Recently I had a very interesting discussion with an automotive industry veteran. Between his high-level background and his current position suffice to say he knows from which he speaks regarding where things are going. I won't provide any additional detail because it's respecting these people's anonymity that gets me this information in the first place. So instead of obsessing over exactly who it was just enjoy the type of information he provided:
1. Predictions of 17 million new cars sales in 2007 are optimistic to say the least. Think 16.5, or less, and with the domestics cutting fleet sales plan on massive market share drops for at least two of them.
2. Plug-in hybrids are definitely coming, but the interesting part will be watching who ends up controlling/supplying the batteries. Panasonic is the leading contender...for the Japanese car companies. However, Panasonic has been less-than-forthcoming (in fact, think radio silence) after ongoing inquiries from the domestics regarding future battery contracts. Apparently there are some alliances the U.S. still hasn't earned -- even if we are the number-one supporter of Japan's automotive industry.
3. The embargo policies that have kept the print publications afloat over the last decade (as automotive internet sites have grown in prominence) are finally getting their long overdue stake-in-the-heart. The amount of broken embargos during the recent Detroit Auto Show effectively displayed the lunancy of trying to control the release of information in the information age. Tomorrow belongs to the publications that can provide both rapid and authoritative content, not the ones that can most creatively manipulate a dying tradition.
4. While ultimately no one knows what Alan Mulally is going to do except Alan Mulally, it's likely Aston Martin's fate is just the first of many "sell-off" plans. Mr. Mulally turned Boeing around by getting serious about efficiency and "cutting the fat." If you take that same view of Ford Motor Company than how much of the Blue Oval wouldn't be jettisoned/eliminated? Lincoln? Mercury? All of the PAG? In the end it's highly unlikely the name "Ford" is going away -- but everything else is on the table and the company cold be unrecognizable in five years. Remember, in 1997 the thought of a foreign company owning Chrysler was beyond the comprehension of most Americans.
By readerreader
on February 6, 2007
07:23 AM
2. Plug-in hybrids are definitely coming, but the interesting part will be watching who ends up controlling/supplying the batteries. Panasonic is the leading contender...for the Japanese car companies. However, Panasonic has been less-than-forthcoming (in fact, think radio silence) after ongoing inquiries from the domestics regarding future battery contracts. Apparently there are some alliances the U.S. still hasn't earned -- even if we are the number-one supporter of Japan's automotive industry.
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That is not the first time I have heard that.
Japanese loyalty lies with Japanese firms first and foremost.
The only hope here might well be anti-trust or serious protectionism on the American end.
Don't look for enough of either.What I never understood is why this was so however.Is it through Panasonic's economies of scale?The US has battery makers as well--although small.
By member12
on February 6, 2007
08:15 AM
I have heard of this before. The japanese government has been pushing protectionist policies for decades.
I guess I'll just have to BOYCOTT Panasonic products now. If this is true, then I'll have to stay away from Toyota, too
We have no business trading with nationalist countries like Japan. And we need to go after CITGO, too.
By flicmod
on February 6, 2007
08:30 AM
I don't think it has to do as much with Japanese "nationalism" as it does with Japanese culture. They take great pride in their work, no matter what they're doing. They'd be foolish to not take advantage of that. Call it nationalism if you will. US companies do it as well. I look at it like this: American battery companies should use this situation for their own benefit. They know that the US auto-industry needs battery suppliers and that the Jap battery companies aren't supplying them. Open market for the US companies. Capitalize on it and make your business grow. There's a huge potential market for this stuff, and THEY'D be foolish for not taking advantage of IT.
As for CITGO, it's a little different story. They're owned by the country of Venezuela. Needless to say, the country is controlled by a wack job. Chavez has control over what CITGO does and he could potentially threaten the US economy with his decisions. The oil business is a lot more volitile than the battery business.
By roar02ram
on February 6, 2007
09:35 AM
I sure hope that last sentence in your blog isn't a harbinger of things to come, Karl. DaimlerChrysler was mind-blowing in '97 and remains mind-blowing today given that the two companies hobble at opposite times and have never really made a strong business case for being married in the first place. I'd hate to see that happen to either Ford or GM...although I am the first to admit that both of them need to kill brands.
By readerreader
on February 6, 2007
09:40 AM
flicmod - Feb 6, 2007 7:30 am (#3 Total: 4)
I don't think it has to do as much with Japanese "nationalism" as it does with Japanese culture. They take great pride in their work, no matter what they're doing. They'd be foolish to not take advantage of that. Call it nationalism if you will. US companies do it as well. I look at it like this: American battery companies should use this situation for their own benefit. They know that the US auto-industry needs battery suppliers and that the Jap battery companies aren't supplying them. Open market for the US companies. Capitalize on it and make your business grow. There's a huge potential market for this stuff, and THEY'D be foolish for not taking advantage of IT.
As for CITGO, it's a little different story. They're owned by the country of Venezuela. Needless to say, the country is controlled by a wack job. Chavez has control over what CITGO does and he could potentially threaten the US economy with his decisions. The oil business is a lot more volitile than the battery business.
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flicmod, please!
How much do you know about Japan?
What does "pride in your work" have to do with monopolizing the battery supply for the benefit of other Japanese companies only?
It is a nationalist move--no question, as anyone who has ever studied Japanese business culture can tell you.http://www.youtube.com/watch?v=xCeK0Trz9E0Now why, in the 21st Century would such things even exist?Surely they couldn't be that dense.
By carlisimo
on February 6, 2007
10:13 AM
There's another possible explanation... the domestics' really poor track record working with suppliers. I would turn them down too.
By flicmod
on February 6, 2007
10:35 AM
Monopoly is a pretty strong word for this. That would imply that ALL battery companies are Japanese and that they're ALL sided with the Jap automakers... but they're not and they're not. There are plenty of American battery companies that are probably more than willing to help out the domestics. Or maybe they're not, considering carlisimo's statement.
Nice piece of propaganda by the way.
By 1487
on February 6, 2007
11:03 AM
Ford indicated before that the suppliers from Japan who make batteries for hybrids were unwilling to give Ford as many batteries as they wanted to buy. They were inferring that the Japanese suppliers that are key to hybrid tech were interested in keeping the Home Teams in the lead on this and thus Ford would be no more than a niche player unless they found new suppliers. I dont find any of this surprising at all but Americans seem to believe that everything done in Japan is honorable and just and it's inconceivable that Japanese manufacturers and the government there work together to keep them at the top of the auto industry. Many American really do have a blind admiration for everything from Japan and it's really odd.
By hondacura4
on February 6, 2007
03:52 PM
Maybe its time America got a taste of its own medicine! It wasnt that long ago when some parts of the United States was like this!
By hondacura4
on February 6, 2007
03:54 PM
I was refering to the YouTube link BTW.
By autoboy16
on February 6, 2007
04:09 PM
I think it will be the energizer. The prius batteries keep on going[boom], and going[boom], and going[boom], and going[boom], and going[boom], and going[boom], and going[boom]....
-Cj
By savetheland
on February 6, 2007
07:15 PM
Opportunity is knocking. Any bad situation can be turned around into new opportunity. American companies may end Japanese monopoly in battery business.
Japan admiration by Americans - how good are Sony laptop batteries? Well engineered you may think? After all it is a Japanese company and even more – it is Sony – technology leader!
By flicmod
on February 7, 2007
07:45 AM
Ironically, there are a lot of people here in America that stand up for everything American in every way, shape, and form and don't recognize the faults of this country and the people in it. Some may think we are the Almighty and can do no wrong.
Not so far off from what Japan does, now is it?
By 1487
on February 7, 2007
07:59 AM
flic,
Sure there are people like that, but I dont see how that justifies what is happening in Japan in regards to keeping key technology away from foreighn competitors. I dont have a problem acknowledging the problems in this country, but that doesnt mean i have an urge to worship Japanese culture as if they are infallable.
By flicmod
on February 7, 2007
09:31 AM
The Japs AREN'T infallable. But people act like this hasn't happened in the past with the Japanese or hasn't happened in any other part of the world with any other culture. It happens all the time with other industries, not just the car industry. I don't see why people make such a big deal out of it. Are we not all capitalists here? Shouldn't we be looking at this as an opportunity for American companies to come forward and produce good results from their own technology? People get pissed off because of stuff like this, but they have the audacity to look to the Japs for help, and then when the Japs refuse, they cry "Ohhh, they're not playing fair!!! Someone do something!!!". Why do we need Japanese batteries anyways? Is there something there that we can't design, engineer, and produce ourselves? I don't think there is.Bottom line: it's time we stop complaining about how foreign companies are stealing the sunshine and start stepping up and filling roles that need to be filled. American ingenuity got us through a whole heck of a lot of tougher situations in the past than who is going to supply our batteries. We can get over this too.
By editor_karl
on February 7, 2007
11:05 AM
Flic -- You're right, and just to confirm, the person who told me about the above trends/issues also told me the domestics are ramping up their own technical divisions to produce their own batteries (as many here have suggested).
So yes, let's use Panasonic's lack of "sharing" to inspire our own ingenuity and competition. Who knows, maybe Detroit will eventually transform from an automotive mecca to a technology mecca. I'm pretty sure there are a couple (or more) folks in that area who wouldn't mind additional employment opportunities...
By bglickman
on February 7, 2007
04:44 PM
Is that Chandler Phillips?
By editor_karl
on February 7, 2007
07:43 PM
It's only a facsimile of Chandler Phillips -- used to represent a facsimile of someone else.
By 1487
on February 8, 2007
07:37 AM
flic,
I just told you what Ford said, I didnt say that there was a massive "Detroit conspiracy theory" or anything similar. GM is doing the hybrid thing it's own way and developing a unique system that will be shared by DC and BMW. GM has also awarded contracts to US firms to develop the batteries needed for a car like the Volt. They are not dependng on Japanese technology to move forward in hybrids. I really dont know what Ford is doing to expand it's hybrid program at this point.
By flicmod
on February 8, 2007
08:18 AM
1487,
I have no clue what you're talking about with the whole "Detroit conspiracy theory". Enlighten me.
If most domestics aren't depending on Jap batteries, then why even argue about the Japs hording their own tech for other Jap companies? Who cares?
By carlisimo
on February 8, 2007
09:37 AM
Is "Jap" an acceptable word now, or did it only become taboo in California?
By jerrywimer
on February 8, 2007
10:22 AM
I'm sure it's probably offensive to most Japanese or Japanese Americans. Most likely best not to use it, like most other politically incorrect terms.
Back to the main topic- I agree that this should be the spur that gets enterprising American companies moving on their own product and technology. But I also see where Japan's "protectionist" governmental policies are bad for us, when our own country (and evidently many of its citizens) can't see that it causes a strong trade imbalance, among other things. There are valid arguments related to this situation that could be tied into why it's wrong for Panasonic to be allowed to shut out non-Japanese companies..
By 1487
on February 8, 2007
02:04 PM
"People get pissed off because of stuff like this, but they have the audacity to look to the Japs for help, and then when the Japs refuse, they cry "Ohhh, they're not playing fair!!! Someone do something!!!". Why do we need Japanese batteries anyways? Is there something there that we can't design, engineer, and produce ourselves? I don't think there is.
Bottom line: it's time we stop complaining about how foreign companies are stealing the sunshine and start stepping up and filling roles that need to be filled. "
I was responding to that little diatribe when I made my comment about only telling you what Ford indicated in an article. I never said all of Detroit or all of america was using this supplier issue as an excuse. Nor did I say that ANYONE said America couldnt become a factor in battery development. Ford was merely saying the supplier who is in the lead didnt seem to be willing to give Ford the quantities Ford was willing to buy which limited Ford abilities to develop hybrids. Never said it was a huge conspiracy theory or that the domestic automakers were using it as an excuse not to develop hybrids. I suspect what Ford said was factual and that makes it difficult for Ford to rapidly expand its hybrid offerings, thats all I was saying. GM and Chrysler do not have a Toyota/Ford hybrid system in production so they arent dependent on that supplier.
By flicmod
on February 8, 2007
02:15 PM
Point taken, 1487. I was just making my point more so towards the people who were making this into a huge issue. I probably wrongly grouped you with them though. But I wasn't making anything out to be a conspiracy. Just reacting to some other posts here and what I've read and seen over the years. I still stand by my point that the domestics need to approach American companies about battery supplying if they're interested in it. Fight fire with fire, eh? I'd hope you'd agree with that.