I can assure you when I was tooling around the U.K.’s Peak District in my leased Vauxhall some 20 years ago, peak oil was not on my mind. Nor were electric vehicles.
How the scenery changes.
General Motors sold Vauxhall to Peugeot in 2017 – all part of the inexorable churn of the auto industry, or in prettier PowerPoint parlance: the reimagining of the transportation ecosystem landscape.
The American landscape remains dominated by the century-old behemoths General Motors and Ford. Their ecosystems and revenues are dominated by sport utility vehicles and pickups. Sedans aren’t doing so well these days. How imaginative.
Yet Mary Barra, CEO of GM, and Ford CEO Jim Hackett are now taking decisive action that presages a new era, one in which the internal combustion engine is mothballed. You can almost hear the bugle playing taps at auto plants the world over – payrolls slashed to the tune of more than 55,000 jobs this year, and the reimagining has just begun.
The timing of Lee Iaccoca’s death has a metaphorical dimension. An era has passed.
Tim O’Hara keenly sensed that passing. He had worked the assembly line at GM’s Lordstown, Ohio, plant for the last 41 years. “Given the trajectory of where things are going, it is time to quit being nostalgic about the past and organize for the future with whatever economic world we have,” O’Hara said.
Or as his fellow ex-employee and third-generation GMer, Chuckie Denison, puts it, “I’m tired of chasing GM, I’m not letting GM dictate what I do for the rest of my life.”
There is a painful side to this reimagining, the upheaval of communities like Lordstown. The pink slips aren’t confined to their 1,600 GM employees – there are thousands more who are suppliers, retailers on main street, and local government workers who will not be “chasing GM” any longer.
The bloodletting across the pond is substantial – Ford has shuttered six plants in Europe, affecting 12,000 of its employees. Yet there is “value in Ford’s restructuring” according to Goldman Sachs analyst David Tamberrino. Ford’s earnings in Europe could reach 6 percent and that translates into “an attractive entry point.” As if attractive entry points haven’t been on our minds all along.
This fanciful imagining for the new transportation ecosystem must not, cannot, relieve itself of its obligation to produce quarterly earnings. These pressures along with sheer cultural obstinance may be the undoing of the American automotive industry. Our addiction to traffic-snarled commutes from our daisy-filled domiciles will see to that.
Meanwhile, there are more than 500 companies in China focused on electric vehicle development. The Chinese government plans to invest $30 billion dollars in 20 EV production hubs across China. The world’s largest utility – State Grid Corporation – will be installing 120,000 public charging stations by the end of 2020. Tesla is even building its own plant there.
Isn’t it somewhat ironic that in 1913, Henry Ford had peered out of his office window and into the parking lot to realize that “Ah! The capitalist bosses’ cars!” … cars that only management could afford. He wasted no time in raising all worker’s wages so that they too could become customers.
If EV is our new transportation ecosystem and GM’s EV — Chevy Bolt, retails for $36,600, there’s still a bit of re-imagining ahead of us.
After years of globetrotting, Todd J. Broadman finds himself writing from his perch on the Palouse and loving the view.