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Where are we?
100 years ago, an auto executive said, "All automobile companies are 1.5 years from bankruptcy." He was well aware that if you didn't have new product available every 1.5 years, your customer base will go elsewhere. It is easy to see who understands this. They are the manufacturers that still produce cars, not bloated, overpriced minivans with 5' cargo boxes on them. 25 years into this century, we are inundated with useless led lighting, TV screens throughout the vehicle and a bunch of technology that nobody needs in order to drive to the store for a half gallon of milk. Realizing that 99% of the time, only one person occupies the vehicle, one must wonder why so many designs have 3 rows of seats and are 3x's larger than they need to be. On the other hand, how large is the market for 3-ton small cars that cost $70,000 that are going to be used to drive to pick up that half gallon of milk?
Ptg0
Highland Park, Michigan
Seeing, understanding and believing.
Peter, you have hit the bullseye once again. I spent a career in product development; there were times and places where the "product cadence" was on point and market success was a regular occurrence. In one instance we were so hot our offshore competitors would try to fence us in with patents and legal borders as they could not keep up with our innovation and "cadence".
I have also endured the B school geniuses who thought buzzwords and hip dialog would somehow translate into a vision and a solid product portfolio plan. They were incorrect! And yet they would survive only to move on to the next dumpster fire.
In my view Bob Lutz and Wolfgang Reitzel were successful as auto executives, because they could tie the following three elements into a meaningful approach:
Seeing = the brand essence and business vision.
Understanding = what product and for whom.
Believing = a plan with the support, trust and willingness to execute.
Thanks for your commentary and insights.
TB
Gainesville, Florida
On Call.
Hello! You’ve reached the D3 autos Hybrid/BelchfireV8/PureEV True Believers Team hot line. We’re all together now and have solutions for any and all of the challenges facing us today. We are the realists and the team working to solve today’s mess. Finally, no bullshit here! Listen carefully as our voices are finally being heard.
Press 1 for our Pure EV True Believer Associates and hear how we failed miserably to convince executives to apply the laws of physics in planning mass market products to replace traditional ICE vehicles for personal transportation. Hear how management is now eating Pure EVs and big batteries for breakfast, lunch and dinner and killing battery and dedicated Pure EV assembly plants for obese pickups and SUVs because they ignored our advice. The driving public wants more than electric golf carts and forklifts but not 10K lb $120K crab walking SUVs. Mass matters and it’s not just for Sunday.
Press 2 to listen in on our Belchfire V8 True Believer Associates as they celebrate the return of the Hemi and re-tooling of Tonawanda Propulsion to bring back and keep the proper authority of sound and performance of the ICE V8 engine. We said “Don’t argue with profits and success.” They said, “We don’t believe you, besides, we have federal money and EPA credits instead of EV profits to prove it.” We asked, “How long do wet dreams last??” ICE will power commercial vehicles until GVWR far surpasses battery weight by many orders of magnitude.
Press 3 to connect via satellite with our Hybrid True Believer Associates currently on assignment in Japan. We have always believed that hybrids solve the worldwide intersection of affordability, range, use case and environmental guilt. We still do. Worldwide, Japanese hybrids have moved more people, more miles, over more roads and over more time using electricity than any other electric automobiles. Don’t argue with the laws of physics. You will lose every time. Hybrids keep everyone happy for now.
Dr. John
Phoenix, Arizona
True Believers almost extinct.
The "True Believer" pool has shrunk to a very low level. Work Ethic is no longer taught in high school or college. I read a report that said the average college graduate expects to have four to six employment changes in their first ten years. Grade point averages have become similar to "star ratings" of high school athletes. Schools now hand out 4 points in order to keep their "prestige" of turning out best in class graduates. Top schools that used to have less than 25% of students earn a 4 point now have over 90% gaining that status. It makes the school look like they attract only the elite academic students. I guess when you charge 150K plus to have grad assistants teach the class, you need to lower the bar so every student gets a ribbon. Work ethic is not the reason GPAs have risen.
3 years ago, I spoke with someone who owns a large diecast company. He needed to hire four engineers and received a resume from a fresh graduate from a very prestigious college in Michigan. The resume was impressive as he graduated with a 4.0 GPA in engineering. After a phone contact, the owner sent the applicant an employment package/offer for review and told him that if his interview went well, he would be offered a job on the spot. An interview date was set. Just prior to the interview, the applicant sent an email asking to delay for a family issue. Owner assured the applicant that family comes first and to reschedule when things got worked out. He called him back three days later and was told there wasn't a family issue. He said since he lived 2-1/2 hours from the office, he really didn't want to drive that far and wondered if the owner would come to his house to do the interview. He assured the student that wasn't necessary as he put the resume in the shredder. True Believers are close to being on the endangered species list. Bless the ones that understand with passion and dedication!
RJ VanDerZee
South Haven, Michigan
More on the EV future.
Re: “companies have bet their futures on the ability to manufacture EVs - and most assuredly lost - while generating real profits with ICEs, some car companies are just not going to make it.”
The flip side of this is Kodak: Film technology was highly profitable and top brass saw no need for investment in digital photography sensor technology, because it required extreme amounts of spending on research and development to mass-produce the technology, let alone retooling manufacturing facilities, with no clear mass market demand, especially for the high prices of digital sensors at the time. It was a very profitable and prudent strategy for well over a decade, until it very suddenly wasn’t. The company went from record profits in 2000 to on the brink just three years later. It eventually went bankrupt.
Eventually, with the ever-lowering costs of batteries, EV market demand will flip like what Kodak experienced. I don’t know when it will happen, but it will, and automakers not ready for this won’t be any better able to suddenly pivot than Kodak was.
As an aside, Tesla lost money for over a decade, and almost went bankrupt, before becoming profitable. If *they* had trouble reaching profitability with EV’s, what chances do the automotive Kodaks have?
Michael Ball
Kensington, Maryland
Editor-in-Chief's Note: The only thing that kept Tesla afloat - and profitable - were the credits paid to the company from other auto manufacturers. -PMD
Antonelli.
I have said this already, but this kid Antonelli in F1 reminds me of... Senna. I don't watch F1 anymore (TV is crap now) but I do read the results. So far, the kid is paralleling what Senna did in his first year. The kid definitely bears watching the next couple years. Talents like his do not come along very often.
Ted R
Raleigh, North Carolina
Editor-in-Chief's Note: Kimi is my favorite driver at the moment, he is gifted with prodigious talent. -PMD
Rock on!
Toyota entering the side-by-side game? With actual testing and durability? The party is over Polaris (I'm a former key die casting supplier--they buy it all from China now). My $50K heat/air side x side neighbor owners will gladly pay another $10K for a reliable Toyota; that will likely have American parts. Me? I just bought a vintage VeeDub dune buggy to thumb my nose at them. Rock on Peter and AE!
bluehillsmike
Lake Holcombe, Wisconsin
AI Hell.
As the world tries to figure out what to do with all the new Artificial Intelligence capacity being built, some prognosticators are saying that it isn't the lowly data analysts who will be replaced: AI makes too many mistakes at that level. However, taking all the work and creating strategic outcomes - the work of executives (AKA "so-called genius executives") - is something AI could do pretty well. What an irony that would be if stockholders decided that high paid executives could be substituted with OpenAI?
CAE
Palm Springs, California
The analog drive.
You once again hit the nail on the head in this week's rant. My 2016 Civic was wrecked last year. In March I bought a new 2025 Civic sport. I wanted the entry level car because I did not want all the electronic nannies. However, it did come with some. Imagine my shock when a couple of weeks I got a warning on my dashboard. Something about the windshield was dirty and it might affect my various nanny controls. I looked at my windshield and it was not that dirty. I cannot wait until these nanny controls break and I have to pay to get them fixed. At least if I want an analog driving experience, I can leave my iPhone at home and take out my '85 TA or my '86 Corvette. I can pay cash for gas and no one will know where I am and can't track my route.
JP
Antioch, California
