Ethanol Backlash

There's a good piece here about the rising back-lash against corn-based ethanol mandates. The government is now finding out that mandating more ethanol is putting pressure on corn prices, which has some undesirable unintended consequences. Such as more expensive feed for livestock, which will translate into more expensive meat; more expensive corn syrup, which is the cheap sweetener of choice in just about every commercial food; more planting means more land use and more pesticides.

Corn ethanol seemed unstoppable, but a remarkable thing happened on the road from Des Moines. Just as the smart people warned, the government's decision to play energy market God and forcibly divert huge amounts of corn stocks into ethanol has played havoc with key sectors of the economy. Corn prices have nearly doubled, which means livestock owners can't afford to feed their animals, and food and drink manufacturers are struggling to buy corn and corn syrup. Environmentalists are sour over new stresses on farmland; international aid groups are moaning that the U.S. is cutting back its charitable food giving, and many of these folks are taking out their anger on Congress.

...

Things are even hotter in Washington, where lobbying groups are firming up their positions against corn ethanol. The hugely influential National Cattlemen's Beef Association has gone so far as to outline a series of public demands, including an end to any government tax credits (subsidies) for ethanol and an axe to the import tariff on foreign ethanol. Put another way, the cattlemen are so angry that they are demanding free markets and free trade--a first.

Those wacky cattlemen.

Once again, a great example of how poorly considered government rule-making can distort the market.

If we really wanted to increase ethanol use, we would drop the tariff on imported ethanol, a whopping $0.54 per gallon. We could then import Brazilian ethanol, which is made more cheaply than our own. But the truth is, the ethanol mandates are mostly a farm lobby pay-off.

Chelli's Bentley

Yesterday, on Southfield Road, I pulled up next to a shiny black Bentley Azure convertible, like this one:


Driving it, slowly, and chatting on a cell phone was (if I recognized him correctly) Chris Chelios, the senior defenseman from the Red Wings, and owner of Chelli's Chilli Bar restaurants.

It doesn't really matter to me what our local celebrities drive, as I don't care much for celebrity one way or another, but it was neat to see a Red Wing and his wheels.

Japanese Precision Auto Stunts

From Break.com.


The Japanese Are Very Talented - Click Here for more great videos and pictures!

Spotted In Birmingham: Holden Crewman

I stopped by the Border's Books in Birmingham the other day, and found myself parked next to one of these, sporting an M-plate. Sorry for the stolen pics, I dont' have a cell phone camera.















It is a sharp looking car, outside and in. Some lucky engineer from GM probably got to drive it for evaluation purposes.

Sometimes, We Need Big Brother

Today, I had a near miss because an idiot in front me of me had exactly one of three brake lamps working. He also had near-black tint on his front windows (technically illegal in MI) and non-functioning hood pins. On a battered Mercedes 200-series!

I would not advocate emissions testing to qualify for vehicle registration, but I am thinking now that mandatory safety inspections may be a good idea.

Should we let people drive with bald tires? Dead brake lamps? Dead headlights? Undamped, bouncing wheels? Worn out brakes? Ridiculously high lift kits that could result in decapitations in a collision with another vehicle?

I'm all for individual freedom, up to the point when people's poor maintenance or poseur engineering endanger the others on the road.

Slip-sliding away, slip-sliding away...

"Domestic" auto sales (Chrysler + Ford + GM) have fallen below 50% market share, and are not likely to recover any time soon, if ever.

But market share doesn't so much matter; the important thing is for the domestics to be sustainable, profitable businesses at the size they wind up at.

How likely is this? It is hard to say. I personally think that GM and Ford are large enough that they might pull itoff, with concessions from the UAW, product updates, and relocating production of low-margin vehicles to low cost countries.

Chrysler, I think, is a tough problem, because they aren't strong enough to stand on their own. Whoever winds up with Chrysler will have to join into alliances with other automakers to keep Chrysler's product pipeline full. If Chrysler's new owner is only interested in making a quick buck, there is a real chance that most of the company will simply evaporate, as the valuable pieces are sold off.

The "elephant in the room" is the massive legacy cost of the pension and retiree health care obligations. These costs mean that the domestics are significantly underwater--for each vehicle they build, they have less money available to put into content. The problem seems intractable, and at some point it will have to be dealt with. Either retirees will be thrown under the bus, or we will see some of the largest bankruptcies in American business history.

Either way, it will be excruciating.

Where I Buy Volvo Parts

Every now and then, my Volvo breaks in some annoying little way... like the wimpy cupholders that slide out from the console lid, packaged like origami and about as strong.

I have two places that I usually use to buy replacement parts from, and neither one is the local dealer, who has a healthy mark-up on his parts (although they do have nice free breath mints and chocolates at the service counter).

The first is an outfit called FCP Groton, at www.fcpgroton.com. FCP has a good selection of tune-up and wear-out parts for Volvo and a number of other European nameplates. The prices are very good.

The other place I have been dealing with is www.getvolvoparts.com, which is an e-commerce site for an auto dealership in Rhode Island called Tasca Automotive Group. When I needed a secondary air valve recently, Tasca had a great price, and very friendly service. If you need help, you can call or email them and they will support you. Tasca has a very nice online parts catalog, where you can find just about any part on your Volvo.

* I am not being compensated for this plug in any way, I am just a happy customer.

Grindhouse!

I saw Grindhouse. Loved it. This is a typical Tarantino movie--vulgar, sharp dialog, well crafted. I think they just have used the m-----f---er about 1000 times. The fake movie trailers shown before each half are hilarious.

Tarantino's half of the double feature is "Death Proof", a car chase/revenge story about some stunt-girls who duel it out with a stunt man who gets his kicks stalking pretty girls in his big black muscle car. There is a lot of talking, which you don't mind much because there are four pretty girls doing the talking (interesting somewhat right-wing tangent on gun rights in one scene), followed by a pretty spectacular car chase. The car chase, supposedly was done with "real" cars, no CGI.

If you don't mind sitting through a (pretty funny) disgusting zombie movie to get to the car chase, and don't mind the word "m-----f---er", and understand Tarantino's idea of humor, then definitely go see it, you won't be disappointed.

Bob's $5,000

Bob Lutz recently said that dramatically increasing fuel economy standards could add $5,000 to the price of the average new car.

He's right. This isn't just auto industry doom-saying.

The efficiency of internal combustion engines has plateaued. Every relatively cheap trick that could be used is being used. This includes variable valve timing, high efficiency lubricants, lighter weight materials, higher precision machining, and complex sensor networks and computer controls. And these advancements have added hundreds if not thousands of dollars to the cost of your engine*.

Major leaps forward require large increases in complexity. For example, diesel engines are more expensive because they must be built to withstand high pressures, and need turbochargers for driveability. Hybrid electric drivetrains keep all of the complexity of the existing gas engine, and add in parallel batteries, electric motors, regenerative braking, etc. Even with high-volume production, adding more stuff will always cost more money.

So how can automakers meet high fuel economy standards, without raising the prices dramatically?

The most obvious way is to down-size engines. As recently as the early 1990's, the average family car was packing something like 150HP. Today, a mid-size car with 150HP is considered lame, and 200HP+ is the norm. 0-60 times have likewise been dropping, with 8 second minivans becoming commonplace. But, what will the public say, and especially the automotive press, when the V6 becomes an expensive option, and the I-4 becomes the standard engine?

The other way, which Lutz mentioned, is to pursue ethanol fueled vehicles. Ignoring the problems of producing enough ethanol, for a moment, it is true that E85 uses less fossil fuel because it is by definition 85% ethanol. And by tuning engines specifically to take advantage of ethanol's high knock resistance, by increasing the compression ratio, automakers can overcome the performance hit from the reduced energy content of E85. An example of this technology is Saab's Biopower powertrain.

There is no free lunch. Drastically higher fuel economy will require consumer and taxpayer pain, and compromises. There isn't a 100mpg carburetor sitting on a basement shelf, gathering dust, somewhere in Auburn Hills, Dearborn, or Detroit.

*Ever have to replace an O2 sensor or a secondary air pump? Ouch!

B-Class Cars?

Besides the Flex, the other vehicles that inerest me are the Chevrolet small-car triplet Beat/Trax/Groove. These are fresh and practical looking small cars, which would have as good a chance as any of being a success, if Americans would be willing to buy small cars. (Image courtesy of AutoBlog. Cutie not included)

Which they aren't.

Despite the current meme that Americans are dumping SUVs for cars (only partly true), there is not a groundswell of demand for very small cars. Americans don't want small, fuel efficient cars, they really want cheap gas. Absent cheap gas, they want large cars and mid-size SUVs to replace their large SUVs.

There are some small cars which do well because they fill a specific niche. The Mini, for example, or the upcoming Smart. Others, like the Yaris (son of the abominable Echo) only really appeal to people who can't afford something better, or rental car fleets. Smart, by the way, has not been profitable since its inception in its home market.

On the regulatory side, the new CAFE calculations, which use a vehicle's footprint to calculate fuel economy targets rather than an arbitrary number, should give manufacturers the flexibility to avoid b-cars and concentrate on improving the efficiency of their larger vehicles.

The Ford Flex in NY

One of the more interesting vehicles to come out of the New York Auto Show is the production intent version of the Ford Fairlane concept "people mover", renamed to Flex. I like it, but I do have the requisite "buts".

Likes:

• Distinct, clean, modern design. Cues from Land Rover, classic station wagons of old, and the "427" theme. I like the white roof. Nice wheel proportions.
  
• Long wheelbase, lots of room for 2nd row passengers.
• Decent interior design.
  
• User programmable color lighting.
  
• Standard electronic stability control and side curtain airbags
• Capless fuel filler, which uses a rotating valve instead of a screw-off cap
• Lock keypad hidden in black b-pillar, with backlit buttons. Slick.
• Sync driver interface with a hard drive for storing MP3s onboard.
• The new aluminum 3.5L V6, 260HP

Buts:

• The name. "Flex" doesn't strike me as very elegant. It may also confuse some people that the Flex is not a FFV (Flexible Fuel Vehicle). On the other hand, Ford could make a Funk Master Flex edition of the Flex.
  
• The (predicted) price. Ford hasn't announced a price, but I doubt they will sell this for much less than the mid-range Edge or the Freestyle/Taurus X. I'm betting this will start at just below $30k and will probably option out north of $35,000. Not the most affordable people mover, compared to the basic minivans of yesteryear.
  
• The optional refrigerator. The cooler is located in the 2nd row, and if purchased will remove the middle seat of the 2nd row. The driver can't reach the cooler in that location. I like Chrysler's cooled glovebox design better.
• The 7th passenger (if the cooler is not installed) appears to sit on a very narrow bench seat, probably only suitable for a kid. This is not true three-across seating, like in a minivan, but more like 2-and-a-half across.
• Suicide doors, like on the concept, would have been neat.
• The center stack design looks rather plain.
• Is this vehicle sufficiently different from a Taurus X (F.K.A. Freestyle)? Will Ford have two very similar vehicles competing for the same buyers?
  

Beware Of Birds

Birds and high performance cars don't mix much better than birds and planes. The windshield did a good job staying solid!

Al Gore: KWh Bandit

An enterprising Tennessee organization called the Tennessee Center for Policy Research did a little bit of digging into Al Gore's personal energy consumption. According to the utility bills, Gore's McMansion uses 20 times the energy of the average American house.

The average household in America consumes 10,656 kilowatt-hours (kWh) per year, according to the Department of Energy. In 2006, Gore devoured nearly 221,000 kWh—more than 20 times the national average.

Last August alone, Gore burned through 22,619 kWh—guzzling more than twice the electricity in one month than an average American family uses in an entire year. As a result of his energy consumption, Gore’s average monthly electric bill topped $1,359.

Since the release of An Inconvenient Truth, Gore’s energy consumption has increased from an average of 16,200 kWh per month in 2005, to 18,400 kWh per month in 2006.

Gore’s extravagant energy use does not stop at his electric bill. Natural gas bills for Gore’s mansion and guest house averaged $1,080 per month last year.

And, do you know where most of that energy is coming from? Coal. Heh.

66 Mustang Limo

A waste of a perfectly good old Mustang? Perhaps. But it does have a strange charm to it. For sale on eBay.

Why Buy Chrysler?

Speculation is rampant about who may buy the Chrysler group from DCX. The Detroit News reports one rumor that GM is considering buying out Chrysler.

I'm not seeing it.

Where is GM strong? SUVs (Hummer, GMC, etc), crossovers, trucks, high end luxury cars, large family cars, sports cars (Corvette, coming Camaro) and economy cars (Aveo, Cobalt). Where is Chrysler strong? SUVs (Jeep), minivans, trucks (Ram), large family cars (300 family), sports cars (Viper, upcoming Challenger?), economy cars (Caliber family).

Both companies are weak on near-luxury (Buick) and moderately priced mid-sized cars.

Where would the "synergy" be, to use the management buzzword of the decade? GM needs viable mid-sized cars, not more trucks. The only Chrysler properties that would make sense for GM to buy would be Jeep, because of the obvious Hummer/Jeep tie-in and a corner on the hard-core off-road market, and maybe the minivan lines.

In addition, Chrysler brings bloated inventories, cranky UAW locals, debt, too many dealers, pension and healthcare obligations--in other words, more of the same problems GM already has.

If Chrysler is spun off from DCX, I would expect that it would be bought by an overseas company which wants a larger presence in SUVs and trucks (Hyundai), or a private investment group.

MI AG, Mike Cox, Rocks!

Michigan's attorney general, Mike Cox, has issued a ruling effectively banning automated red-light ticket cameras in MI.

Cox's legal opinion rekindled the debate over the growing number of red-light cameras, which are used in 22 states and 200-plus communities nationwide. They can't be installed in Michigan because state law only lets police cite motorists after personally seeing a violation, with an exception for cameras at railroad crossings, Cox said.

I thought his tussle with big-dog trial attorney and Democrat loudmouth Jeffrey Feiger was odd and distasteful, but I love how Cox walks the conservative walk.

Neat Jeep Video

A group of young men decide to destroy a Jeep by running it off road. It seems to hold up quite well--if this isn't a Jeep ad, it should be. Check out the tire re-beading technique they use at around 2:30.

The Automotive Angle of the SOTU Speech

A quick take on the policy proposals that the White House has posted as part of the State Of The Union Speech.

PRESIDENT BUSH'S DOMESTIC AGENDA

Energy

President Bush Will Ask Congress And America's Scientists, Farmers, Industry Leaders, And Entrepreneurs To Join Him In Pursuing The Goal Of Reducing U.S. Gasoline Usage By 20 Percent In The Next Ten Years – Twenty In Ten.

America Will Reach The President's Twenty In Ten Goal By:

• Increasing The Supply Of Renewable And Alternative Fuels By Setting A Mandatory Fuels Standard To Require 35 Billion Gallons Of Renewable And Alternative Fuels In 2017 – Nearly Five Times The 2012 Target Now In Law. In 2017, this will displace 15 percent of projected annual gasoline use.

This sounds like increased mandatory ethanol mix, as well as possible mandates of biodiesel. Unless an open international market in ethanol and biodiesel is permitted, fuel prices will likely go up.

• Reforming And Modernizing Corporate Average Fuel Economy (CAFE) Standards For Cars And Extending The Current Light Truck Rule. In 2017, this will reduce projected annual gasoline use by up to 8.5 billion gallons, a further 5 percent reduction that, in combination with increasing the supply of renewable and alternative fuels, will bring the total reduction in projected annual gasoline use to 20 percent.

Not much detail here, but likely it means "increase CAFE", which is a mixed bag. On one hand, it will make cars more expensive or less powerful. On the other hand, more regulation means more competitive advantage to the established players, and a steeper hill to climb for the Chinese.

• Congress Must Reform CAFE For Passenger Cars. The Administration has twice increased CAFE standards for light trucks using an attribute-based method. An attribute-based system (for example, a size-based system) reduces the risk that vehicle safety is compromised, helps preserve consumer choice, and helps spread the burden of compliance across all product lines and manufacturers. Congress should authorize the Secretary of Transportation to apply the same kind of attribute-based method to passenger cars.

So cars would be graded approximately by weight (footprint = wheelbase x track) rather than all being required to average out to the same number. This is a smarter way to do CAFE (a smarter way to do a stupid thing) because it takes size into account. However, we don't know yet how hard the new rule will push on fuel economy.

The President's Plan Will Help Confront Climate Change By Stopping The Projected Growth Of Carbon Dioxide Emissions From Cars, Light Trucks, And SUVs Within 10 Years.

The President's Plan To Strengthen America's Energy Security Also Includes:

• Stepping Up Domestic Oil Production In Environmentally Sensitive Ways

Good. Supply and demand--reduce demand, but also increase supply. Require more ethanol mixing, but reduce the price of the major component to offset some of the pain.

• Doubling The Current Capacity Of The Strategic Petroleum Reserve (SPR) To 1.5 Billion Barrels By 2027. Doubling the SPR alone will provide approximately 97 days of net oil import protection, enhancing America's ability to respond to potential oil disruptions.

Interesting. The SPR is not just used to control market prices, and Bush didn't seem to suggest that it would be. Is he preparing for another possible embargo from the Arabs over war policy? The turmoil in the Persian Gulf caused by a war with Iran would certainly cause a huge spike in oil prices. Update: I did a little reading about the SPR, it only has a capacity of 700 million barrels, in underground caverns. To double it would take a long time.

So, overall it looks not too bad but also not great for the auto industry. CAFE pressure will increase, which will cause vehicles to be more expensive as more technology (hybrids, turbos, direct injection, etc.) is thrown at the problem. A quick answer will be to sell more cars with less powerful engines, so as a result the V6 and V8 options may become pricier. OTOH, CAFE will help keep the Chinese out longer.

Increased mandatory use of ethanol will cause fuel prices to go up (also corn) but may be offset by additional supply, if Congress agrees (unlikely). Increased fuel prices will encourage a mix of smaller vehicles--more pain for the midsize/large truck based SUVs, and fullsized pickup trucks.

CU Effed Up, Schooled By NHTSA

When Consumer's Union (Consumer Reports) reported that the majority of infant seats they tested failed a side impact crash test, NHTSA was horrified and sprang into action. They tested samples of the same car seats that CU was claiming failed--and they couldn't duplicate CU's results. NHTSA deduced that CU had tested an equivalent of a 70mph side impact, not a 38mph side impact.

“Our initial review of the Consumer Reports testing procedures showed a significant error in the manner in which it conducted and reported on its side-impact tests. The organization’s data show its side-impact tests were actually conducted under conditions that would represent being struck in excess of 70 mph, twice as fast as the group claimed. When NHTSA tested the same child seats in conditions representing the 38.5 mph conditions claimed by Consumer Reports, the seats stayed in their bases as they should, instead of failing dramatically.”

I have always been suspicious of Consumer Reports "scientific" methods--they don't reveal details of their testing, use tiny sample sizes, and inject (mostly liberal) politics into their conclusions. For example, CU apparently gives the same weight to a burnt out lightbulb on a new car as a non functioning ABS system--both are "problems". Obviously, one is major and one is not.

CU has retracted their report, but the damage has already been done to the car seat makers, who were pilloried by the local nightly news ("Your kids at risk! News at 11:00!"). Even worse,they may have convinced some people that their car seats are unsafe. I hope they get sued.

Here's a video of a re-test that NHTSA did of one of the "failed" car seats, at the actual speed of 38mph:



Here's a video of an unrestrained infant dummy:



(Please, don't be a dummy!)

Video: Car Curling, Or Maybe Hockey?

Funny/scary video from Portland. Icy street, apparently on an incline, clueless drivers. Add them up, and you get life size curling!