Dr. Michael Kowalski Ph.D.

Consultant, Michael Kowalski


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GLG News by Dr. Michael Kowalski Ph.D., Consultant

Analyses are solely the work of the authors and have not been edited or endorsed by GLG.

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Hope for General Motors! Improved fuel economy for light trucks and SUVs.

July 27, 2006

Guzzlers No More? | www.forbes.com

The imminent introduction of a new hybrid drivetrain, developed in partnership with Daimler Chrysler and BMW, will provide a significant fuel economy improvement for GM's large pick-ups and SUVs. If these vehicles are successful, they will have an interesting impact on other automotive manufacturer such as Toyota and Nissan who compete in this market segment. In this article by Jerry Flint, he forecasts four possible ways this competition may unfold. Most of these scenarios are interesting, but probably unlikely. I think that further licensing of the hybrid technology developed by the joint venture is the most likely near term result.

 

Are Alliances the solution to Fords troubles?

July 27, 2006

Who should Ford team up with? | www.freep.com

The nature of Ford Motor, which is essentially a family controlled business would make a merger with another automotive partner seem very implausible. However if such an alliance were necessary for it and its partner to compete in the global marketplace, Mazda may make the best candidate, given it long history of joint ventures with Ford.

Is an Alliance good for GM, Nissan, or Renault?

July 25, 2006

Bigger Not Necessarily Better | wardsauto.com

Historically "alliances" between automotive companies have taken many years to produce beneficial results, if at all. The recent Daimler-Chrysler and Renault-Nissan owe their success to the powerful influence of a strong leader. It is an open question whether Mr. Ghosn who was that leader at the Renault-Nissan merger, can overcome all of the difficulties of a three way automotive merger. More likely, as management teams of the companies study the benefits of an alliance, they will uncover areas where perhaps joint ventures could benefit the partners without forming a full alliance.

Hybrid Vehicles: will Image or Performance drive this market segment?

July 21, 2006

Effects of Vehicle Image in Gasoline-Electric Hybrid Vehicles | www.its.ucdavis.edu

The market for Hybrid vehicles is likely to remain small as long as purchase decisions are based on emotional issue without an economic basis. There are only so many customers who are willing to shell out more dollars to purchase a Hybrid vehicle for non-economic reasons. Technology advances, cost reductions and probably substantial increases in the cost of fuel are needed before Hybrid vehicles become part of the mainstream market.

Technological Advances will enable wider markets for Hybrid vehicles

July 21, 2006

Advanced Cooling System Makes Hybrids More Efficient | wardsauto.com

Currently most Hybrid vehicle sales are motivated by factor other then saving fuel costs. In this environment, Hybrids can only constitute a small portion of the vehicle sales. Improved performance and cost reduction is one avenue to change the economic equation. This article discusses possible changes to a vehicle cooling system that may accomplish both of these objectives at the same time. It is just such technical advances, that over time, will make hybrid vehicles practical and a more mainstream part of the marketplace

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What will thew impact of an "alliance" have on other Auto manunfacturers?

July 19, 2006

Talk of Alliance is Opening Floodgate Analysis - GM Drama Offers Many Endings | www.freep.com

First an Alliance would probably have a much larger impact on GM than oh Renault or Nissan. Toyota has already downplayed the impact on it business and given its size and reputation that is probably true. The smaller manufacturers from Japan and Korea would probably be most effected. My opinion however the major impact could be felt at Ford Motor.

What will the proposed Alliance trigger next at GM?

July 17, 2006

Talk of Alliance is Opening Floodgate Analysis - GM Drama Offers Many Endings | www.freep.com

Consolidation in the automotive industry is a process that has a long history.  The proposed Alliance may not be good news for GM, but may offer some opportunities for Renault.  The real winner in this is Kirk Kerkorian, GM's largest shareholder.

Does a GM-Nissan-Renault Alliance make sense?

July 17, 2006

Surprise GM Alliance Proposal Raises More Questions Than Answers | wardsauto.com

The alliance between General Motors, Renault, and Nissan has become a very public issue. The benefits to each of the companies vary, as do the negatives. The primary purpose seems to be to maximize the value of GM stock to the benefit of Mr. Kerkorian, perhaps at the cost of the destruction of GM.

How would GM benefit?

July 5, 2006

Renault, Nissan boards open to GM partnership | www.marketwatch.com

The benefits of partnership may be more important for Renault/ Nissan or for Mr. Kirkorian than for GM.  The failure of GM's venture with Fiat point to the difficulties of partnership.  The skills that Mr. Ghosn has demonstrated in the Nissan turnaround could be helpful to GM, particularly in the new product arena.  Instead of agreeing to another partnership, why doesn't GM pursue Mr. Ghosn himself?

Bashing General Motors

June 30, 2006

Would the U.S. economy be better off if a bloated GM went under? A look at the numbers behind the rhetoric | www.msnbc.msn.com

Recently columnist Thomas Friedman has suggested that America would be better off if General Motors goes bankrupt.  He suggests that what good for Toyota, who is poised to become the world largest auto maker, is good for the US.  The article identifies many factual issues to refute Friedman's argument and suggests that we should be rooting for GM's recovery for the good of America.

 

Do Hybrid vehicles make sense?

June 30, 2006

Green Gap:Hybrids might be hip, but are they saving cinsumers enough at the pump to compensate for the high sticker price? | www.msnbc.msn.com

Hybrid vehicles have become "politically correct" for the environmental crowd.  Currently they are not economically justified despite government subsidies and high gasoline prices.  The sales of these many of these vehicles has fallen off and need to be promoted by their manufactures with incentives.

 

Good question:Ethanol: Hype or Solution?

June 27, 2006

Ethanol: Hype or fuel solutiuon | www.detnews.com

Ethanol is being "hyped" as a near term solution to our dependence on imported oil.  The government has created all sorts of tax incentives and subsidies to increase the production and distribution of ethanol based fuels.  With six million flexible fuel vehicles already on the road it is understandable why the government is taking these actions.  These government actions raise questions: is this wise public policy and will it solve the problem?  The article is useful because it presents a fairly balanced discussion of the issues.   In the end it acknowledges that at best Ethanol can provide only a partial solution to reducing our dependance on foreign oil.

 

Fuel Efficient vehicles at GM.

June 26, 2006

GM hides fuel efficient small cars and truck in Brazil | www.detnews.com

General Motors (or any other automotive manufacturer) is certainly highly desirous of marketing attractive fuel efficient vehicles in the North American market.  In fact it has many small high milage vehicles available in this market.  From a historical perspective, such vehicles have had limited appeal even in time of high fuel prices or limited fuel availability.  The problem has been to produce desirable small vehicles which comply with all federal safety regulations and GM's own internal requirements at a reasonable price.

Political issues may contrain the expansion of ethanol production

June 19, 2006

Experts: Ethanol's water demands a concern | news.yahoo.com

The article identifies an issue that needs to be considered with the expansion of the ethanol fuel industry.  Many of the constraints may be reduced or eliminated by technical progress.  The availability of large quantities of water, currently required by the conversion process presents political as well as technical issues.

 

Good news from GM?

June 12, 2006

Mapping GM'sRoute to Recovery | www.latimes.com

In this interview with Rick Wagoner, GM Chairman and CEO,  some recent developments are discussed which are initial steps on the road to GM recovery.  This is good news.  Also the recent announcement of progress in the Delphi-UAW-GM negotiations offers further rays of hope.

 

Where is the lack of "efficiency"?

June 8, 2006

Efficient Auto Factories aren't Spared the Ax | www.detnews.com

What sort of business sense does it make to shut down very efficient  automotive assembly plants?  There are probably many reasons but two problems are key:  The product the plants are producing are not successful in the market place.  That is certainly true of Ford's Taurus/Sable assembled in Atlanta and GM's  products from Oshawa #2 plant.  The second major reason is lack of flexibility at these plants to produce more popular vehicles.

Brand Equity

June 5, 2006

Ford's Graveyard Fills Up | www.thecarconnection.com

Jerry Flint's critique of Ford Motor's dropped vehicles could have been directed at Chrysler of GM as well.  Brand equity is a valuable asset and needs to be protected.  The Japanese manufacturers seem to understand this concept and have applied it superbly.

Environmental Sense.

May 30, 2006

Ethanol plant to be built in Boardman | www.bizjournals.com

The wide spread availability of Ethanol fuels provides a near term solution to dependance on imported oil.  It is a renewable resource and many vehicles already on the road can use this fuel.

Carbon Fiber future?

May 30, 2006

Carbon fibre firms ready for take-off | business.timesonline.co.uk

Carbon fiber engineered materials offer exceptional performance, particularly because of their high strength and stiffness compared to weight.  They have been attractive for aerospace and sports equipment applications for some time because of these impressive characteristics.  For the same reasons they are attractive to other industries.  However, material costs and production cycle times have proven to be a major obstacle to their widespread applications.

Bio-Diesel fuels need Diesel powered vehicles.

May 30, 2006

Thirst for 'green' fuels propels U.S. soyoil | today.reuters.com

Bio derived diesel fuels offer an attractive way to reduce dependance on imported oil.  However, diesel engines are currently available on a limited number of vehicles, primarily trucks.  While this is a significant market, the wide spread adoption of diesel powered automobiles would have a far more significant impact.

 

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