“GM planning strict diet for new pickup trucks” – Reuters, 18 July 2013

In order to remain in competition with rival Ford Motor, General Motors is planning to scale down the weight of its full-size pickup trucks by employing more aluminum from manufacturers like Alcoa and Novelis.

GM’s 2014 Chevrolet Silverado and GMC Sierra are 250-400 pounds lighter than previous models, but Ford’s 2015 F-150 is anticipated to drop at least 700 pounds. It isn’t likely that GM will be able to apply a similar weight reduction so soon, as the Silverado and Sierra have just been redesigned; an overhaul can’t begin until 2019.

Such weight reductions will go to vastly improving the fuel economy of both companies’ trucks; better engineered engines and transmission will also help to curb fuel consumption. GM intends to opt out of conventional steel, instead using lighter materials, such as aluminum and composites.

Both GM and Ford pickup trucks are beneficial to both companies’ bottom line, and stand for almost 10% of all US automobile sales; individually, per-vehicle, the trucks allow for a profit of at least $12,000. It is rumored that, in late 2014, GM will present a special aluminum-intensive redesign of the Silverado: 250 pounds lighter and a 20% improved fuel economy.

As both companies begin to introduce their lightweight models, they have to keep in mind that truck customers don’t want lose the power of their vehicles; but both companies will also have to adhere to new federal fuel economy standards that will begin to intensify in 2017. In 2017, lights trucks will need to average around 29 miles per gallon; by 2025, light trucks will need to average almost 40 mpg.

Alcoa is the main supplier of aluminum body panels for Ford’s 2015 F-150; both GM and Ford‘s current trucks are already using aluminum hoods. Both Alcoa and Novelis, top two suppliers of automotive aluminum sheet products, believe that their sales of aluminum sheets to automakers will triple by 2015.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

July 26, 2013

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

Social Share Toolbar

“Rethinking Energy Subsidies” – Wall Street Journal, 27 March 2013

While climate change remains a large global issue, the world’s leaders have had a hard time addressing it. In a critique of the world’s subsidies, the International Monetary Fund (IMF) announced that energy subsidies might be to blame — that they both hinder and worsen climate change debate and subsequent actions.

Energy subsidies are a large part of global government funds, annual budgets often reaching into the billions. There are a few reasons why governments don’t curtail their energy subsidies: most people don’t understand the disadvantages of subsidies; energy producers protect them; and they are mistakenly thought to help the poor.

Energy subsidies allow residences and businesses to pay less than production and distribution costs. Energy subsidies also boost the use of fossil fuels, and force governments to cut spending in other areas of their budgets, like education and health. The IMF reported that if the world lowered its energy consumption, then we would meet 25% of our goals established at the 2009 Copenhagen Climate Change Conference. We are currently nowhere close to any of those goals.

It is frequently argued that energy subsidies also aid the poor. The IMF reported that, “the richest fifth of households in low- and middle-income countries, garner six times the energy subsidies as the poorest fifth.” Those in lower income brackets, who don’t own things like cars or A/C units, use less energy, and therefore use less subsidy; while those in higher income brackets with multiple cars and A/C units use more energy, and receive more subsidy.

Because energy subsidies push down the prices of gas, cooking fuel, electricity, etc., people tend to use more of them, which inevitably leads to severe environmental impacts. Undervaluing energy costs are also severely detrimental to countries that use a lot of energy, costing major economies — those that are prone to using more energy — $1.41 trillion per year.

Economically speaking, subsidies rarely work as a long term solution, since selecting what to subsidize is often not objective, and subject to undue political and personal influence. Experience has shown that it is difficult to monetize effects of climate change. People and societies only implement what is practical and pocketbook-economical.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

May 6, 2013

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

Social Share Toolbar

“Coal Firm to Shut Mines, Shed Jobs” – Wall Street Journal, 19 September 2012

Due to a decline in the coal market, the largest coal manufacturer in Appalachia, Alpha Natural Resources, Inc., will have to cut 10% of its employees and close mines in West Virginia, Virginia and Pennsylvania.

The downsizing in Alpha Natural Resources is reflective of the downturn in the coal industry, which is experiencing the worst recession in decades. Recently, cheap natural gas has been preferred to coal, and the overseas market for metallurgical coal has plummeted.

Alpha will center its attention elsewhere in the company, especially on growing its ventures in metallurgical coal. The company will also widen its operations in low-cost thermal-coal operations, a development aimed at power plants that use thermal coal for base-load electricity generation.

In order for supply to meet demand, every key producer of coal in the US has had to curb production. It is expected that US coal demand will drop 10% this year, which is almost 100 million tons. The demand for thermal-coal is also falling, demonstrating a shift to metallurgical coal. After a record high in 2011, the price for metallurgical coal has been almost halved to $170 a ton.

The question to answer: how badly will this industry’s layoffs affect our unemployment rate?

Conceived, Developed and Written by Dr. Subodh Das and Tara Mahadevan

October 19th, 2012

Phinix LLC

Copyright 2012. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

 

Social Share Toolbar