Hybrid Option on Every Toyota

Was my hybrid master's thesis too early???

Stanford didn't seem to think it would fit their
new automotive research center focused on "rethinking the automobile"

while Chrysler and Toyota (some of the largest organizations in the world)
are planning to offer hybrids on EVERY future automobile.

Looks like my three years of hybrid research from 2003 through 2006
could have been ahead of it's time... According to the Wall Street Journal at
http://online.wsj.com/article/SB121883067453545253.html?mod=googlenews_wsj
Toyota will follow the words of Jim Press (Toyota's ex-American boss) below
and offer a hybrid option on every single vehicle before cheap oil runs out!

How can these world's largest business bet on hybrid technology???

Well that's pretty simple:

"hybrids" are compatible with all fuels including
gasoline, diesel, E85, electricity, plutonium, water, wood, natural gas, etc.

ALSO "hybrids" are also buildable in any configuration including:
car, bus, truck, train, ship, submarine, spaceship, etc.

AND "hybrids are already powering every part of our life including:

- most freight trains that run America are hybrid
- our washer dryers are hybrid
- our kitchens are hybrid
- restaurants are hybrid
- commercial real estate buildings are hybrid
- our apartments, houses and office are hybrid

- power plants are hybrids
- our cities are hybrids or more

- our power grids are hybrids or more

- our DNA is hybrid

- our spaceships and spacestations are hybrids or more

so should our daily transportation go hybrid
or jump straight to the inevitable next step - digital???

VIDEO: Every Car Will be a Hybrid by Jim Press

"Within the next three or four generations
every Chrysler product will have a hybrid platform"

Chrysler President Sees Green

Jim Press is the ex-president of Toyota America
and worked his way up to a seat on the board
as the highest ranking position for a non-Japanese
for the world's number one automaker.

He now leads the challenge at Chrysler
after heading up the Prius Phenomenal
rise to ubiquity through the Hybrid!!!

Why are the different types (full, mid, and light) and brands (Toyota, Ford, General Motors, and Honda) so important and what contributes to that?

Your question is a great technical question

that people tend to get very emotional about.

So again, the future depends on who and what

regular people buy.

Kind of like brands of clothes regardless if they are made from

organic cotton or chemicals,
brands and stores and prices usually mean more.

HOW DIGITAL IS YOUR HYBRID?

So now that you understand that our world's future

is becoming more digital and that we've powered

the industrial revolution with chemical power such

as coal, oil and gas, it's easy to see the difference

between the types of hybrids and brands.

The level of digitization depends on Research & Development

in the largest business in the world for the most amount.

For example, Toyota spends 10 times Apple on R&D,

but according to a recent survey in Tokyo among 20 years olds,

most don't want a car because they want iPods and digital things.

From light to full, there are R&D costs and technologies that

depend on patents. So if Toyota has 650 patents for the Prius

mostly on the transmission, tranaxle, generator, braker, powerplant

called the Hybrid Synergy Drive, it means that Ford for example

has to make a different hybrid OR pay Toyota for licensing.

Another example, is that oil companies have the R&D patents

on some high voltage digital batteries for cars so car companies

are rumored to have to pay oil companies when people buy hybrids.

Unfortunately, how digital (light, mild or full) depends on

- costs (R&D, patents, licensing, legal)

- what and how many patents you control

- who is working for you in terms of engineers

SUMMARY

The Hybrid Synergy Drive is VERY IMPORTANT to Toyota

because they paid billions to R&D it before everyone else,

so guess what, Toyota has the most FULL hybrids on the road.

Toyota had to build a $1,000,000,000.00 factory just to make

the computer that controls the electricity in the hybrid which

is about the same amount of R&D money that GM spent

on making and killing the now million dollar EV-1 digital car.

The emotional part of R&D is pride!

Honda engineers are never allowed to work for another automaker,

so if Toyota comes up with a full hybrid, Honda will try to pursue

another idea in R&D.

WHO PAYS FOR THE RACE?

Think of types of hybrids and brands like a race

where everybody wants to wear a different color

and drive a different type of technology.

Unfortunately, the consumer has to pay

for all these different choices, failures,

and dirty secrets that costs billions.

Why or why not?

From the same student below: Why or why not?

This part of the question has to do with

how the global variables will change over time.

FUTURE ENERGY

An extreme case would be oil running out.

Many people are working on this problem

because many experts believe that oil will

be gone in cheap large amounts in a century.

So some companies are making synthetic oil,

oil from plants, oil from gases and other things.

HYBRID FLEXIBILITY

The interesting thing about hybrids is that they

are compatible with any kind of chemical fuel:

- biodiesel hybrids (buses and semi trucks)

- diesel eletric hybrids (many trains)

- gasoline electric hybrids (most cars)

- air electric hybrids (trains and cars)

- hydrogen electric hybrids (e.g. Honda clarity)

- natural gas electric hybrids (buildings, houses, washing machines)

- nuclear electric hybrids (most advanced submarines)

- natural gas steam (water) hybrids (most power generation)

and I could go on and on because hybrids can
DIGITIZE any chemical technology and make
it BETTER, FASTER and/or MORE EFFICIENT!

CHEMICAL OR DIGITAL SOCIETY

So if oil runs out and we maintain a chemical society

and do not convert to a purely digital society powered

by futuristic technologies like crystals and string theory,

hybrids will always be more efficient than chemical engines.

HYBRID CONS

The down side is additional costs, although those costs

are going down everyday, while the chemical (gas-powered)

costs of building an engine have dropped about as far as

they can go for now. So hybrids will continue to threaten
chemical technologies if consumers pay the small extra.

SUMMARY
The hybrid is compatible with every gas-powered technology,

costs a bit more, and is in between the chemical and digital world.

If we choose a digital future, hybrids could overtake gas-powered

and then electrics overtake hybrids as our chemicals run out.

If we choose a chemical future, we'll continue to have wars

over natural resources and we may just end civilization

before we can burn up all the things we dig up.

Hybrids are compatible with
BOTH
a chemical and/or digital society!

Do you think that hybrid car levels will ever meet or exceed the number of gas-powered ones?

Kids are getting smarter and doing research reports earlier and earlier.
From the 7th grade, I received the following question about hybrids:

Q) Do you think that hybrid car levels will ever meet or exceed the number of gas-powered ones?

First of all, let's discuss the UNITED STATES market for NEW automobiles.

U.S. COMPARED TO WORLDWIDE

Globally, NEW car and light truck sales usually run about 60 million units,

with 16 to 20 in the U.S. with the rest almost equally divided between

Asia and Europe. Because U.S. consumers (customers) are the most

high profile in the world, the U.S. market is the world's most important.

U.S. CONSUMER BEHAVIOR

There are many things that have changed the U.S. consumer recently.

2008 is forecasted to be one of the worst years in a long time due to

several factors including problems on Wall St, gasoline prices and

of course, a looming recession. These are huge factors that have

nothing to do with the kind of automotive technologies avail,

and according to February data, almost every automaker except

Honda had a drop in sales. Almost all large vehicles were down,

and only the sub-compacts like the Honda Fit spiked upward.

WHAT DRIVES SALES?

There is one variable that appears to be more correlated with

hybrid sales than the others: gasoline prices. Now remember

that the rest of the world uses liters and we use gallons.

So MPG is the consumer side of the equation and U.S. hybrids tend

to look very strong compared to miles per liter or liters per 100km.

HYBRID SALES

Toyota dominates hybrid sales and over the past 10 years

hybrids have followed the typical bell curve upwards.

From 1999 to 2007 hybrids sales grew from 17 to about 350,000.

In my 174 page master's thesis researched from 2004 to 2007,

I identified 100s of hybrids being prepared for showrooms

and forecasted the hybrid market. Experts ranged from

20% to 80% of the overal NEW car market by 2012 to 2020.

FORECAST

My forecast was based on plotting the first several years of U.S. hybrid sales

against Geoffrey Moore's Technology Adoption Life Cycle in Crossing the Chasm.

It's a bell curve and what really drives a technology from something new to

the mainstream is the average buyers. Those that may not understand the

details of how hybrids work and just want a car that gets better mileage.

Under the assumption that the first nine years made up 16% of the area under

Moore's curve, I forecasted that there was 84% of the curve left for Prius and

current generation hybrids. Simple math resulted in a 2.5 million unit market

and at $20,000 per car, it's a $50 billion or $50,000,000,000.00 opportunity.

SUMMARY

To forecast "car levels" we need to look at more than just new car sales

and the current generation of hybrids. How do we count electric cars,

plug-in hybrids, alternative fuel vehicles, etc? If you define "gas-powered ones"

as all the cars like diesel, biodiesel, E85, gasoline-hybrids, flex-hybrids, hydrogen hybrids,

then I would say that hybrids cannot exceed the number of "gas-powered ones."

There are millions of older cars on the road and when and how they are recycled

is up to other factors, usually smog laws driven by politics that has nothing to

do with hybrids being 90% cleaner than most cars.

What I can say for sure is that digital car levels

WILL exceed gas-powered cars in the longer term future.

In the short-term, fuel efficient cars will increase the most

and in the mid-term, hybrids, plug-ins and alternatives

and in the long-term vehicle that have powertrains

controlled by computers. Gas-powered cars have

computer controlled engines, but not

digital transmissions for hybrids, plug-ins and electrics.

CLOSING

The future will converge towards digital just like

the LP became the digital CD that died for the iPod

the tube became the digital transistor that enabled personal computers and flat screens, etc.

According to Jim Press who ran Toyota America to the top,

the automobile industry is the world's biggest and buys

more computers than the computer industry.

What is Detroit's Strategy?

One of the world's leading automotive journalists just wrote a piece titled,
"Shooting For Last Place" at Forbes http://www.forbes.com/2008/02/25/detroit-autos-carmakers-oped-cz_jf_0226flint.html
that talks about strategy.

It's an excellent discussion of the tactics pursued by the Bid 3 in early 2008, but I argue below that "tactics" are not "strategy."

Jerry, very courageous in tackling one of the most important yet misunderstood business concepts that plagues the auto industry today: strategy.

In simple terms, the strategic problem is how to get from analogue to digital.

DIGITAL DILEMMAS
Kodak struggled with this from film to digital cameras. Hollywood and New York struggled with this from Napster to iTunes while Apple became one of the most powerful in the world. All the computer manufacturers struggled with this from IBM all the way to Dell. Even your industry Jerry, media, has struggled with the print news to YouTube's dominance. What's the common theme???

Cost cutting tactics such as laying off the most expense part of running a business or lowering the cost of sales channels like Dell did with the highly doubted www.dell.com in the computer maker shakeout are simply tactics.

Strategy is almost always confused with tactics. Detroit is focused on tactics while strategies ebb in and out with various technologies, such as hydrogen hype, hybrid phenomenon to plug-in doubts. Employees and technology comes and goes, strategy is like a ship's keel.

The bottom line is that tactics are worthless without a solid strategy.

Did Dell pursue laying off or cost cutting as a strategy? No, Dell pursued the toughest strategy, a combination of two of Porter's generics: 1) cost leadership (the ONE automaker that can make cars cheapest not cheaper) 2) differentiation (something special customers pay more for) to sell directly to the customer and 3) focus or niche (dominating a small piece of the market).

Dell's goal from Michael's (from dorm room to #9 richest American in 2007) autobiography, was to lower customer costs and increase service. This is sometimes referred to as, "best cost," and often misunderstood. Toyota just about has it, but any loss of service of cost of building any car will hurt. Dell succeeded even though the service subsided over the years.

COST LEADERSHIP
The key is that you've got to build cars as cheap or cheaper than anyone else. Dell was able to get days inventory down from weeks to eight days in his book, and it's probably lower today. This is often misunderstood as the lowest prices. An example would be Wal-Mart vs. K-Mart. Wal-Mart can move and track a pallet of anything cheaper and BETTER than any other supply chain in the world! That's cost leadership, just like Toyota executives that eat ramen instead of sushi on international business trips!

What are average days inventory for the auto industry?

Most businessmen know that a day's inventory can
translate into millions of dollars of cost savings.

Compared to Dell at 8 days, I've heard 20 to 40 is good
and during the rise of the Prius, it went negative as people
placed orders, just like shopping at www.dell.com and waited
for their hybrids to be delivered to the local dealership.

DIFFERENTIATION FOCUS NICHE
The lock is that your quality is also above industry standards because you are delivering 2) and/or 3). For Dell, that was not only the products, but the 24/7 real-time advantage of www.dell.com linked to a supply chain that ran just in time and cost accounting that only purchased things when they were already sold. In short, "build to order" or "direct."

Could you imagine if an automaker pursued the impossible "best cost" strategy with the goal of lowering the cost for the customer while delivering the BEST quality and service.

The Big 3 did this once. After Ford invented the assembly line just as Dell invented direct, Ford held costs down to help the masses open up American roads. The goal was social change and not just hiring more people or creating more dealerships. Those were tactics behind the philosophy distilled into a very clear strategy: "best cost."

Jerry, you are absolutely right in that any automaker "caught in the middle" of strategies is doomed for last place. Porter confirms this happening in industry after industry shakeout. Especially when technology matures and a new curve comes along. Firing people or closing dealership WILL NOT get an automaker to a strategy.

Stuck in the middle strategy is pursuing tactics with no strategy. For example, thinking you can be the ONLY automaker with the LOWEST (NOT LOWER OR LOW) costs and NOT LOWEST PRICES!!! Word of advice to Detroit, forget about COST LEADERSHIP and 1), leave that up to Toyota, India, China, Korea, etc.

DETROIT'S OPTIONS
What about strategy 2) and 3). This is a different story! We know that American quality is higher than expected; this is a business ace! You can build a strategy around "something special" such as high quality large trucks, BUT EVERYTHING has to be special, not just the truck. The employees need to feel special, the factory has to ooze special, the suppliers top of the heap, and in the end the price, yes it's high, but customers are happy with special products backed by special service. So the dealership in this case, would only service trucks, and do it better than Toyota, Nissan and anyone else.

What about 3) focus or niche. Porsche is a good example of differentiation strategy, very clear culture, goal and DNA, and guess what, tactics like human resources and dealerships becomes a no-brainer tactic. Small market, proud world-class employees and R&D, high prices, and lots and lots of profits. Enough to try and buy out the 5th largest company in the biggest business in the world. This would be like Tesla buying Chrysler and not the other way around. How can this be??? A clear strategy setup by Porsche decades ago.

DETROIT'S TACTICS
1) chopping heads

This tactic only supports low costs if you can replace those heads with people that can build cars cheaper than ANY OTHER automaker in the world. Otherwise, the new employees better know how to make something special or have specialized knowledge of a market niche, let's say electric vehicles.

2) closing dealerships

This tactic only supports low costs ONLY if you can run dealerships CHEAPER THAN EVERY OTHER AUTOMAKER. As far as differentiation, maybe if you're the first to be able to develop the direct model for cars, but are customers ready? Toyota did sell half a million Prius without a test drive sight unseen... How about niche? Closing dealerships MIGHT WORK if they are consolidated and moved into specialized markets. For example, shut 80% of the dealerships leaving only those in electric vehicle markets open to become the industry's top service provider for maintenance and repair of ALL electric vehicles from Golf Carts to Teslas to Volts.

FINISH LINE
When Detroit finally gives up its quest for revenues and is forced to focus on profits, there is only ONE WAY TO SURVIVE = A VERY CLEAR AND SIMPLE STRATEGY that everyone from the line worker to the greeter at the dealership can understand and take to heart everyday!

Making cars cheaper than everyone else, making special cars and making cars for a specific market are the only generic strategies available according to Porter. Only the brave can dream of mixing these into best costs and those stuck in the middle will die in the digitization of the world's largest business!

All About Electric & Hybrid Cars Nugget

This post is one in a series where I capture
"nuggets" of information from books
that we can also use for our references
or to back up our arguments.

In All About Electric & Hybrid Cars by Robert J. Traister
Copyright 1982 by TAB BOOKS, INC, Blue Ridge Summit, PA

on pages 82-88 discusses controlling the speed of electric motors.

This is a very expensive and important topic
and was actually the bottleneck for Toyota
in developing the 80 G21 designs into the
Hybrid Synergy Drive that came may failures
and years later. The most expensive was the
decision to start a factory to manufacturer
power controllers because they could not source them.

Traister writes from an engineering perspective
and explains how the "gas pedal" works in electrics and hybrids:

PULSING TECHNIQUE
Rather than controlling the amount of air that enters a gasoline engine,
turning off and on the electricity to the motor depending on where the
gas pedal is describes pulsing or controlling the motor so you can drive.

SCR
Traister cites silicon-controlled rectifiers (SCRs) as the best devices
because they are highly efficient (95%). Compare that with burning
gasoline one of every four strokes (25%). Remember that electric
motors and batteries have been described as 90% efficient in my
interview with a Tesla Motors VP.

PROS = Secret Black Box
Although the SCR has no moving parts, it can clearly be wired
or programmed to perform differently. I believe that nearby is
where you will find billions of dollars of R&D monies invested
over the next 100 years of digital car development.

Probably in the system controllers that tell the SCR
WHEN, which way and what to do,
both in terms of hardware and software.

CONS = Cost
In 1982 dollars, Traister quoted SCR choppers for 400 amps
for the do-it-yourself electric or hybrid vehicle builder at
$750 to $3000 each.

Even back in the day, Traister agreeed with my silver bullet R&D hypothesis
of controllers over batteries by closing the chapter with,
"Much research and development is presently underway by various companies in the motor controller field. A listing of some of these manufacturers can be found in the appendices of this book."

The list was long 25 years ago and I've taken the time to list the names of organizations from Traister's 1983 Appendix E here ON CONTROLLERS: Brewer Associates, Cableform, Inc., Curtis Instruments, Dart Controls, Inc., EHB Systems, Inc., Electric Motion Control Corp., Electric Regulator, EVC Inc., Fengler Controls, FMC Corporation, General Electric Company, General Power Corporation, H.B. Electrical Mfg. Co., Inc., Propel Inc., RH Electronics, Robert Borsche Corporation, Ross Engineering Corporation, Sevcon, Siskiyou Energy Systems, Soleq Corporation, Uniparts Inc. and Unitron Corp.

Now that's a much lower profile yet arguably more important
list than what you see today, and Secret Black Boxes are
just as hidden even though the end product has blossomed.

The list has grown much larger into many different lists today
and one of my favorite is the Automotive X Prize Teams.

It's amazing to see so many digital auto entrepreneurs
with so few patents and hard core controller understanding.
If I was getting into the digital auto game, I would make sure
my team knew about every controller patent out there as
well as every competitor using a controller to drive a car,
then only then, could I successfully plot the tactics to win.

WHY?
Because if Toyota has a $1,000,000,000.00+ head start on SCR and controller R&D,
what company in their right mind could ever catch up. It doesn't matter if we're
talking about the next great battery, electric cars, hybrids or digital cars,
if you don't have hundreds of patents in your Secret Black Box,
you had better get a license or buy a company fast!!!

THANK YOU Traister for
spending several pages laying out a basic explanation for
tomorrow's "gas pedal" in a world accelerating the use of electrons.

TAKEAWAY
So the next time you pick a stock or judge an electric car company,
criticize a hybrid or start up your own digital automaker,
take a good hard look under the hood of the Secret Black Box.

HINT
It's the big black or silver looking thing under every hood
in plain sight with special words like Hybrid Synergy Drive
hiding billions of dollars, thousands of paychecks, hundred of patents
and the basics of what will drive the digital automotive revolution for years to come!

Which Business Score Counts???

at Martin's Tesla Founders Blog
there is a very lively debate
on how to keep score of a business.

Most of the businesses are automakers
and the products are usually cars.

The majority camp believes that products are what matter
and the minority camp (that myself and Martin subscribe to)
value business systems as more important than business products.

In Built to Last by two Stanford Professors,
the argument is deepened further,
akin to "clock building" vs "time telling."

Clock building is focusing on things in your company's DNA,
like for Toyota, kaizen, or values like frugality that help
employees on business trips order ramen instead of sushi.

Telling time is like making a MP3 player because everyone else is.

The hybrid and electric vehicle is much like the iPod for the world'
largest business and companies are all over the place in searching
for strategies: some are product based and few are systems based.

IF I WAS TO STARTUP AN AUTOMAKER SYSTEM...
I WOULD START WITH ? ENTITIES...
but let's save that for another blog, sorry...

BACK TO TESLA FOUNDERS BLOG AND MY RESPONSE TO A BLOGGER KINDLY ANSWERING MY QUESTIONS ABOUT PATENTS AND MARTIN'S RESPONSE

One of the most lively debates appears under Martin's posts on Kaizen.

In response to my question," How many patents does the Tesla Roadster have compared to the Prius?"

TEG wrote:
"Here are some examples:" and proceeded to list some important details that obviously costs his voluntary time!

FIRST OF ALL TEG, I would really like to say THANK YOU for going out of your way to do some research and answer my question. That is very kind of you!

You have taught some of the value of a blog (as I'm new to this system, although I've been scribbling for decades)...

Back to the question about patents related to the topic of kaizen.

COMPANY OR CAR???
As Martin and I try to hit home over and over, it's about the business system and much less about the product.

Kaizen is simply one example, and it DOES NOT mean that anything Toyota touches is golden. Anyway, that system had roots in Deming's work, who had also worked with Ford. So, yes you need a team AND a system, but I argue, system first, most argue team first...

Martin said:

"A lot of you seem to miss my point. Kaizen applies to the way you run a factory, work with suppliers, negotiate contracts, structure the company, etc. The whole point is to encourage evolution so that your business gets better over time and learns from its mistakes.

I am talking about evolution of business processes."

THIS IS PROFOUND AND PROVED IN BUILT TO LAST!!!

SO IF WE ARE COMPARING companies and technologies under the system approach, how do we keep score???

Traditionally, we measure sales, or consumer acceptance. That to me only measures the products, half the battle. After all, a company is a collection of resources working in a unique system.

What about measuring the system???

PATENT SCOREBOARD
I would argue that the patent trade war is a good place to start.

What is a patent anyway???

Well, is it not the result of several failures???

Trial and error inside of a business system.

If so, than the number of patents is a great metric for evaluating business systems (companies), especially startups that don't have customers yet.

BACK TO TEG's hard work on Tesla vs. Toyota patents. FIRST OF ALL, it's unfair to compare these two business systems, Toyota is a collection of hundreds of businesses and thousands of suppliers and tens of thousands of employees, while Tesla is a startup.

BUT, I was very curious to see if anyone out there knew that the G21 project that failed through 80 car designs to accidentally land on the Prius and filed 650 PATENTS ALONG THE WAY!!!

The bottleneck for the most successful digital automobile every produced was the high voltage controller. Even Silicon Valley knows little (has far fewer patents on than lo voltages) about high voltage.

Toyota plowed $1 billion into a secret factory head up by an engineer that started his career scrubbing catalytic converters 30 years prior, churning through the system of Kaizen, where failure in R&D is acceptable. Up in Northern Nagoya, the guy built the brains that became the Hybrid Snergy Drive. The product WAS NOT the goal, it was a system to run the first Prius because no supplier could come up with enough high quality controllers.

AGAIN THAT WAS A POTENTIAL $1,000,000,000.00 FAILURE (IRONICALLY THE SAME PRICE AS THE EV-1) WITH MANY SMALL FAILURES ALONG THE WAY THAT BECAME PATENTS (IRONICALLY HOW MANY GM EV-1 PATENTS ARE ON THE SCOREBOARD?).

So the reason I keep bringing the Prius into the picture is that VERY FEW people understand how many failures occured and how the Toyota system worked through those with a rush deadline for the Kyoto Protocol. The managers and engineers hated each other on the project.

The other misunderstanding is that people calculate the $1 billion dollar factory into just the Prius and don't realize it's a system that will probably last until Toyota's last day.

SO WHAT IS THE SCORE???

Toyota ($1 billion high voltage controller secret factory and 650 patents that became the Hybrid Synergy Drive)
GM's how many patents on E-Flex
Tesla's how many patents on energy management
Mitsubishi's how many patents on in-wheel electrics
Ford's (300+ related to the Escape hybrid) how many plug-in controller patents

Where we can get a scoreboard of patents on the high voltage race to the digital automobile???


PS I'm not asking for patent search help, as this is not an engineering scoreboard, think ESPN that reports the score on each of the sports systems running. Just the area of patents and number by company.

Supply and Demand for Automotive Talent

Here is a quick Literature review for a project I'm working on that will survey the landscape for doctoral students in America studying advanced automotive technologies. This is to test a hypothesis that exacerbated demand by consumer behavior, energy, environment and other macro-forces will NOT be met by the pace of researchers coming out of schools qualified to work on systems engineering to design tomorrow's digital vehicles. Geography will play a major role, including nationalism. In the war between Detroit and imports, Japan is pursuing an in-house strategy while the Big 3 follow an out-sourcing strategy. If the automobile industry moves towards a built to order direct model, such as Dell assembling computers after they are sold, the R&D strategies for the world's largest business may become the most influential key success factors.

Automotive Education at the Doctoral Level

Running Head: DOCTORAL AUTOMOTIVE

A Survey of Automotive Education at the Doctoral Level in American Universities

John E. Acheson

Community College of Southern Nevada

A Survey of Automotive Education at the Doctoral Level in American Universities

Automotive research is the world’s largest Research and Development (R&D) effort. In Natural Capitalism, Hawken and Lovins (1999) emphasized that automotive transportation is the world’s largest industry. In a Washington D.C. speech at a National Press Club Luncheon, Jim Press (2006), the highest ranking non-Japanese executive to ever earn a seat on Toyota’s Board of Directors, added

It’s the largest manufacturing industry in the nation…responsible for one out of every 10 American jobs and generates nearly 4% of the nation’s GDP. The U.S. auto industry spends more than $15 billion ($22.7 million per day) on Research & Development, more than any other manufacturing industry. We buy more metals, plastics, rubber and textiles than any other business including more computer chips than even the computer industry!

American doctoral students researching automotive technologies are studied in this paper. It is hypothesized that the supply of this primary R&D input, human resources, will be strained in coming decades. As macro-forces including consumer behaviors, governmental policies, energy economics and environmental issues exacerbate demand for automotive R&D, the author investigates if the number of graduates will keep up. The following literature review reveals geography as a key variable in the location, direction and careers of RnD doctoral graduates.

Where does the manpower come from? It’s widely known that college graduates supply the majority of human resources for R&D efforts. According to Landis & Svestka (1983), engineers are an important national resource in which the supply and demand of manpower ensures economic growth: demand is driven by economics, supply is simply linked to an appropriate number of graduates.

In an article that researched American higher education, Folger (1972) studied the relationship between the supply of college graduates and manpower. He concluded that shortages and surpluses occur frequently in America and found weak links between the number of graduates and job openings. In other words, supply rarely responds to demand. Folger’s work supports the hypothesis that there could be a growing shortage of automotive engineering graduates because demand is increasing while supply grows slowly.

One of the gaps in supply and demand is geography. Cassola (2007) believes that graduates choose to stay in the same states as their schools even though the advanced manufacturing degrees he studied were “hot commodities.” M.E. (2007) described geographical ties at Clemson: the proximity of industry and academia is an important part of Clemson University’s International Center for Automotive Research’s vision to be “the premier automotive and motorsports research and educational facility in the world”. It’s no surprise that the center is located 45 minutes away from campus, centered in one of America’s leading automotive industry research clusters. Michelin’s donation of tire machinery is a concrete example of the importance of geography (M.E., 2007). In a study testing the hypothesis of American workplace attitudes at a Ford’s River Rouge Plant, Southworth & Stepan-Norris (2003) found that “geographic separation shaped class-based identity.”

In the auto industry, national identity appears to be an instrumental R&D variable. The national origin of the R&D armies in the trade war between Detroit and Japan could play a very significant role in business survival. According to author Hughes (2006), automaker supply chains are highly nationalistic. The majority of American automakers rely on thousands of supply chains linked to R&D centers based in the United States. In other words, R&D efforts are often outsourced to suppliers.

Acheson’s (2006) research shows that leading Japanese automakers maintain advanced R&D facilities in their home countries. Unlike American rivals, Toyota performs R&D in-house usually in Japan. To help build the electronic brain that controls electricity for the one million Toyota hybrids on the road like the iconic Prius, Toyota invested $1 billion a secret factory tucked into the hills North of Nagoya. Takeshi Yaegashi known as the “father of the hybrid” stayed with a single automaker from college grad to industry changing technology. His work cleaning up smog devices started decades before his ground-breaking hybrid R&D (Fairley, 2004). 30 year careers at the same company, may give Japanese automakers a competitive advantage in advanced automotive technologies. At Honda, Sato (2006) made clear that all Honda employees were hired for life: forbidden to work for any other automaker, even after retirement.

The literature review reveals that geography could be one of the most important variables in studying the supply and demand of human resources for the world’s largest R&D effort. These findings suggest that the study could evolve into a model that predicts a gap in the supply of doctoral graduates vs. demand for automotive R&D manpower.

References

Acheson, J. (2006). The Hybrid Phenomenon. Copyrighted masters thesis, San Francisco State University, San Francisco.

Cassola, J. (2007). More than spinning their wheels. Techniques: Connecting education and careers. 66, 16-18.

Southworth, C. & Stepan-Norris, J. (2003), The geography of class in an industrial American city: Connections between workplace and neighborhood politics. Social Problems, 50, 319-348.

Folger, J.K. (1972). The job market for college graduates. The Journal of Higher Education, 43, 203-222.

Hawken, P. & Lovins A. & Lovins, L.H. (1999), Natural Capitalism (Boston, New York, London: Little Brown and Company), 22.

Hughes, K.H. (2006), Are the wheels coming off the American auto industry? Chronicle of Higher Education. 52.

Landis, F. & Svestka, J.A. (1983). The demand for engineers –- projections through 1987. Management Science Quarterly, 29, 455-464.

M.E. (2007). Parking garage at Clemson’s University’s automotive research center. University Business. 10, 20.

Press, J. (2006). Toyota North American Press Room: Speeches, July 18, 2006, retrieved from http://pressroom.toyota.com/Releases/View?id=TYT2006071879732, accessed August 15, 2006.

Sato, M. (2006). The Honda Myth, New York: Vertical, Inc.

Who will win the Lithium race?

Automakers spend more on R&D than any other industry. For example, Toyota spends 10 times more dollars than Apple. Getting to the Prius cost $1 billion and getting to the next digital transportation breakthrough is costing more.

The race to marry Lithium with automobiles is attracting top talent, global money powering new technologies with promising futures.

Just as entrepreneurs and corporate American filled the analogue to digital wake that Napster left in the music industry, venture capitalist and the largest organizations in the world are racing to R&D the iPod for the auto industry.

I wonder who will sell me the automobile that can drive across the digital divide and set the standard to accelerate away from the competition...


Start your Lithium teams and then engines (ranked in random order)!!!

• Team Toyota: 2006 $7.7B Toyota R&D incl. 300 engineers studying Lithium chemistry vs $6.6B GM R&D's 0 in-house engineers

• Team Volt: Sequoia, GM, A123

• Team VW: 360 million euros to develop Li-ion batteries by Bosch, Evonic Degssa, Li-Tec, STEAG Saar Egnergie including 60 million euros from the German govt. (Automotive Engineer, Dec 2007, Vol. 32 Issue 11, p 47)

• Team Nissan: NEC Lamilion Energy, A123, SAP AG

• Venrock Associates, Granite Global Ventures and Gabriel Venture Partners led by Oak Investment Partners/$68MT-$40MR3 Boston-Power

• New Enterprise Associates, BlueRun Ventures, Draper Fisher Jurvetson and DFJ

• Element/$7.5mR1-$15MR2 Deeya Energy

• Team Ford: GE, $30 million R1, $40 million R2 for A123, Sanyo

• Team Phoenix: Al Yousaf, Altair

• Team GM: Cobasts, Johnson

• Vincent Bollore/EDF/$52.8M BatScap/Continental AG/BMW/Pininfarina/BlueCar

• Team Mitsubishi: GS Yuasu, Lithium Energy Japan, MiEV

• Team Tesla: $37M Musk/VantagePoint Venture Partners, Technology Partners, and Draper Fisher Jurvetson/$105M Tesla

• Team Fisker: $10M Kleiner Perkins Caufield & Byers/Quantum

• Team Zenn: Kleiner Perkins Caufield & Byers/EEEstor/$25M Zenn/Lockheed
  

• Israel Corp., Morgan Stanley, VantagePoint Venture Partners/Renault Nissan/Israel's Ofer Shipping Holdings/$200 million R1 for Project Better Place

Who's making Lithium batteries?

This is probably the next biggest question out there. There are basically two tactics: research and develop in house or play suppliers against each other. Toyota has assembled hundreds of engineers to work on Lithium in house while GM has pit two battery-makers against each other to race the 2010 deadline.

This list will change often so feel free to suggest any additions or changes!!!

Li Batterymakers
A123
Advanced Battery Tech
Altair
Autotech
BASF
Bolloré
Bosch
Boston-Power
BYD
Concorde
Contental AG
Cobasys
Danionics (iPod)
Deeya Energy
EEStor ($2.5M Zenn + Kleiner etc.)
EnerDel
Johnson Controls
KW Energy
Li-Tec
Lithium Energy Japan
Lithium Technology Corp.
Maxwell Technologies
Odyne
Panasonic
Phostech Lithium
Nissan-NEC Lamilion Energy
Quantum
Sanyo Energy
Tesla Energy Group
Toshiba
Valence
ZAP

Who's making Lithium autos?

I've been putting together this list of automakers for quite awhile now. When possible I like to link directly to an automaker's Lithium technology that's on or closest to the road, but if not available, I provide a link to some news about the technology.

Also, there's a possibility of having to go to an overseas website, like Toyota for example, that has been selling small Lithium light hybrids in Tokyo for quite awhile now. Those are called Vitz aka Yaris hatchbacks with options called the Intelligent Package. These are marketed at urban women and Toyota has quietly been selling about 10 Lithium autos per month to be the first automaker on the road.

Li Automakers

AC Propulsion
Azure Dynamics
Aptera
BYD Auto
Chrylser
Commuter Cars
Daimler
Electrovaya
Falcon
Fisker
Ford
Fuji
GM
Honda
Hybrid Technolgies
JR East
Lightening Car
Loremo AG
Miles
Mitsubishi
Phoenix
Pininfarina
Nissan
Renault
Roth Motors
Saturn
Segway
Subaru
Think
Toyota
Universal
Velozzi
Venturi
Venture Vehicles
Visionary Vehicles
Volvo
VW
Wrightspeed
Zenn
ZAP

How to study Lithium?

To Patrick, Assistant Editor
The Futurist by the World Future Society

LITHIUM STUDIES
I have a hard time finding out anything about the back end of Lithium
and am pretty much following the breakthroughs in applications,
such as Stanford's Dr. Cui using silicon to 10x Lithium potential.

To me, I believe that driving is the most expensive,
dirtiest and dangerous choice we make everyday
and the potential to clean up our accelerating fleet
outweighs any mining issues.

BUT a holistic full-cycle article from mining
to electric car battery including dust to dust
well to wheel and environmental impact
is the only way to argue one over another.

I do support Lithium applications for making mobility more efficient,
but in the end, it will be up to the consumer to choose the iPod
for the automotive industry struggling with a digital future,
John

Dear Director of Stanford's Global Climate & Energy Project

John

Acheson, MBA

9353 W Twain Ave, Las Vegas, NV 89147 | (415) 290-7767 | (702) 476-3293

johnmba@sbcglobal.net | http://johnacheson.blogspot.com/ | http://www.linkedin.com/in/johnmba

February 9, 2008

Prof. Lynn Orr, Ph.D., Project Director

Global Climate & Energy Project (GCEP)

Jerry Yang & Akiko Yamazaki Environment & Energy Building — 4230
473 Via Ortega
Stanford, CA 94305

Dear Dr. Orr:

Thank you for the email announcing your Five-year Anniversary Special Event. Congratulations on such relevant and timely research. I am very interested in attending the event, but have relocated to Nevada from San Francisco and won’t be able to make it.

I’m writing to thank you for your publically available information, and ask a few questions. At your GCEP website under [Research], I am grateful for the reports “Advanced Transportation” and “Batteries for Electric Vehicles” as well as at the Presentations available at the Advanced Transportation Workshop summary under [Events].

It’s great to see interdisciplinary research bringing together energy and transportation. Are you integrating the ground-breaking research over at Terman? Have you considered Dr. Yi Cui’s recent breakthrough in Lithium? How will the new CarLab’s mission to “radically rethink the automobile” fit into your GCEP vision?

The reason I’m asking these questions, is because I cited your center (see Statement of Purpose) as a research example of the many projects that have taken place between automakers and Stanford over the years. Toyota’s massive contribution to GCEP intrigues me and I’m very curious about their expectations and research requests from GCEP.

I have been so impressed with the timely world-class automotive related research at Stanford’s that I recently applied to the Management Science & Engineering’s doctoral program to pursue the dream to continue my Master’s research.

I would like to thank you again for your team’s hard work and inspiration!

Sincerely,

John Acheson

Enclosure Stanford Statement of Purpose

Future Drive Nugget

This post starts a new series where I will
capture "nuggets" of information from books
that we can also use for our references
or to back up our arguments.

In Future Drive by Daniel Sperling
Copyright 1995 by Island Press, Washington DC
on pages 53, 54...

Professor Sperling of UC Davis,
advanced automotive transportation expert states,
"The most advanced batteries of the future will probably
never exceed 4 percent of the energy density of gasoline.
This does not mean that electric vehicles are inherently inferior, though."
"First, the 4 percent figure overstates the difference,
because electric vehicles are likely to be at least
four times as energy efficient as comparable ICE vehicles.
Thus future batteries will be closer to 16 percent
of the energy density of gasoline."

Dr. Sperling makes an excellent point in that
comparing technologies should be done holistically.
After all, a battery is more comparable to a gas tank,
and gasoline is more comparable to let's say the type
of battery, such as Lithium or Nickel.

So to compare apples to apples, we have to consider
at least tank to wheel, which measure energy loss
from filling up to turning the wheels.

From that perspective, Dr. Sperling's future prediction
just got outdated by Stanford's Dr. Cui's work on Lithium
at the nano-level. By looking at tiny fibers of Lithium
many times smaller than a human hair, Dr. Cui found that
as we charge and use our Lithium batteries, the Lithium
fiber starts cracking. Imagine your head of hair getting
more brittle by the day and finally unable to hold a charge.

So if Dr. Cui's work is the beginning of a quantum leap forward
in Lithium energy density, Dr. Sperling's prediction drastically
underestimated the energy density potential of batteries.

But his point in incorporating the efficiency of the electric motor
to the apples to apples comparison is VERY important. One cannot
compare gasoline to batteries or even the chemistry without considering
that a typical gasoline four-stroke engine can only produce power
with one stroke for a theoretical maximum of 25%. Electric motors
are far superior, and I interviewed the VP at Tesla who firmly
answered that his motor was at or near 90%.

So I absolutely support Dr. Sperling's metric above of "four times."
From a tank to wheel analysis, if the electric motor is four times
more efficient as the internal combustion engine, then to compare
apples to apples in terms of fuel, the electric fuel only needs
to be 1/4 as powerful as gasoline for the same performance.

Of course we are ignoring things like electric cars can be lighter
with high voltage safety equipment like repelling bumpers,
and that the current electric grid is terribly inefficient,
BUT FROM STRICTLY A TANK TO WHEEL analysis,
if we add Dr. Cui's work of 10x on the Lithium side
to the four times in Dr. Sperling's Future Drive,
we come up with 40% times four which is a SUPERIOR TECHNOLOGY!

In other words, from an apples to apples comparison,
only looking at two similar cars, one Nano-Lithium electric
and the other high-octane gasoline,
the electric actually has more energy.

This result goes against almost any article,
comment, analysis or comments you'll see
anywhere in media, on the internet and from the mouth.

If Dr. Cui's nano-Lithium is brought to market,
there is theoretically more muscle in his electric car
than almost any of the muscle cars built over all time!

Thank you again Dr. Cui and Dr. Sperling
for your world-changing work, after all,
I believe that owning and driving our
cars and trucks is the most expensive,
dangerous and dirtiest choice we make
everyday!

John Acheson
jacheson@gmail.com

Line Graph and Pie Chart

Figure 3.1 Auto Theft in America

Source: Department of Justice, 2000

Figure 3.2 Diversity in American Colleges

Source: Department of Education, National Center for Educational Statistics, 1997

Technical Communications 1

Hybrid Showers

In response to my father's passion for
lo technologies accomplishing high functions,
I responded to Jay Leno's article on the
last and most cleanest steam hybrids titled,
"Jay Leno's Garage: A Case For Steam"
at http://www.popularmechanics.com/automotive/jay_leno_garage/1302916.html?page=2


HOTTER SHOWERS

This brings to mind the small boilers that run Japan vs. the large water heaters that sit around America. There's billions of these hybrid devices powering every modern home providing hot water for showers, washing dishes, clothes, brushing your teeth, etc.

My Japanese wife complains every Winter night (we live in Las Vegas) because she takes showers late (in Japan most everyone bathes at night and washes their hair in the morning) and the incoming water into the heater is so cold, the equilibrium is lost within a minute or so. Very inefficient, but in America, natural gas has been relatively dirt cheap until recently...

In Japan, they run Doble designs everywhere, from showers to washing the dishes, the power plant is a small backpack sized steamer that can burn your hair off. It's either on the wall right above the sink, or right behind the bathroom pipes. Very different from the huge tanks that require a separate room in most American applications of this old world wasteful technology.

The downside for American usage of this more efficient technology, is that the company would get sued to many times from non-precise consumers and there's not enough volume to satisfy our big lifestyle.

On the other hand Jay, you might be right about the emissions and impact issue. With steam or even super steam (the technology that powered WWI and the industrial revolution) we might be able to digitize Doble's idea and run a car more efficiently AND cleaner.

I'm wondering how the efficiencies compare to the 20% ICE and 40% diesel or gasoline hybrid?

How efficient is the Doble? Is it cleaner than a Prius?

Start Your Digital Engines!!!

Influenced by the founder of Tesla's story here:
http://teslafounders.wordpress.com/about/#comment-1030
I wrote this short piece about why the digital car
and not the electric or gasoline or diesel is what matters:

RE About Tesla's Founder
This is a beautiful story in progress, but I would like to politely disagree with one thing.

There have been many theories about why the electric car failed. But did it?

Through the period of the car's invention and growth, the electric and steam hybrids dominated the analogue market. Kind of like AOL dominating the .com boom over copper wires.

What happened?

The internet went digital (broadband) just like record became CDs quickly replaced by the digital iPod that really took off when Jobs lowered the price of flash memory for the world in one deal (nano).

Now imagine if some startup halved the price of Lithium or nano-Lithium or crystal Lithium batteries with one order.

Why would they be making that order?

Because the car went digital, not electric!

Why did it take 10 years from CD to iPod or dial-up to broadband or Walkman to Zune or Tube to Flat Screen or book to Kindle?

Because in between the industrial age (analogue) and the information age (digital), there has to be a analogue to digital converter for the masses.

A dial-up compatible website to plug into your Kindle or TV Guide to run your device or a free cable box for broad band or free iTunes software compatible with any computer OR a hybrid compatible with any gas station.

There has to be an analogue bridge for what I estimate a 10 year period followed by a swift takeover of the analogue industry, it's players and technologies.

The electric car was never killed or came back to life!!! The analogue cars, ie steam hybrids, jet powered, hover crafts, air hybrids, fuel and tube powered electrics have been dying for 110 years.

The analogue car is dying a long awaited slow death and the digital car is accelerating out of the information revolution's garage.

The digital conversion requires a critical mass as well as followers than can safely have one foot in the analogue world and one foot in the digital world.

With 1,000,000,000 million hybrid-electrics (each of these has 300-650 digital patents involved) owners having paid extra to straddle this digital divide, the time is now for several digital organizations to fight to become the standard (like Apple and iPod) as well as many analogue giants to fall (like Zenith at worst or Pixar owning Disney at best).

Start your digital engines!!!

Kaizen = Change to Good

The founder of Tesla wrote a piece on his blog at
http://teslafounders.wordpress.com/2008/01/30/kaizan/#comment-1029
that really got my creative juices flowing after playing to my
Japanese and Caucasian heart strings in love the automobile.

Reading Martin's post suddenly made me realize why I respect
Toyota and Ford, although, I've never been excited by actually
driving or using their products. It's because those founders
have actually pioneered processes and not flashy products!!!

Toyota founded, "kaizen" and Ford invented the "assembly line."

Those two management science principles power almost everything
in the digital world and challenge what's left in the industrial
world of industry and business everyday.

Kaizen
First of all, I'll borrow two quotes, "better late than never," and "failure is the opportunity to begin again, more intelligently." This comment is a month too late, I'm sorry for your experience Martin, only time will heal, and as far as Ford, it's not about what kind of product a Ford car or truck is, but about the man that invented the assembly line.

He also failed twice because shareholders wanted an expensive car, he just wanted to race and build another one for the masses. One of his failures became Cadillac, who's focus was the highest profit margins.

Compare that to Toyota's first entry, an ugly underpowered car, that couldn't get on the freeway. Almost identical to the Prius released 50 years later that has gone on to sell one million units at $20,000,000,000 or more along with saving hundreds of thousand of gallons of gasoline.

So if Ford invented the assembly line and Mr. Toyoda studied it, were they engineers or management scientists? Well, one might argue, just as two Stanford professors do in Built to Last, that a company's true value is it's organization, grounded in permanent DNA that never goes away, but any innovative technology that goes through the system can be innovative. Building a clock vs. telling time.

The time is now for building the digital automobile and Toyota started with the Prius foreshadowed by decades of experience in processes grown from looms grounded in Kaizen.

I asked my Japanese wife to simply define this, and she has no automotive or engineering or business background.

She said, "just a moment..." then drew on a scratch piece of paper, some Kanji (Chinese characters imported by a Buddhist monk who achieved enlightenment by walking around Japan's smallest island for months on a trek people still follow today called something like 88 temples) that she thinks reads...

Searching for Kaizen
"aratameru" for the first one and
and she wasn't sure of the reading when standing alone but very clear on the meaning, "yoi."

So what does Kai from China or aratemeru in Japanese really mean? According to a quick internet search, "change, alter, improve, remodel." I would think that change and alter are Eastern and improve and remodel are modern.

Basically, we're talking about change, NOT make better, or run lean... Now take a look at every Toyota or Toyoda product from cars to houses to controllers. The Prius came from 1,000 engineers THROWING out 80 designs to get to 650 patents replaced by the 2nd generation that Hollywood bought to be made obsolete by plug-ins.

I'm not sure about better, but change is 100% correct.

So what about "zen" and not this is not the zen you are thinking about, remember, the Japanese language is the 2nd most difficult language in the world because of three alphabets and multiple meanings. My wife says that in the Kaizen combination, "zen" means yoi.

Well even I know this word. It's good, but it's a very rare way to say good. Normally, one would say, ii. For example, I'm good (full) or good job. Yoi is a different good.

It seems to carry more respect, as if something difficult or important was achieved, almost as if it's more used in the past tense as opposed to have a good day, maybe, "Wow, that was a good effort" no matter what the result was.

There's no question that you made a "yoi" effort at Tesla Martin, and the only constant in the world's biggest business is change.

So putting the two together, I come up with "change good."

NOTICE THAT THIS KAIZEN HAS NOTHING TO DO WITH LEAN or the Western definition, "continuous improvement" which was taught in my MBA coursework.

This has to do with a different perspective. Whereas the East looks at the process, the West looks at the result. Japanese doctor's don't tell patients that they have cancer and focus on the process of what got there and beyond. We want to cut it out, like firing someone who makes a mistake.

But what if mistakes are part of the "kaizen" process, or change to good as opposed to good change. What if Toyota stopped at the 2nd, 5th, 52nd or 79th G21 (Prius) failure?

We might not have a digital benchmark to beat today...

So as you build your next company, I encourage you to focus half of your early efforts on DNA that relates to the process, not the technology. DNA that make an organization, "lean" not matter what kind of transmission or controller goes through the assembly line. And maybe most important, DNA that applauds failure as another chance to start again more good!