No. 885
February 22, 2017
 

About The Autoextremist

Peter M. DeLorenzo has been immersed in all things automotive since childhood. Privileged to be an up-close-and-personal witness to the glory days of the U.S. auto industry, DeLorenzo combines that historical legacy with his own 22-year career in automotive marketing and advertising to bring unmatched industry perspectives to the Internet with Autoextremist.com, which was founded on June 1, 1999. DeLorenzo is known for his incendiary commentaries and laser-accurate analysis of the automobile business, as well as racing and the business of motorsports. Author. Commentator. Influencer. The Consigliere. Minister of the High-Octane Truth. DeLorenzo is considered to be one of the most influential voices commenting on the business today.

DeLorenzo's latest book is Witch Hunt (Octane Press  witchhuntbook.com). It is available on Amazon in both hardcover and Kindle formats, as well as on iBookstore. DeLorenzo is also the author of The United States of Toyota.

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The Autoextremist - Rants


Tuesday
Jan312017

THE SWIRLING MAELSTROM TO THE FORE.

By Peter M. DeLorenzo

Detroit. While watching as Mary Barra, Mark Fields and Sergio Marchionne (who was dressed like a guy on break from his job as a shoe salesman at Nordstrom’s) were summoned to The White House, I couldn’t help but think that the whole thing was a grossly miscalculated mistake.

This wasn’t some welcoming respite from the storm offered by the new President, and it wasn’t some grand awakening by this nation’s political intelligentsia to the crucial role played by the auto manufacturers as part of the industrial fabric of America. No, this was a photo op with The New Guy so he could make all nicey-nicey for the cameras while throwing a figurative arm around the shoulders of the long-suffering American auto industry.

The body language from two of the CEOs (Barra and Fields) was measured and restrained. In fact they looked more than a little uncomfortable, which was not surprising, because based on decades of past interactions, attention from Washington to the auto industry is usually a bad thing. (Sergio looked like he always looks, like a guy invited to a party that he really didn’t belong at, so he doesn’t count. And he didn’t say anything, which was even better. )

On the one hand, I’m sure Barra and Fields appreciated the moment, as it's nice to be invited to The White House. I mean how many times does that happen in a CEO’s career? But on the other hand, there was a gnarly undertone to the proceedings, that whatever platitudes were thrown around for the gathering were but vacuous sweet nothings that, in fact, meant absolutely nothing.

And sure enough, just a few days later suspicions were confirmed, as the new President made mention that he was thinking about leveling a 20 percent tariff on all goods coming in from Mexico, including automobiles. You could feel an instant, icy chill around here when those words came emanating out of Washington.

No matter what side you come down on about the NAFTA agreement, it is The Devil this industry knows. The industry has adjusted, and the supplier community in particular has devised ingenious solutions to make it all work. A 20 percent tariff on autos coming in from Mexico would decimate the supplier community, not to mention hitting the average consumer hard.

It also served as a warning shot to the CEOs and the auto companies they lead (and the supplier community as well), because no matter what the gushingly positive rhetoric flying around suggests (it’s clear that the new President doesn’t know the campaign has ended) in all of its jingoistic simplicity, the auto industry should consider the reality of Washington and the political establishment, which goes something like this:

When votes are needed, the auto industry “is crucial to the well being of America” (insert language along those lines). But after the election is over, the collective “Detroit” (aka the domestic auto industry) is just a plastic bag caught in the swirling maelstrom of the prevailing political winds.

The new President clearly doesn’t give a damn about the auto industry, even though he insists just the opposite. He speaks with the proverbial forked tongue and he will always take the politically expedient path of least resistance. So pay attention Mary and Mark, you’ve been officially put on notice. Sergio? Go get your shine box.

In cheerier news, GM and Honda solidified their technical partnership when it comes to fuel cell development yesterday announcing the establishment of the auto industry’s first manufacturing joint venture to mass produce an advanced hydrogen fuel cell system that will be used in future products from each company.

Fuel Cell System Manufacturing, LLC will operate within GM’s existing battery pack manufacturing facility site in Brownstown, Michigan, south of Detroit. Mass production of fuel cell systems is expected to begin around 2020 and create nearly 100 new jobs. The companies are making equal investments totaling $85 million in the joint venture. In case you didn’t know, Honda and GM have been working together through a master collaboration agreement announced in July 2013.

Longtime readers of this website know that I have been an advocate of advanced hydrogen fuel cell systems for more than a decade (see Peter’s vision for The Future of Racing and the Hydrogen Electric Racing Federation here. –WG). I believe that it will prove to be the ultimate technological scenario when it comes to powering our electric cars of the future.

But as encouraged as I am about the tremendous progress made by GM, Honda, Toyota and others when it comes to the development of advanced fuel cell propulsion, the unflinching reality is that nothing will come of it on a mass scale unless the infrastructure to support fuel cell vehicles is developed along with it. And the only progress being made so far in developing the infrastructure required for a future of fuel cell vehicles has been a burgeoning initiative ongoing in California.

We’ve arrived at a critical moment when it comes to the transformation of our nation’s vehicle fleet. If hydrogen fuel cell powered vehicles are the ultimate solution – and I believe they are – it will require a massive, national push to transform this nation’s infrastructure.

It’s a chicken and egg scenario, however, because before more hydrogen fuel cell vehicles are built, there will have to be more hydrogen fuel cell refueling stations built. But before more hydrogen fuel cell stations are built, manufacturers will have to commit to building more hydrogen fuel cell-powered electric vehicles. And so on.

It’s always something.

And that’s the High-Octane (fuel stack) Truth for this week.