Once again the US automotive industry is in dire straits. It did not learn from the 1973 energy crisis. It did not learn from the Chrysler experience. It did not learn from Toyota. It continued to depend on old, worn out concepts and on CEO’s that are kept in their positions by nepotism and by boards that do not understand the automotive business.
In a joint effort the Big Three are asking the US government for a $25 billion loan. They argue that government demands for increased fuel efficiency are too expensive to implement and require huge amounts of capital for retooling.
Let’s assume for the moment that the argument has some merit. But how can companies with worldwide manufacturing facilities fail to notice the steady increase in fuel prices and not see the warning signs hoisted by governments across the world that want to limit greenhouse gas emissions and fossil fuel consumption. This neglect is inexcusable.
Efforts of US and European governments to limit fuel consumption are misdirected, counterproductive, and coercive. A comprehensive analysis quickly reveals that we must indeed limit and eventually halt greenhouse gas emissions.
OPEC countries will continue their unstoppable increases of petroleum prices. Electric cars, CNG powered cars, and hydrogen powered cars cannot stop carbon dioxide emissions perceptibly and will not make our country independent of OPEC imports.
Automotive companies are critically dependent on the fickle and changing preferences of national and international markets. Industrial companies that follow political hype will be punished sooner or later. Governments are incapable of designing automobiles for the market place.
The world is relegated to using automobiles, trucks, trains, ships, and airplanes for the next century and will have to power most of them with liquid transportation fuels. We may be able to use less of them, we will be able to reduce energy consumption, we can use other forms of energy for some transportation, and we can produce petroleum substitutes from biomass. We can even produce biomass without competing with critically important food crops.
In order to minimize fuel consumption quickly, the auto industry is forced to deal with performance features. American drivers cannot avoid covering much longer distances than European or Japanese drivers. American drivers have less access to public transportation, have larger families, and drive on different types of roads. Automotive companies must listen to their customers. Toyota and Honda have been listening most successfully.
American and foreign car companies have developed a wide range of comfortable cars with a wide variety of utilitarian and luxury features. Sportive cars and SUV’s are attracting large numbers of buyers. All cars offer a wide selection of comfort and entertainment features. One major car component has received only peripheral attention; it is the much maligned internal combustion engine.
Many modern internal combustion engines are marvels of engineering. Materials, manufacturing processes, and especially peripheral components have progressed to unprecedented levels of performance and longevity. There is a last frontier that has escaped deserved attention. This is the highly energy efficient combustion engine. This is the type of engine that the automotive engine needs to develop, this is the engine that legislators should make mandatory. This is the engine that we need to use for at least one more century.
Long term the automotive industry has to develop an entirely new, advanced, internal combustion engine!
Average energy efficiency of the worlds inventory of combustion engines is somewhere in the lower mid-twenties. Energy efficiency cannot grow indefinitely. When approaching the 50% efficiency mark, it will be difficult and very expensive to increase efficiency by a single percent. Advanced automotive engines are operating in the mid-thirties. Large stationary engines are breaking the 45% mark. Large engines on trains and ships are getting above 40%. Looking at the total world inventory, we may still have a chance to nearly double energy efficiency and to cut energy consumption of present inventory in half.
We cannot reach this goal by legislating fuel consumption of cars only. We can achieve optimum energy efficiency only by reengineering the processes taking place within and around the internal combustion space.
We know that higher compression ratios will increase energy efficiency, we know how to produce high octane fuel, we know why Diesel engines are more efficient, we know how to minimize formation of pollutants. The automotive industry has developed a huge selection of sophisticated electronic components for single cylinder fuel injection, for precise controls of valve motion and ignition timing, and for reclaiming waste energy at the exhaust.
No company seems to have found the nerve to get a jump on the competition and develop the successor to the two more than century old engine concepts; the Otto and the Diesel engines.
If the US government decides to extend a $25 billion loan to the automotive industry, it should attach a few conditions. The loan needs to be secured and must take precedent over shareholder equity. The loan should stipulate that the salaries of top management are tethered to salaries of other top CEO’s like that of the US President. The obscene bonuses of yesterday should be paid only after a waiting period of at least five years; in which previously agreed upon management objectives must have been met or exceeded.
We must stop the prevalent looting of cash from US manufacturing companies by unscrupulous investors. These investors do not contribute anything of lasting value. They are excessively rewarded for ruining once healthy companies. We cannot continue to let a selected few impoverish the many and ruin our country irreparably.