Why the American Automakers Should Go Bankrupt.

(Yes, I know about the current developments around Fannie and Freddie, but the federal government has yet to outline exactly what is going on, so I want to hold off until I have the full details before I provide my 2 pence on whatever is going on.)

Hey everyone,


Despite ICM being long MSFT, I love Yahoo. Not the company, but the website. They have great content. One of the superb articles that I ran across this week was a discussion about the new features that the 2009 cars will have. Much of the article discusses safety features such as emergency brake assist, blind-spot detection, and forward collision warnings.

However, all the safety features discussed in the article, there was only one being considered by a domestic automaker - the adaptive cruise control. This was being considered by Chrysler.

The second half of the article talked about some features that were being put into cars and trucks. What is Ford doing?

They are putting in a refrigerator. That's right. A refrigerator that is big enough to hold a lunch and a few bottles of water.

Ignore the pathetic fuel efficiency. Ignore safety. Ignore common sense. Put in a refigerator.

Nissan is coming up with paint that repairs scratches by itself. Now that's pretty cool. What does Ford do to answer that?

A tool monitoring system on its trucks. No, I'm not joking. You see, you register your tools with RFID tags and the truck keeps track of what tools are in your truck.

To those of you who think this is a good idea - I'm a chemical engineer at a chemical plant which uses trucks for hauling and what they were actually built for. I work with operators who spend $35,000 on trucks which serve as their family vehicles. But I know that none of them are going to be motivated to tag every one of their tools with RFID tags. Why?

1) Because the RFID tags on the tools would be constantly damaged

2) Tools are expensive. They keep track of them like crazy already.

3) You might alter the ergomics of the tool with the RFID tag - smaller tools like screwdrivers have grips which become uncomfortable to hold with RFID tags on them.

One could reasonably argue that such a system might spur an impulse buy amongst people who have tools and are interested in purchasing trucks.

Trucks - especially considering their low gas mileage and high price - are not impulse buys. Getting a truck is a big image issue amongst truck owners. Power, speed, features are closely compared. So someone who sees a more powerful truck for the same money as a less powerful truck with this RFID system is likely going to take the more powerful truck.

So, when the whole world is worried about high gas prices and has always worried about safety on the road, american automakers automakers worry about fridges and RFID tools. They don't DESERVE a bailout.

-Mansij Hans, E.I.T
Member, Intigril Capital Management

Disclosure: Mansij Hans' first car was an American car. It was a '97 Dodge Intrepid and he loved it to death. He now drives a Nissan.