OSLO (Reuters June 9, 2009) - European car scrapping schemes are aiding a shift to small, less polluting cars but environmental campaigners say they fall short of pledges to create a greener economy during the recession.

“It’s definitely a missed opportunity. This is just doling out cash to the car industry,” said Jos Dings, director of the European Federation for Transport and Environment, which campaigns for greener transport.

“The first goal is to help the economy,” German Environment Minister Sigmar Gabriel said of a “cash for clunkers” subsidy that helped boost German car sales by 40 percent in May from the same 2008 month.

“The indirect effect is that you help the climate” by replacing old cars with cleaner vehicles, the minister told Reuters of the scheme that pays motorists 2,500 euros ($3,468) to scrap a car at least nine years old and buy a new vehicle.

Countries setting no demands for low carbon vehicles “have the approach that new cars are better than old ones,” European Environment Commissioner Stavros Dimas told Reuters.

But he said he felt it would be “even better” for governments to spell out tough carbon standards.

“Small cars are benefiting most,” said Sigrid de Vries, spokeswoman of ACEA. “It’s simply not right to say that there is no environmental benefit.”

But Dings noted that German motorists can in theory scrap an aging gasoline-sipping Volkswagen Lupo and use a 2,500 euro subsidy to buy a Porsche Cayenne sport utility vehicle.

ZED COMMENT: With the hydrogen fueled ZED engine, a motorist can purchase any vehicle they wish and not worry about pollution because regardless of engine size, the ZED engine emits only water vapor.  With no chassis redesign needed, the ZED engine can readily replace any gasoline or diesel engine in any vehicle without major reconfiguration. With a projected cost of production less than gasoline, no government subsidy is required.

NEW YORK (Reuters) - June 9, 2009. Raising the allowable levels of ethanol in conventional U.S. gasoline would push up prices of corn and other grains and ultimately meat and dairy, experts said on Tuesday.

The government allows conventional gasoline to be blended with up to 10 percent ethanol. But the ethanol industry, which has grown rapidly over the last two years amid generous government incentives and mandates that call for more ethanol blending over time, wants the blend rate raised to 12 percent to 15 percent ethanol for the industry to continue growing.

“Ultimately this will translates into higher livestock and dairy prices, and eventually further upward pressure on consumer food prices,” said Bill Lapp, president of Advanced Economic Solutions.

He said in a report issued on Tuesday that 12 to 15 percent blends would push up the amount of land needed to grow corn to at least 100 million acres by about 2010 to 2015.

That would compare to 76.5 million acres that were the average from 1983 to 2006 and such an increase could force corn farmers to take land away from other crops, helping to raise prices for all sorts of grains, he said.

Using 100 million acres could spike corn prices to a level that would make last June’s price of about $7.50 a bushel, “look like a walk in the park,” Lapp told reporters in a teleconference.

The U.S. Environmental Protection Agency is evaluating whether to lift the blend level beyond 10 percent. A major concern is whether the higher blends would hurt fuel lines and other aspects of car engines, especially in older vehicles. The EPA has said it has up to December 1 to act upon a request to increase the blend level to 15 percent.

ZED COMMENT: Of all the alternate energy sources, most experts agree that making biofuel from food stocks is the least acceptable solution. Aside from diverting food to fuel, many studies agree that the chemical, water, and fuel input to grow the biomass often exceeds the energy value of the biofuel — which is half that of gasoline by volume. Alternately, ZED hydrogen fuel does not pollute, the energy content exceeds gasoline, and when produced by wind, solar or geothermal means,  it has a net zero environmental impact with no production cost.

According to a report in the International Fluid Power Society 2008 newsletter:

- Less than 6 percent of high school seniors in the US plan to pursue engineering degrees. This is down 36 percent from ten years ago.

- In 2000, 56 percent of China’s undergraduate degrees were in the hard sciences. In the US the figure was 17 percent.

- In 2007, China will produce six times more engineers than the US. While Japan, with half the population of
the USA, has produced double the engineers in recent years.

- If these trends continue, 90 percent of the world’s engineers will be living in Asia by 2010.

ZED COMMENT: Innovation is the only constant when it comes to improved efficiency in any industry, especially automotive manufacturing. With all manufacturing in the USA now less than government spending as a percent of GDP (compared to 50% of GDP in the 1950s), a quality education, and the resulting competitive innovation, is seen by some economists as the real key to long term economic revitalization.

Mon Jun 1, 2009 DETROIT/WASHINGTON (Reuters) - General Motors Corp filed for bankruptcy on Monday, forcing the 100-year-old automaker once seen as a symbol of American economic might and dynamism into a new and uncertain era of government ownership. The bankruptcy filing is the third-largest in U.S. history and the largest ever in U.S. Manufacturing.

The decision to push GM into a fast-track bankruptcy and provide $30 billion of additional taxpayer funds to restructure the automaker is a huge gamble for the Obama administration.

Following the bankruptcy filing, GM shares were removed from the Dow Jones industrial average and delisted by the New York Stock Exchange as “no longer suitable for listing.”

“Now the hard part begins, which is making GM and Chrysler competitive. If they don’t do that, then we’ll be doing this all over again in a few years,” said Christopher Richter, an auto analyst at CLSA Asia-Pacific Markets in Tokyo.

“The immediate implication is that the companies are going to get smaller and so market share is up for grabs, which means that rivals like Toyota, Honda, Nissan and Hyundai are going to gain share.”

GM plans to close 11 U.S. facilities and idle another three plants. It has not provided an updated target for job cuts but had been looking to cut 21,000 factory jobs from the 54,000 UAW workers it now employs in the United States.

GM alone employs 92,000 in the United States and is indirectly responsible for 500,000 retirees.

Founded in 1908, GM rose to dominate the U.S. and global auto industries under the stewardship of pioneering Chief Executive Alfred Sloan, who famously pledged that the automaker would deliver “a car for every purse and purpose.”

By the mid-1950s, at the peak of its success, GM had some 514,000 employees. It accounted for about half of U.S. car production and its sales were twice as large as the No. 2 corporation, Standard Oil.

GM’s stock fell to a low of 48 cents on Monday, a level last seen during the Great Depression.

The bankruptcy case is In re: General Motors Corp, U.S. Bankruptcy Court, Southern District of New York, No. 09-50026.

ZED COMMENT: Unimaginable five years ago, the bankruptcy of General Motors makes June 1, 2009 an historic day in the North American auto industry. Most observers agree though, its been a downward spiral since the mid-1950s. What caused this to happen — government, management, the union, the economy? In contrast, American management, and American workers with the same government and economy  make the best foreign branded vehicles on the planet. So perhaps the most critical change is not the “car model” but the “business model”. Only time will tell. As stated by Richter, “Now the hard part begins”.