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Johnlodge
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Username: Johnlodge

Post Number: 3945
Registered: 10-2003
Posted on Monday, December 03, 2007 - 12:39 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Would it be possible for someone to start their own car company in Detroit? Assuming they had the money, of course. Let's say you just made small, inexpensive, fuel efficient cars. Let's also say you kept the union out of your shops somehow, and employed all those unemployed Detroiters who don't have much skills, but could work an assembly line. Is this completely impossible and unrealistic? Aren't there still enough suppliers around that this could be possible?
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Nainrouge
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Username: Nainrouge

Post Number: 461
Registered: 05-2006
Posted on Monday, December 03, 2007 - 12:42 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Some people are trying. See American Electric: http://www.getkurrent.com/

It is not in Detroit, but it is in Wixom.
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Cambrian
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Username: Cambrian

Post Number: 1763
Registered: 08-2006
Posted on Monday, December 03, 2007 - 12:43 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Whew! Key question. Are you going to buy components like body panels, engines, wire harnesses and interior trim, or are you going to design and engineer your own? If you plan on buying these things on the open market and having Detroiters assemble them it could be plausible start up venture.
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Johnlodge
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Username: Johnlodge

Post Number: 3946
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Posted on Monday, December 03, 2007 - 12:44 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"The first Kurrent was assembled on January 2, 2007, at a factory in Ferndale, Michigan. From a concept at Torino to a reality in the US, Kurrent is poised to take a leadership position in the NV market."

In Ferndale? Crazy. I see they then moved to a larger facility in Wixom.

Too bad Ferndale couldn't keep them!

(Message edited by johnlodge on December 03, 2007)
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Johnlodge
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Username: Johnlodge

Post Number: 3947
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Posted on Monday, December 03, 2007 - 12:46 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Cambrian, it seems like the makers of those components would be DYING to have another customer right now. So I suppose you try to buy as much stuff as you can?
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Irish_mafia
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Username: Irish_mafia

Post Number: 1140
Registered: 10-2003
Posted on Monday, December 03, 2007 - 12:47 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

There is rumour that some years ago, students at CCS put together a business model for a virtual car company.

All parts, sub operations, even final assembly were subbed-out.

Under this model, the cost of a car was a fraction of those brought to market today.

The rumour further stated that the Big3, whose money was heavily invested in CCS, had the study quashed.

Whether its true or not, it would seem that the business model to move forward with might resemble that... along with a "model T" approach to bringing a very cheap car to market.

Give me a $7K car to run around town in. Your namesake would be proud.
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Alan55
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Username: Alan55

Post Number: 811
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Posted on Monday, December 03, 2007 - 12:48 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Been tried before - Delorean, Avanti, Bricklin. All failed. If you mean a real car company, and not just some converter that puts some embellishments on an existing car line, you are talking about hundreds of millions, if not billions, of dollars.

By the way, using "all those unemployed Detroiters who don't have much skills" would produce a car whose quality would embarrass Yugo.
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Mikeg
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Username: Mikeg

Post Number: 1299
Registered: 12-2005
Posted on Monday, December 03, 2007 - 12:52 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

Would it be possible for someone to start their own car company in Detroit? Assuming they had the money, of course.



If someone had that kind of money to invest somewhere, the smart money would use it to enter a market where the entry costs are relatively low, there is minimal government regulation and where the market growth potential is high - none of which describe the United States automobile market.
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Cambrian
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Username: Cambrian

Post Number: 1764
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Posted on Monday, December 03, 2007 - 1:01 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Another clever venture, since no one has $25K to spend on a new vehicle, would be to drop off the current daily driver somewhere and have it brought up to certified used car status. Critical rust areas fixed, engines / transmission rebuilt, as well as safety concerns fixed. You'd in effect be getting your car back "new" again.
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Johnlodge
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Username: Johnlodge

Post Number: 3948
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Posted on Monday, December 03, 2007 - 1:05 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"Been tried before - Delorean, Avanti, Bricklin. All failed."

The Delorean and Bricklin were bad attempts at making "sports" cars. The Bricklin looks like a car choking on an 8-Track.

The Avanti, however, is actually still being built. STRANGE BUT TRUE.

http://www.avantimotors.com/av antinewsandevents.html
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Ndavies
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Username: Ndavies

Post Number: 2898
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Posted on Monday, December 03, 2007 - 1:30 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

A new auto startup is an extremely capital intensive proposition. The assembly plants are actually the easy part.

The Chinese and Indian auto companies that already know how to build cheap cars are struggling to get a vehicle produced that meets US regulations and consumer demand.

Current Auto plants are also automated. Even if you could hire a workforce at a pay less than the UAW you would have to pay out a small fortune for the automation to even get you close to the UAW's productivity rates.

The assembly line is just one cost of producing a car. The costs of the engineers and the support facilities needed to design the vehicle is mind boggling. It takes a team of thousands of engineers 2-5 years to get a Vehicle on the road. Can you fork out enough cash to keep the engineering going to even get the first design into that plant?

Lets not forget the millions of hours of testing that need to be done. You need to test the cars to failure before you hand it to the general public. You need to create a statistically large enough group of prototypes to ensure that the testing will generate enough data to reassure you that you're not selling a group of lemons.

The local auto companies give prototype vehicles to delivery companies to beat on to ensure they can get enough miles to show a vehicle's weaknesses.

All three of the local manufacturers have hot and cold test facilities in Arizona, Minnesota, Michigan and Canada. All needing support staff and a small fortune forked out for prototype vehicles. A vehicle may work great in moderate California, what happens when you take that car to somewhere like Death Vally with it's 110F, Bemidji Minnesota at -40F, or Telluride Colorado at 12,000 feet.

Where are you going to get the Wind tunnel facilities or fuel research labs to help you get a fuel efficient car? Where are you going to test the electronic systems modern vehicles require? How are you going to test the vehicles for electromagnetic radiation and the susceptibility to EMF.

There's also the large numbers of prototype vehicles you have to smash into walls in order to prove you meet federally mandated crash standards.

The cost of EPA and NHTSA testing is astronomical.

Then you have the entire litigation issue. Do you have enough insurance and legal firepower to protect your company when your customers or employees sue you? How are you going to stand up to the government when they sue you? How about suits from the individual states? This is not an if, this is a when. What happens when one of the previously mentioned engineers crashes a prototype vehicle into a bus load of children? The big three are self insured. They have big enough legal departments and legal expense funds to absorb these costs.
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Alan55
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Username: Alan55

Post Number: 814
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Posted on Monday, December 03, 2007 - 1:30 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

John, got this off of the web: "Avanti Motor Corporation has continued to build small numbers of the Ford Mustang based Avanti throughout 2007 and we expect production to continue into 2008"

Apparently it is a Mustang with a different skin.
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Johnlodge
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Username: Johnlodge

Post Number: 3953
Registered: 10-2003
Posted on Monday, December 03, 2007 - 1:37 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Bizarre, Alan!

Ndavies, good points.
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Gnome
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Username: Gnome

Post Number: 420
Registered: 08-2007
Posted on Monday, December 03, 2007 - 1:49 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

The Kurrent is what they call NV or Neighborhood Vehicle. It has a range of 35 - 40 miles and a top speed of 35 mph.

Mrs. Gnome and I just returned from a trip down south. We visited some family in a manufactured retirement community called The Villages in central Florida. The place is comprised of a series of condo neighborhoods connected by an intricate network of golf cart paths and surrounded by a necklace of almost 40 golf courses, swimming pools, and planned downtown squares.

The retirees scoot around on their golf carts all day, going shopping, to the pool, the golf course, etc. Some of the folks have pimped their carts to look like hotrods, Rolls Royces, or any number of fanciful creations.

It was pretty impressive if you like "planned Communities". The Downtowns were especially interesting. They have about three of them; each one is like a movie set where the buildings are all new but "aged" with faux painting effects to resemble a real town. The downtowns have little clothing stores, restaurants and coffee shops ... each one wi-fied for your computing pleasure.

Mrs. Gnome and I enjoyed our morning lattes while lounging next to a babbling brook on the edge on a town square that at night filled to overflowing with folks dancing to live music, having the charactetures sketched, or just visiting with their friends.

It was a hermetically sealed community, that was slightly unreal, but very pleasant.

And they all - 35,000 of them - drive around in electric golf carts.

http://www.thevillages.com/
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Nainrouge
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Username: Nainrouge

Post Number: 462
Registered: 05-2006
Posted on Monday, December 03, 2007 - 2:08 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

It seems like Grosse Ile would be a market for them here. There aren't any roads over 35 on the island. They would have to have heaters, though.
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Mudmarker
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Username: Mudmarker

Post Number: 32
Registered: 01-2006
Posted on Monday, December 03, 2007 - 3:59 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Tesla Motors, although based in California, has operations in Michigan. They make a kick ass electric sports car that wil go into production soon if they can hold everything together.

They will sell this supercar to fund an electric passenger car for the masses. The modern day model T if you will.

It remains to be seen if they will be succesful and/or if they will sell out to GM where the project will be killed for sure.
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Ltdave
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Username: Ltdave

Post Number: 105
Registered: 09-2006
Posted on Monday, December 03, 2007 - 9:21 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

""A new auto startup is an extremely capital intensive proposition... ...They have big enough legal departments and legal expense funds to absorb these costs.""

Geez! NDavies, it sounds like youre saying its NOT necessarily the UNION labor that is the major expense in building a car...

thank you for bringing to light (more fully), the expenses A LOT of anti-union posters like to ignore when they complain about the cost of a new car from the big 3...

d
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Mikeg
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Username: Mikeg

Post Number: 1303
Registered: 12-2005
Posted on Monday, December 03, 2007 - 10:40 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

thank you for bringing to light (more fully), the expenses A LOT of anti-union posters like to ignore when they complain about the cost of a new car from the big 3...



The reason they are ignored is that those are not relevant costs. Foreign-based auto manufacturers in the US have to build similar plants with similar tooling that costs similar amounts. They also have to design their vehicles to meet similar govt. regulations and then validate their products in a similar fashion. Yes, they are huge amounts of money, but the foreign-based manufacturers hold no edge in regards to them, except perhaps for some favorable currency exchange rates on the tooling.

The costs that are relevant to your so-called "union" aspect of the discussions in this forum are those which are different and they are found primarily in the costs of labor. No one who is knowledgeable on the subject would ever claim that labor is the major expense in building cars.

Direct and indirect labor costs associated with the stamping, powertrain and final assembly operations total between 30 and 35 hours per vehicle (HPV), depending on the production efficiency of each manufacturer. Restrictive operating agreements with their unions are the main reason the Big 3 auto manufacturers are all at the 35 HPV end of the range. Therefore, at 5 HPV and about $70/hr (total wage, pension and health care costs), restrictive labor agreements saddle the Big 3 manufacturers with a $350/vehicle competitive disadvantage.

The other cost advantage held by the foreign-based transplants is in the area of the pension and health care costs they are obligated to pay their employees and retirees. Because their competitors have a younger workforce and only a few retirees, the Big 3 pay on average about $20 more per hour in total wage, pension and health care costs than their competition. At 30 HPV and $20 per hour, this amounts to a $600 per vehicle disadvantage.

Add the two components together and you just about have the $1,000 per vehicle competitive cost gap which the Big 3 sought to close during the recently completed negotiations with the UAW.

(Message edited by Mikeg on December 03, 2007)

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