I realized recently that I know exactly Zero engineers working in the automotive industry.
Granted, I live in Houston, but I do know enough people that I could produce a stack of business cards for any other major industry. In fact, I know more people who build satellites, stealth fighters, or submarines than consumer vehicles.
What is the state of automotive R&D in this country anyway... has the industry been turned over to the marketing department wholesale or am I just in the wrong spot?
Maybe the problem is, they stopped making parts and focused on "system integration".
It sounds wonderful and high-level. Faced with hordes of competitors from overseas, people in developed economies tell themselves that they excel at higher order skills, like management and leadership, and big picture thinking. This is especially popular with managers. So things like "vison", "systems thinking" and "the big picture" become your priority, not the nuts and bolts.
But in reality, you become like Dell, rather than Intel. In a vertically integrated market; system builders are the kings, and parts makers are small players trying to get their foot in the door. In a horizontally integrated market; system builders compete on margins, while parts builders compete on quality. And competing on margins is a good way to make peanuts.
Since the bailouts, the company has shifted it's focus back to quality. Many more components and parts are developed and manufactured in-house. See battery systems. With this comes an increase in part/component testing and validation, as well as complete control of quality and behavior of the component. IMO, this is the biggest factor in our quality improvements that have saved us boatloads in warranty costs.
The majority of R&D is done in SE Michigan, with additional small labs located around the world. We also do vehicle testing and controls development globally to validate our assumptions wrt climate/elevation/terrain changes. It's true that you won't meet many automotive engineers that live outside of Michigan.
From the GM careers site: apparently there is an R&D job in Palo Alto, but it would involve concentrating on 'infotainment' and social media, among other similar things... troubling.
Not entirely. My father used to work as an engineer in Michigan but moved to Nebraska for a while working for monroe.com. I also know of several plants that exist in the South, and Mexico.
This deal is being underwritten by U.S. taxpayers, who have given Tesla several hundred million dollars in loans (in exchange for zero equity). I suppose there's now a slightly better chance that some of those loans will actually get repaid...
How much did the taxpayers give the oil industry last year again? Pretty sure the number starts with a B, and >10 of them.
Meanwhile, I love the idea of us selling electric power trains to the Japanese, rather than them selling them to Detroit. Makes me feel like we're doing something right.
In the last six months, I shifted my loyalty to Toyota from lame US car companies. I respect Toyota -- as a maker of fantastic cars, a moderate-thinking and compensating long term business, and as a good employer of US citizens. US car manufactures make shitty cars, sell out their future for bonuses for their shitty executives, and treat their unionized employees like shit (and according to NPR more of a Toyota is built in the US than a US car).
I am proud to support Toyota, and the sooner the Big Three are forced to sell out out to "the japanese" the better.
For what it's worth, Toyota built a plant in my hometown and of the 4 people I know who got jobs there, all of them eventually quit due to the anti-union shenanigans pulled by management. They are a good company, but not without their flaws. (And to be fair, I'm not sure how much of this behavior was influenced by corporate policy vs. typical small town closemindedness.)
You know, I don't support unions as automatically as I used to. From my amateur interest in Toyota and industrial management, one of the major problems with unions isn't wages but inflexible work rules, seniority attached to certain very minutely defined jobs and no accompanying cross training/ rotation, and general bad attitude.
I've never worked for one, but it wasn't an ideological thing. If you worked with people for more than 6 months or so, you'd get your team broken up. If management found out that you were friends with a group of coworkers and were getting together outside of work, you'd get reassigned so none of you were working together. It was the harassment to prevent people from unionizing that that made it a bad working environment.
Yeah, that is sort of weird if it is like that. I don't have any personal experience at all, not even secondhand... but I know Toyota rotates people around all the time according to the books I am reading about them (which do have rose colored viewpoints). I hate to say it, but I have worked with production factory workers who would whine about anything -- having to do inventory, learn a new skill, meet a new person; I am a bit cynical about their complaints. Does "getting reassigned" == "harassment" ? maybe...
This was pretty specifically anti-union behavior, although obviously nothing was done that would generate any paper trail. I am sure there was some exaggeration due to human nature, but it is basically an open secret that large non-union shops will do just about anything to prevent unions from forming.
It may be different for line employees, the people I knew worked skilled trades, electrician, hvac, etc.
Sure they are, if you reduce taxes on one targeted industry without regard to the prevailing tax rate, it's effectively a subsidy. Carving out a tax break specifically for oil is like handing them money compared to other industries who have to pay the full rate. The difference between that and the interest subsidy to Tesla is that it's much bigger and Tesla at least arguably represents a legitimate reason to distort the market.
Good for Germany and Toyota. The tech will be here, they'll be playing catchup, or explicitly neglecting their own tech because they have cheap access to ours.
Can you explain the difference as far as balance sheets?
Gov't - down money
Recipient - up money
Does the mechanism really matter?
EDIT: Hypothetically, let's say the government gave one company a direct subsidy, another a tax rebate, and a third a targetted one-company-only tax break, all for X dollars. You're saying these are substantially different from a macroeconomic perspective? And different enough that a few million in one method is egregious while 50 billion via another method is just how things should be?
One is real dollars (subsidy), one is potential dollars - tax revenue doesn't exist without actual revenue to create it. If the business bankrupts without ever making a dime, you haven't lost anything through a tax break. If you give the business 100 million in capital and they bankrupt, you've just lit 100 million of our tax dollars on fire.
To add to this, looking at the upside of the risk:
If the company is successful with a subsidy or a loan, they've first got to make up the raw dollar value of the subsidy (in extra taxes) or loan (in repayments) before additional taxes become an ROI.
If the company is successful with a tax break, they can start reaping rewards right away as (assuming there is some limited taxation involved), tax revenues increase with volume.
However, with either option you're still gambling with public funds and policy and there are many ways to screw the public fiscally. I'm personally against using the tax code for social engineering purposes (punitive, stimulative, or otherwise), and doubly against subsidies in nearly all cases.
And here I was thinking it's near-impossible to criticize a company that might finally be profitable while creating a new clean-energy car tech hub right here in the United States...
That doesn't make any sense. How is the "deal being underwritten by by US taxpayers"? Toyota is paying Tesla for equipment. Equity is typically not exchanged for a loan (that's why it's a loan). By slightly better, are you meaning 97% verus 96%?
The point is that when someone invests speculative venture capital, which is what the U.S. did when it provided nearly half a billion dollars to a company with almost no revenue and no track record, that investor should get SERIOUS equity. Instead, the cronies at Tesla got a loan at a subsidized interest rate, and taxpayers got no upside and 100% downside in the likely event that Tesla fails.
The upside would be as follows
1. Future taxable income
2. Jobs
3. Chance to create a CoE for electric cars domestically(which feeds back into 1 and 2)
Chrysler got loan guarantees from the US government back in the 1980s (which may or may not have been a good idea), and the USG got warrants. Those warrants ended up being rather valuable, and the government took in hundreds of millions. Personally, I don't think this is the proper role for government, but at least the lenders (us) should get a good deal.
There is no reason the USG couldn't have similarly received warrants as part of the Tesla loan guarantee, or at least a pledge from the insiders not to sell stock until we had been repaid--to better put Musk and his benefactors, you and me, on the same side of the table.
Also, what do you think that future taxable income comes to, discounted to the present at a discount rate that reflects the risk/uncertainty of those cash flows?
We could pay people $400M to dig ditches or paint each others' portraits if all we want is jobs. If private enterprise can't create and sustain the need for that job over the long term, all we're doing is buying paintings from mechanical engineers.
I love the Tesla cars and nearly twist my head off whenever I see one, but can't help from wondering if they will eventually be viewed in the future much as the Delorean is today. Without the epic collapse of the founder, of course, but purely due to economics.
I'm not sure I agree. Strictly sticking with the cars performance - The Tesla roadster met or even exceeded promised goals, whereas the DeLorean was a massively overpriced dud.
You make a good point. If they go the route of just selling the technology to existing car companies, then it's very likely that they'll spend more time on those efforts than producing their own vehicles. If they can get the price on their cars to match that of the average vehicle, they'll be a staple for sure.
Remember that even with the Tesla roadster, they still pretty much only made the power train. The rest of the platform was basically licensed from Lotus.
"Ransom E. Olds was the first mass producer of gasoline powered automobiles in the United States, even though Duryea was the first auto manufacturer with their 13 cars."
I remember reading the wired magazine article for this. Some people can actually benefit from an economy like this. You can buy things for a fraction of a price they were before. Although, that is a double edged sword. In this economy, your own money falls as well.
Granted, I live in Houston, but I do know enough people that I could produce a stack of business cards for any other major industry. In fact, I know more people who build satellites, stealth fighters, or submarines than consumer vehicles.
What is the state of automotive R&D in this country anyway... has the industry been turned over to the marketing department wholesale or am I just in the wrong spot?