[Moose]

I found this speech from Mr. Bob Lutz on another forum, and it's somewhat related to this discussion;



“Five Things I Think I Think”
Remarks by Robert A. Lutz
Automotive News World Congress
Marriott Hotel GM Renaissance Center
Detroit, Michigan
January 23, 2008

Thanks and good evening, everyone. It’s a pleasure to be back at the
Automotive News World Congress.
It’s been five years since I’ve spoken here, which seems unbelievable to me, but
it’s true. Back in ’03, I predicted that the automotive industry was on the cusp of a
New Golden Age… then proceeded to explain how the New Golden Age wasn’t
going to look much like the Old Golden Ages.
To my credit, I didn’t say exactly when this was going to happen…
Obviously, we’re not reveling in the throes of a Golden Age at the moment… But
it’s not chopped liver, either. I would argue that the industry is in much better
shape than it was five years ago, and that General Motors is in a lot better shape
too. Our cars and trucks have improved, and we just had our second best sales
year ever, with growth in total and in three of four regions of the world.
I would also argue that this industry is on the cusp of major change — for the
better — and it’s going to look radically different in the future as a result, although
it will be for reasons none of us imagined five years ago.
So, tonight, I’m going to tell you what I think… about a lot of things.
And the reason for that is simple: Over the past week or two, with the Detroit
show and accompanying hoopla, I’ve been asked more times than I can count,
“Hey, Bob, what do you think about this? What do you think about that?”
I’ve done a lot of media interviews, obviously, and so I’d get the question there,
but I also got it from friends and colleagues on the show floor or at various
events. “What do you think?”
Well, tonight, I’m going to tell you “Five Things I Think I Think.”


And the first one is one I’m going to get out of the way right away, before any of
you has a chance to say, “Hey Bob, what do you think about ‘Global Sales
Leadership’?”
And the answer is: I don’t think about it. And the answer would be the same
whether today’s numbers said General Motors is Number One, or Number Two…
or tied!
Last time I checked, being the biggest or second-biggest automaker on the
planet had absolutely no effect whatsoever on your P&L statement, your share
price, or your market cap. It has nothing to do with it.
Would we like to be the world’s largest automaker? Sure! Who wouldn’t? Will we
continue to fight tooth and nail for every possible sale this year and beyond in the
hopes of doing so? Absolutely.
However, the bottom line is, we are running the business in the best interest of
the customers, employees and shareholders. Period. And that’s what we’ll
continue to do, no matter what.
Besides, there seems to be some hostility generated by some in the American
media and academia toward Number One, because to them, the biggest
corporation is obviously the “baddest” corporation.
So I feel like for the last 76 years we’ve been like the guy at the county fair with
his head poking through the rubber sheet and people throwing pies at him. If it’s
time to pull our head out of that rubber sheet, wipe our eyes and our hair and let
somebody else catch some pie in the face for awhile, so be it.
By the way, I prefer lemon meringue.
OK? On to number two on the list of things I think I think, and that is this: “The
Detroit show was not lacking buzz.”
I couldn’t believe some of the post-show write-ups that characterized it as
“lackluster” or “without its usual buzz.”
How can you possibly not find any buzz at an auto show that includes so many
examples of the world’s most advanced propulsion technology … and a 620-hp
Corvette … and a 550-hp Cadillac… and two significant full size pickup debuts…
not to mention a city street full of longhorn cattle — some of whom were clearly
very close friends?
I’m sorry, but there’s no explanation other than the fact that this is another case
of some members of the media displaying – if you’ll pardon the expression at this
juncture – a herd mentality.





I talked to an awful lot of journalists during the show, and I heard very, very few
of them, individually, say this year’s show was sub-par. And yet, collectively, in
print, many ran stories bemoaning the lack of enthusiasm and the dearth of
show-stopping vehicles.
Some of them complained that in these troubled times of over-dependence on
foreign oil and increasing fuel economy standards, dumb old Detroit is still
showing nothing but new pickups and gobs of horsepower — how woefully
behind the times!
Well, that’s not what I see. I see companies working hard to move the ball down
the field on advanced technologies, and I see companies at the same time giving
customers what they want.
People still have need for trucks in this country. People still buy them for work.
People still want them to haul boats and horse trailers. Everyone is not going to
suddenly switch into Smart Cars, or Saturn Astras, or tiny little pickups, unless
they suddenly decide to haul tiny little horse trailers carrying tiny little horses.
And as for high-performance vehicles, as I said at the show, there is plenty of
room in the global automotive market for green and mean. The Corvette ZR1 and
Cadillac CTS-V, in fact, both captured major awards for Best in Show and I don’t
think we’ll have much trouble finding people who want to buy them.
Now I’m not saying that everyone in the press is short-sighted on this issue—
don’t get me wrong. On the contrary, I think the majority of them understand that
the market is broad enough for this.
Most of them get the fact that just because the grocery store is greatly expanding
its line of organically grown vegetables, it doesn’t mean that it shuts down the
meat counter.
Which brings me to my third assertion, and that is “Consumer behavior is difficult
to change, and it when it does change, it takes time, and a darn good reason.”
For example… look at the differences in automotive purchase behavior between
Europeans and Americans, which is basically dictated by the price of gasoline.
Take a Chevrolet Cobalt entry-level model here in North America, and a
premium, loaded Opel Astra in Europe with six-speed, leather upholstery and
power everything.
Here are two cars basically off the same architecture. One sells here for around
$13,000 and frankly, it’s not breaking any sales records, even at that price. The
other sells for more than $30,000 and it’s Europe’s second-largest selling car.


Why is that? Well, it’s because Europeans, at their fuel prices, are willing to pay
premium prices for premium small cars that deliver terrific fuel economy.
That is not the case here in America, land of the big truck and big horse.
Nor will it magically become the case once the fleet we offer for sale hits a 35-
mile-per-gallon average. It will only be the case if gas prices rise sharply to
levels near what they’re paying in Europe.
We refuse to let the price of fuel rise gradually in the U.S., and therefore we fail
to induce change in consumer behavior. If for the last 15 years we’d had a slow
but sure rise in federal fuel taxation of 15 cents a gallon per year… that would
have gradually put the customer in the equation.
Every time people look for a new vehicle, they would think, ‘Hey, how much am I
paying for gasoline? Is it perhaps time to go to a slightly smaller vehicle?’
We could have, over time and without any federal fuel-economy regulation, used
the market mechanism to gradually transition the American public into a vehicle
mix that looks a lot more like Europe’s, smaller and more diesel-oriented.
I’m not advocating tax hikes or calling for higher fuel prices, I’m just explaining
the difference between the European fleet and our own.
And in America, instead of raising fuel prices, we’ll end up having to raise new
vehicle prices, because of the increased use of lightweight materials and fuelsaving
technology. And that, in turn, is going to cause people to hang on to the
vehicles they have longer and so it will take that much longer to roll over the fleet
on the road today, which is exactly counter to the intended effect.
And if the intended effect is to lower our dependence on petroleum and imported
oil, well, it won’t do that either.
Which brings us to the fourth thing I think I think: “The best route to a significant
near-term reduction in petroleum usage is E85.”
It’s just common sense! As I said, you don’t roll over the whole fleet at once. It
takes decades… and the bigger the price disparity between the old ones and the
new ones, the longer it takes.
I kept getting the question at the show… if GM is so gung ho on electrified
vehicles and hybrids and fuel cells, then why this emphasis on E85? Why the
deal with Coskata? They’d ask, “Which of these technologies are you really for?”
And I’d say, “Yes!”



(continued)


As Rick Wagoner said at the show, several times, the answer is we are for all of
the above, but ethanol and biofuels are the best near-term solution. Yes, we
continue to work on electrically driven vehicles, as fast as we can, but
realistically, they are going to take many years to be on the road in volumes that
make much of a dent in petroleum usage.
We need to make more of an impact on petroleum usage, more quickly than that.
We already have millions of flex-fuel vehicles on the road right now… more than
6 million in the U.S. alone… vehicles that could be running on ethanol, if it were
more readily available.
In fact, as Rick said, if all the flex-fuel vehicles that GM, Ford, and Chrysler have
committed to have on the road by 2020… were to run on ethanol, we could
displace 29 billion gallons of gasoline annually… or 18 percent of the projected
petroleum usage at that time.
And if all manufacturers in the U.S. made that same commitment, we could save
53 billion gallons of gasoline annually… or 32 percent of our petroleum usage.
Nothing else we can do… gets even close to that kind of impact, that soon.
What’s more, ethanol offers a cleaner alternative to petroleum… it’s adaptable to
our refueling infrastructure… it doesn’t have to be imported… and it requires little
change in that pesky subject I mentioned earlier: consumer behavior.
Now, that said, let me tell you the fifth and final item on the list: “Electrically
driven vehicles powered by lithium ion batteries represent the long term future of
the automobile industry.”
A year ago, everyone was saying, ‘What’s GM doing with this car that’s allegedly
going to run on lithium ion batteries, which we all know won’t work in a car?’ Fast
forward to this year, and we saw no fewer than five automotive companies at the
show with concepts that are purported to either someday run on lithium ion
batteries, or a lithium ion propulsion system that’s just around the corner.
But remember, not all lithium ion technology is created equal. It’s like beer.
Some people say beer tastes bad. But there are many different types… you’ve
got pilsner, ale, stout, wheat beer… some beers are better than others.
Just because somebody says one particular lithium ion technology is a little bit
aggressive and it’s been known to cause thermal problems, does not mean they
all do. Some approaches are better than others, and the technology is
advancing every day. Just recently scientists at Stanford presented technology
using nanosilicon wires in the lithium ion mix that offers 10 times the energy
storage. That would make a 40-mile-range become 400 miles, in theory.



This and other advancements may be years away, in reality, but we’re going to
be ready, because we’re developing the vehicles, the drive systems, the
electronic control technology… today.
We are going to be ready, more ready than anyone else is going to be, when the
battery technology is beyond what it is right now. And then you’re going to see,
gradually but emphatically, the auto industry enter a whole new age.
That’s what I think, anyway.

Thank you for your kind attention.
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