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It's not just a struggle for control - it's a struggle for survival. The auto industry has reached one of it's rare inflection points with the arrival of pure

by chiph 8y ago

It's not just a struggle for control - it's a struggle for survival. The auto industry has reached one of it's rare inflection points with the arrival of pure EVs. They will have to offer a model that people will buy, or they'll lose the company. Previously, this happened to the US tire makers in the post-1973 oil-crisis years. They'd been happy producing bias-ply tires, when suddenly everyone wanted radials because they got better mileage and lasted 2-3 times as long. Goodyear was the only one to make the switch, and they're still in control of their business. All the others - Firestone, General, etc. did not, and ended up getting sold to someone else. https://www.alixpartners.com/media-center/press-releases/pile-up-awaits-auto-industry-investments-electric-autonomous-future-balloon/ https://www.alixpartners.com/media-center/press-releases/pil... The car makers realize this, and will spend whatever it takes, regardless of the return on capital, to stay alive.

tomatotomato37 8y ago
I don't think EV's are that big a deal on the automative manufactor side of things. The engine is only one component of the multi-ton combination of steel, cloth, rubber that is the automobile. Sure it's one of the most complex parts, but that's just bigger reason to ditch it and replace it with something that doesn't give their industrial engineers panic attacks
- AnthonyMouse 8y ago
  > The engine is only one component of the multi-ton combination of steel, cloth, rubber that is the automobile. It's not just the engine. Some things EVs don't have or do differently: Engine, transmission, cooling system, fuel system, fuel tank, exhaust system, emissions controls, power steering (electric, not hydraulic), everything else on the accessory belt (which itself no longer exists), vehicle frame (designed for batteries in the floor instead of engine at the front), instrumentation, etc. It's a lot of stuff. They have a huge infrastructure for building oil pans and belt-driven A/C compressors and decades of expertise in valve timing and equipment for compliance with vehicle emissions regulations, and none of that applies to EVs. They have to start over. But at the same time they have billions in unfunded pension liabilities and debt weighing them down. GM's current total liabilities stand at seventy-six billion dollars. They also have tons of assets, but how much of the assets are facilities for the manufacture of mufflers and fuel filters? They have the resources and incentive to make the transition, but they've also got a hill to climb and hungry competitors.
  - toomuchtodo 8y ago
    GM and Ford are one economic slowdown away from insolvency (due to the liabilities you mentioned, and most vehicle purchases having been pulled forward with easy credit).

by chiph 8y ago

tomatotomato37 8y ago

I don't think EV's are that big a deal on the automative manufactor side of things. The engine is only one component of the multi-ton combination of steel, cloth, rubber that is the automobile. Sure it's one of the most complex parts, but that's just bigger reason to ditch it and replace it with something that doesn't give their industrial engineers panic attacks

AnthonyMouse 8y ago
> The engine is only one component of the multi-ton combination of steel, cloth, rubber that is the automobile. It's not just the engine. Some things EVs don't have or do differently: Engine, transmission, cooling system, fuel system, fuel tank, exhaust system, emissions controls, power steering (electric, not hydraulic), everything else on the accessory belt (which itself no longer exists), vehicle frame (designed for batteries in the floor instead of engine at the front), instrumentation, etc. It's a lot of stuff. They have a huge infrastructure for building oil pans and belt-driven A/C compressors and decades of expertise in valve timing and equipment for compliance with vehicle emissions regulations, and none of that applies to EVs. They have to start over. But at the same time they have billions in unfunded pension liabilities and debt weighing them down. GM's current total liabilities stand at seventy-six billion dollars. They also have tons of assets, but how much of the assets are facilities for the manufacture of mufflers and fuel filters? They have the resources and incentive to make the transition, but they've also got a hill to climb and hungry competitors.
- toomuchtodo 8y ago
  GM and Ford are one economic slowdown away from insolvency (due to the liabilities you mentioned, and most vehicle purchases having been pulled forward with easy credit).