Archive for the 'Manufacturing' Category

Weekend entertainment: How cars were made in the 1960s!

Friday, February 25th, 2011

Made by hand was the early Porsche 911.

Check out this archive footage from the early 1960s. If you were to tour Porsche now, you wouldn’t even recognize the place!

Part 1:

Part 2:

Part 3:

Part 4:

Part 5:

European investment in green cars is all the rage!

Thursday, April 16th, 2009


Mercedes E-class BlueTec Hybrid

Mercedes E-class BlueTec Hybrid



Without a doubt, the EU has become the leader in improving the pollution problem for the automotive sector. Recently the U.S. put in a 27.3 mpg average fleet requirement for 2011. Please see: for the latest information and the impact analysis. But is the change enough to get us on the right track? How exactly do carmakers implement changes in their fleet to address the higher requirements?

The European Union defines specific emissions targets for the following 5 years as the following:


Prioritizing in an automotive recession

Thursday, February 26th, 2009


The iconic MINI Cooper

The iconic MINI Cooper



It is quite true that an economic recession hurts. Company after company has laid off millions of workers worldwide over the last 12 months. While one can discuss blame all day long, part of the problem is that consumers and lenders have over-extended themselves. Virtually every company, especially automakers, has seen drastic reductions in expenditures.

The numbers for UK-produced automobiles are dramatic, to say the least.

A total of 61,404 new cars were produced in January 2009, 58.7% lower than January 2008, as plants closed for extended winter shutdowns, according to the Society of Motor Manufacturers and Traders (SMMT).

Aston Martin: Extended Christmas shutdown and 600 redundancies. Three-day week

Bentley: Three-day week in October and longer Christmas break. The company is closing its Crewe plant for seven weeks from March. February announced 220 job losses and 10% pay cut.

GM (Vauxhall): Extended Christmas closure and 40-day shutdown

Honda: Four-month shutdown between February and May

Jaguar Land Rover: Series of one-day shutdowns and production cuts late 2008 plus 1,000 redundancies planned

Mini: Christmas shutdown was extended by 10 days. 300 agency staff let go and with a one-week shutdown planned for February. From March, plant will run five days per week, from seven, and a further 850 jobs to go.

Ford: 850 jobs to go by May


One of the difficulties that manufacturers have is that they constantly struggle to gauge demand of vehicles. Since the rise of U.S. gas prices to $4/gallon a year ago, the automakers had to make a switch to smaller/lighter less-gas guzzling vehicles such was the case at GM. GM is still paying for the ineptitude in their failing to have these smaller cars ready to be sold when demand took hold. The result of the rising cost of gas was that MINI found itself well positioned to offer good quality, fuel-efficient passenger cars. In the moment, they seemed brilliant strategists. And one day, they may again come off as brilliant will the gas prices in the U.S. rise – it is only a matter of time.


In the meantime, the world struggles with a major credit crisis, evolving into a major jobless crisis. Combined, these two factors have meant a major slowdown for all manufacturers, even those who produce fuel-efficient cars. Toyota has seen a major slowdown, even for the once-prized Prius, and MINI, as seen from the above information, is now facing rough times. Does the company deserve it?


According to BMW Group, BMW sales fell by 4.3% in 2008, to 1.4 million vehicles, although Mini sales actually rose by 4.3% last year, to 232,425 cars.


The end result is that hard-working employees have been let go, despite their successes. In a capitalist system where people are supposed to be rewarded for their work, one can understand the employees’ fury behind the BMW/MINI

Reports the BBC:

Russell Hager told the BBC he had seen the sackings coming, but was still shocked at how the situation had been handled.

“It’s the unfairness of the way people are treated in large corporations such as BMW,” he said. “Why is it allowed to happen that people like myself go to work, give the company fairness, loyalty, commitment, and try to build a better life for [themselves], then half an hour later they can just be told, ‘You haven’t got a job any more’?”

Tony Woodley, joint secretary of the Unite union, said the sacking of the Mini workers was a “national disgrace” and agency staff were being treated as “second class citizens”.

“This kind of action would be illegal in Germany,” Mr Woodley said.

“BMW is guilty of blatant opportunism by sacking workers on the cheap. It has got to be stopped.

“These aren’t just temporary workers – these are workers like you and I who have got families and commitments.

“They’ve been loyal, decent, dedicated and they get called in with an hour’s notice to say that after four or five years they are going to be cast aside like cannon fodder.

“It can’t be right.”


Silvia Fernandes worked at the plant for four years; she says she feels betrayed by the suddenness of the news.

She told the BBC: “In this meeting they told us we’d all been sacked because of the credit crunch. But actually we already knew some of us would have to go, that was a fact of course because of the crisis – but what we never expected from BMW was knowing one hour before [our shift].

“I’ve never been sick, I’ve never missed work and they tell me one hour before that I’ve been sacked. That’s not on. That’s why people are angry and so upset with BMW and with the union.”

John Cunningham worked at the factory for over two years. He says he does not yet know what he will do next.

Mr Cunningham told the BBC: “I feel betrayed, they’ve planned this for months and we’ve only just been told – one hour’s notice. We’ve been given a week’s pay for an enforced week off which I suppose is a week’s notice.

“If I have to sign on to benefits that makes that increasingly difficult so I’m not sure what I’m going to do yet.”

Yes, it is true that times are tough, but there will come a day when the global recession

True, we should not expect automakers to be rewarded for bad practices. We should not expect the banks to be rewarded either. But everyone must understand that when companies are success, when employees do a commendable job, that the executives at companies make decisions that positively impact their people and their clients, not negatively impact them.

BMW and the dozens of other automakers around the world facing similar problems need to have open and frank discussions about organizational issues. They must prioritize long-term strategic planning over short-term bottom-lines. Transparency and communication must be valued. Companies that intend to bring back workers should let them know when they will be back, and those that fire them permanently should provide them monetary and job training assistance so that they may rejoin the workforce.

We are, after all, in this one together.

Sources: SMMT/ BBC Archives

Link of the week: Splitwheel Project

Sunday, January 25th, 2009

Splitwheel Project Logo

If you’re interested in starting your own car company, but don’t have the requisite $500 million on hand, you ought to have a look at Splitwheel.


Project Splitwheel is a unique project that will incorporate the ideas of project particpants and then turn the designs over to famous Lotus 7 builder Caterham. 

Caterham is UK-based and is working with the project to take the designs, turn them into engineering, and then project participants will vote on key decisions. Check it out, and sign up. The project should be starting soon!

Say goodbye to the $4000 car

Tuesday, November 25th, 2008

Well, if you were not aware that Serbian (haha, yes you read correctly) automaker Zastava makes the Koral compact car it’s probably because you know it by another name, the “Yugo”. When production ceased on November 11, 2008, the company had produced just under 800,000 cars.

American origins of the Yugo data back to Malcolm Bricklin, who brought the car over, and previously brought over the Subaru. Though the Yugo in America started in 1985, the “fun” was short lived and the last one was sold in 1992. Not aided by incidents in which the cars were slept off the road resulting in injury and death, the death of the Yugo will go largely unnoticed by much if not all of the developed world. Maybe the Cubans will pick them up on the second hand market…


NY Times

The Key to Automotive Profitability is Easier Than You Think

Monday, March 31st, 2008

2008 Ford Focus

Hardly a day goes by when an American automaker isn’t making an announcement that negatively impacts either the consumer or the workforce. Today was different. I would like to thank LeftLane News for bringing to focus a story about Ford, GM, and Chrysler. All three operations have seen what has historically been their respective worst years ever so far this decade. While decade isn’t over yet, it looks like they have “survived” the worst of it. But when we analyse the causes of this downfall of the Big 3, one place to look as at production.

Specifically, let’s look at the options list for the 2007 Ford Focus. According to Ford, the venerable Focus line had an astounding – wait for it – 100,000 different options combinations. 80% of sales came from just 4,000 or 4% of the available combinations. That means that 20% of sales required an extra retooling of 96,000 combinations. Talk about a money suck. And the problem got twice as bad when you went to the dealer because if you were a consumer smart enough to know what you wanted, you had the devil’s own job of getting exactly the car you wanted. That meant that Ford was forced to slash prices on vehicles sitting on the lot for not weeks, but MONTHS! The logistical headaches were more than enough reason for Ford to rethink how it produced and marketed its automobiles.

Where art Thou Mondeo?

Friday, March 16th, 2007

Our friends at Winding Road magazine recently spent the time and money to go to the Geneva Motor Show, one of the top motor shows in the world. Where there, they spotted the all-new Ford Mondeo.

We noted some months ago that Ford was opting not to sell their hot hatchback Ford Focus ST and Ford Focus RS in the USA, a market that craves large engines and fast cars. It is no wonder Ferrari’s number one market is the gas-guzzling American market. The Mondeo is no gas-guzzler. It is a well-designed and well-engineered family sedan, much like the Fusion in the American market. But make no mistake, it is most definitely not the Ford Fusion. What this represents is a poor marketing effort on the part of Ford Motor Company. It also signifies a synergy lost in a global company. Ford could save money by eliminating the Fusion and using the Mondeo in the USA. A smart move, but instead the company struggles and has to sell of its profitable Aston Martin division, and brand that did not fit into the streamlined strategy of the future Ford PAG.

The conclusion is that we should not be surprised about this ill-advised move considering they have brought back the Taurus name – a name synonymous with boring sedans.


Cost Cutting Ahead for European and US Automakers

Wednesday, February 14th, 2007

The big news today was of course DaimlerChrysler has announced massive layoffs – 16% or 13,000 – of their total US workforce at the Chrysler division. One article here. The layoffs come as Chrysler division struggles to bring costs under control and at the same time roll out highly successful products. Of late, Daimler’s US brand has successfully rolled out well-designed products, some of which have certain cachet to American buyers. Still, they have struggled to find mass-market appeal in key vehicles such as the Chrysler Crossfire and the Aspen. Most successful has been the 300C. A large part of this success can attributed to the designers – and the customizers who seem to “pimp” nearly every Black 300C to hit the road. God knows they aren’t buying the car for the amazing handling and braking (perhaps the 300C is meant to be a drag racer).

To return to the main point, European manufacturers are looking to cut costs. Most notably the changes are affecting Peugeot. Both Renault and PSA Peugeot-Citroën have gone from strong product lineups a few years ago to abysmal performance today. Sales are off and both companies are working to improve. Renault with the key ownership of Nissan is in a much different position than Peugeot. 2006 results showed that Peugeot sales slipped .7% to 1,960,000 from 1,995,000 the year prior. In line with these results Peugeot axed the CEO at the beginning of the year and has installed former Airbus and Saint-Gobain executive Christian Streiff.

Unlike Nissan-Renault’s Carlos Ghosn, who seeks to develop broad global alliances, Streiff is seen as a master of cost cutting. It is widely speculated that such cost cutting could come in the form of plant closure in France, Spain, or the UK as noted by the Financial Times earlier this month. Streiff could take two different approaches or a hybrid. One option would be to sell or spin off certain parts of Peugeot’s vertically integrated infrastructure, thus freeing up cash flow and at the same time driving cost competition among suppliers. A second, less likely, approach would be to adopt the aforementioned alliance schematic that Ghosn has adopted at Nissan-Renault.

We will continue to research and write about this topic for future articles, but we would close by noting that the auto industry is nearly cyclical in nature. VW with its governance problems, and Fiat with problems in every area, were considered in recent years to be quite poor off. VW has made a great comeback with 9.3% sales increase and Fiat’s turn around is also worth noting. Bottom-line is that the French automakers may be a bit down, but they are certainly not out.

Sources: Financial Times, January 9, 2007.
Examples of the latest Peugeot