Saturn's diesel savior and the foundation of a new "Big 3 or 4 or 5??"

 In case anyone missed the news, Saturn was sold to the Penske Auto Group.  For the uninitiated, Penske's an automotive conglomerate to put it mildly. Basically if it's got wheels or has something to do with transportation, chances are this group has a piece of the action.  The company is the second largest automotive car dealer in the country.  They also have their own u-haul truck business. And yes, they do racecars.

But what has me intrigued, is that one of their biggest businesses has to do with diesel engines and other motor parts.  The company has said that it has wanted to enter the car industry besides retail and parts for a long time.  They've also been a big promotor of diesel, and one wonders now if Saturn will be a platform to show off that engine's potential.  GM will not be at a loss either, as for the time being, they will be a contract manufacturer for Penske.

Could we be seeing the entrance of a new member into the old Big 3 or the establishment of a new North American grouping.  The old order is essentially dead, except for Ford and they are surviving only because of some fancy financing.  Chrysler is exiting bankruptcy, but it's shotgun wedding to Italian automaker, Fiat, is now an uncertainty.  GM has only started on the path of rebuilding. The forecast of the Detroit three still remains cloudy.  Ford is hoping it's financed cash horde will last until car sales pick up. Chrysler and GM have both stated that they need autosales to be at least 10 million just to break even.

Regarding Saturn, Penske purchased some assets and the brand.  Roger Penske, the company's chairman, has stated that he wants to keep all 13,000 employees. But will Penske continue to contract out manufacturing to General Motors or seek new avenues for production?  The company could build it's own plants in the US, or it could also contract out to foreign manufacturers.

So does this open the door to a "new generation" of domestic automakers? There are currently a host of new entrants into the market, but all are struggling at the moment.  California-based Testla claims it will have an all-electric sedan out soon and is trying to meet demand on the Roadster (they are even opening up seven new dealerships).  Others include Canadian outfit, ZENN, which has been selling electric "microcars," has seen expanding car sales.  There are a slew of other electric car companies, not to mention those of the more "old fashioned" variety.  Now we have Penske's Saturn.

Subject Meta: 

Forum Categories: 

something to compete against Volkswagon Jetta?

I believe those are the ones that burn clean,51 MPG and you can also turn them into french fry cars with no modification at all to the diesel engines.

If so, that's wise, because I frankly want a french fry car where I can load up on diesel or at McDonalds and it also gets 51 MPG with loads of HP.

Or, how about an alcohol car? Makes siphoning and DUI 1-stop shopping. All ya need then is a drive thru attorney and automatic bail bonds supercenter. Perhaps Wal-mart would get into the biz?

Put those vices to work baby. None of this wheat grass and bicycle to work stuff. ;)

A good side market for them to get into

If a bit small:
A small Saturn with a diesel engine and a biofuel generator on a 1000 lb trailer.

Basically just an oil press for various types of vegetable oil, combined with a filtering reactor and an electric pump that a survivalist or farmer could park at the edge of a rapeseed or other oil bearing seed field, and create one's own biofuel to run in the car.
-------------------------------------
Maximum jobs, not maximum profits.

-------------------------------------
Maximum jobs, not maximum profits.

About the French Fry car

Straight veggie oil doesn't work too well with modern diesels. The oil is quite viscous, and since modern diesels run injector pressures of over 2000 bar (as in 30000 psi, hydraulic knife pressures) veggie oil will either clog up or wear out the injectors. Even fatty acid ester biodiesels (what most people mean when they say biodiesel) have somewhat higher viscosities than D2 petrodiesel and VW of America will only warrant up to 5% biodiesel usage (but Citroen/Peugeot will warrant up to B30).

The very high pressures improve combustion efficiency and reduce emissions. Veggie oil works great for older diesels running lower injection pressures -- but their emissions are higher as well.

Also the start of a fabless model?

I've been toying around these past few months an idea for the auto industry. Basically applying the "Nvidia model" for the domestic car companies. I really thing the fabless model would have worked for GM and the other two. Seperate the manufacturing aspect from the rest of the company. Instead of all that money going to GM, take the billions to retool the existing viable plants to me able to produce a wider range of jobs on contract.

Yes, I think it's highly doable. This would releave the burdon of these companies of such heavy costs. It would open up competition as many of the smaller car companies could now take advantage of much larger production capabilities that simply was not available before. Workers on the line would not have their futures tied to one single management's abilities or mistakes. Companies like GM could not blame a union, as their success would hinge soley on their remaining responsibilities: design, marketing, finance, and retail & service.

--------------------------------------------

www.venomopolis.com

fabless autos

I don't think it's quite the same. In VLSI Si manufacturing they do not have to retool the process, it's just another die to create the wafers, the process i.e. 156nm, 65nm, 45nm, is where one needs to "Retool" and it's very expensive.

Autos on the other hand, as I understand it for each assembly I think they need to retool, each different car.

Now I don't know exactly how they make cars, but it seems already GM, Ford, Chrysler have already outsourced almost all of the real design and manufacture. i.e. engine, transmission, radios, seats, mirrors, ...
almost all of the real design of these components I believe they outsourced and in house they are playing legos.

So clearly that isn't much of a money saver.

this is what I meant by as far as I know their global supply chain is pure insanity.

I don't know what Toyota, Honda, etc. do but I suspect a lot of their component design, i.e. engine, transmission, drivetrain, etc. is more in house.

Good question because the argument that it's all about the "labor costs" is pure B.S. No one is mentioning Japan has high labor costs in their country.

So, the answer is not always to look for the cheapest labor and the supposed cheapest manufacturing around the globe.

Even on FABs, Intel just committed billions to building up new FABs in the U.S. So even there clearly there is an advantage to having manufacturing in their home country and I suspect in Intel's case it has to do with quality control and having the most advanced VLSI process in the world, keeping it so is possibly their motivation.

(We know they are not patriotic or believe in doing their duty or being a good corporate citizen!)

About intel

One of the things that moved them was China's moves into their own semiconductor chip. A while back, do you remember the big stink on how some mainland electronics firms were stealing designs from AMD and Texas Instruments? There is also the story about the Loongson (also known as the "Dragon chip"), which is a MIPS based CPU. Its no secret that China wants it's own version of Intel, and there have been rumors of workers at one of "chipzilla's" plants in China stealing design info. You have to figure the folks in Santa Clara are figuring that as the Chinese ramp up their move high up the value chain, that they will attempt to mooch off of more of Intel's designs.

--------------------------------------------

www.venomopolis.com

I think you're right

It's dawning on them that China isn't interested in being a cheap labor destination but is building up their own advanced manufacturing and has a long term strategy, including committing massive economic and industrial espionage to get it.

Duh, I don't know how many economists and experts warned on this very issue for over 15 years.

So, keeping all manufacturing, the entire chain within the United States, protected is a way to protect one's intellectual property and business.

Duh. Seems nation-states matter after all.

I dunno, guys. I find it

I dunno, guys. I find it very, very hard to believe that it's news to Intel that China has always planned to move up the value chain, or that they're shocked, shocked that China is committing industrial espionage. And, as you say, we know their investments in new FABs in the U.S. have nothing to do with patriotism and "making the U.S. competitive". (My first thoughts when I read about those plans a couple of months ago was imagining what their PR b.s. was going to look like, if and when the public discerns that the new plants are non-citizen staffed.) Yes, nation-states do matter, even to these people. The problem is, these people think that nation-states matter only to promote and protect their interests, regardless of how much damage their "interests" do to the group of people to whom their ostensibly connected. And as it stands now, they're right.

Rohan Swee

Please login to your account before posting. I'm pretty sure you have one and I'm getting burnt out of having to moderate your comments in the queue. Come on dude, you comment on here almost every day, login and then not only can you post immediately you can also track your comment sto see who responded.