During President George Bush’s State of the Union Address in January this year, he pointed out that one of his administration’s goals is energy independence for the country. He also promised to earmark a huge amount of funding for the development of alternative fuels which will reduce the United States’ dependence on oil-producing countries.
This announcement was followed by the President’s visit to the assembly plants of General Motors and Ford. The president also met with chief executive officers from Ford, General Motors and Chrysler as evidence of his dedication to making the United States energy independent. While the “Twenty in Ten” goal announced by the President is supported widely by U.S. car manufacturers, General Motors’ Vice Chairman Bob Lutz seems to have taken a step back from the administration-inspired “global climate-change mania”.
The journeyman of the auto industry who has worked for BMW, Chrysler and Ford and currently with General Motors pointed out that the administration should enact a national policy concerning the use of alternative fuels. Lutz pointed out that the current energy dependence issue is putting pressure on the auto industry only. He pointed out that the auto industry is already doing its part to reduce fuel dependence but it also needs help from other sectors of the country especially the alternative fuel industry with the support of the U.S. government.
One problem being faced by the auto industry is that there are few refilling stations that are catering to the need for bio-ethanol.
This issue has been raised recently by concerned individuals in the auto industry. The number of flex-fuel vehicles on the road is ever increasing but only one percent of these actually run on E85. This fact shows that the vehicles produced by car manufacturers to reduce fossil fuel consumption and greenhouse gas emissions are being rendered useless.
While tests have shown that if these vehicles run on E85, which is a combination of conventional gasoline and bio-ethanol, greenhouse gas emissions can be significantly reduced. Add to that the fact that these vehicles are still running on conventional gasoline shows that greenhouse gas emission is not really reduced.
Another problem being faced by the alternative fuel industry is that it cannot produce enough bio-ethanol for the nation’s consumption. The Bush administration has already taken steps to support the alternative fuel industry by urging the U.S. Congress to approve the funding for companies developing alternative fuels. Bob Lutz though has suggested that the United States should import bio-ethanol from Brazil. Brazil is currently the fastest growing producer of bio-ethanol. “I'd much rather import from Brazil than from some of the countries that we're getting the oil from today,” says Lutz.
In the United States, aside from developing bio-ethanol as an alternative to fossil fuel, biodiesel is also being promoted as a substitute to petroleum diesel.
As far as General Motors financial stability, Lutz said that GM is having a “pretty good year”. This is in view of the fact that Toyota has overtaken them for the first quarter of 2007 in terms of global sales. General Motors, while losing billions for the past couple of years or so, has posted a good ending to the year 2006 with a fourth quarter profit of $950 million. Although the Detroit-based auto manufacturer ended 2006 on a high note, they still suffered from a $2 billion loss for the entire year. While Toyota's success may require highly efficient brake pads from EBC active brakes direct to be slowed down, General Motors is already taking steps to take back their position as the top of the sales output list.
As far as the competitiveness in today’s auto industry, Lutz has this to say: “This industry is more than 100 years old, and it has definitely seen some dog-eat-dog days, but I'd venture to say that it's never seen a period of more intense, more pressure-packed competition than right now.”
