths caused by sudden acceleration incidents, according to data compiled by Bloomberg. Lanier has filed two personal injury cases and is considering filing about 100 others, including a dozen involving deaths, he said.
--With assistance from Margaret Cronin Fisk in Southfield, Michigan. Editors: Steve Geimann, Larry Liebert
To contact the reporters on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net.
To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net
Toyota Hid Defect in Violation of Law, LaHood Says
April 05, 2010
By Angela Greiling Keane and Alan Ohnsman
April 6 (Bloomberg) -- Toyota Motor Corp. “knowingly hid a dangerous defect” that caused its vehicles to accelerate unexpectedly, the U.S. said, for the first time accusing the world’s largest automaker of breaking the law.
Transportation Secretary Ray LaHood proposed a record civil penalty of $16.4 million, the most the government can impose. The fine recommended yesterday escalates the confrontation between Toyota and LaHood, who initially praised the carmaker for its handling of recalls the company attributed to faulty accelerator pedals.
The fine was announced the week after Toyota reported U.S. sales rose 41 percent in March with the help of no-interest loans and discount leases, signaling the Toyota City, Japan- based company may be recovering from recalls of more than 8 million vehicles worldwide.
The Transportation Department’s action showed “safety matters and they’re going to be tough as nails,” Joan Claybrook, a former head of the National Highway Traffic Safety Administration, said in an interview. “That’s very appropriate. They caught Toyota red-handed.”
The Japanese automaker waited at least four months before telling the agency that accelerator pedals might stick, LaHood said in a statement yesterday. Companies have five business days to report safety defects, the agency said.
Toyota fell 45 yen, or 1.2 percent, to 3,770 yen at 10:36 a.m. in Tokyo Stock Exchange trading. The shares have declined 2.8 percent this year.
‘We Now Have Proof’
“We now have proof that Toyota failed to live up to its legal obligations,” LaHood said in the statement. “Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families.”
Toyota hadn’t received NHTSA’s letter on the fine, according to an e-mailed statement yesterday from the company’s North American sales unit.
“We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance,” the company said, without saying whether it will exercise its right to dispute the fine.
‘They Screwed Up’
LaHood has increasingly faulted Toyota’s response since Jan. 28, when he said he had “no criticism” of the company and Toyota “did what they’re supposed to do.”
Toyota in January recalled about 2.3 million U.S. cars and trucks for sticky accelerator pedals.
The penalty could “very possibly” be the first of multiple fines, said Claybrook, who is former president of Public Citizen, a Washington-based consumer advocacy group.
NHTSA cited documents obtained from Toyota in saying the company knew about the pedal defect since at least Sept. 29, the day it told distributors in 31 European countries and Canada to make repairs to resolve sticky-pedal complaints.
“NHTSA wants to make it clear that it was Toyota that was at fault and the agency did its best within the system,” said Alan Baum, an auto industry analyst at Baum & Associates in West Bloomfield, Michigan. He said Toyota probably won’t contest the fine, “since they’ve essentially said they screwed up.”
‘Firepower to Attorneys’
At a February congressional hearing, Toyota’s U.S. sales chief Jim Lentz told lawmakers “we failed to promptly analyze and respond to information emerging from Europe and in the United States” about the sticky pedals.
Toyota has two weeks to accept or contest the proposed fine, Olivia Alair, a Transportation Department spokeswoman, said in an e-mail. If Toyota contests the penalty and a settlement isn’t reached, “it would go to court,” she said.
“One of the biggest reasons to fight the fine would be to defend themselves from the language used by the Department of Transportation,” Ed Kim, an industry analyst for forecaster AutoPacific Inc. in Tustin, California, said in an interview. “That would seem to provide some firepower to attorneys that are suing the company.”
NHTSA’s largest civil penalty was $1 million against General Motors Corp. in 2004 to settle charges that the company failed to conduct a timely recall involving windshield-wiper failures in about 581,000 vehicles.
‘Free Publicity’
“Both industry and government failed the test of putting the safety of America’s drivers first” in the Toyota recalls, Representative Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, one of three panels that has held hearings on Toyota actions, said in a statement yesterday.
The proposed NHTSA fine may help consumers suing Toyota over sudden acceleration, said Houston attorney W. Mark Lanier, who has filed class-action and individual lawsuits related to the claims.
“Toyota is spending millions of dollars on public relations right now to sway consumers or a potential jury pool,” Lanier said in a phone interview. The fine “is free publicity that counters Toyota.” The penalty probably couldn’t be introduced in court because “it’s not like a criminal finding in that there was due process,” he said.
Toyota is facing at least 177 consumer and shareholder lawsuits seeking class-action status and at least 56 suits claiming personal injuries or deaths caused by sudden acceleration incidents, according to data compiled by Bloomberg. Lanier has filed two personal injury cases and is considering filing about 100 others, including a dozen involving deaths, he said.
--With assistance from Margaret Cronin Fisk in Southfield, Michigan. Editors: Steve Geimann, Larry Liebert
To contact the reporters on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net.
To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net
Saturday, April 3, 2010
Toyota dismisses account of runaway Prius
Robalini's Note: Here's the part of the story that shows Toyota is still engaging in a pattern of lies and coverup:
Toyota said it believes a CHP officer's account that he smelled burning brakes while guiding Sikes on the freeway.
"That is the puzzling aspect of this," Michels said.
http://www.google.com/hostednews/ap/article/ALeqM5gc_pIFqke7WxQovY3MnhcyIYiLgwD9EFD2J80
Toyota dismisses account of runaway Prius
By ELLIOT SPAGAT and TOM KRISHER
3-16-10
SAN DIEGO — Toyota Motor Corp. dismissed the story of a man who claimed his Prius sped out of control on the California freeway, saying Monday that its own tests found the car's gas pedal and backup safety system were working just fine.
The automaker stopped short of saying James Sikes had staged a hoax last week but said his account did not square with a series of tests it conducted on the gas-electric hybrid.
"We have no opinion on his account, what he's been saying, other than that the scenario is not consistent with the technical findings," spokesman Mike Michels told a press conference.
The episode March 8 was among the highest-profile headaches Toyota has suffered in recent months. It recalled more than 8 million cars and trucks worldwide because gas pedals can become stuck in the down position or be snagged by floor mats. Dozens of Toyota drivers have reported problems even after their cars were supposedly fixed.
In Sikes' case, Toyota said it found he rapidly pressed the gas and brakes back and forth 250 times, the maximum amount of data that the car's self-diagnostic system can collect. That account appears to contradict Sikes' statement — backed by the California Highway Patrol — that he was frantically slamming the brakes, at one point lifting his buttocks off the seat.
Toyota officials said they believed Sikes was hitting the pedals lightly, which would have prevented the brake-override system from kicking in.
The company had no explanation for discrepancies with Sikes' account but confirmed the brakes were overheated and the pads worn. Bob Waltz, vice president of product, quality and service support at Toyota Motor Sales USA., said the front brakes were "metal to metal."
Toyota said it believes a CHP officer's account that he smelled burning brakes while guiding Sikes on the freeway.
"That is the puzzling aspect of this," Michels said.
Sikes has said his car raced to 94 mph on a freeway near San Diego. He called 911, but did not respond to instructions from the dispatcher to shut off the engine or throw the car into neutral.
The CHP officer ultimately helped bring the car safely to a stop by telling him over a loudspeaker to hit the emergency brake and foot brake simultaneously. Sikes spoke to reporters shortly after the incident but has since kept a low profile.
Toyota said it had conducted two days of tests on the car last week. It found severe wear and damage on the front brakes from overheating, but the rear brakes and parking brake were in good condition.
And the rest of the car was fine, the automaker said — the gas pedal was not slowed by friction, the floor mat was not even touching the pedal, and a system that cuts the engine power when the gas and brakes are pressed at the same time was working.
Toyota said its tests showed the car's electronics were working fine.
"If there were some kind of electronic problem, you would think it might actually stay permanent," Michels said. "When your TV goes on the fritz, when electronic stuff goes on the fritz, it doesn't just do it once and never do it again."
A statement from Sikes' attorney, John H. Gomez, said the firm would not comment further on the episode until a government investigation was complete. Sikes did not respond to phone messages.
The company also said the push-button power switch worked normally and shut the car off when pressed for three seconds, and that the shift lever worked normally, so the car could be shifted into neutral.
The power management computer contained no diagnostic trouble codes, and the dashboard malfunction lights were not activated, Toyota said.
Earlier in the day, federal regulators said they were reviewing data from the gas-electric hybrid but so far had not found anything to explain the out-of-control acceleration reported by Sikes.
"We would caution people that our work continues and that we may never know exactly what happened with this car," the National Highway Traffic Safety Administration said in a statement.
On Sunday, Gomez said it was neither surprising nor significant that inspectors had been unable to recreate the conditions reported by Sikes.
"They have never been able to replicate an incident of sudden acceleration. Mr. Sikes never had a problem in the three years he owned this vehicle," he said.
But Rep. Darrell Issa, R-Calif., suggested it raised questions about Sikes' story.
"It doesn't mean it didn't happen, but let's understand, it doesn't mean it did happen," Issa said on CBS' "The Early Show."
Toyota spokesman John Hanson said the event data recorder — a car's version of the "black box" inspected after plane crashes — would be of no use to investigators because it only stores information when the airbags are deployed. The box only stores four to six seconds of information before the airbags go off, he said.
But investigators were able to download valuable information from the hybrid's control computer system, which showed the car was functioning normally, Toyota said.
Toyota will give the car back to Sikes soon, Michels said, indicating that no further testing will be done for electronic causes.
Two outside experts, however, said it would be a mistake not to test for unknown electronic gremlins, such as electromagnetic interference, static electricity or software glitches. Those problems, they said, can gum up electronics and then disappear.
It's possible the Prius' backup system could have been compromised by an electronic glitch, said Keith Armstrong, a British electronic engineer and consultant who advises companies on electromagnetic interference.
Toyota challenged Sikes' account that a dealer turned him away when he brought the car in a few weeks ago after he got a recall notice. It said Toyota of El Cajon, east of San Diego, checked his floor mats and told him he would get a notice when they would be replaced.
The 2008 Prius is subject to a recall for floor mats but not sticky accelerators.
Krisher reported from Detroit. Associated Press Writer Ken Thomas in Washington contributed to this report.
Toyota said it believes a CHP officer's account that he smelled burning brakes while guiding Sikes on the freeway.
"That is the puzzling aspect of this," Michels said.
http://www.google.com/hostednews/ap/article/ALeqM5gc_pIFqke7WxQovY3MnhcyIYiLgwD9EFD2J80
Toyota dismisses account of runaway Prius
By ELLIOT SPAGAT and TOM KRISHER
3-16-10
SAN DIEGO — Toyota Motor Corp. dismissed the story of a man who claimed his Prius sped out of control on the California freeway, saying Monday that its own tests found the car's gas pedal and backup safety system were working just fine.
The automaker stopped short of saying James Sikes had staged a hoax last week but said his account did not square with a series of tests it conducted on the gas-electric hybrid.
"We have no opinion on his account, what he's been saying, other than that the scenario is not consistent with the technical findings," spokesman Mike Michels told a press conference.
The episode March 8 was among the highest-profile headaches Toyota has suffered in recent months. It recalled more than 8 million cars and trucks worldwide because gas pedals can become stuck in the down position or be snagged by floor mats. Dozens of Toyota drivers have reported problems even after their cars were supposedly fixed.
In Sikes' case, Toyota said it found he rapidly pressed the gas and brakes back and forth 250 times, the maximum amount of data that the car's self-diagnostic system can collect. That account appears to contradict Sikes' statement — backed by the California Highway Patrol — that he was frantically slamming the brakes, at one point lifting his buttocks off the seat.
Toyota officials said they believed Sikes was hitting the pedals lightly, which would have prevented the brake-override system from kicking in.
The company had no explanation for discrepancies with Sikes' account but confirmed the brakes were overheated and the pads worn. Bob Waltz, vice president of product, quality and service support at Toyota Motor Sales USA., said the front brakes were "metal to metal."
Toyota said it believes a CHP officer's account that he smelled burning brakes while guiding Sikes on the freeway.
"That is the puzzling aspect of this," Michels said.
Sikes has said his car raced to 94 mph on a freeway near San Diego. He called 911, but did not respond to instructions from the dispatcher to shut off the engine or throw the car into neutral.
The CHP officer ultimately helped bring the car safely to a stop by telling him over a loudspeaker to hit the emergency brake and foot brake simultaneously. Sikes spoke to reporters shortly after the incident but has since kept a low profile.
Toyota said it had conducted two days of tests on the car last week. It found severe wear and damage on the front brakes from overheating, but the rear brakes and parking brake were in good condition.
And the rest of the car was fine, the automaker said — the gas pedal was not slowed by friction, the floor mat was not even touching the pedal, and a system that cuts the engine power when the gas and brakes are pressed at the same time was working.
Toyota said its tests showed the car's electronics were working fine.
"If there were some kind of electronic problem, you would think it might actually stay permanent," Michels said. "When your TV goes on the fritz, when electronic stuff goes on the fritz, it doesn't just do it once and never do it again."
A statement from Sikes' attorney, John H. Gomez, said the firm would not comment further on the episode until a government investigation was complete. Sikes did not respond to phone messages.
The company also said the push-button power switch worked normally and shut the car off when pressed for three seconds, and that the shift lever worked normally, so the car could be shifted into neutral.
The power management computer contained no diagnostic trouble codes, and the dashboard malfunction lights were not activated, Toyota said.
Earlier in the day, federal regulators said they were reviewing data from the gas-electric hybrid but so far had not found anything to explain the out-of-control acceleration reported by Sikes.
"We would caution people that our work continues and that we may never know exactly what happened with this car," the National Highway Traffic Safety Administration said in a statement.
On Sunday, Gomez said it was neither surprising nor significant that inspectors had been unable to recreate the conditions reported by Sikes.
"They have never been able to replicate an incident of sudden acceleration. Mr. Sikes never had a problem in the three years he owned this vehicle," he said.
But Rep. Darrell Issa, R-Calif., suggested it raised questions about Sikes' story.
"It doesn't mean it didn't happen, but let's understand, it doesn't mean it did happen," Issa said on CBS' "The Early Show."
Toyota spokesman John Hanson said the event data recorder — a car's version of the "black box" inspected after plane crashes — would be of no use to investigators because it only stores information when the airbags are deployed. The box only stores four to six seconds of information before the airbags go off, he said.
But investigators were able to download valuable information from the hybrid's control computer system, which showed the car was functioning normally, Toyota said.
Toyota will give the car back to Sikes soon, Michels said, indicating that no further testing will be done for electronic causes.
Two outside experts, however, said it would be a mistake not to test for unknown electronic gremlins, such as electromagnetic interference, static electricity or software glitches. Those problems, they said, can gum up electronics and then disappear.
It's possible the Prius' backup system could have been compromised by an electronic glitch, said Keith Armstrong, a British electronic engineer and consultant who advises companies on electromagnetic interference.
Toyota challenged Sikes' account that a dealer turned him away when he brought the car in a few weeks ago after he got a recall notice. It said Toyota of El Cajon, east of San Diego, checked his floor mats and told him he would get a notice when they would be replaced.
The 2008 Prius is subject to a recall for floor mats but not sticky accelerators.
Krisher reported from Detroit. Associated Press Writer Ken Thomas in Washington contributed to this report.
Thursday, March 18, 2010
Ex-Toyota lawyer says documents prove company hid damaging information
http://www.cnn.com/2010/US/03/10/toyota.whistleblower/
Ex-Toyota lawyer says documents prove company hid damaging information
Deborah Feyerick and Sheila Steffen, CNN
March 10, 2010
Turning the tables on Toyota
STORY HIGHLIGHTS
Lawyer kept internal documents that he says could be damaging to Toyota
Biller says he quit because of what he alleges were "criminal acts" by Toyota
He said Toyota settled one lawsuit to avoid divulging information
Los Angeles, California (CNN ) -- When former in-house defense attorney Dimitrios Biller resigned from his top post at Toyota, he walked out with something potentially more valuable than his nearly $4 million severance package.
He took some 6,000 internal documents, including memos and e-mails potentially damaging to his former employer.
"Not potentially, they are. They are very damaging," Biller said.
Biller, now entangled in litigation with the auto giant, defended the company in product liability and negligence cases from 2003 to 2007. He says he quit because of what he alleges were "criminal acts" by Toyota -- specifically, withholding information the company was legally required to turn over to plaintiffs' lawyers during litigation.
"There is a regular pattern and practice of not producing memos, minutes, reports, and e-mails," Biller said. "These documents can be used to establish liability against Toyota in product liability and negligence cases."
The documents -- some of which were reviewed by CNN -- were sent by Biller to Toyota officials. There are numerous references to so-called "Books of Knowledge," highly confidential information on design, safety systems and testing records allegedly generated by Toyota engineers on everything from roll-overs and roof safety to sudden unintended acceleration.
The chairman of a U.S. House committee investigating Toyota seems to agree with Biller, saying Toyota engaged in a "systematic disregard for the law and routine violation of court discovery orders in litigation."
Rep. Edolphus Towns, D-New York, whose committee subpoenaed Biller's documents, said "The material, I must admit, is very, very disturbing."
Toyota defends its actions, saying, "We are confident that we have acted appropriately with respect to all product liability litigation."
Yet so far, the company has fought to keep the documents confidential and away from court cases -- like Pennie Green's. The Texas native was 17 and driving to see a movie with her cousin when her life instantly changed.
"I didn't make it," she said.
A car turned in front of Green and, with no time to react, her 1997 Camry swerved, rolled over and landed upside down. "When I opened my eyes, my nose felt like it was almost touching my belly button I was so curled up."
Green never walked again. In 2005 she filed suit against Toyota, claiming the roof was defective because it didn't withstand the weight of the car like it should have.
Biller defended Toyota in that rollover case, brought by Green's lawyer, Jeff Embry.
"We certainly requested everything that had any relevance to our case at all and, in fact, we had to go to the court to have Toyota ordered to provide their information," said Embry, who added Toyota provided just enough information to show Toyota vehicles "met the minimum standards."
Green's case settled in 2006 for $1.5 million.
Included in Biller's documents is an e-mail he said he sent to his bosses summarizing negotiations. It says, "TMS [Toyota Motor Sales USA] concluded that it would be better to pay a premium to settle this case and avoid producing the 'Books of Knowledge.'"
Embry said he had no idea how close he'd come to uncovering Toyota's alleged secrets. "I think they were very careful to keep design information, very important information in Japan, out of reach of our system as much as possible," he said.
Although Toyota calls the materials "trade secrets," Embry said, "That doesn't mean that you get to keep them a secret from the court system."
So why, if Biller knew a judge had ordered all information produced, didn't he produce it? He said he tried but was stopped by a superior who told him, "You have to protect the client at all costs."
"Even if that includes," Biller asked, "committing criminal acts or violating the law?"
The answer, Biller said, was yes.
Did he break the law? "No, I did as much as I could as a lawyer for a client to not break the law," he said. "I wrote e-mail after e-mail, memo after memo, explaining the legal obligations Toyota and its affiliates needed to fulfill."
In response to Biller's documents and his allegations, Toyota spokeswoman Cindy Knight released this statement: "Mr. Biller continues to make inaccurate and misleading allegations about Toyota's conduct that we strongly dispute and will continue to fight against vigorously."
Before leaving Toyota four years ago, Biller had a nervous breakdown caused, he said, by stress. Still, he said, he is confident his e-mails left a trail showing he tried to change Toyota.
"The documents speak for themselves. I know what happened. I know exactly what happened. I know the names of the people who were responsible for it. I know where the skeletons are hidden."
As for Pennie Green, if a judge finds Toyota did hide documents, she said, "all I want is justice for that. They just need to take responsibility for their actions."
Embry has filed a motion in Texas with the state's 18th District Court to investigate whether Toyota unlawfully withheld evidence in Green's case and should be held in contempt.
So far Toyota has fought successfully to keep Biller's documents sealed and Biller from testifying.
Ex-Toyota lawyer says documents prove company hid damaging information
Deborah Feyerick and Sheila Steffen, CNN
March 10, 2010
Turning the tables on Toyota
STORY HIGHLIGHTS
Lawyer kept internal documents that he says could be damaging to Toyota
Biller says he quit because of what he alleges were "criminal acts" by Toyota
He said Toyota settled one lawsuit to avoid divulging information
Los Angeles, California (CNN ) -- When former in-house defense attorney Dimitrios Biller resigned from his top post at Toyota, he walked out with something potentially more valuable than his nearly $4 million severance package.
He took some 6,000 internal documents, including memos and e-mails potentially damaging to his former employer.
"Not potentially, they are. They are very damaging," Biller said.
Biller, now entangled in litigation with the auto giant, defended the company in product liability and negligence cases from 2003 to 2007. He says he quit because of what he alleges were "criminal acts" by Toyota -- specifically, withholding information the company was legally required to turn over to plaintiffs' lawyers during litigation.
"There is a regular pattern and practice of not producing memos, minutes, reports, and e-mails," Biller said. "These documents can be used to establish liability against Toyota in product liability and negligence cases."
The documents -- some of which were reviewed by CNN -- were sent by Biller to Toyota officials. There are numerous references to so-called "Books of Knowledge," highly confidential information on design, safety systems and testing records allegedly generated by Toyota engineers on everything from roll-overs and roof safety to sudden unintended acceleration.
The chairman of a U.S. House committee investigating Toyota seems to agree with Biller, saying Toyota engaged in a "systematic disregard for the law and routine violation of court discovery orders in litigation."
Rep. Edolphus Towns, D-New York, whose committee subpoenaed Biller's documents, said "The material, I must admit, is very, very disturbing."
Toyota defends its actions, saying, "We are confident that we have acted appropriately with respect to all product liability litigation."
Yet so far, the company has fought to keep the documents confidential and away from court cases -- like Pennie Green's. The Texas native was 17 and driving to see a movie with her cousin when her life instantly changed.
"I didn't make it," she said.
A car turned in front of Green and, with no time to react, her 1997 Camry swerved, rolled over and landed upside down. "When I opened my eyes, my nose felt like it was almost touching my belly button I was so curled up."
Green never walked again. In 2005 she filed suit against Toyota, claiming the roof was defective because it didn't withstand the weight of the car like it should have.
Biller defended Toyota in that rollover case, brought by Green's lawyer, Jeff Embry.
"We certainly requested everything that had any relevance to our case at all and, in fact, we had to go to the court to have Toyota ordered to provide their information," said Embry, who added Toyota provided just enough information to show Toyota vehicles "met the minimum standards."
Green's case settled in 2006 for $1.5 million.
Included in Biller's documents is an e-mail he said he sent to his bosses summarizing negotiations. It says, "TMS [Toyota Motor Sales USA] concluded that it would be better to pay a premium to settle this case and avoid producing the 'Books of Knowledge.'"
Embry said he had no idea how close he'd come to uncovering Toyota's alleged secrets. "I think they were very careful to keep design information, very important information in Japan, out of reach of our system as much as possible," he said.
Although Toyota calls the materials "trade secrets," Embry said, "That doesn't mean that you get to keep them a secret from the court system."
So why, if Biller knew a judge had ordered all information produced, didn't he produce it? He said he tried but was stopped by a superior who told him, "You have to protect the client at all costs."
"Even if that includes," Biller asked, "committing criminal acts or violating the law?"
The answer, Biller said, was yes.
Did he break the law? "No, I did as much as I could as a lawyer for a client to not break the law," he said. "I wrote e-mail after e-mail, memo after memo, explaining the legal obligations Toyota and its affiliates needed to fulfill."
In response to Biller's documents and his allegations, Toyota spokeswoman Cindy Knight released this statement: "Mr. Biller continues to make inaccurate and misleading allegations about Toyota's conduct that we strongly dispute and will continue to fight against vigorously."
Before leaving Toyota four years ago, Biller had a nervous breakdown caused, he said, by stress. Still, he said, he is confident his e-mails left a trail showing he tried to change Toyota.
"The documents speak for themselves. I know what happened. I know exactly what happened. I know the names of the people who were responsible for it. I know where the skeletons are hidden."
As for Pennie Green, if a judge finds Toyota did hide documents, she said, "all I want is justice for that. They just need to take responsibility for their actions."
Embry has filed a motion in Texas with the state's 18th District Court to investigate whether Toyota unlawfully withheld evidence in Green's case and should be held in contempt.
So far Toyota has fought successfully to keep Biller's documents sealed and Biller from testifying.
Wednesday, February 10, 2010
Woz says his Toyota Prius accelerates on its own
http://www.latimes.com/business/la-fi-toyota-wozniak3-2010feb03,0,3057333.story
Apple co-founder Steve Wozniak says his Toyota Prius accelerates on its own
Apple Inc. co-founder Steve "Woz" Wozniak is famous for collecting technology he likes, including Segways, iPhones and Priuses.
Jessica Guynn
February 3, 2010
Apple Inc. co-founder Steve "Woz" Wozniak has seen his share of software glitches in the gadgets he has created and in those he collects.
But Wozniak said he was surprised several months ago when his 2010 Toyota Prius started accelerating on its own -- to as much as 97 mph -- when he used cruise control to increase the vehicle's speed. He said he had to tap the brakes to stop the car from accelerating.
Wozniak, 59, wanted to alert Toyota Motor Corp. and the National Highway Traffic Safety Administration to the possible safety issue, but he grew frustrated when no one would listen.
Thanks to a media blitz Tuesday -- including an appearance on CNN -- Toyota engineers are going to borrow Wozniak's car for a week to diagnose the problem, he said. A Toyota spokesman confirmed that the automaker had reached out to Wozniak.
Toyota has recalled millions of vehicles and temporarily halted sale of eight models because of reports of unintended acceleration. Toyota has not recalled Wozniak's model, which has a steering wheel-mounted radar cruise control.
Wozniak is famous for collecting technology he likes, including Segways, iPhones and Priuses. "No product is perfect," he said. "I would buy another one."
jessica.guynn@latimes.com
Apple co-founder Steve Wozniak says his Toyota Prius accelerates on its own
Apple Inc. co-founder Steve "Woz" Wozniak is famous for collecting technology he likes, including Segways, iPhones and Priuses.
Jessica Guynn
February 3, 2010
Apple Inc. co-founder Steve "Woz" Wozniak has seen his share of software glitches in the gadgets he has created and in those he collects.
But Wozniak said he was surprised several months ago when his 2010 Toyota Prius started accelerating on its own -- to as much as 97 mph -- when he used cruise control to increase the vehicle's speed. He said he had to tap the brakes to stop the car from accelerating.
Wozniak, 59, wanted to alert Toyota Motor Corp. and the National Highway Traffic Safety Administration to the possible safety issue, but he grew frustrated when no one would listen.
Thanks to a media blitz Tuesday -- including an appearance on CNN -- Toyota engineers are going to borrow Wozniak's car for a week to diagnose the problem, he said. A Toyota spokesman confirmed that the automaker had reached out to Wozniak.
Toyota has recalled millions of vehicles and temporarily halted sale of eight models because of reports of unintended acceleration. Toyota has not recalled Wozniak's model, which has a steering wheel-mounted radar cruise control.
Wozniak is famous for collecting technology he likes, including Segways, iPhones and Priuses. "No product is perfect," he said. "I would buy another one."
jessica.guynn@latimes.com
Tuesday, January 12, 2010
10 Things Not to Buy in 2010
http://www.smartmoney.com/spending/budgeting/10-things-not-to-buy-in-2010/
Consumer Action by AnnaMaria Andriotis
December 31, 2009
10 Things Not to Buy in 2010
Ten years ago, most homes relied on dial-up connections to access the Internet and iPods, flat-screen TVs and the Nintendo Wii didn’t exist.
As we prepare to ring in 2010, consumer should expect to see more revolutionary products supplanting old mainstays. In media, DVDs, books, newspapers and magazines will continue to lose ground to services like in-home movie rentals and gadgets like the Amazon Kindle. In big-ticket items, the push for energy efficiency will continue to influence consumer decisions on cars and home upgrades.
As a result, some consumer products appear poised for a dip in sales, which could be a prelude to obsolescence. Here are 10 items not to buy in 2010.
DVDs
The days of going to a video shop to rent a movie are at an end. In September, Blockbuster said it plans to close roughly 22% of its stores by the end of 2010; meanwhile, third-quarter revenue was down 21% from the year-ago period. (The company didn’t return calls for comment.)
Looking ahead, DVD purchases could turn cold, as well. On average, DVDs sell for at least $20 each. That’s pricier than signing up for Netflix or renting movies from cable providers’ on-demand channels. Netflix charges as little as $8.99 a month to rent one DVD at a time (with no limit to the number of monthly rentals).
Time Warner Cable offers thousands of movies on demand for around $4.99 each. Verizon Fios cable service charges $5.99 a month to download unlimited movies.
Home telephone service
It will probably take a while, but home landlines could become as archaic as the rotary phone.
According to a Centers for Disease Control and Prevention study, more than one in five U.S. homes (22.7%) had cellphones – and no landlines – during the first half of 2009, up from 10.5% during the same period in 2006.
Ditching your home phone is easier now than it has been in the past, as cell phone companies compete for greater market share and alternatives to the home landline continue growing. For example, magicJack provides phone service when it’s plugged into a computer’s USB port and a home phone. It costs $39.95 and includes a one-year license for calls in the U.S. and Canada; after that, service costs $19.95 per year. (By contrast, Time Warner Cable’s digital home phone service costs $39.95 per month.)
And, consider Skype, which is free when you communicate with other Skype users; this software application uses the Internet as a platform to make calls, hold video conferences and send instant messages.
External hard drives
Consumers who keep their computers for years and upload thousands of songs, videos, movies and photos will need to get more space at some point.
External hard drives are one option, but an up-and-coming alternative might be simpler and save you another transition down the road. Online backup services, like Carbonite.com or Mozy.com, allow users to back up data over the Internet.
These services are more expensive than purchasing an external hard drive, which typically starts at around $70. At Carbonite.com, a one-year subscription starts at $54.95, and at Mozy.com monthly subscription costs total $54.45 for a year.
Smartphone also-rans
In the past few years, several smartphones hit the market with similar features to the iPhone and BlackBerry, but they haven’t generated the same buzz. As a result, fewer developers are likely to create applications and other products that cater to those phones.
Today, the BlackBerry dominates the smartphone market with 40% market share, followed by the iPhone with 25%, according to data released by ComScore in December. In the near term, both are expected to stay at the top. ComScore found that most consumers who’ll be shopping for smartphones in the next three months plan to purchase a Blackberry (51%) or an iPhone (20%).
By contrast, only 5% of respondents said they planned to purchase T-Mobile’s MyTouch. The Palm Pre and Palm Centro received 2% and 1% of the vote, respectively.
A possible upcoming competitor that could shake up the space is Google’s Android. According to ComScore, as of October, the Android’s market share had doubled to 3.5% in the past year.
Compact digital cameras
For nearly a decade, digital compact cameras were must-haves for most consumers.
But during the past several years, another type of digital camera has been slowly rising in popularity: the single-lens reflex (SLR) camera, from manufacturers including Nikon, Canon, Sony and Olympus. Although bulkier, these cameras produce pictures that more accurately represent what’s in their viewfinders than those that use older technology.
They’re also pricier. For example, Canon’s digital compact cameras start at $110, while the SLRs start at $570.
Newspaper subscriptions
The past few years have been unkind to the publishing industry.
In 2008, newspaper advertising revenues declined by 17.7%, according to the Newspaper Association of America. Meanwhile, average daily circulation at 379 newspapers fell 10.6% from April through September 2009, compared to the same period a year ago, according to the Audit Bureau of Circulations.
Magazines haven’t fared any better. In 2009, more than 360 magazines shut down. During the first half of 2009, ad pages fell 27.9% when compared to the same period in 2008, according to Publishers Information Bureau.
The morning newspaper has been replaced by a growing online media presence – much of which is accessible for free. The Amazon Kindle – even with its price tag of around $250 – and other eBook readers could increasingly become one-stop sources to access newspapers, magazines and books.
CDs
When was the last time you bought a CD or even walked into a record store?
The past decade was one of the worst for the industry. In the beginning, there was Napster. Then came iTunes, which was introduced in 2001 and offered affordable pricing and easy accessibility. Face it, CDs aren’t coming back.
Record stores are feeling the pinch. Most Virgin Megastores in the U.S. have shut down following declines in sales and revenues. In 2004, Tower Records entered bankruptcy and by 2006 most locations had closed.
New college textbooks
Unless a student absolutely needs brand-new textbooks, they can use several alternatives to save.
Shop for used textbooks, which can help you save 70% to 90% off the retail price, says Mike Gatti, the executive director at the Retail Advertising and Marketing Association, a trade group. Check out web sites like CheapestTextbooks.com, Booksprice.com or Amazon.com. Many college bookstores also sell used texts.
Another option is downloading books online. Sites like Coursesmart.com sell subscriptions to digital copies of more than 7,000 textbooks. TextbookMedia.com allows students to download textbooks for free. You can also rent textbooks on Chegg.com.
Gas-guzzling cars
Skyrocketing gasoline prices dominated headlines during most of the decade, and they remain volatile.
The Energy Information Administration estimates that crude oil prices will average around $77 a barrel for the fourth quarter of 2009, up from $42.90 in the first quarter. The EIA also projects prices will rise in 2010 to their highest point in more than two years: $81.33 a barrel.
Recent announcements by car manufacturers to mass produce fuel-efficient cars could help push consumers away from gas-guzzling vehicles.
According to the Department of Energy, the most efficient cars include the Honda Civic Hybrid, which gets 40 miles per gallon (mpg) in the city and 45 mpg on the highway, the Volkswagen Jetta and Golf (both run on diesel), which each get 30 mpg in the city and 41 mpg on the highway, and the Toyota Prius hybrid (51/48 mpg).
Energy-inefficient homes and appliances
Ten years ago, shopping for home upgrades involved looking at a product’s functionality and aesthetic. Now, there’s another component: energy efficiency.
Today, the products most touted by manufacturers and retailers are those that are Energy Star certified and those that meet new federal environmental standards – most of which have higher price tags than their counterparts but help to lower heating and cooling bills.
The government is offering a federal tax credit of up to $1,500 on energy-efficient home upgrades through Dec. 31, 2016. But many are set to expire by Dec. 31, 2010; these include eligible insulation, roofs and windows and doors.
Consumer Action by AnnaMaria Andriotis
December 31, 2009
10 Things Not to Buy in 2010
Ten years ago, most homes relied on dial-up connections to access the Internet and iPods, flat-screen TVs and the Nintendo Wii didn’t exist.
As we prepare to ring in 2010, consumer should expect to see more revolutionary products supplanting old mainstays. In media, DVDs, books, newspapers and magazines will continue to lose ground to services like in-home movie rentals and gadgets like the Amazon Kindle. In big-ticket items, the push for energy efficiency will continue to influence consumer decisions on cars and home upgrades.
As a result, some consumer products appear poised for a dip in sales, which could be a prelude to obsolescence. Here are 10 items not to buy in 2010.
DVDs
The days of going to a video shop to rent a movie are at an end. In September, Blockbuster said it plans to close roughly 22% of its stores by the end of 2010; meanwhile, third-quarter revenue was down 21% from the year-ago period. (The company didn’t return calls for comment.)
Looking ahead, DVD purchases could turn cold, as well. On average, DVDs sell for at least $20 each. That’s pricier than signing up for Netflix or renting movies from cable providers’ on-demand channels. Netflix charges as little as $8.99 a month to rent one DVD at a time (with no limit to the number of monthly rentals).
Time Warner Cable offers thousands of movies on demand for around $4.99 each. Verizon Fios cable service charges $5.99 a month to download unlimited movies.
Home telephone service
It will probably take a while, but home landlines could become as archaic as the rotary phone.
According to a Centers for Disease Control and Prevention study, more than one in five U.S. homes (22.7%) had cellphones – and no landlines – during the first half of 2009, up from 10.5% during the same period in 2006.
Ditching your home phone is easier now than it has been in the past, as cell phone companies compete for greater market share and alternatives to the home landline continue growing. For example, magicJack provides phone service when it’s plugged into a computer’s USB port and a home phone. It costs $39.95 and includes a one-year license for calls in the U.S. and Canada; after that, service costs $19.95 per year. (By contrast, Time Warner Cable’s digital home phone service costs $39.95 per month.)
And, consider Skype, which is free when you communicate with other Skype users; this software application uses the Internet as a platform to make calls, hold video conferences and send instant messages.
External hard drives
Consumers who keep their computers for years and upload thousands of songs, videos, movies and photos will need to get more space at some point.
External hard drives are one option, but an up-and-coming alternative might be simpler and save you another transition down the road. Online backup services, like Carbonite.com or Mozy.com, allow users to back up data over the Internet.
These services are more expensive than purchasing an external hard drive, which typically starts at around $70. At Carbonite.com, a one-year subscription starts at $54.95, and at Mozy.com monthly subscription costs total $54.45 for a year.
Smartphone also-rans
In the past few years, several smartphones hit the market with similar features to the iPhone and BlackBerry, but they haven’t generated the same buzz. As a result, fewer developers are likely to create applications and other products that cater to those phones.
Today, the BlackBerry dominates the smartphone market with 40% market share, followed by the iPhone with 25%, according to data released by ComScore in December. In the near term, both are expected to stay at the top. ComScore found that most consumers who’ll be shopping for smartphones in the next three months plan to purchase a Blackberry (51%) or an iPhone (20%).
By contrast, only 5% of respondents said they planned to purchase T-Mobile’s MyTouch. The Palm Pre and Palm Centro received 2% and 1% of the vote, respectively.
A possible upcoming competitor that could shake up the space is Google’s Android. According to ComScore, as of October, the Android’s market share had doubled to 3.5% in the past year.
Compact digital cameras
For nearly a decade, digital compact cameras were must-haves for most consumers.
But during the past several years, another type of digital camera has been slowly rising in popularity: the single-lens reflex (SLR) camera, from manufacturers including Nikon, Canon, Sony and Olympus. Although bulkier, these cameras produce pictures that more accurately represent what’s in their viewfinders than those that use older technology.
They’re also pricier. For example, Canon’s digital compact cameras start at $110, while the SLRs start at $570.
Newspaper subscriptions
The past few years have been unkind to the publishing industry.
In 2008, newspaper advertising revenues declined by 17.7%, according to the Newspaper Association of America. Meanwhile, average daily circulation at 379 newspapers fell 10.6% from April through September 2009, compared to the same period a year ago, according to the Audit Bureau of Circulations.
Magazines haven’t fared any better. In 2009, more than 360 magazines shut down. During the first half of 2009, ad pages fell 27.9% when compared to the same period in 2008, according to Publishers Information Bureau.
The morning newspaper has been replaced by a growing online media presence – much of which is accessible for free. The Amazon Kindle – even with its price tag of around $250 – and other eBook readers could increasingly become one-stop sources to access newspapers, magazines and books.
CDs
When was the last time you bought a CD or even walked into a record store?
The past decade was one of the worst for the industry. In the beginning, there was Napster. Then came iTunes, which was introduced in 2001 and offered affordable pricing and easy accessibility. Face it, CDs aren’t coming back.
Record stores are feeling the pinch. Most Virgin Megastores in the U.S. have shut down following declines in sales and revenues. In 2004, Tower Records entered bankruptcy and by 2006 most locations had closed.
New college textbooks
Unless a student absolutely needs brand-new textbooks, they can use several alternatives to save.
Shop for used textbooks, which can help you save 70% to 90% off the retail price, says Mike Gatti, the executive director at the Retail Advertising and Marketing Association, a trade group. Check out web sites like CheapestTextbooks.com, Booksprice.com or Amazon.com. Many college bookstores also sell used texts.
Another option is downloading books online. Sites like Coursesmart.com sell subscriptions to digital copies of more than 7,000 textbooks. TextbookMedia.com allows students to download textbooks for free. You can also rent textbooks on Chegg.com.
Gas-guzzling cars
Skyrocketing gasoline prices dominated headlines during most of the decade, and they remain volatile.
The Energy Information Administration estimates that crude oil prices will average around $77 a barrel for the fourth quarter of 2009, up from $42.90 in the first quarter. The EIA also projects prices will rise in 2010 to their highest point in more than two years: $81.33 a barrel.
Recent announcements by car manufacturers to mass produce fuel-efficient cars could help push consumers away from gas-guzzling vehicles.
According to the Department of Energy, the most efficient cars include the Honda Civic Hybrid, which gets 40 miles per gallon (mpg) in the city and 45 mpg on the highway, the Volkswagen Jetta and Golf (both run on diesel), which each get 30 mpg in the city and 41 mpg on the highway, and the Toyota Prius hybrid (51/48 mpg).
Energy-inefficient homes and appliances
Ten years ago, shopping for home upgrades involved looking at a product’s functionality and aesthetic. Now, there’s another component: energy efficiency.
Today, the products most touted by manufacturers and retailers are those that are Energy Star certified and those that meet new federal environmental standards – most of which have higher price tags than their counterparts but help to lower heating and cooling bills.
The government is offering a federal tax credit of up to $1,500 on energy-efficient home upgrades through Dec. 31, 2016. But many are set to expire by Dec. 31, 2010; these include eligible insulation, roofs and windows and doors.
Thursday, December 3, 2009
Ford Fusion Named Motor Trend Car of the Year
http://autos.yahoo.com/articles/autos_content_landing_pages/1167/ford-fusion-named-motor-trend-car-of-the-year/
Ford Fusion Named Motor Trend Car of the Year
Dee-Ann Durbin, AP Auto Writer
DETROIT (AP) -- The 2010 Ford Fusion was named Motor Trend magazine's car of the year Tuesday, beating out the Toyota Prius, BMW 7-Series, Chevrolet Camaro and others in the closely watched competition.
It was yet another accolade for Ford Motor Co.'s midsize sedan, which got high reliability scores in the most recent rankings from Consumer Reports and was the top-selling car made by a Detroit automaker through October. U.S. Fusion sales were up 15 percent in the first 10 months of this year, to 148,045, despite a 25 percent drop in overall car sales.
Still, the mid-size Fusion continues to lag behind the Toyota Camry and Honda Accord -- perennial leaders in the competitive U.S. mid-size market.
Motor Trend said the Fusion can compete with the Camry and Accord in performance, comfort and fuel efficiency. It praised Ford for offering several versions of the Fusion, including a fuel-efficient gas-electric hybrid and a sporty version with a V-6 engine.
"Ford has proven its resilience in these tough times by delivering to market a car with broad appeal to a broad range of consumers," Motor Trend Editor in Chief Angus MacKenzie said in a statement.
Motor Trend considered 23 new or significantly refreshed vehicles. The Fusion, introduced in the 2006 model year, was redesigned for 2010 with a new lineup of engines and transmissions, new exterior and interior and new options, including the Sync entertainment system and a blind-spot warning system.
Derrick Kuzak, Ford's group vice president of global product development, said the 2010 Fusion has a sportier look and better fuel economy than previous versions. It gets 34 miles per gallon on the highway when equipped with a four-cylinder engine and six-speed automatic transmission. The gas-electric hybrid version gets 41 miles per gallon in the city.
The Mercedes-Benz E-Class sedan, Buick LaCrosse, Lexus HS 250h and Hyundai Genesis coupe were among the cars Motor Trend considered. The Fusion also beat out other Ford models, including the Mustang sports car and Taurus sedan.
It was the first time a Ford car had won since 2003, when the Ford Thunderbird got the honor, Kuzak said. Ford's 2009 F-150 was Motor Trend's truck of the year last fall. The Nissan GT-R was the car of the year for 2009.
"It reinforces the progress that we've made, particularly on the car side of the business," Kuzak told The Associated Press. "When people think of trucks they think Ford, but we needed to put Ford cars and crossovers in people's consideration."
Motor Trend conducts road tests on each vehicle and judges vehicles in six categories: design advancement, engineering excellence, intended function, efficiency, safety and value.
Ford Fusion Named Motor Trend Car of the Year
Dee-Ann Durbin, AP Auto Writer
DETROIT (AP) -- The 2010 Ford Fusion was named Motor Trend magazine's car of the year Tuesday, beating out the Toyota Prius, BMW 7-Series, Chevrolet Camaro and others in the closely watched competition.
It was yet another accolade for Ford Motor Co.'s midsize sedan, which got high reliability scores in the most recent rankings from Consumer Reports and was the top-selling car made by a Detroit automaker through October. U.S. Fusion sales were up 15 percent in the first 10 months of this year, to 148,045, despite a 25 percent drop in overall car sales.
Still, the mid-size Fusion continues to lag behind the Toyota Camry and Honda Accord -- perennial leaders in the competitive U.S. mid-size market.
Motor Trend said the Fusion can compete with the Camry and Accord in performance, comfort and fuel efficiency. It praised Ford for offering several versions of the Fusion, including a fuel-efficient gas-electric hybrid and a sporty version with a V-6 engine.
"Ford has proven its resilience in these tough times by delivering to market a car with broad appeal to a broad range of consumers," Motor Trend Editor in Chief Angus MacKenzie said in a statement.
Motor Trend considered 23 new or significantly refreshed vehicles. The Fusion, introduced in the 2006 model year, was redesigned for 2010 with a new lineup of engines and transmissions, new exterior and interior and new options, including the Sync entertainment system and a blind-spot warning system.
Derrick Kuzak, Ford's group vice president of global product development, said the 2010 Fusion has a sportier look and better fuel economy than previous versions. It gets 34 miles per gallon on the highway when equipped with a four-cylinder engine and six-speed automatic transmission. The gas-electric hybrid version gets 41 miles per gallon in the city.
The Mercedes-Benz E-Class sedan, Buick LaCrosse, Lexus HS 250h and Hyundai Genesis coupe were among the cars Motor Trend considered. The Fusion also beat out other Ford models, including the Mustang sports car and Taurus sedan.
It was the first time a Ford car had won since 2003, when the Ford Thunderbird got the honor, Kuzak said. Ford's 2009 F-150 was Motor Trend's truck of the year last fall. The Nissan GT-R was the car of the year for 2009.
"It reinforces the progress that we've made, particularly on the car side of the business," Kuzak told The Associated Press. "When people think of trucks they think Ford, but we needed to put Ford cars and crossovers in people's consideration."
Motor Trend conducts road tests on each vehicle and judges vehicles in six categories: design advancement, engineering excellence, intended function, efficiency, safety and value.
Friday, August 14, 2009
GM says new Volt could get 230 mpg in city driving
http://www.google.com/hostednews/ap/article/ALeqM5gTbzGj-FRO_vOw4xVy1tOG6DBn_wD9A0THOO0
GM says new Volt could get 230 mpg in city driving
By KIMBERLY S. JOHNSON (AP)
8-11-9
WARREN, Mich. — General Motors said Tuesday its Chevrolet Volt electric car could get 230 mpg in city driving, making it the first American vehicle to achieve triple-digit fuel economy if that figure is confirmed by federal regulators.
But when the four-door family sedan hits showrooms late next year, its efficiency will come with a steep sticker price: $40,000.
Still, the Volt's fuel efficiency would be four times more than the popular Toyota Prius hybrid, the most efficient car now sold in the U.S.
Most automakers are working on similar designs, but GM would offer the first mainstream plug-in with the Volt, which seats four and was introduced at the 2007 Detroit auto show.
The Volt will join a growing fleet of cars and trucks powered by systems other than internal combustion engines.
Unlike the Prius and other traditional hybrids, the Volt is powered by an electric motor and a battery pack with a 40-mile range. After that, a small internal combustion engine kicks in to generate electricity for a total range of 300 miles. The battery pack can be recharged from a standard home outlet.
Hybrids use a small internal combustion engine combined with a high-powered battery to boost fuel efficiency. Toyota's Prius — which starts at about $22,000 — gets 51 mpg in the city and 48 mpg on the highway.
The number of all-electric vehicles available to U.S. consumers remains limited. The Tesla Roadster, a high-end sports car with a range of 224 miles, is perhaps the best known. But its $100,000-plus price tag keeps it out of reach of all but the wealthiest drivers.
The company is working on an electric family sedan that will be priced considerably less.
Nissan Motor Co. unveiled its first electric car, the Leaf, earlier this month. Nissan said the vehicle will go on sale in Japan, the U.S. and Europe next year.
General Motors Co. is touting the 230 mpg figure following early tests that used draft guidelines from the Environmental Protection Agency for calculating the mileage of extended-range electric vehicles.
The EPA guidelines, developed with help from automakers, figure that cars such as the Volt will travel more on straight electricity in the city than on the highway. If drivers operate the Volt for less than 40 miles, in theory they could do so without using a drop of gasoline.
Highway mileage estimates for the Volt based on the EPA's methodology have yet to be released.
"We are confident the highway (mileage) will be a triple-digit," GM CEO Fritz Henderson said.
The EPA conducts testing to determine the mileage posted on new car stickers. The agency said in a statement Tuesday that it has not tested a Volt "and therefore cannot confirm the fuel economy values claimed by GM."
The EPA is working with the Society of Automotive Engineers and state and federal officials to develop testing procedures to measure the fuel efficiency of advanced vehicles, according to a draft outline of the proposal obtained by The Associated Press.
The plan could be released later this year.
It was not immediately clear how GM reached the 230 mpg in city driving, but industry officials estimated the automaker's calculation took into consideration the Volt traveling 40 miles on the electric battery and then achieving about 50 mpg when the engine kicked in.
Although Henderson would not give details on pricing, the first-generation Volt is expected to cost nearly $40,000, making it cost-prohibitive to many people even if gasoline returns to $4 per gallon.
The price of the sporty-looking sedan is expected to drop with future generations of the Volt, but GM has said government tax credits of up to $7,500 and the savings on fuel could make it more affordable, especially at 230 mpg.
"We get a little cautious about trying to forecast what fuel prices will do," said Tony Posawatz, GM's vehicle line director for the Volt. "We achieved this number, and if fuel prices go up, it certainly does get more attractive even in the near-term generation."
The mileage figure could vary as the guidelines are refined and the Volt gets further along in the manufacturing process, Posawatz said.
Chrysler Group, Ford Motor Co. and Daimler AG are all developing plug-ins and electric cars, and Toyota Motor Corp. is working on a plug-in version of its gas-electric hybrid system.
GM has produced about 30 Volts so far and is making 10 a week, Henderson said during a presentation at the company's technical center in the Detroit suburb of Warren.
Henderson said charging the Volt will cost about 40 cents a day, at about 5 cents per kilowatt hour.
GM is nearly halfway through building about 80 Volts that will look and behave like the production model, and testing is running on schedule, Posawatz said.
Two critical areas — battery life and the electronic switching between battery and engine power — are still being refined, but the car is on schedule to reach showrooms late in 2010, he said.
GM is simulating tests to make sure the new lithium-ion batteries last 10 years, Posawatz said, as well as testing battery performance in extremely hot and cold climates.
"We're further along, but we're still quite a ways from home," he said. "We're developing quite a knowledge base on all this stuff. Our confidence is growing."
The other area of new technology, switching between battery and engine power, is proceeding well, he said, with engineers just fine-tuning the operations.
"We're very pleased with the transition from when it's driving EV (electric vehicle) to when the engine and generator kick in," he said.
GM also is finishing work on the power cord, which will be durable enough that it can survive being run over by the car. The Volt, he said, will have software on board so it can be programmed to begin and end charging during off-peak electrical use hours.
It will be easy for future Volt owners living in rural and suburban areas to plug in their cars at night, but even Henderson recognized the challenge urban, apartment dwellers, or those who park their cars on the street might have recharging the Volt. There could eventually be charging stations set up by a third-party to meet such a demand, Henderson said.
GM says new Volt could get 230 mpg in city driving
By KIMBERLY S. JOHNSON (AP)
8-11-9
WARREN, Mich. — General Motors said Tuesday its Chevrolet Volt electric car could get 230 mpg in city driving, making it the first American vehicle to achieve triple-digit fuel economy if that figure is confirmed by federal regulators.
But when the four-door family sedan hits showrooms late next year, its efficiency will come with a steep sticker price: $40,000.
Still, the Volt's fuel efficiency would be four times more than the popular Toyota Prius hybrid, the most efficient car now sold in the U.S.
Most automakers are working on similar designs, but GM would offer the first mainstream plug-in with the Volt, which seats four and was introduced at the 2007 Detroit auto show.
The Volt will join a growing fleet of cars and trucks powered by systems other than internal combustion engines.
Unlike the Prius and other traditional hybrids, the Volt is powered by an electric motor and a battery pack with a 40-mile range. After that, a small internal combustion engine kicks in to generate electricity for a total range of 300 miles. The battery pack can be recharged from a standard home outlet.
Hybrids use a small internal combustion engine combined with a high-powered battery to boost fuel efficiency. Toyota's Prius — which starts at about $22,000 — gets 51 mpg in the city and 48 mpg on the highway.
The number of all-electric vehicles available to U.S. consumers remains limited. The Tesla Roadster, a high-end sports car with a range of 224 miles, is perhaps the best known. But its $100,000-plus price tag keeps it out of reach of all but the wealthiest drivers.
The company is working on an electric family sedan that will be priced considerably less.
Nissan Motor Co. unveiled its first electric car, the Leaf, earlier this month. Nissan said the vehicle will go on sale in Japan, the U.S. and Europe next year.
General Motors Co. is touting the 230 mpg figure following early tests that used draft guidelines from the Environmental Protection Agency for calculating the mileage of extended-range electric vehicles.
The EPA guidelines, developed with help from automakers, figure that cars such as the Volt will travel more on straight electricity in the city than on the highway. If drivers operate the Volt for less than 40 miles, in theory they could do so without using a drop of gasoline.
Highway mileage estimates for the Volt based on the EPA's methodology have yet to be released.
"We are confident the highway (mileage) will be a triple-digit," GM CEO Fritz Henderson said.
The EPA conducts testing to determine the mileage posted on new car stickers. The agency said in a statement Tuesday that it has not tested a Volt "and therefore cannot confirm the fuel economy values claimed by GM."
The EPA is working with the Society of Automotive Engineers and state and federal officials to develop testing procedures to measure the fuel efficiency of advanced vehicles, according to a draft outline of the proposal obtained by The Associated Press.
The plan could be released later this year.
It was not immediately clear how GM reached the 230 mpg in city driving, but industry officials estimated the automaker's calculation took into consideration the Volt traveling 40 miles on the electric battery and then achieving about 50 mpg when the engine kicked in.
Although Henderson would not give details on pricing, the first-generation Volt is expected to cost nearly $40,000, making it cost-prohibitive to many people even if gasoline returns to $4 per gallon.
The price of the sporty-looking sedan is expected to drop with future generations of the Volt, but GM has said government tax credits of up to $7,500 and the savings on fuel could make it more affordable, especially at 230 mpg.
"We get a little cautious about trying to forecast what fuel prices will do," said Tony Posawatz, GM's vehicle line director for the Volt. "We achieved this number, and if fuel prices go up, it certainly does get more attractive even in the near-term generation."
The mileage figure could vary as the guidelines are refined and the Volt gets further along in the manufacturing process, Posawatz said.
Chrysler Group, Ford Motor Co. and Daimler AG are all developing plug-ins and electric cars, and Toyota Motor Corp. is working on a plug-in version of its gas-electric hybrid system.
GM has produced about 30 Volts so far and is making 10 a week, Henderson said during a presentation at the company's technical center in the Detroit suburb of Warren.
Henderson said charging the Volt will cost about 40 cents a day, at about 5 cents per kilowatt hour.
GM is nearly halfway through building about 80 Volts that will look and behave like the production model, and testing is running on schedule, Posawatz said.
Two critical areas — battery life and the electronic switching between battery and engine power — are still being refined, but the car is on schedule to reach showrooms late in 2010, he said.
GM is simulating tests to make sure the new lithium-ion batteries last 10 years, Posawatz said, as well as testing battery performance in extremely hot and cold climates.
"We're further along, but we're still quite a ways from home," he said. "We're developing quite a knowledge base on all this stuff. Our confidence is growing."
The other area of new technology, switching between battery and engine power, is proceeding well, he said, with engineers just fine-tuning the operations.
"We're very pleased with the transition from when it's driving EV (electric vehicle) to when the engine and generator kick in," he said.
GM also is finishing work on the power cord, which will be durable enough that it can survive being run over by the car. The Volt, he said, will have software on board so it can be programmed to begin and end charging during off-peak electrical use hours.
It will be easy for future Volt owners living in rural and suburban areas to plug in their cars at night, but even Henderson recognized the challenge urban, apartment dwellers, or those who park their cars on the street might have recharging the Volt. There could eventually be charging stations set up by a third-party to meet such a demand, Henderson said.
Wednesday, July 29, 2009
Bolivia holds key to electric car future
http://news.bbc.co.uk/2/hi/business/7707847.stm
Bolivia holds key to electric car future
By Damian Kahya
BBC News, Salar de Uyuni, Bolivia
Sunday, 9 November 2008
Bolivia's lithium reserves could bring wealth to the country
High in the Andes, in a remote corner of Bolivia, lies more than half the world's reserves of a mineral that could radically reduce our reliance on dwindling fossil fuels.
Lithium carries a great promise. It could help power the fuel efficient electric or petrol-electric hybrid vehicles of the future.
But, as is the case with fossil fuels, it is a limited resource.
Lithium carbonate is already in the batteries of laptop computers and mobile phones.
It is used because it allows more energy to be stored in a lighter, smaller space than most alternatives.
And as the auto industry rushes to produce new fuel efficient and electric cars, it too is turning to lithium batteries as its first choice to boost the power of their new models.
GM has one in its new hybrid Volt, Toyota is testing one in its next generation hybrid Prius. Mercedes is testing an electric version of its Smart, while BMW is doing the same with its Mini.
And Nissan-Renault, Mitsubishi and VW are all rushing to buy or produce enough of the batteries to power their future models.
The best of the pure electric cars can reach ranges of more than 150 kilometres per charge.
More is needed
But there is a problem.
Mitsubishi, which plans to release its own electric car soon, estimates that the demand for lithium will outstrip supply in less than 10 years unless new sources are found.
And they have ended up in Bolivia.
"The demand for lithium won't double but increase by five times," according to Eichi Maeyama Mitsubishi's general manager in La Paz.
"We will need more lithium sources - and 50% of the world's reserves of lithium exist in Bolivia, in the Salar de Uyuni," he adds, pointing out that without new production, the price of lithium will rise prohibitively.
Locals fear the benefits will not be passed on
But almost all the commercially exploitable reserves are found in the brine under salt flats.
The world's largest reserves lie in Bolivia at the Salar de Uyuni - in the remote southern Andean plane.
But Bolivia is not a country known to be friendly to foreign industry.
Its socialist president, Evo Morales, is keen to expand state control over its natural resources, a task carried out by Bolivia's minister for mining, Luis Alberto Echazu.
"We want to send a message to the industrialized countries and their companies," Mr Echazu says.
"We will not repeat the historical experience since the fifteenth century: raw materials exported for the industrialisation of the west that has left us poor."
Modest ambitions
Gold, silver, tin, oil and gas have all been found and exported from here whilst the country remains the poorest in the region.
For President Morales' supporters, that is reason enough not to allow in foreign mining companies to extract the lithium.
Across the flats, freelance miners work to break up the surface salt selling it to passing trucks for just a few dollars.
Indigenous and poor, they are core supporters of the president.
A grizzled old miner, giving his name only as Alfredo, says he does not believe that lithium will ever be extracted.
"We don't want to see foreign companies here," he says.
"It would be very bad, as the government says."
Alfredo's hopes for the future are modest.
"I just want to work until I die" he says, a smile across his face. It is not an uncommon sentiment here.
Sharing the benefits
In spite of the grinding poverty here, attempts in the 1980's and 1990's by foreign companies to extract the lithium met with resistance from the community.
They say the money would go elsewhere.
Francisco Quisbert is a local activist with President Morales' party who took part in the resistance.
Now he is working with the president to hammer out a new plan for a state-owned pilot plant on the flats.
"We don't want international involvement," he says.
"This plan has raised the hopes of the region.
"Before our grandparents lived on the salt. They arrived from the valleys in caravans of llamas, but the market forced them to leave.
"We want to return to live on the salar [and] improve our living conditions and to participate in the project."
To begin with the pilot plant will produce no more than 1.2 kilotonnes a year.
If an industrial plant is then built it may increase to around 30 kilotonnes by 2012, - thats just under a third of current production.
But most lithium now goes to small batteries for electronic goods.
Car batteries are far larger and Mitsubishi estimates the world will need 500 kilotonnes a year just to service a niche market. For electric cars to become the norm, it could need far more.
Mitsubishi predicts that there will be a supply shortage by 2015.
Pollution nevertheless
Analysts suspect that Bolivia's government can produce this much.
"Governments in South America have had a very successful history of mining," explains Charles Kernot, a mining analyst at Evolution Securities.
But the question is how fast.
"They probably don't have a lot of experience of doing this sort of thing themselves so they'll have to bring in expertise and technology," Mr Kernot adds.
"That whole process may take a lot longer than people are anticipating."
Consequently, he continues, "the car manufacturers will have to strike a balance between how quickly they manufacture with the supply of metal because they don't want to drive the price up to such an extent that the cars get priced out of the market".
Long-term, Bolivia's government is wary of the environmental damage mass extraction could cause.
The mining minister, Mr Eschazu, has a stark message for Western firms.
"The capitalist leaders have to change," he says.
"If all the world had consumers like North America, everyone with a car, it would grind to a halt.
"It is also going to generate pollution, not just from fossil fuels but also from lithium plants, which produce sulphur dioxide. This isn't a magic solution."
It is not a view likely to go down well in the offices of Toyota and General Motors.
Bolivia holds key to electric car future
By Damian Kahya
BBC News, Salar de Uyuni, Bolivia
Sunday, 9 November 2008
Bolivia's lithium reserves could bring wealth to the country
High in the Andes, in a remote corner of Bolivia, lies more than half the world's reserves of a mineral that could radically reduce our reliance on dwindling fossil fuels.
Lithium carries a great promise. It could help power the fuel efficient electric or petrol-electric hybrid vehicles of the future.
But, as is the case with fossil fuels, it is a limited resource.
Lithium carbonate is already in the batteries of laptop computers and mobile phones.
It is used because it allows more energy to be stored in a lighter, smaller space than most alternatives.
And as the auto industry rushes to produce new fuel efficient and electric cars, it too is turning to lithium batteries as its first choice to boost the power of their new models.
GM has one in its new hybrid Volt, Toyota is testing one in its next generation hybrid Prius. Mercedes is testing an electric version of its Smart, while BMW is doing the same with its Mini.
And Nissan-Renault, Mitsubishi and VW are all rushing to buy or produce enough of the batteries to power their future models.
The best of the pure electric cars can reach ranges of more than 150 kilometres per charge.
More is needed
But there is a problem.
Mitsubishi, which plans to release its own electric car soon, estimates that the demand for lithium will outstrip supply in less than 10 years unless new sources are found.
And they have ended up in Bolivia.
"The demand for lithium won't double but increase by five times," according to Eichi Maeyama Mitsubishi's general manager in La Paz.
"We will need more lithium sources - and 50% of the world's reserves of lithium exist in Bolivia, in the Salar de Uyuni," he adds, pointing out that without new production, the price of lithium will rise prohibitively.
Locals fear the benefits will not be passed on
But almost all the commercially exploitable reserves are found in the brine under salt flats.
The world's largest reserves lie in Bolivia at the Salar de Uyuni - in the remote southern Andean plane.
But Bolivia is not a country known to be friendly to foreign industry.
Its socialist president, Evo Morales, is keen to expand state control over its natural resources, a task carried out by Bolivia's minister for mining, Luis Alberto Echazu.
"We want to send a message to the industrialized countries and their companies," Mr Echazu says.
"We will not repeat the historical experience since the fifteenth century: raw materials exported for the industrialisation of the west that has left us poor."
Modest ambitions
Gold, silver, tin, oil and gas have all been found and exported from here whilst the country remains the poorest in the region.
For President Morales' supporters, that is reason enough not to allow in foreign mining companies to extract the lithium.
Across the flats, freelance miners work to break up the surface salt selling it to passing trucks for just a few dollars.
Indigenous and poor, they are core supporters of the president.
A grizzled old miner, giving his name only as Alfredo, says he does not believe that lithium will ever be extracted.
"We don't want to see foreign companies here," he says.
"It would be very bad, as the government says."
Alfredo's hopes for the future are modest.
"I just want to work until I die" he says, a smile across his face. It is not an uncommon sentiment here.
Sharing the benefits
In spite of the grinding poverty here, attempts in the 1980's and 1990's by foreign companies to extract the lithium met with resistance from the community.
They say the money would go elsewhere.
Francisco Quisbert is a local activist with President Morales' party who took part in the resistance.
Now he is working with the president to hammer out a new plan for a state-owned pilot plant on the flats.
"We don't want international involvement," he says.
"This plan has raised the hopes of the region.
"Before our grandparents lived on the salt. They arrived from the valleys in caravans of llamas, but the market forced them to leave.
"We want to return to live on the salar [and] improve our living conditions and to participate in the project."
To begin with the pilot plant will produce no more than 1.2 kilotonnes a year.
If an industrial plant is then built it may increase to around 30 kilotonnes by 2012, - thats just under a third of current production.
But most lithium now goes to small batteries for electronic goods.
Car batteries are far larger and Mitsubishi estimates the world will need 500 kilotonnes a year just to service a niche market. For electric cars to become the norm, it could need far more.
Mitsubishi predicts that there will be a supply shortage by 2015.
Pollution nevertheless
Analysts suspect that Bolivia's government can produce this much.
"Governments in South America have had a very successful history of mining," explains Charles Kernot, a mining analyst at Evolution Securities.
But the question is how fast.
"They probably don't have a lot of experience of doing this sort of thing themselves so they'll have to bring in expertise and technology," Mr Kernot adds.
"That whole process may take a lot longer than people are anticipating."
Consequently, he continues, "the car manufacturers will have to strike a balance between how quickly they manufacture with the supply of metal because they don't want to drive the price up to such an extent that the cars get priced out of the market".
Long-term, Bolivia's government is wary of the environmental damage mass extraction could cause.
The mining minister, Mr Eschazu, has a stark message for Western firms.
"The capitalist leaders have to change," he says.
"If all the world had consumers like North America, everyone with a car, it would grind to a halt.
"It is also going to generate pollution, not just from fossil fuels but also from lithium plants, which produce sulphur dioxide. This isn't a magic solution."
It is not a view likely to go down well in the offices of Toyota and General Motors.
Saturday, April 11, 2009
10 Cars That Sank Detroit
http://autos.yahoo.com/articles/autos_content_landing_pages/923/10-Cars-That-Sank-Detroit;_ylc=X3oDMTE4aGI2MDhuBF9TAzI3MTYxNDkEc2VjA2ZwLXRvZGF5BHNsawNzYW5rLWRldHJvaXQ
10 Cars That Sank Detroit
By Rick Newman
The global financial crisis is suffocating the Detroit automakers, but the problems at General Motors, Ford, and Chrysler have been festering for years—even when the mighty "Big Three" were earning billions. Aging factories, inflexible unions, arrogant executives and shoddy quality have all damaged Detroit. Now, with panicky consumers fleeing showrooms, catastrophe looms:
There will be plenty of business-school case studies analyzing all the automakers' wrong turns. But, as they say in the industry, it all comes down to product. So here are 10 cars that help explain the demise of Detroit: GM and Chrysler need a multibillion-dollar government bailout to survive, and both could be in bankruptcy by summer if they don't meet tough government demands. Ford hasn't asked for a bailout—yet—but it's bleeding cash and racing the clock to turn itself around.
Ford Pinto. This ill-fated subcompact came to epitomize the arrogance of Big Auto. Ford hurried the Pinto to market in the early 1970s to battle cheap imports like the Volkswagen Beetle that were selling for less than $2,000. Initial sales were strong, but quality problems emerged. Then came the infamous safety problems with exploding fuel tanks, which Ford refused to acknowledge. Message: The customer comes last. "The problems for the domestics really started in the '70s when they were offering cars like the Pinto up against higher-tech, better-built Toyota Corollas and Honda Civics," says Jack Nerad of Kelley Blue Book.
Chevrolet Cavalier. GM sold millions of Cavaliers in the 1980s—and decided the thrifty car was so successful the company didn't need to update it for more than a decade. To milk the model, GM even added some lipstick and high heels and tried to peddle the upgrade as the Cadillac Cimarron—a legendary flop. Honda and Toyota, meanwhile, were updating their competing models every four or five years, and grabbing market share with each quality improvement. A new Cavalier came out in the mid 1990s—then languished for another decade, while GM put most of its money into big trucks and SUVs. GM has since improved its small cars. "But they have to be miles better than the imports for Americans to forget how bad their small cars used to be," says Jamie Page Deaton of U.S. News's Rankings and Reviews car-ranking site. Even if they are better, many Americans wonder why they should give Detroit a second—or third—chance.
Chevrolet Astro. While Chrysler, Toyota, and Honda were refining their minivans in the 1990s and coming up with innovations like hideaway seats and electric sliding doors, GM was offering an old, truck-based van gussied up with carpeting and cupholders. "It showed GM's repeated failure to market competitive products based on styling and packaging," says Tom Libby of J. D. Power & Associates. The Astro drove like a bread truck, and consumers noticed. It also earned the worst safety ratings in its class. Before long, GM was effectively out of the minivan segment. No biggie—those were just mainstream American families the automaker decided to ignore.
Ford Taurus. Try to explain this logic: After its 1986 debut, the Taurus became a perennial bestseller. So for the next 20 years, Ford let quality decline and neglected the family sedan, while pouring love and money into trucks and SUVs. By early this decade, the Taurus had become a dowdy, rental-lot staple. So Ford simply retired the Taurus in 2006 and replaced it with the 500 sedan—which went on to set records as one of the most short-lived models ever. A year later, Ford revived the Taurus name and applied it to a bastardized 500. But by then, the damage was done.
Ford Explorer. This breakout vehicle helped launch SUVs and drove record profits at Ford in the 1990s, as Americans flocked to big utilities that could take them off-road if they ever got adventurous. It also blinded Ford to the future. "Executives could not see beyond the green piling up at their feet," says David Magee, author of How Toyota Became No. 1. "The Explorer helped create an addiction that lasted 15 years." GM and Chrysler followed right behind, with SUVs like the Chevy Trailblazer and the Dodge Durango—lockstep moves that reveal how the Detroit automakers focused on each other rather than the broader marketplace.
Jaguar X-Type. Ford bought the British luxury brand Jaguar in 1990, when all three Detroit automakers were seeking ways to expand their global reach. Eventually, Ford decided to build an entry-level Jaguar starting at around $30,000 for people looking to move up from, say, a Mercury Marquis. The down-market move "represented everything that Jaguar is not," says Libby of J. D. Power. The X-Type was built on an ordinary sedan platform from elsewhere in Ford's lineup, and the front-wheel-drive system underwhelmed enthusiasts used to rear-drive European makes. Jag purists were horrified, and aspiring luxury buyers shunned the X-Type in favor of BMWs, Lexuses, and Acuras. After fumbling the luxury brand for nearly two decades, Ford sold Jaguar to an Indian conglomerate in 2008.
Hummer H2. It sure seemed cool back in 2003, when gas was less than $2 per gallon. And it sure seems gaudy now. This supersized SUV clearly had a heyday, but it also helped paint parent company GM as an enviro-hostile corporation that sold only gas guzzlers. Sales collapsed as gas prices rose toward $4 a gallon in mid-2008, and GM has been trying to sell the division for six months—with no takers, so far. "GM wanted to make Hummer a signature company brand," says Magee. "Instead, it showed the company was out of touch with the needs of the 21st century."
Toyota Prius. While GM was spending $1 billion to build up the Hummer franchise, Toyota was spending $1 billion to develop a high-mileage hybrid—even though gas prices were still low. After the Prius debuted in the United States in 2000, GM execs seized yet another opportunity to display their intimate knowledge of American consumers, arguing that hybrids didn't make economic sense and that only environmentalists would buy them. Today, Toyota can barely keep up with demand for the Prius, and it has plans to start building them in the United States. GM, meanwhile, is scrambling to rush hybrids and other high-mileage cars into dealerships—far too late.
Chrysler Sebring. Did Chrysler engineers set out to build the world's most boring car? Of course not. Yet Chrysler still produces this blandmobile to keep assembly lines running and maintain a presence, however weak, in the sedan market. In the new Darwinian auto industry, this model seems destined for extinction, since the only way to sell marginal cars is with steep discounts, which money-losing automakers can no longer afford. In fact, if Chrysler ends up being carved into pieces and sold to competitors, as many analysts expect, most of its passenger-car lineup could get the axe, since there's little to distinguish it. Besides—what's a sebring, anyway?
Jeep Compass. Quick, what's the difference between the Jeep Compass, the Jeep Liberty, and the Jeep Patriot? The bosses at Chrysler, which owns Jeep, could explain, but the real answer is that Chrysler has oversaturated its strongest brand lineup in a desperate attempt to boost sales. "The Compass is not needed," says James Bell of Intellichoice.com. "Just the Liberty, please." The Compass has the same mechanical underpinnings as the Dodge Caliber, which helps illustrate one of Detroit's favorite tricks: Create multiple versions of every product under a bunch of different brand names, hoping that if buyers shun one, they'll take a more favorable view of another. Message to Detroit: Consumers aren't that stupid. Give them a bit more credit, and you might have a future.
10 Cars That Sank Detroit
By Rick Newman
The global financial crisis is suffocating the Detroit automakers, but the problems at General Motors, Ford, and Chrysler have been festering for years—even when the mighty "Big Three" were earning billions. Aging factories, inflexible unions, arrogant executives and shoddy quality have all damaged Detroit. Now, with panicky consumers fleeing showrooms, catastrophe looms:
There will be plenty of business-school case studies analyzing all the automakers' wrong turns. But, as they say in the industry, it all comes down to product. So here are 10 cars that help explain the demise of Detroit: GM and Chrysler need a multibillion-dollar government bailout to survive, and both could be in bankruptcy by summer if they don't meet tough government demands. Ford hasn't asked for a bailout—yet—but it's bleeding cash and racing the clock to turn itself around.
Ford Pinto. This ill-fated subcompact came to epitomize the arrogance of Big Auto. Ford hurried the Pinto to market in the early 1970s to battle cheap imports like the Volkswagen Beetle that were selling for less than $2,000. Initial sales were strong, but quality problems emerged. Then came the infamous safety problems with exploding fuel tanks, which Ford refused to acknowledge. Message: The customer comes last. "The problems for the domestics really started in the '70s when they were offering cars like the Pinto up against higher-tech, better-built Toyota Corollas and Honda Civics," says Jack Nerad of Kelley Blue Book.
Chevrolet Cavalier. GM sold millions of Cavaliers in the 1980s—and decided the thrifty car was so successful the company didn't need to update it for more than a decade. To milk the model, GM even added some lipstick and high heels and tried to peddle the upgrade as the Cadillac Cimarron—a legendary flop. Honda and Toyota, meanwhile, were updating their competing models every four or five years, and grabbing market share with each quality improvement. A new Cavalier came out in the mid 1990s—then languished for another decade, while GM put most of its money into big trucks and SUVs. GM has since improved its small cars. "But they have to be miles better than the imports for Americans to forget how bad their small cars used to be," says Jamie Page Deaton of U.S. News's Rankings and Reviews car-ranking site. Even if they are better, many Americans wonder why they should give Detroit a second—or third—chance.
Chevrolet Astro. While Chrysler, Toyota, and Honda were refining their minivans in the 1990s and coming up with innovations like hideaway seats and electric sliding doors, GM was offering an old, truck-based van gussied up with carpeting and cupholders. "It showed GM's repeated failure to market competitive products based on styling and packaging," says Tom Libby of J. D. Power & Associates. The Astro drove like a bread truck, and consumers noticed. It also earned the worst safety ratings in its class. Before long, GM was effectively out of the minivan segment. No biggie—those were just mainstream American families the automaker decided to ignore.
Ford Taurus. Try to explain this logic: After its 1986 debut, the Taurus became a perennial bestseller. So for the next 20 years, Ford let quality decline and neglected the family sedan, while pouring love and money into trucks and SUVs. By early this decade, the Taurus had become a dowdy, rental-lot staple. So Ford simply retired the Taurus in 2006 and replaced it with the 500 sedan—which went on to set records as one of the most short-lived models ever. A year later, Ford revived the Taurus name and applied it to a bastardized 500. But by then, the damage was done.
Ford Explorer. This breakout vehicle helped launch SUVs and drove record profits at Ford in the 1990s, as Americans flocked to big utilities that could take them off-road if they ever got adventurous. It also blinded Ford to the future. "Executives could not see beyond the green piling up at their feet," says David Magee, author of How Toyota Became No. 1. "The Explorer helped create an addiction that lasted 15 years." GM and Chrysler followed right behind, with SUVs like the Chevy Trailblazer and the Dodge Durango—lockstep moves that reveal how the Detroit automakers focused on each other rather than the broader marketplace.
Jaguar X-Type. Ford bought the British luxury brand Jaguar in 1990, when all three Detroit automakers were seeking ways to expand their global reach. Eventually, Ford decided to build an entry-level Jaguar starting at around $30,000 for people looking to move up from, say, a Mercury Marquis. The down-market move "represented everything that Jaguar is not," says Libby of J. D. Power. The X-Type was built on an ordinary sedan platform from elsewhere in Ford's lineup, and the front-wheel-drive system underwhelmed enthusiasts used to rear-drive European makes. Jag purists were horrified, and aspiring luxury buyers shunned the X-Type in favor of BMWs, Lexuses, and Acuras. After fumbling the luxury brand for nearly two decades, Ford sold Jaguar to an Indian conglomerate in 2008.
Hummer H2. It sure seemed cool back in 2003, when gas was less than $2 per gallon. And it sure seems gaudy now. This supersized SUV clearly had a heyday, but it also helped paint parent company GM as an enviro-hostile corporation that sold only gas guzzlers. Sales collapsed as gas prices rose toward $4 a gallon in mid-2008, and GM has been trying to sell the division for six months—with no takers, so far. "GM wanted to make Hummer a signature company brand," says Magee. "Instead, it showed the company was out of touch with the needs of the 21st century."
Toyota Prius. While GM was spending $1 billion to build up the Hummer franchise, Toyota was spending $1 billion to develop a high-mileage hybrid—even though gas prices were still low. After the Prius debuted in the United States in 2000, GM execs seized yet another opportunity to display their intimate knowledge of American consumers, arguing that hybrids didn't make economic sense and that only environmentalists would buy them. Today, Toyota can barely keep up with demand for the Prius, and it has plans to start building them in the United States. GM, meanwhile, is scrambling to rush hybrids and other high-mileage cars into dealerships—far too late.
Chrysler Sebring. Did Chrysler engineers set out to build the world's most boring car? Of course not. Yet Chrysler still produces this blandmobile to keep assembly lines running and maintain a presence, however weak, in the sedan market. In the new Darwinian auto industry, this model seems destined for extinction, since the only way to sell marginal cars is with steep discounts, which money-losing automakers can no longer afford. In fact, if Chrysler ends up being carved into pieces and sold to competitors, as many analysts expect, most of its passenger-car lineup could get the axe, since there's little to distinguish it. Besides—what's a sebring, anyway?
Jeep Compass. Quick, what's the difference between the Jeep Compass, the Jeep Liberty, and the Jeep Patriot? The bosses at Chrysler, which owns Jeep, could explain, but the real answer is that Chrysler has oversaturated its strongest brand lineup in a desperate attempt to boost sales. "The Compass is not needed," says James Bell of Intellichoice.com. "Just the Liberty, please." The Compass has the same mechanical underpinnings as the Dodge Caliber, which helps illustrate one of Detroit's favorite tricks: Create multiple versions of every product under a bunch of different brand names, hoping that if buyers shun one, they'll take a more favorable view of another. Message to Detroit: Consumers aren't that stupid. Give them a bit more credit, and you might have a future.
Friday, March 6, 2009
Beast of the Month - January 2009
Beast of the Month - January 2009
Rick Wagoner
CEO, General Motors
"I yam an anti-Christ..."
John Lydon (aka Johnny Rotten) of The Sex Pistols, "Anarchy in the UK"
For Americans living outside of Detroit worried about the USA falling into a major depression, be thankful at least you aren't a resident of the Motor City: it's already one there. It's bad enough for the city's rep that LA and New York hip-hop passed Motown as ground zero for African-American music. Michigan's great metropolis is now the poorest city in the nation. Unemployment has hit 21 percent and is still rising, while the average price of a home is down to $18,513. Indeed, the economic downturn is so bad, the notoriously violent city is no longer the nation's most dangerous, having been passed by New Orleans and Camden, New Jersey in 2008 thanks to the lack of worthwhile targets for crime. And to top it all off, the Lions went 0-16.
We bring this all up because naming the city's most powerful korporate executive, General Motors CEO and Chairman Rick Wagoner, The Konformist Beast of the Month seems almost like an excessive piling on overkill. After all, yes, Wagoner and his cohorts at Ford and Chrysler, Alan Mulally and Bob Nardelli, may have come off as clueless and arrogant after coming to Congress asking first for $25 billion and then $34 billion. (You gotta admire their balls, though: usually when you flub your first request for a loan, you ask for less the second time, not $9 billion more.) And yes, maybe it does seem appalling after the Wall Street bailout swindle to have another well-connected industry coming to DC begging for a handout while the working class hasn't received a dime in help from the financial crisis. And yes, for all their whining and moaning about needing help, none of the auto execs could give a convincing mea culpa and admit they have no one to blame for their crisis besides themselves.
(And yes, maybe it would have been at least symbolically wiser for the auto executives to have driven to Washington in good old fashion cars made by their companies rather than fly their in private company jets.)
But, on the other hand, the auto industry is a labor-intensive business that does actual manufacturing, unlike the parasitic, leeching deadweight at the core of Wall Street banks. That means if GM, Ford and Chrysler go down, estimates ranging from 3 to 5 million jobs will disappear with them, good quality jobs at that. And that's before any likely domino effect causes even more jobs to vanish. And while the vast majority of Americans are rightfully disgusted at the idea of another bailout after the Wall Street con, even $34 billion for up to 5 million jobs centered in the manufacturing sector is pretty damn cost-effective, and certainly not comparable to the $700 billion bankster black hole. Maybe Wagoner, Mulally and Nardelli are a bunch of incompetents creeps, but American auto workers shouldn't be left holding the bag for their screw-ups.
This is why The Konformist is awarding the prestigious BOTM prize to Wagoner after all. If workers shouldn't receive the punishment for the failures of Wagoner and his pals, neither should he receive a free pass for the plight of the people of Detroit.
And unfortunately, the auto worker ARE receiving the punishment for the auto executive failures, just as they have over the last 30 years. The framing of the debate was staged when right-wing propagandists repeatedly claimed the average worker gets paid $70-80 in wages and benefits. In fact, the average wage is $28: the grossly inflated figure is based on adding payments to retirees to current benefits and dividing the total by the current work force. But the damage has been done: the blame for the automobile industry crisis was laid at least partially on the feet of overpaid union auto workers, and the remedy was massive cuts in pay and benefits along with layoffs. These talking point barely challenged by the so-called Democratic Party. As Michael Moore rightfully put it with his usual share of deserved outrage: "After giving BILLIONS to Wall Street hucksters and criminal investment bankers -- billions with no strings attached and, as we have since learned, no oversight whatsoever -- the Senate decided it is more important to break a union, more important to throw middle class wage earners into the ranks of the working poor than to prevent the total collapse of industrial America."
Okay, so the auto workers are the predictable scapegoat here, but what is the real cause of the auto market crisis? In some ways, it's just a symptom of the bad economy. After all, Toyota announced in December that it would have an operating loss in 2008, the first time it has failed to make a profit since 1938. Meanwhile, Toyota, Honda and Nissan all had drops in sales last year, all averaging over an astounding 30 percent drop in US sales during December alone.
The problem with this explanation is that while the Japanese car companies are indeed slumping, they still are doing way better relative to Detroit. While the Japanese fell from 8 to 15 percent in US sales in 2008, Ford went down 20%, GM 23%, and Chrysler 30%. All told, the Big Three's US market share fell below 50 percent last year. As far as Toyota goes, it finally overtook GM as the world's largest automaker, and solidified its lead over Ford as number two in the US market. Honda nearly overtook Chrysler as number four in the US market as well, a ranking it should decidedly own in 2009. Meanwhile, GM saw its shares fall to their lowest level since 1950, and warned it could run out of cash the first half of 2009 without help. The Detroit auto companies have become so desperate, there have been talks of merging all three into one company, or possibly all three being taken over by Chinese auto firms (something which would have major national security implications.)
So if isn't evil unions or the economy, stupid, what is the real problem with the US auto companies? The Konformist diagnosis isn't an original one, and one we (and others) have been repeating for quite awhile: the Big Three are victims of their own lack of creative thinking. Since the nineties, the US auto companies have had their focus almost solely on the SUV fad as their meal ticket. It wasn't a bad idea: over half their profits have come from light trucks and SUVs, thanks to the vehicle's wider profit margins. "But now," as The Konformist warned five years ago when we gave the BOTM prize to the Hummer, "the US auto industry seems to be falling back in a lazy, self-satisfied pattern. By hiding behind the short-term lack in economy of scales in hybrid technology to justify the non-creation of economy of scales, the Big Three may have made one of the worst decisions in business history. Meantime, GM keeps pumping out those Hummers, which in the short term is indeed profitable. But somehow we suspect that the Hummer will soon resemble another Titanic, as a symbol of the great economic disaster that may soon fall the entire American auto industry if they don't rise to the challenge of the Prius and Insight."
You would think, at this point, we would get some sort of smug satisfaction out of being once again vindicated by history. But frankly, The Konformist doesn't really enjoy having to say "I told you so" repeatedly like we're Jose Canseco discussing steroids, especially in this case where the victims are hard-working American union members. Unfortunately, the numbers pretty much confirm our prediction: SUV sales peaked in 1999, back when the price of oil was $16 a barrel. With the cost of oil passing $140 last summer (and over $4 a gallon at the gas pump) after the 2000-2008 oil price spike, even the most vain of yuppies and soccer moms had enough of the gas-guzzling behemoths. Here are some of the most noted drops in 2008 US sales: at Ford, the SUVs Explorer and Expedition fell 43% and 39%; at Chrysler, the Jeep Grand Cherokee 39% and the Dodge Dakota pickup 48%; and, perhaps most telling, GM's Hummer brand sank at 51%. Even with the recent stunning drop in oil prices, US consumers are decidedly too gun-shy to drink the SUV Kool-Aid anymore.
"How will the economics of hybrids ever match that of the internal combustion engine? We can't afford to subsidize them." This was Wagoner in a 2002 quote from Business Week, a quote that symbolized the view of Detroit executives. The Japanese took another viewpoint, and the results are now in. Put it all together, and there's a reason why Japan is replacing Detroit as the center of the automobile universe. In retrospect, Motown's double down on SUVs is a "IBM letting Microsoft own MS-DOS" kind of business blunder, rivaling as this decade's worst biz decision the AOL-Time Warner merger, Vince McMahon's XFL and Wall Street's plunge into subprime mortgage loans.
Of course, even as Detroit abandon's the SUV craze faster than you could say "Disco sucks!" in 1979, they still have an extremely difficult road ahead. Simply put, US autos are deemed decidedly inferior in quality and reliability compared to those made in Japan by consumers. The difference is highlighted by the view of Japan making more hi-tech, fuel-efficient cars. This is what happens when Japan markets the Prius and other hybrids as the symbol of their creativity. Had GM not squashed the electric EV1 (covered meticulously in the 2006 documentary Who Killed the Electric Car?) they would have something besides the Hummer to showcase as their vision.
The punch line is Detroit is actually making some excellent cars. GM hit a home run with the 2008 Chevy Malibu (named the North American Car of the Year) and the Corvette is still dollar for dollar the best sports car on the planet. The ultra-economical Ford Focus gets 35 MPG. Even the most clueless of US auto companies, Chrysler, has in the PT Cruiser wheels with a cult following usually associated with Apple Computers and The Big Lebowski. (Not to let a good thing be used wisely, Chrysler has decided to kill the Cruiser off.) But these exceptions almost seem to prove the rule, and are deemed too little too late by most American car buyers.
What could change Detroit's image quickly? As usual, Konformist ally Michael Moore presented a pretty good plan last month: making any government bailout of Motown conditional on them producing hybrid and electric cars, as well as mass transit such as trains, buses, subways and light rail. The kind of moves that also would help cure America from its oil addiction while creating millions of blue-collar construction jobs. It's also the kind of move that would be a great change of pace for the Big Three, who long have battled increasing MPG standards and any new environmental laws. (Earlier this year, GM Vice Chairman Bob Lutz dismissed global warming as a “total crock of shit" while speaking to reporters.)
Naturally, the establishment ignored Moore's idea, and instead embraced a different modest proposal: massive layoffs and wage cuts for auto workers, of course. There should be no surprise in this prescription, as it has been the game plan since the 1970s. And no surprise Cerebus, the geniuses who took over Chrysler in 2007, would embrace such a plan, as they already slashed jobs by 24K their first year. (The private equity firm has long been a champion of the "strip and flip" profit strategy: handing out pink slips to "right-size" a korporation for a turnaround sale.) And there should be little surprise GM plans to dump 31,500 jobs (nearly a third of its workforce) and Ford has already eliminated 57,000 North American jobs over the last three years. (GM laid off over 3000 workers on December 23 alone. Merry Christmas.) And little surprise that already UAW contracts cut new worker wages to $14 an hour, or half of what they currently make. (As Business Week remarked, "for the first time since World War I we will have people building automobiles in America who won't be able to afford the vehicles they build.") And none should be surprised that opposition to bailing out Detroit in Congress came not from Democrats protesting the attack on American workers, but Republicans (such as the rabidly anti-union Bob Corker) who felt that workers weren't getting the shaft enough.
How will this all end up? Well, Detroit got its money, but with the expectation they screw the autoworkers yet again. Perversely, the huge number of job cuts, combined with the same fixed cost of retirement benefits to former workers, will only increase the "wage and benefits" costs per labor hour, thus giving right-wing propagandist even more bogus ammo to justify future cuts in jobs in wages. It seems the downward spiral will only continue, unless the working class finally responds in a mass rebellion. Of course, considering the economic crisis Team USA is currently in, anything is possible...
In any case, we salute Rick Wagoner as Beast of the Month. Congratulations, and keep up the great work, Ricky!!!
Sources:
Special thanks to the World Socialist Web Site ( WSWS.org ) for help in this article as a research resource.
Boehlert, Eric. "The Media Myth: Detroit's $70-an-hour Autoworker." Media Matters 25 November 2008 <http://mediamatters.org/columns/200811250012>.
City Crime Rankings 2008-2009. CQ Press 2008 <http://os.cqpress.com/citycrime2008/citycrime2008.htm>.
"Depression Hits Detroit." Prison Planet 23 December 2008 <http://www.prisonplanet.com/depression-hits-detroit-average-home-price-18513-unemployment-rate-21.html>.
"GM Shares Fall to Lowest Level Since 1950." Yahoo Finance 9 October 2008 <http://biz.yahoo.com/rb/081009/business_us_gm_shares.html>.
"GM Warns It Could Run Out Of Cash By 1st Half '09." CNNMoney.com 7 November 2008 <http://money.cnn.com/news/newsfeeds/articles/djf500/200811071240DOWJONESDJONLINE000633_FORTUNE5.htm>.
Goodman, David N. "Motor City Named Nation's Most Dangerous." Yahoo News 19 November 2007 <http://news.yahoo.com/s/ap/20071119/ap_on_re_us/dangerous_cities>.
Hamsher, Jane. "Chinese Want To Buy the Big 3 Automakers." Huffington Post 20 November 2008 <http://www.huffingtonpost.com/jane-hamsher/chinese-want-to-buy-the-b_b_144920.html>.
Krebs, Michelle and Visnic, Bill. "2008 U.S. Auto Sales Are Worst Since 1992." Auto Observer 5 January 2009 <http://www.autoobserver.com/2009/01/2008-us-auto-sales-are-worst-since-1992.html>.
Krolicki, Kevin. "GM Exec Stands by Calling Global Warming a 'Total Crock of Shit.'" Common Dreams 23 February 2008 <http://www.commondreams.org/archive/2008/02/23/7251/>.
Moore, Michael. "Senate to Middle Class: Drop Dead." MichaelMoore.com 12 December 2008 <http://www.michaelmoore.com/words/message/index.php?id=243>.
Moore, Michael. "Saving the Big 3 for You and Me..." MichaelMoore.com 3 December 2008 <http://www.michaelmoore.com/words/message/index.php?id=242>.
Neiwert, David. "Republicans to Detroit: Drop Dead." Crooks and Liars 20 November 2008 <http://crooksandliars.com/david-neiwert/republicans-detroit-drop-dead>.
Ohnsman, Alan and Ramsey, Mike. "Honda Passes Chrysler as Asia Brands Widen U.S. Share." Bloomberg 4 September 2008 <http://www.bloomberg.com/apps/news?pid=20601087&sid=agUdhAPT2KEY>.
Parks, James. "If Auto Industry Goes Bankrupt, Millions of U.S. Jobs Will Be Lost." AFL-CIO 4 December 2008 <http://blog.aflcio.org/2008/12/04/if-auto-industry-goes-bankrupt-millions-of-us-jobs-will-be-lost/>.
"Rainbow PUSH Mobilizes to Save 4 Million Jobs." Rainbow PUSH Coalition 16 December 2008 <http://www.rainbowpush.org/FMPro?-db=rpodata.fp5&-format=rainbowpush%2Fdata06%2Fdetailpress.htm&-lay=main&-sortfield=date&-sortorder=descend&category=press&year=2008&-max=20&-recid=34007&-find>.
"Reports: Chrysler, GM Discuss Merger, Acquisition." Associated Press 11 October 2008 <http://ap.google.com/article/ALeqM5ha9rjtSaQvjt-5p8ej6DXKECN4AQD93O40F00>.
Riechmann, Deb. "Bush Orders Emergency Bailout of the Auto Industry." Yahoo News 20 December 2008 <http://news.yahoo.com/s/ap/20081220/ap_on_go_pr_wh/meltdown_autos>.
Roberts, Paul Craig. "The Crisis Has Hardly Begun." Online Journal 18 November 2008 <http://onlinejournal.com/artman/publish/article_4021.shtml>.
Salmon, Felix. "Chrysler Follows the Strip-and-Flip Playbook." Portfolio.com 1 November 2007 <http://www.portfolio.com/views/blogs/market-movers/2007/11/01/chrysler-follows-the-strip-and-flip-playbook?addComment=true>.
Sorkin, Andrew Ross. "Chrysler and the Fallibility of Private Equity." New York Times 1 November 2007 <http://dealbook.blogs.nytimes.com/2007/11/01/chrysler-and-the-fallibility-of-private-equity/>.
Vlasic, Bill and Fackler, Martin. "Car Slump Jolts Toyota, Halting 70 Years of Gain." New York Times 23 December 2008.
Rick Wagoner
CEO, General Motors
"I yam an anti-Christ..."
John Lydon (aka Johnny Rotten) of The Sex Pistols, "Anarchy in the UK"
For Americans living outside of Detroit worried about the USA falling into a major depression, be thankful at least you aren't a resident of the Motor City: it's already one there. It's bad enough for the city's rep that LA and New York hip-hop passed Motown as ground zero for African-American music. Michigan's great metropolis is now the poorest city in the nation. Unemployment has hit 21 percent and is still rising, while the average price of a home is down to $18,513. Indeed, the economic downturn is so bad, the notoriously violent city is no longer the nation's most dangerous, having been passed by New Orleans and Camden, New Jersey in 2008 thanks to the lack of worthwhile targets for crime. And to top it all off, the Lions went 0-16.
We bring this all up because naming the city's most powerful korporate executive, General Motors CEO and Chairman Rick Wagoner, The Konformist Beast of the Month seems almost like an excessive piling on overkill. After all, yes, Wagoner and his cohorts at Ford and Chrysler, Alan Mulally and Bob Nardelli, may have come off as clueless and arrogant after coming to Congress asking first for $25 billion and then $34 billion. (You gotta admire their balls, though: usually when you flub your first request for a loan, you ask for less the second time, not $9 billion more.) And yes, maybe it does seem appalling after the Wall Street bailout swindle to have another well-connected industry coming to DC begging for a handout while the working class hasn't received a dime in help from the financial crisis. And yes, for all their whining and moaning about needing help, none of the auto execs could give a convincing mea culpa and admit they have no one to blame for their crisis besides themselves.
(And yes, maybe it would have been at least symbolically wiser for the auto executives to have driven to Washington in good old fashion cars made by their companies rather than fly their in private company jets.)
But, on the other hand, the auto industry is a labor-intensive business that does actual manufacturing, unlike the parasitic, leeching deadweight at the core of Wall Street banks. That means if GM, Ford and Chrysler go down, estimates ranging from 3 to 5 million jobs will disappear with them, good quality jobs at that. And that's before any likely domino effect causes even more jobs to vanish. And while the vast majority of Americans are rightfully disgusted at the idea of another bailout after the Wall Street con, even $34 billion for up to 5 million jobs centered in the manufacturing sector is pretty damn cost-effective, and certainly not comparable to the $700 billion bankster black hole. Maybe Wagoner, Mulally and Nardelli are a bunch of incompetents creeps, but American auto workers shouldn't be left holding the bag for their screw-ups.
This is why The Konformist is awarding the prestigious BOTM prize to Wagoner after all. If workers shouldn't receive the punishment for the failures of Wagoner and his pals, neither should he receive a free pass for the plight of the people of Detroit.
And unfortunately, the auto worker ARE receiving the punishment for the auto executive failures, just as they have over the last 30 years. The framing of the debate was staged when right-wing propagandists repeatedly claimed the average worker gets paid $70-80 in wages and benefits. In fact, the average wage is $28: the grossly inflated figure is based on adding payments to retirees to current benefits and dividing the total by the current work force. But the damage has been done: the blame for the automobile industry crisis was laid at least partially on the feet of overpaid union auto workers, and the remedy was massive cuts in pay and benefits along with layoffs. These talking point barely challenged by the so-called Democratic Party. As Michael Moore rightfully put it with his usual share of deserved outrage: "After giving BILLIONS to Wall Street hucksters and criminal investment bankers -- billions with no strings attached and, as we have since learned, no oversight whatsoever -- the Senate decided it is more important to break a union, more important to throw middle class wage earners into the ranks of the working poor than to prevent the total collapse of industrial America."
Okay, so the auto workers are the predictable scapegoat here, but what is the real cause of the auto market crisis? In some ways, it's just a symptom of the bad economy. After all, Toyota announced in December that it would have an operating loss in 2008, the first time it has failed to make a profit since 1938. Meanwhile, Toyota, Honda and Nissan all had drops in sales last year, all averaging over an astounding 30 percent drop in US sales during December alone.
The problem with this explanation is that while the Japanese car companies are indeed slumping, they still are doing way better relative to Detroit. While the Japanese fell from 8 to 15 percent in US sales in 2008, Ford went down 20%, GM 23%, and Chrysler 30%. All told, the Big Three's US market share fell below 50 percent last year. As far as Toyota goes, it finally overtook GM as the world's largest automaker, and solidified its lead over Ford as number two in the US market. Honda nearly overtook Chrysler as number four in the US market as well, a ranking it should decidedly own in 2009. Meanwhile, GM saw its shares fall to their lowest level since 1950, and warned it could run out of cash the first half of 2009 without help. The Detroit auto companies have become so desperate, there have been talks of merging all three into one company, or possibly all three being taken over by Chinese auto firms (something which would have major national security implications.)
So if isn't evil unions or the economy, stupid, what is the real problem with the US auto companies? The Konformist diagnosis isn't an original one, and one we (and others) have been repeating for quite awhile: the Big Three are victims of their own lack of creative thinking. Since the nineties, the US auto companies have had their focus almost solely on the SUV fad as their meal ticket. It wasn't a bad idea: over half their profits have come from light trucks and SUVs, thanks to the vehicle's wider profit margins. "But now," as The Konformist warned five years ago when we gave the BOTM prize to the Hummer, "the US auto industry seems to be falling back in a lazy, self-satisfied pattern. By hiding behind the short-term lack in economy of scales in hybrid technology to justify the non-creation of economy of scales, the Big Three may have made one of the worst decisions in business history. Meantime, GM keeps pumping out those Hummers, which in the short term is indeed profitable. But somehow we suspect that the Hummer will soon resemble another Titanic, as a symbol of the great economic disaster that may soon fall the entire American auto industry if they don't rise to the challenge of the Prius and Insight."
You would think, at this point, we would get some sort of smug satisfaction out of being once again vindicated by history. But frankly, The Konformist doesn't really enjoy having to say "I told you so" repeatedly like we're Jose Canseco discussing steroids, especially in this case where the victims are hard-working American union members. Unfortunately, the numbers pretty much confirm our prediction: SUV sales peaked in 1999, back when the price of oil was $16 a barrel. With the cost of oil passing $140 last summer (and over $4 a gallon at the gas pump) after the 2000-2008 oil price spike, even the most vain of yuppies and soccer moms had enough of the gas-guzzling behemoths. Here are some of the most noted drops in 2008 US sales: at Ford, the SUVs Explorer and Expedition fell 43% and 39%; at Chrysler, the Jeep Grand Cherokee 39% and the Dodge Dakota pickup 48%; and, perhaps most telling, GM's Hummer brand sank at 51%. Even with the recent stunning drop in oil prices, US consumers are decidedly too gun-shy to drink the SUV Kool-Aid anymore.
"How will the economics of hybrids ever match that of the internal combustion engine? We can't afford to subsidize them." This was Wagoner in a 2002 quote from Business Week, a quote that symbolized the view of Detroit executives. The Japanese took another viewpoint, and the results are now in. Put it all together, and there's a reason why Japan is replacing Detroit as the center of the automobile universe. In retrospect, Motown's double down on SUVs is a "IBM letting Microsoft own MS-DOS" kind of business blunder, rivaling as this decade's worst biz decision the AOL-Time Warner merger, Vince McMahon's XFL and Wall Street's plunge into subprime mortgage loans.
Of course, even as Detroit abandon's the SUV craze faster than you could say "Disco sucks!" in 1979, they still have an extremely difficult road ahead. Simply put, US autos are deemed decidedly inferior in quality and reliability compared to those made in Japan by consumers. The difference is highlighted by the view of Japan making more hi-tech, fuel-efficient cars. This is what happens when Japan markets the Prius and other hybrids as the symbol of their creativity. Had GM not squashed the electric EV1 (covered meticulously in the 2006 documentary Who Killed the Electric Car?) they would have something besides the Hummer to showcase as their vision.
The punch line is Detroit is actually making some excellent cars. GM hit a home run with the 2008 Chevy Malibu (named the North American Car of the Year) and the Corvette is still dollar for dollar the best sports car on the planet. The ultra-economical Ford Focus gets 35 MPG. Even the most clueless of US auto companies, Chrysler, has in the PT Cruiser wheels with a cult following usually associated with Apple Computers and The Big Lebowski. (Not to let a good thing be used wisely, Chrysler has decided to kill the Cruiser off.) But these exceptions almost seem to prove the rule, and are deemed too little too late by most American car buyers.
What could change Detroit's image quickly? As usual, Konformist ally Michael Moore presented a pretty good plan last month: making any government bailout of Motown conditional on them producing hybrid and electric cars, as well as mass transit such as trains, buses, subways and light rail. The kind of moves that also would help cure America from its oil addiction while creating millions of blue-collar construction jobs. It's also the kind of move that would be a great change of pace for the Big Three, who long have battled increasing MPG standards and any new environmental laws. (Earlier this year, GM Vice Chairman Bob Lutz dismissed global warming as a “total crock of shit" while speaking to reporters.)
Naturally, the establishment ignored Moore's idea, and instead embraced a different modest proposal: massive layoffs and wage cuts for auto workers, of course. There should be no surprise in this prescription, as it has been the game plan since the 1970s. And no surprise Cerebus, the geniuses who took over Chrysler in 2007, would embrace such a plan, as they already slashed jobs by 24K their first year. (The private equity firm has long been a champion of the "strip and flip" profit strategy: handing out pink slips to "right-size" a korporation for a turnaround sale.) And there should be little surprise GM plans to dump 31,500 jobs (nearly a third of its workforce) and Ford has already eliminated 57,000 North American jobs over the last three years. (GM laid off over 3000 workers on December 23 alone. Merry Christmas.) And little surprise that already UAW contracts cut new worker wages to $14 an hour, or half of what they currently make. (As Business Week remarked, "for the first time since World War I we will have people building automobiles in America who won't be able to afford the vehicles they build.") And none should be surprised that opposition to bailing out Detroit in Congress came not from Democrats protesting the attack on American workers, but Republicans (such as the rabidly anti-union Bob Corker) who felt that workers weren't getting the shaft enough.
How will this all end up? Well, Detroit got its money, but with the expectation they screw the autoworkers yet again. Perversely, the huge number of job cuts, combined with the same fixed cost of retirement benefits to former workers, will only increase the "wage and benefits" costs per labor hour, thus giving right-wing propagandist even more bogus ammo to justify future cuts in jobs in wages. It seems the downward spiral will only continue, unless the working class finally responds in a mass rebellion. Of course, considering the economic crisis Team USA is currently in, anything is possible...
In any case, we salute Rick Wagoner as Beast of the Month. Congratulations, and keep up the great work, Ricky!!!
Sources:
Special thanks to the World Socialist Web Site ( WSWS.org ) for help in this article as a research resource.
Boehlert, Eric. "The Media Myth: Detroit's $70-an-hour Autoworker." Media Matters 25 November 2008 <http://mediamatters.org/columns/200811250012>.
City Crime Rankings 2008-2009. CQ Press 2008 <http://os.cqpress.com/citycrime2008/citycrime2008.htm>.
"Depression Hits Detroit." Prison Planet 23 December 2008 <http://www.prisonplanet.com/depression-hits-detroit-average-home-price-18513-unemployment-rate-21.html>.
"GM Shares Fall to Lowest Level Since 1950." Yahoo Finance 9 October 2008 <http://biz.yahoo.com/rb/081009/business_us_gm_shares.html>.
"GM Warns It Could Run Out Of Cash By 1st Half '09." CNNMoney.com 7 November 2008 <http://money.cnn.com/news/newsfeeds/articles/djf500/200811071240DOWJONESDJONLINE000633_FORTUNE5.htm>.
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Hamsher, Jane. "Chinese Want To Buy the Big 3 Automakers." Huffington Post 20 November 2008 <http://www.huffingtonpost.com/jane-hamsher/chinese-want-to-buy-the-b_b_144920.html>.
Krebs, Michelle and Visnic, Bill. "2008 U.S. Auto Sales Are Worst Since 1992." Auto Observer 5 January 2009 <http://www.autoobserver.com/2009/01/2008-us-auto-sales-are-worst-since-1992.html>.
Krolicki, Kevin. "GM Exec Stands by Calling Global Warming a 'Total Crock of Shit.'" Common Dreams 23 February 2008 <http://www.commondreams.org/archive/2008/02/23/7251/>.
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Neiwert, David. "Republicans to Detroit: Drop Dead." Crooks and Liars 20 November 2008 <http://crooksandliars.com/david-neiwert/republicans-detroit-drop-dead>.
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Parks, James. "If Auto Industry Goes Bankrupt, Millions of U.S. Jobs Will Be Lost." AFL-CIO 4 December 2008 <http://blog.aflcio.org/2008/12/04/if-auto-industry-goes-bankrupt-millions-of-us-jobs-will-be-lost/>.
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Riechmann, Deb. "Bush Orders Emergency Bailout of the Auto Industry." Yahoo News 20 December 2008 <http://news.yahoo.com/s/ap/20081220/ap_on_go_pr_wh/meltdown_autos>.
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Salmon, Felix. "Chrysler Follows the Strip-and-Flip Playbook." Portfolio.com 1 November 2007 <http://www.portfolio.com/views/blogs/market-movers/2007/11/01/chrysler-follows-the-strip-and-flip-playbook?addComment=true>.
Sorkin, Andrew Ross. "Chrysler and the Fallibility of Private Equity." New York Times 1 November 2007 <http://dealbook.blogs.nytimes.com/2007/11/01/chrysler-and-the-fallibility-of-private-equity/>.
Vlasic, Bill and Fackler, Martin. "Car Slump Jolts Toyota, Halting 70 Years of Gain." New York Times 23 December 2008.
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