2008 July 02 | money news blog

02 07 2008

General Motors (GM): Electro-Shock Therapy

Posted by: in Products and Services

Filed under: Good news, Products and services, Consumer experience, Competitive strategy, General Motors (GM)

General Motors Corporation (NYSE: GM) investors, as well as auto industry trackers, will want to read Jonathan Rauch’s “Electro-Shock Therapy” in the July 2008 issue of Atlantic Magazine. Mr. Rauch was given unprecedented access to all personnel involved in GM’s company-wide commitment to have a market-ready electric vehicle by late 2010. GM personnel note the Chevy VOLT, as the vehicle is named, will not be a hybrid per se, but will be the first mass market electric vehicle with a range of 40 miles per charge, enough to cover the daily commute of 75% of American workers. The car’s small gasoline engine will be used to recharge the battery, while only electricity will be used to power the wheels. GM is trying to wow consumers by manufacturing an affordable electric automobile that’ll sever the connection between driving and the gas pump.

GM lost the engineering and publicity wars on electric vehicles to Toyota’s Prius years ago. Toyota has been eating GM’s lunch ever sense. According to GM’s VP Bob Lutz, it’s payback time. Using the same rhetoric President Kennedy used to launch the Apollo space program and race to land on the moon, GM has sectioned off the Volt division and given it complete decision-making and spending authority to reinvent not only the electric vehicle, but also the company itself. In one Volt engineer’s words: “Go massive or go home.”

Yes, there are problems with the weight to power ratio in the battery. And yes, production of both the battery and the vehicle body are being rushed towards production without the normal period of evaluation. But GM has staked its future on the Volt, and unlike my colleague Michael Rainey who isn’t that positive on the Volt, there’s reason for at least cautious optimism, a quality currently in short supply coming out of Detroit.

02 07 2008

Google’s one chance for Android - become a wireless carrier

Posted by: in Products and Services

Filed under: Products and services, Launches, Google (GOOG)

When Google, Inc. (NASDAQ: GOOG) purchased wireless software development company Android years ago, its founder asked Google’s co-founder Larry Page, “Is this interesting to Google?” It sure turned out to be, even though the mobile phone operating system environment was announced nearly a year ago and nothing concrete has shipped in a customer device yet. My bet is that Google isn’t delaying development to fine-tune its software — it’s had years to do that and the money to boot.

The problem is the wireless environment in the U.S., for starters. The competitive landscape is so tightly controlled that Google’s mantra of “open access” just won’t sit well with wireless carriers used to telling customers what they have the ability to and can’t do with their phones. If you think U.S. consumers have control over their wireless lifestyles, a swift trip to Europe will dispel that notion pretty fast.

If Google really wants to make Android the ubiquitous, free and open mobile operating system it wants it to be, what are the alternatives to having partnerships with mobile carriers who will, of course, be afraid of Google? Google has bid on wireless airwaves before (only to have the goal of allowing open devices accessible to shut networks), but this time, I see it going down the mobile virtual network operator route, plain and easy. Although the MVNO model has largely failed in the U.S., Google doesn’t have a national wireless network to operate. But with its huge pockets, it sure can buy wholesale from the existing carriers and place its Android customers with service — and then, give them anything they want. Like, mobile search results with ads next to them.

Read | Permalink | Email this | Linking Blogs | Comments

02 07 2008

General Motors (GM): Electro-Shock Therapy

Posted by: in Products and Services

Filed under: Good news, Products and services, Consumer experience, Competitive strategy, General Motors (GM)

General Motors Corporation (NYSE: GM) investors, as well as auto industry trackers, will want to read Jonathan Rauch’s “Electro-Shock Therapy” in the July 2008 issue of Atlantic Magazine. Mr. Rauch was given unprecedented access to all personnel involved in GM’s company-wide commitment to have a market-ready electric vehicle by late 2010. GM personnel note the Chevy VOLT, as the vehicle is named, won’t be a hybrid per se, but will be the first mass market electric car with a range of 40 miles per charge, enough to cover the daily commute of 75% of American workers. The car’s small gasoline engine will be used to recharge the battery, while only electricity will be used to power the wheels. GM is trying to wow consumers by manufacturing an affordable electric vehicle that will sever the connection between driving and the gas pump.

GM lost the engineering and publicity wars on electric automobiles to Toyota’s Prius years ago. Toyota has been eating GM’s lunch ever sense. According to GM’s VP Bob Lutz, it’s payback time. Using the same rhetoric President Kennedy used to launch the Apollo space program and race to land on the moon, GM has sectioned off the Volt division and given it complete decision-making and spending authority to reinvent not only the electric vehicle, but also the company itself. In one Volt engineer’s words: “Go large or go home.”

Yes, there are problems with the weight to power ratio in the battery. And yes, production of both the battery and the automobile body are being rushed towards production without the normal period of evaluation. But GM has staked its future on the Volt, and unlike my colleague Michael Rainey who isn’t that positive on the Volt, there’s reason for at least cautious optimism, a quality currently in short supply coming out of Detroit.

02 07 2008

Google’s one chance for Android - become a wireless carrier

Posted by: in Products and Services

Filed under: Products and services, Launches, Google (GOOG)

When Google, Inc. (NASDAQ: GOOG) bought wireless software development company Android years ago, its founder asked Google’s co-founder Larry Page, “Is this interesting to Google?” It sure turned out to be, although the mobile phone operating system environment was announced almost a year ago and nothing concrete has shipped in a customer device yet. My bet is that Google isn’t delaying development to fine-tune its software — it’s had years to do that and the money to boot.

The problem is the wireless environment in the U.S., for starters. The competitive landscape is so tightly controlled that Google’s mantra of “open access” just won’t sit well with wireless carriers used to telling customers what they can and cannot do with their phones. If you think U.S. consumers have control over their wireless lifestyles, a swift trip to Europe will dispel that notion pretty fast.

If Google really wants to make Android the ubiquitous, free and open mobile operating system it wants it to be, what are the alternatives to having partnerships with mobile carriers who will, of course, be afraid of Google? Google has bid on wireless airwaves before (only to have the goal of allowing open devices accessible to shut networks), but this time, I see it going down the mobile virtual network operator route, plain and easy. Although the MVNO model has largely failed in the U.S., Google doesn’t have a national wireless network to operate. But with its massive pockets, it sure can buy wholesale from the existing carriers and place its Android customers with service — and then, give them anything they want. Like, mobile search results with ads next to them.

Read | Permalink | Email this | Linking Blogs | Comments

02 07 2008

Automakers brace for more hard times to come

Posted by: in Products and Services

Filed under: Bad news, Products and services, Consumer experience, Competitive strategy, Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM), Oil

It probably should come as no surprise, but June was a tough month for automakers, and all signs are pointing to more troubles out on the horizon.

All but one major automaker saw their sales drop last month, with Honda Motor (NYSE: HMC) being the sole exception. For the month, Honda actually had a 1% year-over-year sales growth, which given the current market place was an exceptional feat.

So just how bad was June for the automakers? Pretty bad. During the month, combined auto sales fell to 1.19 million automobiles sold, a 266,000 decline from the same period last year. This just continues the trend that we have been seeing all year, amounting to roughly a 10% sales decline during the first half of the year.

Consumers are definitely reacting to the record high gasoline prices, moving as far away from SUVs as possible. In the wake of the shift, the major automakers found that they were unable to keep up with demand for the smaller, more fuel efficient vehicles. Typically you would think Japanese automaker Toyota (NYSE: TM) would have flourished under these circumstances, but it too suffered sales declines, mainly a result of not being able to keep up with demand for their its vehicles, in particular its fuel-efficient Prius, Corolla and Yaris automobiles.

General Motors (NYSE: GM) was able to put up superior total sales than Toyota, by selling 262,000 during the month, edging out its Japanese rival by about 69,000 automobiles. But this was mainly accomplished by offering last minute no-interest financing to bring buyers onto its lots. GM was able to keep the #1 slot for for the month, which does not cancel out the fact that it had a 21% drop in its vehicle sales and a 16% decline in its truck sales.

America’s other major automaker, Ford Motor (NYSE: F) also felt the pain last month. During the month, Ford’s sales shrunk by a mind-boggling 28%. The company is scrambling to shift its focus away from its heavy-duty trucks and SUVs, but the transition is just not coming fast enough. Ford, as well as GM — which have both announced that new, smaller automobiles are in the pipeline — will continue to face pressure since in both companies’ case the new subcompacts are not expected to roll off the production floor for at least another couple of years.

So yet another disappointing month for auto sales, and with gasoline prices continuing to remain at record levels, most analysts concur that the hard times are here to stay, at least for a while.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the internet investment advisory service Investor’s Observer.

02 07 2008

General Motors (GM): Electro-Shock Therapy

Posted by: in Products and Services

Filed under: Good news, Products and services, Consumer experience, Competitive strategy, General Motors (GM)

General Motors Corporation (NYSE: GM) investors, as well as auto industry trackers, will want to read Jonathan Rauch’s “Electro-Shock Therapy” in the July 2008 issue of Atlantic Magazine. Mr. Rauch was given unprecedented access to all personnel involved in GM’s company-wide commitment to have a market-ready electric vehicle by late 2010. GM personnel note the Chevy VOLT, as the vehicle is named, will not be a hybrid per se, but will be the first mass market electric car with a range of 40 miles per charge, enough to cover the daily commute of 75% of American workers. The car’s small gasoline engine will be used to recharge the battery, while only electricity will be used to power the wheels. GM is trying to wow consumers by manufacturing an inexpensive electric car that will sever the connection between driving and the gas pump.

GM lost the engineering and publicity wars on electric vehicles to Toyota’s Prius years ago. Toyota has been eating GM’s lunch ever sense. According to GM’s VP Bob Lutz, it’s payback time. Using the same rhetoric President Kennedy used to launch the Apollo space program and race to land on the moon, GM has sectioned off the Volt division and given it complete decision-making and spending authority to reinvent not only the electric automobile, but also the company itself. In one Volt engineer’s words: “Go massive or go home.”

Yes, there are problems with the weight to power ratio in the battery. And yes, production of both the battery and the vehicle body are being rushed towards production without the normal period of evaluation. But GM has staked its future on the Volt, and unlike my colleague Michael Rainey who isn’t that positive on the Volt, there’s reason for at least cautious optimism, a quality currently in short supply coming out of Detroit.

02 07 2008

Automakers brace for more hard times to come

Posted by: in Products and Services

Filed under: Bad news, Products and services, Consumer experience, Competitive strategy, Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM), Oil

It probably should come as no surprise, but June was a tough month for automakers, and all signs are pointing to more troubles out on the horizon.

All but one major automaker saw their sales drop last month, with Honda Motor (NYSE: HMC) being the sole exception. For the month, Honda actually had a 1% year-over-year sales growth, which given the current market place was an exceptional feat.

So just how bad was June for the automakers? Pretty bad. During the month, combined auto sales fell to 1.19 million vehicles sold, a 266,000 decline from the same period last year. This just continues the trend that we have been seeing all year, amounting to roughly a 10% sales decline during the first half of the year.

Consumers are definitely reacting to the record high gasoline prices, moving as far away from SUVs as possible. In the wake of the shift, the major automakers found that they were unable to keep up with demand for the smaller, more fuel efficient automobiles. Typically you would think Japanese automaker Toyota (NYSE: TM) would have flourished under these circumstances, but it too suffered sales declines, mainly a result of not being able to keep up with demand for their its automobiles, in particular its fuel-efficient Prius, Corolla and Yaris automobiles.

General Motors (NYSE: GM) was able to put up superior total sales than Toyota, by selling 262,000 during the month, edging out its Japanese rival by about 69,000 vehicles. But this was mainly accomplished by offering last minute no-interest financing to bring buyers onto its lots. GM was able to keep the #1 slot for for the month, which does not cancel out the fact that it had a 21% drop in its car sales and a 16% decline in its truck sales.

America’s other major automaker, Ford Motor (NYSE: F) also felt the pain last month. During the month, Ford’s sales shrunk by a mind-boggling 28%. The company is scrambling to shift its focus away from its heavy-duty trucks and SUVs, but the transition is just not coming fast enough. Ford, as well as GM — which have both announced that new, smaller vehicles are in the pipeline — will continue to face pressure since in both companies’ case the new subcompacts are not expected to roll off the production floor for at least another couple of years.

So yet another disappointing month for auto sales, and with gasoline prices continuing to remain at record levels, most analysts agree that the hard times are here to stay, at least for a while.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor’s Observer.