Ford down but not out

On my personal blog I mentioned that Honda and Toyota stocks have been going up recently. On the other hand Ford stock has not faired so well. Today Ford was down, and thats with major cost cutting announcements.

Ford is cutting jobs in North America after its auto business in the region posted losses in three of the past four quarters. Bill Ford's new plan will mark his second restructuring effort in less than four year for the Dearborn, Michigan-based automaker. Ford Motor's shares have declined 33 percent this year, and its net income fell 31 percent in the first half.

While cost cutting will help, cutting costs alone will not get them back to being the worlds second largest car company (a title they recently lost to Toyota). They need to sell cars in America that Americans want to buy, and right now Americans seem to want to buy Toyotas.

Ford does have the problem of not wanting to alienate the customers that are happy with the typical American Ford car. So in two previous posts to this blog ( one & two ), I have given my idea for planting the seeds of a turn around. Ford either needs to move the Mercury brand into a position slightly upscale of Mazda with sportier and more stylish cars. Or create a new brand, like Honda did with Acura, to appeal to a different market segment.

Diesel Tax Credits

Clean Diesels Eligible for Tax Credits

Buyers of newer, cleaner-burning diesel cars, trucks and SUVs will soon be eligible for the same kind of tax incentives as purchasers of gasoline-hybrid electric vehicles under a new national energy plan expected to be signed into law soon by President George W. Bush, according to a news release by the Diesel Technology Forum (DTF), which represents manufacturers of engines, fuel and emissions control system.

A Bio-Diesel World

I read one article at Wired this afternoon, and realized that at the bottom there were a number of bio-diesel articles at wired.com. The following list is a run down of the articles:

• As I noted before, the military has an interest in fuel efficiency. In this Wired article we learn that the military is the country's largest user of bio-diesel. "When Erwin Rommel's Panzer tanks ran out of diesel fuel in North Africa in World War II, the German general poured cooking oil into their gas tanks to keep the vehicles fighting."
• This article on Bio-Diesel adoption tells us that "When inventor Rudolf Diesel first showed his engine at the 1900 World Exhibition in Paris, it was running on 100 percent peanut oil."
• Here is a pre-hurricane season article on the rise of bio-diesel co-ops.
• The Tour de Sol, which is a alternative fueled car competition, is covered in this article from 2004.
• This article describe the inevitability of diesel hybrids. Which leads us to diesel hybrids running on bio-diesel.

  Kahn said that the ultimate green machine would be a hybrid-diesel car running on biodiesel, which is made from plants such as soybeans.
  "If you factor in biodiesel, then you have a total solution," he said.

Of course that last one really appeals to me, should save money in the long run, and be much better for the environment.

Why compact fluorescent

I use compact fluorescent lights for about half the lights in my house. I started doing this living in an apartment where I needed many lamps and didn't like the heat produced by standard incandescent bulbs. Being the engineer that I am I did a cost benefit calculation before buying that first bulb. Times have changed and I wanted to run through the calculations again.

Let us assume we have a lamp that is on 5 hours a day. If we use a 60-watt incandescent bulb it will use 60x5x364/1000 = 109.5 kilowatt-hours of electricity. I pay a little over $0.09 a kilowatt-hour for electricity, so that works out to be $9.86 a year to run that lamp with a regular bulb.

Doing the same thing with a 13 watt bulb gives us 13x5x364/1000 = 23.66 kilowatt-hours of electricity and $2.13 to get the same light. Now a 13 watt compact fluorescent costs about $2 these days and should last for 5 years. But even if it did only last a year, in economic terms it would save you 9.86 - (2 + 2.13) = $5.73 per year (or $7.33 per year if you assume it does last 5 years). Depending on how many lights replaced this can add up to significant savings. Plus it keeps rooms with large numbers of lights cooler and more comfortable. And of course there are the environmental benefits of using the compact fluorescent light.

More on EuroFocus

The folks over at autoblog have two bits of Ford news that tie into last night's post.

• One is about how no one knows when Ford will turn a profit again. Their cars are rather boring in the extreme. The new Mustang is the exception, at least from the outside. I'm still not sure if the cool body makes up for the "amusing" interior. Honestly the only Ford car I would consider is the Focus. Which brings us to ...
  
• Autoblog also has some praise for the New European Ford Focus. The U.S. will not see the second generation Focus from Ford, we get that platform only as the Mazda3 and the Volvo S40. I have heard the following quote on the news: "In April Toyota sold more Prius hybrids than Mercury sold all models combined." If this is true then Ford should dump the traditional Mercury models (slightly upscale Fords) and reintroduce the brand by selling the company's European models in the U.S. under the Mercury name. This would allow them to treat the Mercury brand much as Honda treats the Acura brand.

Bill are you listening? I'll take a job as a Senior VP any day. If Mercury's sales are less than the Prius Ford doesn't have much to lose in trying this approach.

What Ford should do

Rumor has it that Bill Ford wants to have an 'energy summit." Having auto executives meeting with political leaders might lead to progress. But there is much Bill Ford could do on his own.
Europeans seem to rave about the Ford Ka, a stylish sub-compact. People who have driven them in Europe wish Ford would sell them here. And with the sucess of cars like the Mini and the Scion xA, selling the Ka in the U.S. could be a viable option.

Beyond the Ka, there is also the European Ford Focus, which has many more engine options than are available in the U.S. Focus. Included in those options are multiple diesel engines that get between 40 and 70 mpg (British miles to British gallons, I presume). Ford would be well advised to bring some of its European offerings to this side of the pond. Engineers at Ford shook up the American car market when they introduced the Taurus, but that was in the 1980's and its now 2005. Some of the stylish and efficient models from Europe might breath a little life into Ford's U.S. sales.

More on Geothermal heat pumps

Shortly after making yesterday's post someone sent me another link on geothermal heating. This article in Popular Mechanics does a very good job of describing modern geothermal heat pumps. The more I read the more I think this is a great option for most of the US when it comes to heating (or cooling) homes.

Breaking News 11:55pm: Check out the post about a live data feed from a geothermal house on inttech.

Army Hybrid

The logistics of moving fuel is a major problem for the military, therefore the DOD is interested technology to increase the fuel efficiency of its fighting machines. While not a front line vehicle, this new hybrid "jeep" is an example of the goal of using more efficient vehicles.

The vehicle is powered by a small, three-cylinder diesel engine and two hybrid motors. It would cost about $20,000 to manufacture and could replace a $65,000 Humvee, Almand said. The vehicles are expected to get about 50 miles per gallon, compared to the Humvee's current 11 mpg. "The more money we can save the better," Almand said.

Efficiency Front

A number of "green" related news items today:

• Hybrid-Car Hype at the Frankfurt Auto Show - So I'm starting to agree with the Europeans that the hybrids are more hype than help. In the '80's a Honda CRX HF got 50 mpg, perhaps the the new hybrids have better performance, I don't know. But for the expense they don't get hugely more mpg. I want to see diesel-electric hybrids. More coverage at Forbes.


• Bill introduced to require better MPG - A bipartisan bill introduced in the house would require automakers to increase efficiency of vehicles to an average of 33 MPG instead of the current 25 MPG.


• Forbes has an article on GE's Green movement (registration required) - I read this while waiting in a Dr.'s office this week. It points out that regardless of your motivation, there is money to be made by being "green".
  

70 mpg plus

I first mentioned this car in my getting better milage post. I was thinking about it again because it was mentioned this morning in Marshal Brain's alteng blog. The following is a quote from the article:

The low drag and lightweight components are key reasons for the fact that the 140 horsepower concept car gets 20 percent better mileage than other diesels of its size, DaimlerChrysler said.
Combined city/highway driving delivers about 70 mpg, DaimlerChrysler said, while highway driving at 55 mph gets around 84 mpg.

For those who haven't driven a modern diesel car, 140 HP from a diesel engine will provide very peppy performance. Some years ago I test drove a diesel VW Beetle that had less than 100 hp and it still effortlessly pulled out into traffic and cruised at 80 mph, with 4 adults on board.

Now if you look at the shape of this 4 person car, you will realize that it would not be hard to adapt a mini-van to the same aerodynamic shape, and that the 140 hp engine would be sufficient motivation for a mini-van as well. So what I want to see from DaimlerChrysler is a production mini-van that can average 50 mpg in combined city/highway driving.

Don't think a 50 mpg mini-van is possible? Consider the Dodge Sprinter, a production vehicle from DaimlerChrysler, It seats 10 comfortably and gets 30 mpg highway and 26 mpg city. Car and Driver had a tongue in cheek review of it a few years ago, and even they managed to get 30 mpg driving the Sprinter (and they only managed to get 42 mpg in the Prius). For those that feel you need a Suburban to comfortably carry your family to the beach, try the Sprinter. You will have more room and nearly twice the mpg.

Big Boxes

I know I'm not the only one who is annoyed that big-box retailers continually open mega-stores across the street from each other. In my part of the US the companies that do this as apparent standard practice are Home Depot and Lowe's Hardware, along with Target and Walmart. In other places different companies might also follow this practice.

The traditional reason retailers like to gather together is it helps to draw customers. Yet each of these big-box players is the draw that all the smaller retailers want to be next to. So that reason doesn't hold for the mega-stores. I can think of two reasons why they practice this form of competition and several reasons why they shouldn't.

1. Lazy - Instead of doing their own market research they just ride the coat-tails of the first store to build in the area.
2. Malice - The desire to inflict economic damage on a competitor regardless of if it helps their own bottom line or not.

What frustrates me are competitors that don't really compete. This summer I was working on a number of home projects and just can not understand why two companies that sell 85% the same items and are located right across the road from each other, also keep exactly the same hours. As a customer I am not benefiting from what appears to be the waste of several million dollars to put up a store but in no way offer significantly different service!

Of the reasons I give for these actions, "Lazy" should be self explanatory, and appears to be the one most people assume is taking place. However I am more inclined to believe that option two is the real reason. In industry this goes by the professional term "pissing contest."

Now for the reasons share holders (and city planners) should put an end to this behavior:

• When one store is built across the street from an equal competitor, the best you can really hope for is to steal about 50% of their customers.
• For the investment (these boxes must cost $5 to $10 million to construct) it would be money better spent to be in a location where there is less competition. Locating in areas where there is no other big-box competition could well give a bigger return for the money invested.
• If these companies were more spread out, then they would have geographical appeal to the people who live closer to their store. The customer benefits since for 1/2 of them it cuts the drive time in half to get to a store satisfying their needs.
• It benefits the city by not concentrating the traffic on just a few over loaded streets, and likely would lead to a decrease in emissions from cars due to less congested traffic conditions.

It would take a better mathematician than I to prove it, but I believe the work of John Nash shows this to be irrational behavior. Both city planners and company share holders have something to gain by ending this "contest."

Saving energy, saving money...

There are many more articles today on the possible world energy crisis due to Katrina.

To point out that when you save fuel you often save money, read Marshal Brain's blog entry on buying an electric scooter. Marshall works out how much you can save just running short trips in good weather on the scooter instead of the cars. As the saying goes, "Every little bit helps."

On a smaller scale is the electric lawn mower. I have used a cordless electric lawn mower for about 6 years now. According to this link the cost of using a rechargeable lawn mower is about $3-4 a year. Thats about the same about of money you will save replacing one normal 75 watt bulb with a 22 watt compact fluorescent light in a lamp used 5 hours a day or more.

I can tell you from experience that the battery operated lawn mower works well for a 1/4 acre lot, will work for a 1/3 acre lot if the lawn isn't too thick. Eventually manufactures should take the next logical step and have battery modules so you can quick switch a depleted pack for a fully charged one. Switchable batteries will allow for larger mowing area's and potential self-propeled electric mowers. Beyond the savings, it is really nice to not have to worry about oil or gas for the lawn mower!