Engineering Materials

Obama Should Tell Detroit's CEOs: No- Part II

Thirty years ago, the American steel industry went through an experience similar to today’s crisis in Detroit.  I remember writing a page one story for the New York Times in 1977 about a stunning third-quarter loss at Bethlehem Steel, which announced plans to close mills in Johnstown, PA and Lackawanna, NY. Many of the great old names of American steel, like Bethlehem, National, Armco, and J&L, all disappeared. Their assets closed or were bought and improved. Only United States Steel survived as a corporate entity, albeit a very different one. There were many cries of despair, in particular that we needed a domestic steel industry for national defense. But there was no bail-out. The American steel industry re-emerged, pretty quickly really, in a new form. Entrepreneurs launched new mills that operated with electric furnaces fed with scrap. In general, the industry became more customer focused, and less production focused. American steel is very competitive today.

The auto industry needs to go through the same economic Darwinian process.

Obama Should Tell Detroit's CEOs: No

The auto lobby is pushing hard for a federal bail out right now. As much as I support American manufacturing, I think a federal bail out for GM, Ford and Chrysler would be a tragic mistake.

In the first place, I don’t support the idea that the government should prop up failing industries, as painful as that might be. If we did, the textile mills in Lowell, MA would still be humming away, even though those products are made more productively in the Third World.  My hometown of Pittsburgh, PA would still be clouded with toxic gases from the J&L coke ovens that lined the Parkway East. And so on. We have adapted and found our place in the global economic order. Pittsburgh is booming with Internet and automation spin-offs from Carnegie Mellon University. Lowell, MA buzzes with nano manufacturing and other research spawned at UMass Lowell.

I also don’t support propping up badly managed industries. As any tool builder or injection molder operating in North America knows, the auto industry has been very badly run. I discussed the supply chain aspect of this at length in my first co-written book, Straight to the Bottom Line. In a chapter called “A Tale of Two Spenders”, I looked at a seminal moment in Detroit when Auto OEMs had the choice of following the collaborative product development process espoused by Chrysler’s Tom Stallkamp or the head-knocking approach of GM’s Jose Ignacio Lopez de Arriortua. The supplier-busting approach evolved into reverse auctions, which automated the supplier-be-damned approach in Detroit.

And recently I blogged about the inappropriate priorities in Detroit  today, where CEOs emphasize engineering aimed at expensive frills and luxury cars. Management should be telling engineers to put more emphasis on fuel-efficient, durable cars that use as many environmentally friendly materials as possible.

I thought I was in the wilderness on this until I read a very powerful column in yesterday’s Wall Street Journal by former Detroit Bureau Chief Paul Ingrassia: “Detroit Auto Makers Need More than a Bailout.”

It’s time for a fresh start with new management at the helm. There is a place for American-owned auto producers. A big place. And employment will start growing again. We need to clean out the bad management in Detroit just as much as we need higher-quality management on Wall Street.

Hydrogen as an Auto Fuel: Forget About It

With all due respect to John Dodge, my boss, hydrogen is not a realistic solution to America’s energy problems.

That message is coming through loud and clear at the American Society of Mechanical Engineers’ congress in Boston this week. John devoted a big chunk of Design News print and electronic resources in his excitement to promote hydrogen as a fuel for cars. It’s hard to find experts in the field who share his enthusiasm.

These comments come from a track called “Fuel Cells: The Future of Sustainable Automotive Transportation—Fact and Fiction”

Steven Beale, a researcher at the National Research Council of Canada: “I started in solar power research and saw it implode in the 1980s, and now I’m concerned about all of the enthusiasm for fuel cells.”  There are huge technical and economic problems with hydrogen as a fuel source, starting with the fact that one of the most often referenced sources for hydrogen  is methane, which represents no improvement from a carbon perspective. “It’s not enough to say: Trust us, we’ll fix it.”  Beale also comments: The government is putting billions of dollars into the hydrogen economy because of intense lobbying by several companies.”  The current cost to produce a hydrogen car (one hydrogen-fueled car) is $1 million.

Anthony Mascarin, a managing partner at IBIS Associates, said the best-case economic scenario for hydrogen is that it may be economically viable as a fuel for cars by the year 2030. In response to a question, he conceded that even that projection does not include the cost of the hydrogen. He also remarked that it’s not realistic for any corporate player to remain in the field that long without extensive subsidies. The enormous cost of the platinum catalysts is a major problem. Hydrogen storage and delivery are also big problems.

Satish Kandlikar, a professor at the Rochester Institute of Technology, has been working on fuel cell development for eight years with General Motors, with a particular focus on water management issues in cars. Given his association with GM, it isn’t surprising that Kandlikar starts: “Hydrogen as a fuel is attractive.” He quickly adds though that given the technical issues, “Translating all of this into the auto sector will take time.” Water accumulation on the anode side of the cell remains a “major problem”, says Kandliker.

Jeffrey Allen, an assistant professor at Michigan Tech, commented on the water management issues and added that “durability (of the cells) is a significant issue. You see a lot of degradation problems.” As a result, proton exchange membrane cells are falling way short of the Department of Energy target of 5,000 hours of useful life. “In reality, we’re only getting 1,500 hours” due to the presence of liquid water on terminals.

I think we may be trying too hard to find quick fixes for our energy problems. Yes we have to find solutions, but there also needs to be some hard technical thinking in the arguments.