The Cars GM Needs To Make

[SuperTrooper]

As a 3-wheeled vehicle the Aptera is indeed classifed as a motorcycle.

In September Aptera received $24M in venture capital for production startup costs, mainly from google and Idealab. As part of the deal founder Stave Fambro was demoted to Chief Technology Officer, and they hired an experienced industry exec in Paul Wilbur to be CEO.

[jamesqf]

Originally Posted by SuperTrooper

As a 3-wheeled vehicle the Aptera is indeed classifed as a motorcycle.

Exactly my point. Under current laws it has the same status as that Harley trike. Of course no one can say for sure how the laws may change in the future, but given the need for higher fuel economy, the government'd have to be even stupider than the Bush administration (and I doubt that's possible :-)) to restrict them.

As part of the deal founder Stave Fambro was demoted to Chief Technology Officer, and they hired an experienced industry exec in Paul Wilbur to be CEO.

Letting a technology person go back to doing technology is NOT a demotion. Having occasionally been pushed into positions where I had to do management stuff for a while, I can say that words like "relief", "reprieve", and "deliverance" are much more appropriate :-)

[Frank Lee]

Originally Posted by owlafaye

It is an enclosed passenger vehicle and WILL be subjected to various safety regulations outside of "motorcycle" status.

What? It falls squarely (as squarely as a trike can fall) into motorcycle status.

No need to worry however, it is an income generator for the inventor, not an honest new car effort. Fortunately, large investors see through these schemes and this guy doesn't seem to be getting anywhere because of it.

I sometimes wonder about that too. The Moller example you brought up is perfect.

[NeilBlanchard]

Hello,

We'll know in the next few months whether Aptera is for real or not. They will be crash testing it, and they are starting production soon. They had hoped to start production in October (just past), so if things slip until early this year, I'm not going to hold that against them.

They have been revising the design, and have added outside mirrors in place of the video cameras; to meet the letter of CA law. They have rented a much larger space, and have moved into it.

They have $500 deposits from ~4,000 people; hardly seems worth spending millions for.

[Big Dave]

My bad. Charles Nash was not the last guy to start a car company in the US. It was Walter P. Chrysler. Nash in 1917. Chrysler in 1925.

Actually neither man started from scratch. Both bought existing (struggling) firms a combined them and turned them around. Only two guys ever started car companies from scratch and made them work: Henry Ford and Billy Durant, and Durant only on his second try.

Starting car companies and getting them to stay in business is a tough game to play. A lot of smart cookies have lost mountains of money trying. This is why I have contempt for those who tell me Ford and GM are dying of "bad management." You cannot tell me anyone who could do it better. Even Jack Welch knew better.

Thecombination of legacy costs, excessive regulation, excessive litigation, and excessive taxation make starting a car company in the US mission impossible.

[jamesqf]

Originally Posted by Big Dave

This is why I have contempt for those who tell me Ford and GM are dying of "bad management." You cannot tell me anyone who could do it better.

Honda? Toyota? Subaru? What other foreign manufacturers have assembly plants in the US? They seem to have found ways to deal with the costs, and (presumably) make a profit on US operations.

Granted that conditions for the US automakers were not exactly easy, their management still seems to have been engaged in a 40-year exercise in denying reality. We kept hearing them endlessly chanting their mantra "Americans don't want small cars" while steadily losing market share to foreign automakers which sold - guess what? - mostly smaller cars. They kept on producing ever-larger & more fuel-hungry products, while ignoring all the evidence showing that major fuel price increases were inevitable. They painted themselves into the corner. If that's not bad management, what is?

[Big Dave]

In the first quarter of 2009 Chrysler will go into Chapter 7. GM couldn’t swing the deal and Carlos Ghosn only offers fifteen cents on the dollar of its liquidation value.

Ford and GM will have burned through their remaining cash and will go into Chapter 11.

Obama could find himself presioding over the end of the US auto industry. One out of every fourteen people in the US are associated with this industry.

What does he do?

[jamesqf]

Instead of giving the not-so-Big 3 a $25 billion reward for their bad management, how about loaning much smaller amounts of money to startups like Aptera (on a match with what they can raise from private investment) so they can ramp up production and replace those old jobs with new ones.

Even if the used-to-be Big 3 go down, I can't see it as being the end of the US auto industry. There'll still be a demand for cars, and it's cheaper to build them in the US than to ship them in. They'll just be Hondas & Toyotas and so on, and with luck a bunch of Apteras, Teslas, and who knows what.

I really doubt that 1 in 14 people being associated with the US auto industry - meaning the Detroit 3. Maybe with the auto industry as a whole, considering everything from parts suppliers to mechanics & used-car salespeople. So if the Detroit three go under tomorrow, how much of that goes away? About half the cars are "imports" already, so that stays, even grows a bit. The mechanics & so on stay in business - my neighbor still makes a good living working on things like Cords & Model T Fords. The sales people just change brands...

[Big Dave]

It will be interesting when the UAW gets "card check" certification at Japanese transplant assembly plants. I wonder if the Japanese will play ball with the UAW or will they just close up shop and go back to Japan. With the exception of the Toyota engine plant in Buffalo WV, all Japanese plants in the US are just assembly plants. Nothing but a conveyor and a paint shop. They could shut them down and all the equipment moved within 90 days.

I know VW will not work with the UAW. They got burned in Westmoreland, PA back in the 70s.

[SuperTrooper]

Originally Posted by Big Dave

It will be interesting when the UAW gets "card check" certification at Japanese transplant assembly plants. I wonder if the Japanese will play ball with the UAW or will they just close up shop and go back to Japan. With the exception of the Toyota engine plant in Buffalo WV, all Japanese plants in the US are just assembly plants. Nothing but a conveyor and a paint shop. They could shut them down and all the equipment moved within 90 days.

I know VW will not work with the UAW. They got burned in Westmoreland, PA back in the 70s.

Actually Dave, Honda has engine plants in Anna, OH and Lincoln, AL. As well as an auto transmission plant in Russel Point, OH. They also have a large facility in Allison, ONT that just opened a big 4-cyl engine plant. Their U.S. plant production capacity is too large to just pick up and move at a moments notice. Not to mention the PR nightmare that would result here.

I'm not any fan of unions, but they have their place and they might be needed if HALF of what I've read about Toyota's treatment of it's US employees is true. They function a lot like a Wal-Mart. They fire injured employees. Employees bear most of the health plan costs on wages that are far below other local jobs of similar complexity and responsibility. The average wage at the San Antonio, TX plant is said to be $12/hr. Since the plant opened in 2003 the Texas Dept. of Labor has had to hire 3 employees just to deal with the worker complaints directed at Toyota. A third of their employees are temps so they can avoid hitting time-of-service milestones triggering things like sick pay, vacation time, and holiday pay. The temps don't quailfy for any type of health coverage. This sounds like a situation where a union could help balance the playing field somewhat. Toyota has almost $60B tied up in US manufacturing plants so they can't just walk away without taking a huge financial hit that investors wouldn't take kindly to.