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Tag: cars (page 2 of 3)

GM mortaged the future

FiveThirtyEight.com has a simple explanation of why GM is dying:

GM was willing to cut its employees some very attractive deals in the 1950s through the 1980s — provided that they took them in the form of retirement benefits rather than salary, which wouldn’t hit GM’s books until much later and which until 1992 weren’t even required to be carried on its balance sheets all, making its financial statements (superficially) more appealing to its shareholders. That health care costs have risen so substantially in the United States have made a bad matter worse.

This issue is wrongly portrayed by both the liberal and the conservative media as one of management versus labor, when really it is a battle between General Motors past and General Motors present. In the 50s, 60s and 70s, everyone benefited: GM and its shareholders got the benefit of higher profit margins, and meanwhile, its employees benefited from GM’s willingness to cut a bad deal — for every dollar they were giving up in salary, those employees were getting a dollar and change back in retirement benefits. But now, everyone is hurting.

Links from March 30th

Links from March 12th

Germany’s old car repurchase program

The Truth About Cars writes about a German program that pays drivers to get their old cars off the road:

The attack of the aging automobiles is caused by the Abwrackprämie, cash for clunkers, paid by the German government. Since January 14th, 2009, owners of cars nine years or older can collect €2.5K if they put the pile of rust out of its misery, and buy a new one.

In the beginning, the program was ridiculed. It’s not going to work, said many, owners of clunkers won’t buy new. The Green Party said it’s “a joke.” Quickly, the mood changed.

Polk Germany prognosticated that the program would result in seven percent more sales than in 2008, that’s 200K units. A few days later, a new study said 1.2m people would buy a new car because of the Abwrackprämie. Too good to be true, given that barely 3m new cars were sold in 2008, with gruesome losses in Q4 08 and an awful January.

This strikes me as a pretty good idea. For the most part, old cars get worse mileage, have worse emissions, and are less safe than new cars. It’s a simple idea but one that could be of huge benefit to the car industry, and have some environmental benefits as well. Sounds like stimulus to me.

Why car GPS isn’t upgradeable

Michael Parekh notices that Harman and Mercedes are working on building an upgradeable navigation system for cars. As the article points out, car navigation systems are ridiculously expensive and obsolete the day the cars leave the factory:

From the initial details, it’s not clear if Harman has advanced the state of the art or offered automakers a short-term BandAid fix while they figure out why their navigation devices cost two to 10 times as much as portable navigation devices (PNDs). Traditional automaker navigation (as on the Mercedes-Benz C-Class, photo above) costs $1,500 to $2,000.

The cheapest is $1,250, from Hyundai. Update discs cost well on the high side of $100. And a built-in device reflects technology that’s several years old (and can’t be upgraded other than maps). Automakers say they’re held to higher standards than what buyers expect from $200 PNDs. With factory-installed navigation, the controls are integrated, there are no cords that clutter the cockpit, and the windshield isn’t obstructed.

I never realized how much better the portable units are until I rode in my brother in law’s brand new Acura a couple of years ago. Everything about my basic Garmin unit was better than the built in unit in a very nice luxury car. This is a problem.

In an ideal world, there would be an industry standard GPS API in car navigation units and firmware that would allow upgrades. Then Magellan, Garmin, and perhaps even Google could offer aftermarket GPS software that runs on the standard platform. As it stands now, if I were buying a new car I’d look for cars without navigation so as not to be left with a system as anachronistic as the built in car phone in my coworker’s 1998 BMW a few years down the road.

The question is, why hasn’t such a standard been established? I can think of a few reasons:

  • Lack of cooperation among automakers. They don’t want to work together on such a standard.
  • Planned obsolescence. Car manufacturers want to sell new cars. Making it easy for customers to upgrade the functionality of cars they already own is bad for business.
  • Integration challenges. Most built-in navigation systems provide other functionality specific to the cars they’re in. Decoupling the navigation functionality from the other functionality in the car computer requires extra engineering work.

I’m not holding my breath.

Porche’s financial maneuvering

Back in May I mentioned that Porsche is more a hedge fund than a car company. Little did I know that Porsche is actually a hedge fund that kills. That link is to a great explanation of how Porsche acquired Volkswagen and managed to earn billions of euros playing the financial markets in the process.

Small things in large numbers

Small things count when they come in large numbers — lead wheel weights used to balance tires are an example. According to the Ecology Center, 70,000 tons of lead per year is used to manufacture these weights, and they are the largest source of unregulated new lead in the environment. These are the issues of activism that interest me. Replacing them with weights made of other materials would be fairly easy and cheap, but most people don’t even know what lead wheel weights are. What’s the path to producing change on this front? My guess is that you try to get them outlawed somewhere, and then try to get that law to spread. Eventually they’ll be banned in enough places that it’s just easier not to use them at all.

The auto industry in a nutshell

Take a look at the Edmunds.com list of price change alerts for every model currently being produced. The constant stream of down arrows tells the story of the auto industry today. The US automakers are doing poorly, but so is everyone else. In many ways, the difference between how the US automakers are doing and how everyone else is doing is that their labor relationships go back a lot further than do the labor relationships of foreign automakers that are producing cars in the US.

Things are tough all over

Honda is selling off its Formula One team and getting out of the business of supplying other F1 teams with engines to save money given their poor fortunes in the current economy. Much attention has been paid to the suffering of America’s inept automakers, but it’s also true that all of the auto manufacturers are doing very poorly right now. Anyone think that Japan, South Korea, and Germany are just going to let their car companies bite the dust? I doubt it.

Red light cameras

Bruce Schneier flags a post about the ineffectiveness of red light cameras. Unfortunately, because cities find the cameras to be a useful source of revenue, I doubt we’ll be seeing them disappear anytime soon. I’ve seriously considered running for city council or county commissioner on the sole issue of getting rid of them.

Not only do I hate the general level of anxiety they cause for drivers at the intersections where they’re posted, but I also hate that they condition people to accept being constantly, passively observed for potential violations of the law.

Big companies and the government both suck, particularly when they work together. The insurance companies are evil:

The IIHS, funded by automobile insurance companies, is the leading advocate for red-light cameras since insurance companies can profit from red-light cameras by way of higher premiums due to increased crashes and citations.

And so are city governments:

In fact, six U.S. cities have been found guilty of shortening the yellow light cycles below what is allowed by law on intersections equipped with cameras meant to catch red-light runners. Those local governments have completely ignored the safety benefit of increasing the yellow light time and decided to install red-light cameras, shorten the yellow light duration, and collect the profits instead.

More people will die thanks to red light cameras, but surely that’s justified by increasing government revenue without “raising taxes” and more profit for the auto insurance industry.

Here are more details on the six cities that have been caught shortening yellow lights to raise red light camera revenue.

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