
Bob Lutz: Kiss the good times goodbye: The auto industry's change curve - jseliger
http://www.autonews.com/article/20171105/INDUSTRY_REDESIGNED/171109944/bob-lutz%3A-kiss-the-good-times-goodbye
======
igetspam
From my cold, dead hands...

My wife and I were discussing American culture today and some of the reasons
we'll be hard pressed to do anything to solve our present issues with mass
shootings and I look at car culture and see the same kind of value. Americans
aren't really good at giving up freedom, for any reason, no matter how many
people will die. Cars and driving represent a freedom that I don't think we're
going to be giving up any time soon. As you likely assumed from my first line,
I'm part of the side that would fight tooth and nail against any attempts to
legislate away independently owned and operated automobiles.

I won't waste any time trying to convince people who hate cars that I'm right
but I'll tell you that Uber doesn't come near my house and that's a perk. I
live 30+ miles outside of the nearest "city" and loooooooove driving/riding
(motorcycles) back roads and hills. I'm not trading in my car or truck or jeep
or bike or bike for a blob that slips in and out of a pneumatic tube, no
matter how much I love Futurama.

ps- Some of my neighbors ride their horses on the same road I drive. We wave.

~~~
michaelbuckbee
I think it's more likely going to be your cold empty wallet that prompts the
change.

As the shift moves on the insurance pool of manual only drivers is going to
get worse and worse and the rates are going to skyrocket.

~~~
kylec
Let’s say we get to a point where being driven autonomously is cheaper and
more convenient than owning and driving your own car. Wouldn’t the people that
still choose to drive, despite the higher cost, be the people that _like_
driving? And wouldn’t it make sense that these people would be pretty good
drivers, get into accidents less, and therefore cost less to insure than the
average driver today?

~~~
mannykannot
I would not bet on it, given that most of those who have, for example, crashed
while drag racing on urban streets would probably fall into the 'like to
drive' category.

~~~
qbrass
They'll just quit insuring their car. What's one more law broken?

------
taylodl
It can't come soon enough as far as I'm concerned, though my 15 year old
daughter who's anxiously waiting to learn to drive may see things differently.
She could very well be amongst the last people who learn how to drive.

The article doesn't discuss how far-ranging these impacts will be. Automakers
and dealerships are just the tip of the iceberg. Part suppliers are impacted,
as well as auto insurers and gasoline filling stations. Perhaps less obvious
are auto repair shops of all stripes, auto repair stores, parking
garages...this is a HUGE impact to the U.S. economy. It's amazing how little
discussion this is getting beyond unemployed taxicab drivers.

~~~
swampthinker
It's not sexy talking about how we have the potential to put millions of
Americans out of jobs, and would rather handwave the discussion with a "Oh
they said the same thing during the industrial revolution."

~~~
zlynx
Present your argument that we'd be better off with 500,000 people employed as
farmers and ditch diggers working by hand without automation and equipment.

~~~
lobotryas
Yes, of course. How is this even a question?

If we had the resources to give 500,000 people a living wage, a home, health
care, in exchange for performing a completely meaningless task then that would
be a pretty good deal (that many would also be happy to take).

~~~
ryandvm
You're basically suggesting the broken window fallacy:

[https://en.wikipedia.org/wiki/Parable_of_the_broken_window](https://en.wikipedia.org/wiki/Parable_of_the_broken_window)

Basically, it's foolish to have people do unnecessary work because in doing so
you have squandered time and resources that could have been spent creating
additional value.

~~~
yequalsx
The broken windows fallacy is not apt in terms of what lobotryas wrote. If we
had enough resources so that everyone had a home, health care, and access to a
livable amount of money each month then that would be good. Wouldn’t it?
Lobotryas did not state how to accomplish this. Just said it’d be great if we
lived in such a world.

------
hprotagonist
My counter to this line of thinking, when it's come up in conversations
before, is this:

Horses are still legally permitted on basically all of the roads they were
before automobiles were invented.

Granted, they're generally quite rare, expensive to maintain, and a luxury ...
but they're still with us.

~~~
dustinmoorenet
Horses have been relegated to back country roads. If there is any amount of
traffic, the horses are on the shoulder of roads, in the grass. I have never
seen a horse on an interstate or highway.

~~~
romwell
The OP's point still stands. There were no interstates or highways in the
horse-and-buggy era.

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fenwick67
> Unfortunately, I think this is the demise of automotive retailing as we know
> it.

I wouldn't start this sentence with "Unfortunately".

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epx
I don't think it will happen anytime soon. I can see autonomous car mode
enabled in " controlled" environments like highways and advanced cities but
there are a lot of countryside roads and trails where even cell phones don't
work.

~~~
Theodores
In the UK I don't imagine B roads or smaller being autonomous and the UK road
structure is different to the US highways in many ways that make autonomous
driving that bit harder.

The bit I am seeing is private ownership of cars with a view to the batteries
in the car partnering up with their solar panel and cheap overnight
electricity. In this mode the car plays a really important role in evening out
the peak power demands on the grid by selling electricity back at a higher
rate than purchased overnight.

Due to the culture of private ownership I see people getting electric plugs on
the lamppost in their street, hooking up to that and buying their electric car
on a favourable 5 year lease arrangement. It is very much the family vehicle
with child-seats and whatnot permanently installed. These cars will be
conventionally driven except on A roads and motorways when the car is allowed
to drive. There will still be some expectation of the driver being at the
wheel.

There are trucks from all over Europe, until that guy from Turkey also has an
electric, self-driving truck then the road is not going to be a fully
automated zone, as proposed in the article.

If you don't own an electric car then you won't be able to use it to even out
the power demand at home, you would need a Tesla PowerWall or equivalent to
store your solar and do that. I am not seeing people buy those things as
quickly as they are buying iPhones. Most people don't even have decent
insulation.

The ownership of the car jumpstarts this transformation in how we use the
electric grid and gets people involved in a way 'Uber' services will not.

------
avn2109
The article mentions "handset providers" as a thing that General Motors
doesn't want to be.

I'd like to observe that "a handset provider" is the most valuable public
company on earth.

~~~
godzillabrennus
That's one handset provider who captures about 95% of all the profits in the
industry while the others fight over table scraps.

General Motors knows they won't be Tesla and they don't exactly looking
forward to fighting over table scraps.

~~~
BoorishBears
What makes you think Tesla won’t be fighting for scraps while a company like
GM does?

------
richardknop
I am in a minority of skeptics in this case. I still believe that the
"imminent" arrival of autonomous cars on scale is a pie in the sky and it will
take many more decades to really make this leap.

I believe we are in the same time period as AI was during 50s, 60s, 70s when
huge promises of great things it would achieve were made but it took many more
decades before AI started to really take off (meaning just recently).

I believe Waymo and others are still in very early stage and it will take
decades to get reliable enough product which can be rolled out en masse.

------
harshaw
My intuition is this seems like futuristic thinking that you might have found
from the 60's where everyone thought we would have bases on the moon and
flying cars. I'd love if someone could post some well written rebutals.

~~~
ameister14
I don't think it's quite that far fetched - the reason we don't have flying
cars or moon bases is that neither was actually all that desirable; neither
was better than what we have by enough of a margin to make the short-term
capital investment worth it.

The same doesn't really hold true for driverless cars. It appears they will be
cheaper, traffic and road safety would improve significantly and we're already
now used to calling for a car with the push of a button on our mobile phones.
Plus, we've already got billions being put into the development of them, by
real public companies with a lot of shareholders and boards to answer to.

We never really had that with flying cars or moon-bases.

------
pzone
20 years is not soon enough. My mother is aging and I don't want her to lose
her mobility.

~~~
Game_Ender
Has she consider using Uber of Lyft as they are right now?

------
fulafel
Bizarre that co2 emissions are not mentioned in the article or the first
couple of pages of comments here. That's the obvious high bit of why private
car culture is unsustainable and immoral.

------
deathanatos
Riiiighht.

> _traveling at 120, 150 mph. The speed doesn 't matter._

What about pedestrians? Or an animal, such as a moose, that wanders, or
bounds, onto the roadway from the nearby forest? Even an autonomous vehicle,
even a _group_ of autonomous vehicles traveling as a well coordinated group,
need to be able to stop for the person/moose, or they risk killing their
occupant or that person. (or the moose.) The top speed will be dependent on
how far you can clear around the vehicle. (A quick Google says a speed of
150mph has a stopping distance for a car of a fifth of mile!)

> in 15 to 20 years — at the latest

That is, by 2037, there will be no vehicles that aren't fully autonomous. It
won't happen. Even _if_ the technology manages to progress that far, I doubt
society is capable of that kind of rapid deprecation, even if we limit it to
just the mainland US.

> _Everyone will have five years to get their car off the road or sell it for
> scrap or trade it on a module._

Such legislation is going to be _terrible_ for the individual; how are you
going to propose that people make such a selfless trade, because in my
experience, they'll never do it. For some people, you're going to legislate
away their current means of transport, require them to start paying either for
a new vehicle or for the cost of renting one (through a provider, e.g., Uber,
counts as renting), and expect them to be fine with it, when for some folks,
this might be hugely financially harmful?

> _That is the death knell for companies such as BMW, Mercedes-Benz and Audi._

Seems to me like they could easily pivot to making luxury cars (which isn't
really a pivot?); want a decent ride? $X. Want _nice_ ride? $Y, where Y > X.
There will still be people who want to go from point A to point B, and other
people who want to do so in style.

> _computer terminals with full connectivity._

No, there will be WiFi. Maybe. And unless we make big improvements to mobile
connectivity (which in 20 years, hopefully we will), it must be limited by
that.

> _This transition will be largely complete in 20 years._

That would be nice, but I just don't see us going from "I can't buy a fully
autonomous vehicle" to "manually cars are illegal" in 20 years.

I'm still also curious about a few aspects of (what I know are hypothetical,
since nothing is on the market yet) autonomous vehicles:

* Will it bend the law, particular during the transition when there is a mix of human and computer driven vehicles? I, as a human, will regularly bend the absolute letter of the law to keep myself and others on the road safe: e.g., to avoid hazards, to allow a motorcycle to lane-split, because I don't believe the fool next to me will remain in his lane, etc. I.e., I'd rather be alive than right, as the old saying goes.)

* Navigation of a car is sometimes a hideously complex thing. E.g., I need to stop on a long road trip. I might not know where, yet, but we need to take the next exit. Today's mapping apps have always, in my experience as a user, failed terribly here: searching for something always shows results in a X mile radius around you; this includes useless results that are behind me, or completely irrelevant due to being hard to get to.

~~~
rohit2412
> Today's mapping apps have always, in my experience as a user, failed
> terribly here: searching for something always shows results in a X mile
> radius around you; this includes useless results that are behind me, or
> completely irrelevant due to being hard to get to.

Google maps does have a nice search feature for on the way while you are
navigating. [https://www.greenbot.com/article/2995423/google-
apps/google-...](https://www.greenbot.com/article/2995423/google-apps/google-
maps-now-lets-you-search-for-food-gas-and-more-along-your-navigation-
route.html)

------
Doctor_Fegg
What the fuck is up with the scrolling on this article.

(Mobile Safari.)

------
daodedickinson
Meanwhile, I saw an amazing cabin this fall that had a stunningly low price
because it still requires fording a major river to access.

------
neo4sure
Good thing he is finally admitting reality. Did this guy regularly come on tv
to bach Tesla?

------
RickJWag
Lutz is the visionary who brought us the Pontiac Aztec.

I hope is vision is just as good here.

~~~
linksnapzz
Wrong wrong wrong.

Lutz arrived at GM just as the Aztek/Rendezvous were being released, way, way
after anything could be done about it; in fact, in one of his recent books he
talks in detail about the process failures at GM that resulted in those cars
as well as others being sent to market when even many people inside the
company were acknowledging that they were nowhere near what they needed to be
to be competitive.

------
rrhd
I feel like we should start organizing the resistance to this "you just call
for it" now.

I liek my car. I like owning my car. I like keeping my random stuff in my car.
I like being able to jump in my car and go on a trip if I want. I like having
my dog in my car.

How is "oh well you just call for a car" better?

~~~
LeifCarrotson
That's great. I like my car too. I think it's important to note, though, that
while I enjoy _owning_ my car I do not enjoy _paying_ for it.

If there was a reasonable alternative to that $10,000 a year luxury that is
car ownership, many people would take that alternative. They might take it
gladly or take it reluctantly, but they would still take it.

~~~
BRAlNlAC
>a reasonable alternative to that $10,000 a year luxury that is car ownership

This fundamentally isn't true. I've had a used Camry for almost a decade and
the annual cost of ownership including purchase price, maintenance,
registration and insurance is around 2,500 dollars. It has given me a place to
store my things when I have limited housing, it is always ready with all my
effects when I want to leave, and I am very much in tune with how the car
should feel when it is on the road which gives me considerable comfort.
Politically, expect any sort of legislation trying to force "legacy" cars off
the road as being anti-poor, because it is. Cars don't have to be expensive.

~~~
r00fus
[https://www.usatoday.com/story/news/nation/2013/04/16/aaa-
ca...](https://www.usatoday.com/story/news/nation/2013/04/16/aaa-car-
ownership-costs/2070397/)

As of 2103 the average yearly cost of ownership was $9000. I doubt it's gone
done since.

~~~
Mister_Snuggles
That includes depreciation, which is effectively the cost of the car.

If you own the car outright and aren’t planning on selling it, this is
effectively zero.

~~~
LeifCarrotson
Depreciation is the difference between the price of the vehicle when you
purchase it, and the value of the car when you can no longer drive it -
whether that's because you sold it, because it died, or because you died.

There are different amounts of depreciation between a 2-year-lease of a new
vehicle, a purchase of a 50k mile vehicle sold at 150k, and the purchase of a
200k mile vehicle that's sold to the scrapyard to be melted down for
steel...but it's all depreciation.

~~~
Mister_Snuggles
The thing with including depreciation in the "cost" is that it doesn't
actually matter to individuals.

To a business, depreciation is a real thing that affects their tax return. The
Canada Revenue Agency has a lot of rules around how to depreciate assets and
how they affect income. I'm sure the IRS has similar rules.

To a person, this is not the case. If I have a $10,000 car loan on a $20,000
car, the only things that matter are the down payment of $10,000 and the
regular loan payments. If I pay the loan off over five years but the car has a
10 year useful life, those last five years are effectively free.

Yes, from a pure accounting perspective I would debit the asset account for my
car, credit cash for the down payment, and credit a liability account for the
car loan. But in reality, that doesn't actually matter. There is no impact on
my taxes by amortizing my car over 10 years vs 5 years. The only impacts are
how the down payment affected my savings and how the loan payments affect my
cash flow.

~~~
LeifCarrotson
After those 10 years, you can ostensibly sell the car when you feel it has
outlived its usefulness to you.

Whether you can then sell that car for $8,000 (and thus finance your next
vehicle down payment with it) or have to scrap it for $500 has a huge impact
on your total cost of owning a vehicle. The loan payments are factored into
our sum of car payments, registration, insurance, gas, and maintenance
already, yes, but some of your down payment should be factored into the annual
cost. Not all of it, because then you'd be ignoring the value of the car when
you sell it. The resulting factor in the sum is equal to the depreciation of
the vehicle.

