Old Wizard

Obama Announces List of Grant Recipients, Recognizing Significance of Hybrid Markets

John, through my own sources, I was reminded that GE has a big investment in A123. As your table reveals, A123 received one of the largest grants from the Government's 2.5b program. Since A123 is probably going to have an IPO soon, it appears that GE will stand to gain a substantial return from its investment. Further, it is also true that the head of American Superconductor was a former principal in A123 and this firm is also a possible recipient of a Gov. grant. I have not verified whether GE has an interest in AM. SUP.. You are right about the political climate, but did not comment on the Buffet point. On the above, a jaundiced observer might conclude that it pays to back the winner politically, especially when the winner has the power to make such large investments in your business' well being.

Obama Announces List of Grant Recipients, Recognizing Significance of Hybrid Markets

John, I didn't see GE in the list. Did they not get money for their new hi-powered battery initiative? On another subject, The natural gas for fuel bill that is wending its way through congress has been allocated 30m. It would seem to me that a balanced energy plan that really deals both with our critical economic and jobs problem would be more balanced. The investment in battery technology is driving toward an electric vehicle solution that will have a major impact in possibly ten years while that which can impact the country in the near term is hardly addressed. Let's look at the numbers, 3 billion for the CAC program that might save 6 to 9m/gallon on 675k cars whereas converting roughly a million vehicles to natural gas fuel for the same money would save2 to 4 times the amount of oil and have a greater immediate impact on jobs and the country's current account. Further, I believe that this battery money is still a buck shot approach that is not likely to converge as quickly and with the focus of Chinese competitors whose investment in equivalent man hours dwarfs the USA'S . Warren Buffet's alone in the Chinese company shows this to be true.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

I think there still quantitative questions to ask: 1] What are differences in costs due to destroying the cluncker engine rather than salvaging them for parts and are there any differences in the transportation or disposal costs for the mandated progra/, 2] how much less work will mechanics have if any as a result of this progra?, 3] do we believe that Citi group which has been hired to administer the program has a good track regard in managing its own business?4]n any of the previous calculations, where was the administrative cost of the program accounted for/ 5] What percentage of the new cars bought were made in america by american car companies? Until this data is on the table any evaluation is more anecdotal, salesmanship and propoganda. The effect on the environment is relatively insignificant and quantifying it objectively is hopeless

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

What a discussion! Thought I'd add some facts to the discussion before editorializing. 1] Administrative costs so far for the program are about $50M, 2] There are approximately 130M passenger cars on the road and this figure doesn't include trucks, buses and other motor vehicles, 3] The costs of clunker disposal to the public and dealers has not been estimated but since the program mandates not only that they be destroyed but also how the motor is disabled, it is an exercise still to be calculated. 4] The environmental impact of this disposal is not known, but the mandated destruction process makes items 3 and 4 bigger than normal, 5] It doesn't follow that the new car is safer than the one traded in.6] a vehicle that gets less than18m/gallon doesn't necessarily have a trade-in value of less than $1k; e.g.what if the car to be traded was a 1999 mercedes or 2004 lincoln or a corvette or any number of suv's. The benefit to the carbuyer is the 4500 less the real trade-in value of the the so called clunker. A family member just sold his old chevy with more than 95k miles on it for more than 4500 dollars. Now the editorial comment: The program is being sold as a job creator and another big step to clean up the environment, but no real quantitaive analysis has been done, as with most of the programs coming out of washington. It sounds good and it may ultimately be a net benefit, but the simple fact that people are jumping at the deal is not the ultimate measure of performance. The fact that the computer facility set up to handle inquires and the administration of the program has already crashed twice and is leading to a processing bottleneck is evidence of the lack of detailed planning that accompanies the" the stimulus actions" emanating from Washington. A program that would drive car sales and let people keep the cars they have like conversion to natural gas fuel would also help solve our negative current account problem, have a known and calcubale impact on the environment and create instant business for our domestic car companies, jobs for mechanics and parts suppliers that come from converting millions of cars per year. The postage stamp, let's try this gimmick approach to solving our fundamental problems is troubesome and increasingly disjointed and if it replaces substantive and well-planned programs, wastes time and diverts resources from real solutions to the country's economic and strategic problems, dangerous. Both time and resources are not commodities we should squander.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

Sorry about the glich, our operating cash flow as a country has been increasingly negative since1991. On top of that we are running increasingly negative domestic budgets. For the most part, we borrow the money to balance our budget from the countries who have positive operating cash flows like China,the Mid east oil producers and some countries in western europe. If a company keeps having this situation it would probably file for bankruptcy. As you have pointed out, a significant contributor to this economic problem is energy import. The current administration can't seem to get to the heart of the ultimate problem and therefore thinks that greenhouse gas is the real imminent threat to the future of the US and that they have 30 years to solve the problem. Unfortunately, if the USA doesn't solve the basic cash flow problem in the next ten years, the whole environmental issue might be academic as far as the quality of life for our progeny is concerned. Replacing today's electrical generation capacity with natural gas generated electricity will reduce green house gases but won't help our cash flow as a country. That is why we need to work the gasoline part of the problem first. The president is still talking about clean coal but I believe this a political gambit to assuage the miners and other workers. The trurth is that he knows that replacing the coal-fired facilities is not even close to the horizon. I was surprised by your transportaion oil usage, I thought it was 40% of our total usage, maybe that was only for passenger cars. Today's electrical generation from wind and solar is less than !% of the total and the president's goal is to double this in three years, hardly a sense of urgency, hence fitz's comment that insisting on relying on this form of energy will only lead to more green house gases in the foreseeable future. We had a golden opportunity to step up the introduction of solar and wind with a focused Gov plan and stretch goals for five and ten years but chose to buckshot the money into a myriad of things with no focus,no concrete goals and a relatively naive set of objectives that satisfy single variable constituencies. This may be good politics, but it isn't solving our critical problem. By the way supplanting importation of oil for the importation of lithium won't solve our problem either. I believe that the conversion to gas fueled vehicles will pick up momentum in spite of the Government. As you have stated trucks which enter the port of Long Beach must be natural gas powered, AT&T has announced a 600 m+ program to convert and refleet their commercial vehicles to natural gas powered and some few states are moving that way. Long Beach by the way is the port of entry of about 60% of imported goods from the far east and a major entry point for Walmart's goods.Getting Walmart to convert their trucks to natural gas would really be a green initiative.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

Sorry about the glich, our operating cash flow as a country has been increasingly negative since1991. On top of that we are running increasingly negative domestic budgets. For the most part, we borrow the money to balance our budget from the countries who have positive operating cash flows like China,the Mid east oil producers and some countries in western europe. If a company keeps having this situation it would probably file for bankruptcy. As you have pointed out, a significant contributor to this economic problem is energy import. The current administration can't seem to get to the heart of the ultimate problem and therefore thinks that greenhouse gas is the real imminent threat to the future of the US and that they have 30 years to solve the problem. Unfortunately, if the USA doesn't solve the basic cash flow problem in the next ten years, the whole environmental issue might be academic as far as the quality of life for our progeny is concerned. Replacing today's electrical generation capacity with natural gas generated electricity will reduce green house gases but won't help our cash flow as a country. That is why we need to work the gasoline part of the problem first. The president is still talking about clean coal but I believe this a political gambit to assuage the miners and other workers. The trurth is that he knows that replacing the coal-fired facilities is not even close to the horizon. I was surprised by your transportaion oil usage, I thought it was 40% of our total usage, maybe that was only for passenger cars. Today's electrical generation from wind and solar is less than !% of the total and the president's goal is to double this in three years, hardly a sense of urgency, hence fitz's comment that insisting on relying on this form of energy will only lead to more green house gases in the foreseeable future. We had a golden opportunity to step up the introduction of solar and wind with a focused Gov plan and stretch goals for five and ten years but chose to buckshot the money into a myriad of things with no focus,no concrete goals and a relatively naive set of objectives that satisfy single variable constituencies. This may be good politics, but it isn't solving our critical problem. By the way supplanting importation of oil for the importation of lithium won't solve our problem either. I believe that the conversion to gas fueled vehicles will pick up momentum in spite of the Government. As you have stated trucks which enter the port of Long Beach must be natural gas powered, AT&T has announced a 600 m+ program to convert and refleet their commercial vehicles to natural gas powered and some few states are moving that way. Long Beach by the way is the port of entry of about 60% of imported goods from the far east and a major entry point for Walmart's goods.Getting Walmart to convert their trucks to natural gas would really be a green initiative.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

Hi Fitz, Incorporating a near term goal in your plan as I have suggested is a necessary addition, since it drives out pie in the sky alternatives. What many of the folks who look at the energy problem don't do is relate it to our economic structural problem. What should alarm every citizen is the fact that our operating cash flow as a country na

The Current Stagnation of Natural Gas Vehicles in America

Fitz, How about today's announcement by AT&T? They are going to use some620+ million of their money to convert their vehicle fleet to natural gas. Imagine what the federal and state governments could do by using just 25b to converting all their vehicles in the next 5 years and buying them from GM, Ford and Chrysler. Maybe Obama will do better next time if he has the time and money for next time,but where is the sense of urgency. The AT&T announcement just goes to prove that Washington has neither the competance,vision nor political will to address our most pressing problems in a meaningful,efficient or timely way. AT&T has shown the way to a real stimulus plan.

The Current Stagnation of Natural Gas Vehicles in America

Fitz, You are asking everyone to do a real cost analysis that accurately computes cost using all factors. What a novel idea! The one thing I would add is that a large contributer to our current economic problem is the an increasingly negative current account balance since 1991. In practical terms the only way we balance the negative cash flow is by borrowing from the providers of our energy and China. In order to keep the chinese lending us money, we buy everything from toys to furniture to solar panels from them. Even if natural gas fuel would be more expensive by 20% now and it was produced in the USA, we need to prceed with a sense of urgency, to break the cycle. Encouraging consumption, which in turn causes us to buy more from China and import more energy, so that we can borrow more money from China and other dangerous folks is myopic at best and disasterous at worst for the future of our country.

The Current Stagnation of Natural Gas Vehicles in America

Hi Fitz, Very well thought out article and I will write to the president. I did use the e mail medium and got no reply. As I've said before, I don't believe that the powers to be in Washington are capable of dealing with problems that have more than one variable. The president so far has displayed very little of his often extolled superior intelligence in the energy arena. His rhetoric that states that renewable generation facilities will double the amount of energy generaton in 3 years sonds good, but that will take us from.9 to 1.8 % of our energy supply.Further, the money to do this is to be borrowed, largely from the Chinese and the sovereign funds. Maybe this is why foreign oil is not to be taxed. Again, without significant goals like 5 million barrels less/ day in 5 years all alternatives can be argued as feasible and the tower of babble about the best solution for energy independence goes on ad nauseum. Fitz, While I am in agreement with your focus on natural gas,I can't spot a viable solution forthcoming from washington on energy independence. No one seems to relate any of our problems to the country's current account and its negative operating cash flow of which your 700b[assuming oil is$140/ barrel] would be the largest negative component.

When Will the Auto Industry Reach a "Better Place"?

Fitz, I think the flaw in the recognition by our politicians of the strategic nature of our oil importation problem is not that many don't recognize that problem but in their faliure to link it to our current economic problems correctly. The other flaw is then to enact several pilot programs with sufficient funding to drive the solution process. Unfortunately, much if not all of our media has the same problem. For those who believe government action can't affect us positively, how do you rate the Appollo project which propelled this country into a host of products we use today? Surely you don't believe that composits, conversion of urine to drinking water, solar panels, space communications,etc.,et... were competitive in the 60,s and 70's. Jump starting solutions to the nation's critical problems should be the function of the people,s government if it has vision and the courage to lead.

When Will the Auto Industry Reach a "Better Place"?

Fitz, We are largely in agreement. Do you think it's possible for us to start a grass roots movement to get the politicians to get serious about solving the energy problem creatively. With the prospects of another 500b stimulous package which will only make things worse and really not address what is driving the sickness in our economy, is it possible to affect the process.? I'm game to try.

When Will the Auto Industry Reach a "Better Place"?

Fitz, It might also be true that Iran is switching to natural gas driven vehicles because they import all their gasoline, since they have no refineries and are, therefore ,subject to getting chocked off by their adversaries. That said, if we all would elevate the driving of the current account to zero as the number one economic and strategic priority, we would not get ourselves deflected from the right energy plan. Issues like global warming, the right cafe standards, and bandaid bailout moves that don't solve the long term problem we face as a nation ,create more heat than light in the solution process. I'm a believer in the two bullet theory which is: if the first bullet is aimed at your head and you don't duck, it doesn't matter where the second bullet goes. If we don't address the strategic issues of energy dependence on hostile suppliers and the momentus negative operational negative cash flow out of the country, it won't matter what global warming does to us in 50 or 100 years from now or whether GM is still viable or whether we can make profitable other than gas cars per se. Fortunately, by products of solving our no 1 problem, properly, would lead to solutions for the others if we act correctly now. Catering to one or the other pressure group will lead to solving one problem at the risk of making the right solution more difficult and therefore making the country's future more problematic at best and bordering at non existant as we kown it today at worst..

When Will the Auto Industry Reach a "Better Place"?

Fitz, It won't take long for it to be obvious that the new administration can't look beyond the nine dots either. No economic set of bandaids will fix the economic problems we have unless the fix addresses the almost trillion dollar negative current account balance. Building roads and fixing bridges, giving 1000dollars to every family and bailing out sick industries that refuse to take the medicine to get well doesn't address the real drivers. Spending the 1000 dollars on products made in China that one buys in target and walmart only excaserbates the negative balance. Building more roads does nothing to change structural and ingrained driving habits in our metroplexes. Building electrically -powered mono-rail spiders in those metro-plexes will make the needed kind of structural changes and reduce gas consumption. Converting connection buses to natural gas as a amandate associated with connection to the spiders will ease the problem of natural gas filling stations. Small electric cars can then be another economically feasible personal connecting conveyance. Obama has a unique opportunity to create this and other pilot prjects for wind and solar like a wind farm for Chicago that will provide 20% of its required electrical energy in 5 years and a similar solar project for Phoenix or SanDiego. The mono-rail spider might be created for washdc or Los Angeles. Implementing these projects as gov. sponsered would eliminate the cost-effective arguments and teach us how and where improvements and efficiencies could be realized. Instead he seems to be going the route of same old, same old. Appoint a commission to study our economic problems, create another stimulus to put a 1000 bucks in families hands and pander to the constituencies who want to continue the status quo. Doing the above would put people to work, make a dent in our energy problem,reduce the negative balance of our current account and spawn a new set of products that we could sell abroad. My advice to the new president and the so called leaders of Congress is When you're in a hole don't dig.

Demand More for Your Auto Bailout Dollar; Oil Patch Should Bounce Back Long Term

Fitz, I thought that the state of Texas passed a 4.6b funding bill for T Boone's infra-structure delivery system a couple of months ago. My early impression of Warren Buffet was very positive, until I, as a GE stockholder, got the details of his investment in the company and found that he was charging close to usery interest rates and that my stock value was immediately diluted by 6%. GE is a multi-national company that still has its headquarters here. I understand the deal even less after GE got a go ahead from the Gov. for a 140b loan backing for their credit corp. That and the fact that Buffet was instumental in convincing the Bush family to sell out to a foreign company, which provided a windfall for his company since it had a substantial stake in the beer company. I hate to be so single minded, but how does this latter action help this country's cash flow balance? Further how does collecting 10% interest or 300m/year on his loan help GE'S long term profitability. Since He already earns more than 99.99% of all folks in the US, and has paid 15% taxes, how does it help to say that he could pay more taxes? Lending at a rate that is more reasonable to US- based companies and encouraging US icons like Anheiser- bush to remain in US ownership would be much more helpful and would certainly be better for the country's current account. If he truly believes that his duty is to pay more in income taxes, he could unilaterally write his personal check every year to the IRS. There is no law that prohits him from doing so. I'm tired of listening to people who don't pay the tax rate I pay and politicians who not only don't pay at my marginal rate, but hardly contribute to charity tell me what my duty is. I am willing to pay at a higher marginal rate, if the Government will take steps along the lines I have suggested to fix our energy supply and spawn new jobs in product areas that are produced in the USA. if that doesn't happen and my taxes go up then I, personally, will start a lobbying activity that asks that the Warren Buffets,and the 6 hedge fund managers who made a billion last year and paid 15% marginal rate pay at least what the people who make between 250k and 1m pay.