My daughter, who is a senior in high school, showed me a news item today.Honda has announced two major developments in automotive technology with devastating implications for both GM and Ford in the coming years.Honda says that it has developed a diesel engine which meets all California standards for emissions including Nox.And in the other part of the announcement, it has announced the development of a fuel cell powered automobile in which the fuel cell is a small package so that it does not occupy a large amount of space.The car has a range close to 300 miles.
Both of thes etechnologies are being readied for commercialization and we should see cars with these on the streets as early as 2008.
Consider the implications of these technolgies.The diesel, in one fell swopp can increase gas mileage by 30%.When married to a hybrid power train it could be well over 50% over our current gasoline engines.It would also stretch our gasoline reserves because diesel fuel is not merely cheaper, it also uses up a larger fraction of the crude.
The other technology, Fuel Cell has been put on the back burner by many auto companies,simply because of the bulkiness of the “reformer” that is needed to breakdown natural gas to hydrogen and carbon monoxide.If, as the announcement says, Honda has managed to produce a compact reformer, it is a major milestone.
Each of this news item has the potential of burying GM and Ford as they flounder in the many self inflicted problems of the past thirty odd years.
And what does this say to young people like my daughter searching for a place to make their contributions?
I told my daughter to pack up her bags and go to Tokyo.
Good thing my son is learning Japanese, eh?
What I find frustrating is that we have the talent and enthusiasm for accomplishing this kind of breakthroughs right here.And, yet, because our captains of industry cannot be bothered to invest in hybrid power trains,diesel technology or fuel cell technology we are forced to become also rans in an industry that was practically invented here.
I have also found that because the industry is run by accountants and financial types, they have no idea what to work on and how long some of these breakthroughs take.They simply want miracles like the next blockbuster movie to bail them out of their incompetence.So, by default, all these projects get run by the know-nothings on Wall Street.
It’s all a product of the quarterly statement and the stock market’s reaction to it. Have to make your quarterly statement look good to keep the stock price up. How to do that? The quick and easy way is to cut expenses, and one of the first places expenses are cut is R&D. The next place is labor costs. That is, layoffs.
And then the CEO’s hand picked and very chummy board of directors award the CEO a big bonus for this kind of management.
It’s a joke.
By eliminating R&D funding at the say-so of Wall Street, the CEOs of the auto companies have essentially eaten their seed corn.The kind of commitment over fifteen years and several billion dollars that led to the development of the Prius and a whole raft of hybrid cars at Toyota and Honda would have been shot down at any of the Big Three by the accountants running the show there.Anything that does not a produce a return within three months is no good for them.
One by one the Japanese have chipped away at the Big Three until now it will be Toyota, Honda and Nissan as the Big Three in our automobile industry.
And it was all so avoidable.
And I haven’t even considered how our obsession with military superiority has led us down this path and ruined the lives of so many people.