AAH #757 - Regulation Revolution: U.S. and EU Could Share

TOPIC: Chassis Tech PANEL: Ramiro Gutierrez, ZF NA; Jeff Gilbert, WWJ NewsRadio95; Gary Vasilash, shinymetalboxes.net; John McElroy, Autoline.tv

Episode Transcript

Speaker 1 (00:00):
Thank you Alex Partners for sponsoring the show. I want
to welcome all of you for joining us here on
online after hours.

Speaker 2 (00:07):
Gary's here, John, how are you.

Speaker 1 (00:09):
I'm doing good.

Speaker 2 (00:10):
This is the last official show of the summer with
Labor Day coming up. I mean it's just well.

Speaker 1 (00:16):
Look not official because remember summer doesn't end until the equinox.

Speaker 2 (00:22):
Well, we're not talking planets here, John, we're talking labor days.

Speaker 1 (00:26):
I don't want to lose the summer. I'm just trying
to drag it out as much as I can. We
got Jeff Gilbert here. Thanks for being here, Jeff.

Speaker 3 (00:31):
No problem.

Speaker 4 (00:32):
I didn't bring anything pumpkin spice, So I guess we
are still summers.

Speaker 2 (00:35):
All right, We're good. Next time you're in you okay.

Speaker 1 (00:38):
And then we've got to let everybody know. Our special
guest today is Ramiro Gutierrez. He's the president of ZF
North America. Some people say ZF. I guess you don't care, right,
I don't care.

Speaker 5 (00:48):
I mean set a f CF. The import of the
venis to send the missage across with companies. Thank you
for having me a pleasure to be with you today.

Speaker 1 (00:56):
Yeah, Ramiro, we got so much with that we want
to get into with you right now. I'll just kick
off the discussion by saying, you know, probably in the
audience a lot of people knows that efforts transmissions. But
you guys are making a big push into chassis right now.
Why and what are you doing and why are you
pushing into chassis?

Speaker 5 (01:16):
Well, first of all, I mean the CF or set F,
both tier W. Ten years ago. Tier W was a
big chassis supplier and this is from where the chassis
thing is coming. Then why is now a renew therefore
on the chassis area is because of the software defined vehicles.
The chassis components call it breaking steering suspension are becoming

(01:40):
a by wire technology. Therefore is becoming an intelligent component
rather than being just a mechanical or linkage element into
the car. And that provides a complete different set of
functionality that we exploding and the end customer is going
to benefit out of it.

Speaker 1 (01:57):
I would say one thing too is evs, E revs
don't need transmissions when you're in chassis. It doesn't matter
what the powertrain is.

Speaker 5 (02:08):
You're right on that. I mean, so far every card
and it's breaking steading suspension. But you know, even on
that area, you know, we have development on going. You know,
how to stop a vehicle with an electrical motor. If
you have an electrical or a bouttery operated vehicle with
an electrical motor, you can actually get the motor to
slow down the car to a point that the use

(02:30):
of the breaking components is going to become a minimum
element into that dynamic. So there is a lot of
a lot of room into that technology to evolve over time.

Speaker 4 (02:41):
If we'd have had this conversation a year ago, we'd
be talking about how the world is marching toward electric vehicles.
Things have changed a lot in the past year, particularly
in the United States, but also to a lesser degree
in some other countries. How does that affect your planning
for chassis for other things like that, Because you know,
you might have thought evs would pedestrate x percent of

(03:04):
the market in the next ten years. Now maybe you're
projecting y percent of the market.

Speaker 5 (03:09):
Correct, and the y is way lower than the eggs.
That's the problem, and especially the timeline into that happening
has been extremely short. So we have made that, we
have deployed a lot of capital into electrical vehicles, and
we are now at the time where a lot of
those programs should be hitting the startup production. And I

(03:29):
tell you what, we have beautiful lines installed and the
lines are not running, and they are not running because
volumes are not there. Why are in volumes there? Because
on the one side, regulation has been brought down, we
roll back regulation, and then the OEMs are are not

(03:51):
basically pushing those cars into the market and customers are
not buying them. So the problem is that all that
capital has been deployed, all that engineering nefort has be made,
and we have all that debt out there right that
we are paying at a very high interest rate. That's
the FED holding on these very expensive money out there,

(04:11):
and that is a struggle for the industry. So we
have a big problem with that. And as I said,
all these things has happened very late into that process.
If we will have seen these happening two years ago,
we may have a slow down the deployment of that capital.
We may have as slow down the engineering and effort,
the validation effort for those solutions. But the reality is

(04:32):
that everybody was marching full speed to hit the SOPs
that were scheduled and those are not happening.

Speaker 2 (04:39):
So I suppose the good news, though, is that you
guys still have those wonderful eight and nine speed transmissions
that you're mad. I mean, so it seems that you know,
what you may lose on one side, you're going to
be gaining on the other side as they become more
popular and as you guys make improvements there. Now, one
of the things that I think is very interesting about

(04:59):
your company is is that you know you're talking about
the you know, the chassis two point zero and making
it a smarter thing is that you know, the the
company that's all the rage right now out there is
in video and you guys were actually working with Nvidia
years ago before anybody even knew about that stuff. So,
I mean, your level of software intelligence is probably a

(05:20):
cut above many of your competitors. Can you talk to
us about that?

Speaker 4 (05:25):
So?

Speaker 5 (05:25):
Well, you're right. I mean, we were with Nvidia together
in developing controllers for aidas for active driving systems, and
we deployed or we launch in the market those units,
and in terms of our software capability is precisely connected
to this new chassis by ware technology. But we have

(05:47):
developers apart from that, we call qubics that basically coordinate
all the longitudinal lateral and vertical movement of the car.
And with qubics you can basically I mean qubis is
software and is agnostic, so we can use our own components,
our own hardware, or we can use somebody else hardware.
But it makes extremely easy well nothing is in this life,

(06:11):
but easier. Let's put it this way. Or we can
shorter shorten the development time to validate new solutions in
terms of bay call dynamics. And also by the ability
of managing through software the vertical, the longitudinal, and the
lateral movement of a car, you can develop a lot
of new functionality that we cannot even imagine. I mean,

(06:33):
you can go to now these software engineers that may
not have any good idea what a car is, and
then tell them here you have the tools, go play
with it and develop functionality for the end customer that
nobody has predicted or imagined so far.

Speaker 1 (06:50):
Ramiro, you're right about all this investment that's gone into evs.
It's kind of stranded investment right now, right, I'd like
to get your thoughts on extended range evs because it
seems to me they're perfect for the American market, you know,
especially if you've got a full size pickup or a
full size suv. You can plug it in at night

(07:11):
and pretty much driving electricity. If you want to take
a long distance, especially if you're towing a heavy load
or carrying a heavy load, you can stop at any
gasoline station. And is it possible that if e revs
catch on, that you would be able to use some
of those stranded EV assets, you know, whether it's assembling
battery packs, electric motors, and verters are like, what's your

(07:32):
thought on e revs?

Speaker 5 (07:33):
So I think they are a great solution, especially when
you have developed an electrical bag or platform and then
you have a situation where your customers have range of
anxiety or they don't like the range. Let's say you
have a customer that is going to the market to
wey a car and they are looking for a four
hundred mile range, and what they find in the affordability

(07:55):
price is a two hundred mile range, and then a generator,
which is a range is then that can give them
that extra marriage and can give also the peace of
mind that they can keep going on gas if they
run out of a charger or cannot find a charger.
So I think it's an excellent product to your point,
a range extender is basically having an electrical motor and

(08:17):
is having an inverter, so you can actually reuse some
of that technology. Then, in some of the cases, we
have deployed very automatical lines to produce electrical vehicles, and
modifying those lines is also very expensive, because, for example,
we have a big factory in South Carolina. We've been
going full automation.

Speaker 3 (08:38):
On those lines.

Speaker 5 (08:38):
So is possible it's cheap, probably not that cheap, but
certainly cheaper than producing a complete new line.

Speaker 4 (08:46):
But as you're talking about this, we're talking about expense.
We're talking of course EREV you've got the gasoline generator
as well as the electric battery. And earlier before we
went on the air, we were talking about affordability being
a big issue for customers.

Speaker 3 (09:03):
So how does this work from the supplier level to
make a.

Speaker 4 (09:07):
Vehicle more affordable for customers, Because obviously somebody who's cut
off on the entry level is going to be able
to afford an e REV, but we're seeing so many
people who are cut off at the entry level.

Speaker 3 (09:20):
How do we balance that.

Speaker 5 (09:21):
That's a very good question. Actually, we're learning things out
of our customers in China, they were the first ones,
and we were in production in there with range extenders,
and they are they have been the first ones figuring
out where the sweetest pot is in saving money in
the battery of the vehicle and spending some of that
money into the range extender and have a combination of
the two that hits the sweetest spot in terms of affordability.

(09:45):
So the range extent that can be used. You have
the electrical vehicle with the big battery pack, and then
on top of that you put the range extenda, or
you can actually reduce this big pattery battery pack that
is quite expensive, and then get a bigger generator and
the combination of the two gives you the range that
you still want. Certainly, the pure electrical range, well, the

(10:06):
car is going to be moving electrically all the time.
But the range that comes from the plugging, the loading
of the battery, the charging of the battery is going
to be lower versus the range that you get out
of the generator. But the combination of the cost. I mean,
at the end of the day, our customers in China
are fiting three cylinder engine one point five liters that

(10:29):
they run at a very constant rpm. Providing a super
low consumption and that combined within a small battery pack
gives their customers seven hundred miles of range. And that
is the solution for that because again they don't need
to spend the big battery pack costs. They get a
very cheap three cylinder one point five liter engine in

(10:51):
there that they run a very constant rate optimal RPMs
and the consumption is just extremely low and they get
the perfect nation.

Speaker 2 (11:00):
So what is what is the input that you have
into those vehicles?

Speaker 5 (11:04):
What you mean with the input the what are.

Speaker 2 (11:07):
You selling the Chinese OEMs that they're the ranger standard.

Speaker 5 (11:10):
So we actually develop a solution where we can put
in one park the what you will call the generator
itself with the drive unit, So one one one assembly
has the two functionalities and you can put that early
on the actual provide the drive unit movement and at
the same time generated the electricity to load the battery

(11:33):
that is sitting on the vehicle.

Speaker 2 (11:34):
So it's a module that is integrated.

Speaker 1 (11:36):
Yes, Ramiro, have you had a chance to drive in
or ride in any of these e revs. Yeah, I'm
just curious because I have not, and I'm wondering does
the engine come on at odd times? Is it at
a high rpm? Is it you noisy?

Speaker 4 (11:56):
To you?

Speaker 6 (11:57):
What's the experience with an So to be clear, the
car is going to be driven electrically, so you still
enjoy all these noise free environment and there is going
to be this little in the background which is going
to be the small one liter one point five liter
engine that is going to be running at very low

(12:18):
RPMs two thousand RPMs three thousand, that is going to
be there in the background, but is a very silent.

Speaker 5 (12:24):
Generator, is not a noisy one. So I think in
terms of the experience, you're still going to experience the
electrical driving, which all that with all that torque and
massive feedback on how powerful the vehicle is, and you
will now get a lot of the disturbance of the
noise or the NBAH issues that you may think there. Also,

(12:45):
there is not going to be any transition between the
one engine and the and the battery pack because again
the vehicle is going to be driven electrically one hundred
percent of the time.

Speaker 2 (12:55):
So as you're having these these smaller engines which would
in less cost, you guys have an integrated system that
I'm sure it is very competitive. To Jeff's point about affordability,
I mean, does this lend itself to making more affordable
electrified vehicles that would find use here?

Speaker 1 (13:17):
Thing.

Speaker 5 (13:17):
It's a combination of convenience and cost, right, I mean,
if you can get a very cheap battery pack and
you can run out of that battery pack four hundred miles,
then you don't need to worry about anything else. But
the reality is not there today, So then what is
your solution you still need that. I mean a customer
that comes into the dealership is still want the four
hundred miles. What is the cheapest way to give that

(13:39):
guy the four hundred miles? Is still using an electrical
drive train, and the solution is the rengis standard. You
can go the opposite way and go into a hybrid.
You have a traditional powertrain system and then you get
a hybrid. Right, you put the electric machine next to
the engine to combine with the main power the main

(14:00):
powertrain which is still combusting. So you have the two solutions.
But if you are let's say going back to the
discussions before, you are in a business where you have
already put all your engineering in developing a platform of
vehicles that are electric. Your way to go is probably
the range of standard because you can downsize on your
battery pack, you put the generator, your customers are going

(14:23):
to be heavy. Their experience is exactly the same. And
just to be clear in this market that we are in,
convenience is the key because people, for the most part,
they don't like to plug in. You give a guy
something that still behaves like the same car that they
have forever, so they put guys when they need to.

(14:44):
They're putting gus on a generator, but they don't care.
I mean, at the end of the day, the car
is moving. They have the convenience of the generator that
they may not plug in the car at any time
or for a month. Yeah, so it's just pure convenience.
But you need to hit the price right right, and
the way in China they've been hitting the price point
is reducing those battery packs, getting the generator, and the

(15:07):
combination of the two giving the customer the price point
and the range they wanted to get sort of.

Speaker 2 (15:13):
Been more cost effective for an E rev or a hybrid.

Speaker 5 (15:17):
So this is two different solutions right. If my view,
if you have already developed an electrical platform. You are
an oh, you have a platform of vehicles that you
have a skateboard right with different top hats or different bodies,
and that is already developed. The way to go, I
think is with a range extended. If you haven't done that,

(15:41):
maybe with a new regulation. You stay with the combustion
engine and then you go the hybrid solution. Then you
plug a module or a new transmission, a new hybrid
transmission into your existing combustion engine, and then you get
a better fuel economy. But again, what the market is
telling us is that hybrids are growing, market share of
hybrids are growing. The plug in hybrid market SHAP is

(16:03):
not taking off. That is in this country, not in
this country.

Speaker 1 (16:07):
In Europe it's doing very good right right, But in.

Speaker 5 (16:09):
This country people don't like to plug in, and that
is the convenience factor into this. That's why I have.

Speaker 4 (16:14):
It's also another issue in this country in that the
government is no longer pushing people toward electric vehicles. So
do you run up with an issue with an e
REV where somebody just goes, well, hey, I don't need this.
I can still buy my good old fashioned internal combustion
Because you know, California is no longer pushing me to

(16:35):
buy an electric vehicle. The government's no longer giving me
a rebate to buy an electric vehicle, So why should
I even worry about an erav.

Speaker 3 (16:43):
I'll go back to my you know what I'm used to.

Speaker 5 (16:46):
I don't think for the most part, we are petrol heads,
but the average customer is not a petrol head. They
move by convenience. I go into a dealership I need
a new car, and then I go look at the
fuel economy. I mean, basically, if I can behave like
I've been behaving all my life, putting us when I

(17:07):
need us, then the pure convenience kicks in. Oh is
the price point right?

Speaker 3 (17:12):
Yes?

Speaker 5 (17:12):
Is the range right? Yes? I like the car, Yes,
let's go. But I don't think the average customer have
a lot of thinking about whether it's a hybrid, whether
it's a range extender, or what it is. They check range, yes, price, yes,
I like it, Yes, let's go. So when you force

(17:33):
them into plug it in, this is when the problems
start to happen because they don't like to do that,
and the market is stelling us they don't like to
do that.

Speaker 2 (17:42):
What's interesting, if you think about it, that. You know,
when you bought your first several cars, did you even
think about range? I mean it was a non issue, right,
it was maybe miles per gallon, But it's only with
electric fie.

Speaker 3 (17:54):
I thought of can I start it this morning?

Speaker 2 (17:56):
That's all the other So range is is this new
metric that is you know, if you do if you
do the math on how far you can go in
a you know F one fifty like, it's amazing, you know,
four hundred miles, right, But nobody ever says, oh my,
by the F one fifty angle four hundred miles on it?

Speaker 3 (18:15):
Right?

Speaker 5 (18:15):
It's it's well, I think, is how easy you can
get range on an electrical vehicle? Getting range is not a
sec or. It takes longer than in a normal or
normally in a combustion engine vehicle. Right, and uh is
that that situation more than the overall range? But I mean,
if the electrical vehicle will give you the equivalent in range,

(18:36):
then probably you're going to be fine. But it is
not the case.

Speaker 4 (18:39):
I think the psychology of a consumer when it comes
to range is what's going to happen when I run
out of range? They don't worry about it as much
with a gasoline car because they know there's, you know,
a gas station every couple of miles, all right. They
worry about it more with an EV because they don't
know if there's a charging station. They don't know if
it's going to work, they don't know if it's going to.

Speaker 3 (18:58):
Have to wait. So that's what difference.

Speaker 1 (19:01):
In my experience talking to people who are EV owners
and have owned them for years, they don't have range anxiety.
They've already figured this all out. They're plugging in at home,
you know, just like you every night or you know,
before you go to bed, you plug in your cell phone.
They're doing the same thing. They're plugging in their car.
They have zero range anxiety. Even the ones who travel,
especially those who own teslas, they'll go all over the place.

(19:26):
They don't they don't have any worry about it. It's
mainly the people who don't have evs, have never experienced
an EV, haven't lived with an EV. They're the ones
with the range anxiety. So, you know, part of it
is just biting the bullet and jumping into the ecosystem
of electric cars and seeing how it does. But to
your point, Ramiro, people aren't going to do that they're

(19:49):
you know, you know there, they know what works and
they're going to stick with it.

Speaker 5 (19:53):
I agree urogic, but the market is telling now something different.
And you know, the customer talks, and when they talk,
you want to be on. You want to give them one.

Speaker 1 (20:03):
Of the customer That's rule number one. So I got
another topic I'd like to ask you about. Ford Motor
Companies showed this very intriguing assembly process that they're going
to use in a couple of years where they break
a vehicle into three modules. They assemble of the module
separately front, center, rear, put that together. What are your

(20:24):
thoughts on this? And you know, especially as you're going
into chassis controls, there's a new assembly process affect what
you're doing.

Speaker 5 (20:33):
I think first is a very clever idea. Then I
think moderate assembly is nothing new. It has been out
there for a while. I think these solutions seems to
be innovative in the way they want to do it,
but it makes absolute sense when it comes to our components.
I mean, naturally we are the coupling the mechanical so
the hardware from the software and in cases like for example,

(20:56):
this treating system, now you don't have a steading column
that go through the firewall from the occupant into the
engine bay. Right, So that is a big advantage in
terms of assembly. It's even an advantage when you have
a left hand driving versus or right hand driving. Now
you don't worry anymore about where the pedals go, how
I got I get the stealing column through the thin

(21:19):
It's even a safety element. You now don't have a
stealing column that will collapse in towards the occupant in
a cross So there are fundamental advantages. Same on breaking
now you don't have you have break by wire. Now
you don't have an hydraulic fluid that is highly corrosive
into the environment. Even in the customer plants, the OEM plants,

(21:41):
they now don't need environmental protection to manage these kind
of fluids into the plant. We have new customers that
are going with those solutions, that are setting up new
plants and they are super happy having having a break
by war system because they don't need to worry about
how to deal with these environmental constraints and the set

(22:02):
up in the plant. So there are fundamental advantages in
the bywater technology and then for the end customer as well.
I mean we mentioned before the extra functionality that customers
may get out of it.

Speaker 2 (22:14):
So you mentioned steering. Now you guys are also going
to the rear steering as a possibility for.

Speaker 5 (22:21):
More correct So we are in production with real Stadium.
It's interesting because real stilling, I think, is a fantastic product,
but so far the market, maybe because of being integrated
in a package that is bigger, didn't understand the advantages
of the technology. The technology is not only great for

(22:42):
as low as speed money overs when you park in
because obviously your turning radio is way smaller. It's especially
incredible during the Dream Cruise a couple of weekends ago,
right we put a car out there and we open
it up to people to go tested. You would be amazed,
is how people like it. I mean, we put it

(23:02):
in a big, full size truck and they were amazed
how easy it was to money over in a parking lot.
But it has fundamental advantages as well in terms of safety.
I am driving a lot up north and I can
tell you that the number of incidents that I see
on the road with people trailering, but with real still
in trailering is way safer. This sway movement that you

(23:25):
have on the trailer. When you have a high speed
money over is going away with real still, then you
have advantages in tirewear. Tirewear is way lower. You even
have advantages in motion sickness. The rear passengers on a
real stead in equipped vehicle they don't get motion sickness.
So again, I think it's one of those products that

(23:46):
are great, but in some ways on how we are
failing to show the people how good of a product
it is.

Speaker 1 (23:54):
No, I totally agree with that. I add one more
feature of rear steer in a truck or suv. If
you're backing up with a trailer, it's way easier. You
don't have to turn the steering wheel opposite to the
way that you want to turn, so intuitively it's just
a lot easier. But yeah, I mean, you know, General

(24:14):
Motors was the one that pioneered rear steering on data trucks.
This goes back I don't know, know twenty five years
ago or something, but it was a very expensive option
because they packaged it in a certain trim level. The
people who got it absolutely loved it, but there were
very few of them and it was dropped. How do
you get people to understand it because I agree. I
think it's a fantastic technology and cars.

Speaker 5 (24:36):
So Gula Modos have real steal in fronas on the
Hammer and the Silverado IV, but for some reason they
are not putting that option into the mainstream gas power Silverados,
and that is something that we need to convince them
to do. I recently I was talking with a GM

(24:59):
executive and she was telling me she was dropping her
hammer that she had for six months. And she was
telling me without me asking, the feature that I loved
the most in the hammer was my ability to park
that monster any what I wanted, she said. I even
went to Detroit Metro and I parked the hammer inside
the parking lot. I couldn't get out of it.

Speaker 6 (25:21):
I've been able to put it inside the parking lot
and it was super easy with the realistyting system.

Speaker 5 (25:26):
So I think we need to make an effort to
I mean, I actually directed my team to get into
customer clinics to get the end customer to understand the system,
to understand the benefits, and try to drive more market
penetration through that because for some reason, the OEMs don't
feel comfortable in pushing it harder.

Speaker 1 (25:47):
Well, you know, this is an industry that's got a
long memory and they remember GM tried it and it
didn't work right, and we need to break that paradigm
because it's a terrific technology.

Speaker 4 (25:57):
Hower MS doing in terms of wanting to employ Sturby
wire because you've been demonstrating that for a while. It's
very impressive. But we don't see it rolling out that
fast our production vehicles. So we're going to see a
fast roll out of the coming years.

Speaker 3 (26:12):
Yeah.

Speaker 5 (26:12):
We have been first to market in North America, we
have been first to market in Asia. We are launching
in the next six months and another two programs. This
is rolling out fast. I mean, like everything, initially you
see a cost that is a little bit higher, but
as well the functionality that you can get out of it,
we are still scratching the surface. As I said before,

(26:34):
as soon as you get into the software domain a
defined vehicle and you start to explore different ways of
using those actuators through software, you can develop a lot
of new functionality out of it that customers are going
to see value. I mean, let's go into an example here.
Let's say you drive up north right and then you

(26:55):
have a cottage somewhere in Upper Michigan and you drive
on seventy five and you want you're stilling to be
high way right, no performance as a stable, just going.
Then you get out of the highway in grailing, and
then you go into the into the normal road, and
then you want you're stilling to be more direct because

(27:16):
there is some turns and maybe you pass in another
car and so forth, And how good is that you
don't need to do anything your car detect that you
get out of seventy five, then automatically you're stealing tunes
into that direction. And then when you get passing Traverse City,
you get into a gravel road and then the vehicle

(27:37):
automatically change you're stilling into less direct because you are
on a gravel road. And all that happens without you
doing anything. Not to mention that you go into the
m one concourse one day and you want to go
kind of go racing, and then you can on purpose
go say I want a super directed stilling, and then
you basically have a complete different feeling of a car

(27:59):
in each of those cases.

Speaker 2 (28:00):
So I'm assuming that the drive to seventy five get
off at grilling, I'm seventy two is sensor based. I mean,
how does the steering the GPS.

Speaker 1 (28:10):
Is going to know that.

Speaker 5 (28:11):
Okay, then the problem is that before your GPS cannot
get action into your steating column and move your steating
will from one.

Speaker 1 (28:19):
That's a great point with the software defined vehicles, no problem.
It's so real quick because we're getting down towards the
end here. Same with break by wire. I mean a
lot's been talked about it. That's going to be coming
to you. Yeah, I mean I know it's coming, but
do you see a lot of it coming?

Speaker 5 (28:34):
So yeah, we have secured an order with an American
IM with a Detroit OM for a very large vehicle
that is hitting very large volumes, and this is going
to go. It's going to go one hundred percent penetration.
So yeah, it's going to happen.

Speaker 1 (28:49):
Sure by wire is it a combination of electric m.

Speaker 5 (28:53):
These particular full size vehicle is going to have a
highrid system where they're going to have in one axle
by wire and in the other actual traditional system. That
brings some advantages for the system the way they want it.
But yeah, it's going to be one hundred percent on
at least onto one of.

Speaker 1 (29:12):
The axles fantastic because yeah, I know for a fact,
assembly plants don't like dealing with all that break fluid. Uh.
You know, anytime you change the pads or anything, you
have to bleed the brakes and all that's going to
go away, right.

Speaker 5 (29:27):
I mean, we have a customer that is hundred percent
electric on the West coast and they are developing a
new factory and you can I can tell you how
happy they are in going into that technology because they
don't need to worry about that fluid.

Speaker 1 (29:41):
Look, we're gonna have to wrap this up, but Ramiro,
it's been terrific. Havenu on the show. We're gonna have
to have you back and talk. Oh well, questions Okay,
let's go audience questions.

Speaker 7 (29:50):
Yeah, drive, please ask how well do electric breakes work
when the alternator dies in the batteries of marginal health?

Speaker 1 (29:59):
Okay, so to repeat the question for those you know
what happens with uh, electric breaks break by wire when
the alternator isn't working well or the battery charge is
very low.

Speaker 5 (30:11):
Well, you still have a full back solution with like
you have electric park break today is still an electrical
motor that isn't there, So there are redundancies built into
the system for those cases.

Speaker 1 (30:24):
Right, And I'm sure the same goes with any kind
of steering by wire steering. There's a redundant system for that,
is correct. Okay, Sean, another question, just one more.

Speaker 7 (30:35):
Robert Foster just write active suspension question mark. So I
don't know if that means does your tech that your
software tech that you have will allow active suspension, or
whether or not you're actively working on active suspension.

Speaker 1 (30:48):
Yeah, so the question again to repeat it, what about
active suspension?

Speaker 5 (30:52):
I think active suspension is a great product. We have
them in production in multiple customers. A big one, for
example is Porsche and UH and the things that acting
suspension can do for you. Some people associate active suspension
to a sport driving. You can get a sport driving
out of actor suspension, but you can get a heck
of a of a comfort out of it. And there

(31:14):
are some interesting videos on on on YouTube that you
can see the situation where a car is going through
an an even partnment and isn't even on the left
and on the right, and the car just basically floats
over that like no effort, and when you drive it,
you love.

Speaker 1 (31:32):
It real good. We are of your questions. Okay, we
are Romero. Thanks much for coming on.

Speaker 5 (31:38):
Really good having.

Speaker 1 (31:40):
We're going to take a quick commercial break right now.
We're going to come back and talk about the news
of the week.

Speaker 8 (31:45):
We act, we grow, we transform, we protect, we rescue
in moments that define the future. We are the partner
you can trust Alex partners when it really matters.

Speaker 1 (32:03):
All right, we're back, and boy, there's some good stuff
to get into here. Gary, I'm sure I respects. I
want to do topics and we're going to pummel Jeff
with questions.

Speaker 2 (32:14):
Well, you know, Jeff, you're mentioning that, you know, the
affordability thing. And so today I noticed an order of
the news where cloud Theory has their average marketed price
for a vehicle today it's forty nine, six hundred and
seventy eight dollars. How can people deal with prices like that?

Speaker 4 (32:34):
Well, that is the question that we've all been asking.
I mean, of course that's the average, so that means
there are ones that are below that. But the biggest
problem isn't so much the average. The biggest problem is
some of those below it are starting to disappear, you know,
especially when you know a lot of them are not
made in the United States, don't have a lot of
US content, So there's going to be a lot of

(32:57):
pressure from that end with tariffs going forward.

Speaker 3 (33:00):
So you know, as we have seen.

Speaker 4 (33:03):
You know, you guys have been covering this longer than me,
But throughout my career, we've always been talking about a
certain number of people are cut out of the new
car market. Every year, it's more and more and more,
so that continues to happen.

Speaker 1 (33:14):
Look, this is why car sales have gone nowhere for
a decade. You know, we sold more at cars in
this country a decade ago than we do now. And
I think the major culprit is just that what you're
talking about, Jeff, it's people can't afford these new ones.
I mean, there's at least sixteen million people who will
come into the market this year, maybe a little less
than that who can't afford it. But none of them

(33:37):
are happy about prices. Everyone's complaining about the price of cars.

Speaker 4 (33:42):
But the industry also got a little euphoric about the
high end of the market a few years back with
the chip crisis, when people were paying anything to get
every last thing that they wanted. And you know, I
had a conversation with a certain executive a certain brand
that is gotten blamed for having vehicles that weren't affordable,

(34:03):
and he said, oh, you know we have all right,
it was cheap and you beat it out of me.
And I said, I just prove, you know, eighty ninety
thousand dollars Grand Cherokee. So o, people are begging for those,
People are wanting those. Well, that was the industry attitude
a couple of years ago. Then things change and now
people are begging for mid size models and things of

(34:23):
that nature. So I think there was a little bit
of industry euphoria that pushed these fully loaded vehicles because
you know as well as I do. You know that's
where you make a lot of the money is on
the extras.

Speaker 2 (34:35):
So is it your sense, as you're talking to people
in the industry that they are willing to adapt their
product plans in order to address this lower end of
the market or are they just basically going, you know
what it's it is going to be, what it's going
to be.

Speaker 4 (34:53):
Let's look at just just look at the product lineup
for GM and Ford over the past two or three decades.
So much has disappeared at the low end, and we
keep adding more on to F one fifties, F two fifties,
Silverado's heavy duties, et cetera. So you know, small cars

(35:15):
mean small profitces you've often heard. So you know, I
don't see a huge push. Remember Bob Lutz was always quotable.
Remember the Tata Nano came out and somebody asked him,
is anybody going to make a twenty.

Speaker 3 (35:33):
Five hundred dollars car? And his answer was, we already
have them.

Speaker 4 (35:37):
They're called used cars. So in many cases that's the
auto industry's answer to that, because they're not going to
make a ton of money off of these smaller vehicles.

Speaker 1 (35:45):
Yeah, that's right, Gary. Another news item that broke this
week is European automakers and suppliers sent a letter to
the EU saying enough of the CO two regulations already.
There's no way that we're going to meet them. We've
spent two hundred and fifty billion euros developing electric cars,

(36:06):
We've launched hundreds of models. The market share is stuck
at fifteen percent. We're supposed to be at fifty five
percent by twenty thirty, one hundred percent by twenty thirty five.
Enough already what do you think is going to happen?

Speaker 2 (36:20):
Well, you know, I think that when I was a
little kid, I wrote a letter in a Napoleon solo
and said, you know, you send me a man from
Uncle Badge. Never happened. I think what's I think what's
going to go on here is is because of the
roiling of the international auto industry right.

Speaker 3 (36:38):
Now, that.

Speaker 2 (36:41):
The EU may step back and say, hey, we'll give
you an extension on this. But that said, if they
spent that money, I mean, are are they basely are
they going to basically want to walk away from it
or they're going to say, okay, we want to be
able to get some advantage out of that. So maybe
it's not twenty thirty five, but maybe it's twenty thirty eight.

(37:03):
I mean, I don't see.

Speaker 1 (37:04):
Twenty forty five or so.

Speaker 2 (37:05):
I don't see, but that that that becomes science fiction
at that point right now.

Speaker 1 (37:10):
No, I think they're going to get relief because number one, uh,
jobs are going to start going away. It's already started.
Then you're going to have the unions in euro up
screaming that something's got to be done about it. The
thing that I keep pointing out is the auto industry
is the only industry or industry sector, economy sector that's

(37:33):
facing all these massive CO two rules and massive fines.
Nobody else in the economy faces.

Speaker 2 (37:40):
That's because everybody can see a tailpipe.

Speaker 1 (37:42):
Well I know they can't, but you know, in this country,
I'm going by EPA data, CO two emissions from cars,
greenhouse gases from cars, because we got to look at
the big picture, it's more than CO two account for
sixteen one six percent of total emissions. So you're we're
we're throwing all of our regulatory effort into a rather

(38:03):
small piece of what's going on out there.

Speaker 4 (38:06):
Of course, because we follow the auto industry, we see
what they're doing on the auto industry. I think if
we were following the energy industry or something like that,
they would say, you know, they're putting a lot on
our back as well.

Speaker 1 (38:18):
Look, I've looked this up. There's nothing on trains, there's
nothing on planes, there's nothing on ships, there's nothing on
agricultural equipment. There's nothing on motorcycles, there's nothing on residential,
there's nothing on business. There isn't anything out there. There's
talk of collecting data and guidelines and future goals. There
are zero regulations, zero fines except on the automotive industry.

Speaker 3 (38:43):
And some of those are backing off.

Speaker 1 (38:44):
And in this country. But that's what I'm asking. Is
this going to happen with the European industry.

Speaker 3 (38:51):
I think it has to.

Speaker 4 (38:52):
I mean, if people will not buy the vehicles, what
are you going to do? And I was in Europe
on vacation not that long ago, and of course it's
dangerous to judge things based on just what I see
on roads, but you hear a lot about Europe leading
the way with electric vehicles. Honestly, as I made it

(39:12):
a point to look at roads in France, England, Switzerland
and Italy, and it didn't really seem there were a
ton of electric vehicles out there. Honestly, I felt like
I saw more evs on the road here in Detroit,
which is not a big EVA market than I saw
on the roads of European cities like London and Paris,

(39:33):
because you still have the ton of the small cars,
a ton of small SUVs that things of that nature.

Speaker 3 (39:38):
But I didn't see the wide variety.

Speaker 4 (39:41):
I saw a couple of olkswagens here and there, a
few teslas because they're now hitting in that market, but
not quite the wide variety.

Speaker 2 (39:47):
But as percentage of sales, I mean, the EU is
vastly right.

Speaker 4 (39:52):
But that's supposed to be leading the way, and I
think countries like Norway that heavily incentivize EV's kind of
skew the percentage. I think if you're looking in Italy
or France and places like that, it's probably not a
whole lot different than the US.

Speaker 3 (40:08):
Yeah, so.

Speaker 2 (40:11):
You know, it's that issue. You know, we've been sort
of talking about of whether they'll be homuligation of safety
standards between cars.

Speaker 1 (40:24):
Between the US and then yeah, well Europe accepts US
certified cars, will the US accept European certified cars? Quite honestly,
our emission standards and their emission standards are pretty close.
Our safety standards are extremely close. To me, it would
be an easy thing to just say for the United States, look,

(40:44):
if if the you meet euro n CAP, you meet
euro emissions, come on in. Conversely, Europe could say, hey,
look if the EPA certified emissions and it's a certified
the safety, come on in. You're good to go.

Speaker 3 (40:58):
And pay a tariff and.

Speaker 1 (41:02):
Pea turf. That's right. But to me, it would be
pretty easy to do. It would obviously benefit the European
manufacturers more because they ship vastly more vehicles to the
US than the US ships to Europe. But or we
should say, we buy.

Speaker 2 (41:20):
More European vehicles than Europeans by US vehicles. So it's
not like they're like shipping them over and saying, hey,
buy these things. It's like, you know, it's it's demand,
which somehow gets lost in all of this economic discussion.

Speaker 1 (41:33):
Yeah, you know, but you know, Cadillacs got a big
push into Europe right now. It's very small numbers, but
something like that would help them a lot. It would
probably help companies like Rivian and lose it as well,
you know, on the US side. But yeah, you're right
for the legacy, automaker's legacy. You know, look, Europe's not
going to go out and buy big American pickups and SUVs,

(41:56):
not in any big numbers.

Speaker 2 (41:58):
So Ford had another big recall.

Speaker 4 (42:02):
Which one today or yesterday, you know, I believe, and
I haven't counted.

Speaker 1 (42:07):
These bolts on the back act.

Speaker 4 (42:10):
Oh no, this is uh the brakes, fuel leaky break
fluid lines. And this is according to Automotive News number
one hundred five for the year that is Stagger and
according to them, Stilantis is second with like twenty three.

Speaker 2 (42:25):
Man, so I've I've got that slightly different as General
Motors with seventeen and that Ford is one hundred and four. Okay, okay,
So here's my question to you guys. Okay, so you
know you you talked about you know, Ford's new production system,
and Ford announced today that they're, you know, opening new
charging stations at dealerships, and you know what a wonderful.

Speaker 3 (42:48):
Company it is.

Speaker 2 (42:50):
Can people really feel comfortable about buying Fords when they're
having this many recalls?

Speaker 1 (42:56):
A lot of people are going to be very scance at,
you know, thinking about buying a Ford. My question would be,
what what what do you know? What the cause of
the break fluid leakages? It was a hose that hoosed
with rupture or something, so you know.

Speaker 4 (43:11):
Those were twenty thirteen to eighteen models something like that.

Speaker 2 (43:15):
All right, so they have one. It was announced yesterday
three hundred and fifty five thousand trucks in the US
to an issue with an instrument panel display. Now they
can fix if it's an OKA. But again this is
and these are twenty twenty five, twenty twenty six models.

Speaker 1 (43:32):
Yeah, so see this is not good. They just had
a big call on a bolt and a rear axle.

Speaker 2 (43:37):
So it's a rear axle thing. And these are f
one to fifty pickups twenty twenty three, twenty twenty four,
and twenty twenty five, so you know, it's not like
yeah ancient history.

Speaker 1 (43:47):
What I'd like to do is trace down what's the
root cause here? I mean when a bolt fails, was
the bolt not put in? Was the bolt not torqued?

Speaker 3 (43:55):
Right?

Speaker 1 (43:56):
Was did you know engineering go through all their their validation,
you know, give their blessing to these sets of bolts,
and then maybe purchasing went and found a cheaper bolt
that had not been you know what's going on because
and then when you say leaky breaks or a hose
blows out, same thing. Did purchasing buy something cheap? Was

(44:17):
it twisted in a way when it was installed at
the assembly plan? Was it under engineered to begin? You know?
What's the root cause? And I would love to get
to the bottom of it, right, But.

Speaker 2 (44:28):
Do you think about it? I mean, the guys who
work at Ford are no different than the guys that
are working at Stilanters. So the guys who are working
at General Martris, you know.

Speaker 1 (44:35):
But it's not a people things. It's a process and
procedure thing. Whether it's you know, engineering procedures, whether it's
purchasing procedures, whether it's manufacturing ones. You got to follow
the rules. You got to make sure that things are
getting done and double check it. And it sounds like
that's not happening.

Speaker 2 (44:54):
So I thought they had the Ford production system.

Speaker 3 (44:56):
I thought they had that too.

Speaker 4 (44:57):
I mean, if you listen to that last conference call,
Jim Farley was saying, oh, this has been fixed on
the newer vehicles, it's just the older vehicles.

Speaker 3 (45:05):
But what did they take as.

Speaker 4 (45:06):
A charge against earnings in the last quarter. Was it
like half a million dollars or half a billion dollars?

Speaker 1 (45:11):
Well, last year, I can tell you.

Speaker 3 (45:13):
I'm just talking the last quarter.

Speaker 1 (45:14):
Last quarter. It must have been more than that because
last year they spent nearly six billion dollars.

Speaker 4 (45:19):
I think it was half a million recalls in the
last quarter. So, I mean, this is an issue. I mean,
we'll just have to see whether they have properly, properly
dealt with it. But I'm sure they're asking the same
questions in house that you're asking because this is this
is money for them and reputation.

Speaker 1 (45:36):
That's right, exactly right.

Speaker 2 (45:37):
I just wonder about the reputation part.

Speaker 4 (45:39):
I mean, well, come on, you remember the old joke
when we were kids about fixer repair daily, So you
know people have issues like that. I actually did an
interview with somebody on another radio station where they brought
up that old abbreviation. So you know, you got to
assume that they are working on it. They're trying to
do the best they can. Will they fix it?

Speaker 3 (45:59):
I don't. I can't tell you.

Speaker 1 (46:00):
Well, look, it's not getting better by the just this
recall count, and that tells me there's no end in sight.
I mean, I think they're seeing some things in their
data because they're they've got access to stuff that we don't.
But as far as what's ending up in the customer's hands,
we're not at the end of this, not even close, all.

Speaker 2 (46:24):
Right, John, So twenty twenty five, you're of autonomy.

Speaker 9 (46:27):
That's it, baby, Okay, So we're here, here's our entry
for today's You're in a ton So Stilantis decided that
it's going to pull the plug on its level three,
hands free and eyes off driving system that it has
long been developing.

Speaker 2 (46:43):
This would be integrated in other EV technologies like Stella
Brain and Stella Smart Cockpit. So they've put all this
money into this and they're like, this ain't working out.

Speaker 1 (46:54):
So look, you got a new CEO. Antonio Felosa comes in,
knows that the place is a total mess. I think
North America lost two billion dollars last year. He's got
to cut cost as fast as possible. What's the fastest
way to do that? Get rid of people, close down programs,
delay programs. That's exactly what I think you're seeing here,

(47:18):
because just in the last week or so, GM came
out and bragged how many people are getting Super Crews
and and and actually using and signing up when the
free period, and Ford came out and bragging about how
many people are using Blue Crews and they now have
a million vehicles on the road with Blue Crews. And
then Level two it's.

Speaker 4 (47:41):
I have driven Stellanis' system with Level two plus. They
don't advertise it, they don't push it like GM or Ford,
and it's pretty good.

Speaker 3 (47:50):
It's on.

Speaker 4 (47:51):
I believe some of the rampickups, some of the newer ones,
and maybe the Grand Cherokee. It's not on a lot
of vehicles, but their system is really comparable to Blue Cruise.
I think Super Cruise is on a level of its own.
And you know, people I've talked to who are experts
in the field, you know, like Sambabel Samita Telemetry who

(48:12):
study these.

Speaker 3 (48:13):
Things, feel it's just as strong.

Speaker 4 (48:15):
So you know, in terms of level two, they've got
a pretty good system.

Speaker 1 (48:21):
So level three, as you guys know, once you declare
that it's a level three system, you run into a
buzzsaw more regulation. So nobody wants to call their system
level three. I think you could arguably say that Blue
Cruise and Super Crews, you know they call it.

Speaker 4 (48:38):
Doesn't level three mean that there are periods where you
can just pay attention its off. That is like a
big hurdle.

Speaker 2 (48:49):
Degrees the newspaper, and nobody knows newspapers anymore.

Speaker 3 (48:54):
The only legal.

Speaker 1 (48:56):
Place for eyes off, I think is Nevada is a
californ too. It's not a fifty state. Yeah, it's like
a one or two state option. So if you're looking
at that and thinking, man, I got to cut costs,
and I can't even deploy it as legally except in
one or two states, forget about it, closed the program down.

Speaker 2 (49:15):
Yeah, he didn't get the memo event about this being
the year of the autonomy. No, if that's something I didn't,
I don't think he got.

Speaker 1 (49:21):
But I still stick by my guns.

Speaker 2 (49:23):
This is this is the year of autonomy.

Speaker 3 (49:25):
Did you know that?

Speaker 1 (49:29):
No? I was talking more like nineteen eighty seven when
I really got into this stuff. So, Gary, I got
a question for you. We knew this was coming. Now
the war has started. The Honda dealers in California are
suing Honda, Sony a fela for direct for for them

(49:49):
trying to do direct sales. What's going to happen?

Speaker 2 (49:55):
If this were another period in time, I would say
that dealers will win. I'm not so sure anymore. Wow,
I I think that there would be sufficient examples of
direct consumer sales that are happening by other vehicle manufacturers.

(50:18):
That precedent has been set. Therefore, it's not going to
be that big a problem. And you know, if the
a feel a vehicle is identified as being a brand
onto itself and not a you know, not what Accura
is to Honda, right, and Sony doesn't have any cars,
So this this is an entirely different thing. So I

(50:39):
think that the uh sony Honda people are going to win.
What do you think, Well, let's ask Jeff first.

Speaker 4 (50:48):
I could have I don't know what that withou much depth,
but could this be a shot across the bow, just
essentially saying to Honda, Look, we've got our eyes on you. Uh,
we're going to draw a line in the sand right here,
so we don't have to draw a line in the
sand further back if you're at some point deciding you
might want us sell a more mass market vehicle direct

(51:09):
to customers, So we will just say right now, we'll
put it on record right now, this is something we
don't want to do.

Speaker 1 (51:14):
Yeah, I would say this is the third shot. So
they sent a letter to Honta saying, look, you don't
want to do it. Then they filed a cease and
desist order. Now they have filed a lawsuit. So that's
why I say the war has started. Now it's in
the courts, And I think, what.

Speaker 3 (51:35):
Does Honda get out of this. It's a small, very
small niche vehicle, correct, So what do they get out
of it?

Speaker 1 (51:42):
Well, you know what they would say is that it's
a lot cheaper to sell a car directly than sell
it through a dealer franchise network.

Speaker 2 (51:51):
I wonder to what extent this goes back to what
we were talking about earlier, and that is, once upon
a time everyone thought that we're going to be selling
like mad and so what was it three ces is
ago when Honda and Sony came out and made this
announcement that they're going to make this wonderful car that'll

(52:12):
have all of this Sony infotainment and screen content. And
you've got the engineering prowess of how Honda, how can
it fail?

Speaker 4 (52:21):
Right?

Speaker 2 (52:22):
And now they're probably knows to your point, So it's
going to be an expensive car that's going to be
very limited volume, and you know you'll probably see I
don't know three or forum on Santa Monica and call
it good.

Speaker 1 (52:35):
Well, I think, uh, you know, if I were Honda
and they're probably already doing it, i'd call Volkswagen and say, hey,
you know, what are you guys doing? What's your strategy?
You know, because we want to sell our car our
scouts direct and.

Speaker 2 (52:49):
I would be sued as well Scout.

Speaker 1 (52:53):
I don't know if that lawsuit has been filed yet.
It will, it will, didn't and so to answer you,
you asked me, what do I think is going to happen.
It's going to depend on how much stick to itness
the car companies have, because it's going to trial. If
they lose, will they appeal it to the Circuit Court

(53:14):
of Appeals. If they lose there, will they appeal it
to the Supreme Court. So it's just a matter of
how deep are they going to reach into their pockets
to pay these legal fees.

Speaker 2 (53:24):
Okay, but this would be the Supreme Court of California.

Speaker 1 (53:27):
Well yeah, but I believe this is ultimately going to
the US Supreme car I don't think it'll ever.

Speaker 2 (53:31):
Get there.

Speaker 5 (53:33):
In Florida and California.

Speaker 1 (53:36):
Okay, So Sean's telling us that California and what was
the other one? Florida dealers have sued Volkswagon, and look,
they're going to face lawsuits in every one of the
fifty states because franchise laws are are there's a different
national Every state has a different set of franchise laws,

(53:57):
and those dealers in those states will sue those companies
their dealer organizations. Well, far better that you take this
one and keep appealing it up until you get either
you win or you lose.

Speaker 2 (54:08):
So the question though becomes, Okay, if, as we suspect,
car sales are going to go down, right, this basically
means that dealers will make less money. Right, So, if
you're a dealer making less money, do you necessarily want
your trade association to be spending a whole lot of

(54:31):
money against a corporation I don't know the size of Sony,
which is humongous.

Speaker 1 (54:38):
Oh yeah, no, No, the dealers will take this to the mat.
They this as an existential threat. They will spend the money.
And remember, you know the NADA, the National Auto Dealers Association,
I believe, is the most powerful lobby in Washington.

Speaker 2 (54:53):
Okay, but do you think that okay, that is it
going to be the new two automakers that will go
with the direct model or will existing automakers go with
the direct model? And we saw that Ford tried it
in Utah and they said, I screw this.

Speaker 1 (55:10):
Yeah, So well, look, franchise laws are pretty clear. If
you're a car company and you've used dealers, you have
to use dealers. You can't go and start selling cars
on your own and compete against your own dealers. That's
against the law. The real question is if I come
out with all new company that's never used dealerships. Can

(55:32):
I go and do that? Well, that's what Tesla came
and ran into, and state dealership associations all fifty states
put up roadblocks. There are still states that banned Tesla
from selling cars. There are other states like here where
we live in Michigan that very much limits how many
outlets and service stores it can have. And so, I

(55:54):
mean Tesla is still kind of fighting with one arm
tied behind its back when it comes to selling vehicles.
So that's where it's going to be. Can an all
new company have cart wants to sell cars as it wants?
And then the question is going to be is Scout
really independent of Volkswagen? Is a feel A really independent

(56:20):
of Honda? And so so when you ask me what's
going to happen, I don't know. My own personal opinion is,
of course they should let them do this. I mean,
come on, why should there be a law that says
you can only buy cars from franchise together Like I
like to say, that's like saying you can only buy
hamburgers from a franchised fast food restaurant.

Speaker 2 (56:41):
So it almost seems to me that you know, in
the case is Scout. I mean, so Scout is a
subsidiary of Volkswagen Group, right, So, I mean it's it's
clearly identified. But if you look at to feel it
is is it a wholly owned subsidiary of Honda or
does it Sony. Let's say Sony owns fifty one percent,

(57:01):
so then it would be owned by Sony, which has
never sold cars. Right, So if I were if if
if it's a joint venture like a fifty to fifty
Right now, this I is selling a lot.

Speaker 3 (57:14):
A lot of people are going to get rich on this,
and most of them are lawyers.

Speaker 1 (57:17):
No, all of them are believe.

Speaker 3 (57:20):
That's right.

Speaker 1 (57:21):
So we're getting down towards the end. Here you got
a burning one of I got one of my all right,
But so Cadillac announced its Formula one drivers this week,
Valteri Botas from Finland, Sergio Perez from Mexico. There's been
a little bit of buzz and uh, you know out
on the web there that hey, they didn't pick an
American driver. How can this American brand not have an

(57:43):
American driver.

Speaker 2 (57:45):
Because it's the standard of the world, an American standard
for the world.

Speaker 1 (57:51):
Any thoughts, I.

Speaker 4 (57:52):
Don't know enough about the drive teams and the drivers
in Formula One to have a thought. But yeah, I
think of it as an international event. So I think
Cadillac is trying to show the world it's a global
brand and it's not just depending on having to have
an American If the best drivers or somebody else, they'll
choose them.

Speaker 2 (58:10):
Yeah, we're not gonna have an American engine.

Speaker 1 (58:12):
No, that's right. They're starting with Ferrari. So for the
first two three years, a couple of years they'll run
Ferrari engines and then Cadillac's own engine.

Speaker 3 (58:22):
Is Brad Pitt available.

Speaker 2 (58:26):
He retired.

Speaker 3 (58:26):
Oh that's right.

Speaker 2 (58:27):
So okay, So here's my question to you guys. So
what will success look like for Cadillac in Formula One
in its first year.

Speaker 1 (58:39):
I think it'll do rather well because when you look
at new teams coming into racing, especially Formula One, they've
been building these teams for several years. The Cadillac team's
been building for three years now, three years concentrating on
that first race and that first season. They've probably planned
out everything to the absolutely minushav you know, where the

(59:02):
transporter trucks go, where the hotels are going to be,
for the crews that go there, where the flights are
going to you know, they plan out everything. I'm sure
they've run multiple, multiple, multiple simulations of their car running
on every single racetrack. So the point is they hit
the season next year with three years of preparation just

(59:22):
for that season. Meanwhile, everybody who's running in Formula One
right now has had to concentrate on this season now
probably you know, midyear. Just recently they said, okay, enough
concentrating on twenty twenty five. Now let's move to twenty
twenty six. So Cadillac's going to hit the ground running
with three years of preparation. Most everybody else is going

(59:45):
to hit their ground running with about six months or
so of preparation. So there's no way the Cadillac will win.
I doubt very much will even hit the podium for
second or third, but.

Speaker 2 (59:58):
Throughout the entire season or just the first race throughout
the season, so you don't think it'll have a podium
probably not. Okay, So will Mary Bearra sustain the spending
for that?

Speaker 3 (01:00:09):
Good question?

Speaker 4 (01:00:10):
But I mean they want to be known as a
global brand, so this puts them with all the other
global players, So okay, they don't hit the podium, but
at least they don't embarrass themselves. That's a victory.

Speaker 3 (01:00:21):
Yeah.

Speaker 1 (01:00:21):
No, I would agree with you on that, Jeff, and
I think that will be success. We didn't suck, you know,
we didn't fall flat on our face, and.

Speaker 2 (01:00:29):
So millions and millions and millions of dollars, okay, billions.

Speaker 1 (01:00:33):
I'm sure GM's commitment to Formula one is at least
a billion dollar.

Speaker 2 (01:00:37):
Bill So, so just not sucking will be just not.

Speaker 1 (01:00:40):
Sucking for the first three years. It's look, you know,
it's like saying, let's go start an NFL football team,
let's get all good players in it. How long do
you think it's going to take to build up to
be a winning organization. It's going to take you at
least three years to get there.

Speaker 2 (01:00:59):
Or in Detroit that was just like hanging curveball.

Speaker 1 (01:01:03):
Yeah yeah, so yeah, I mean the the reality is, Look,
you're going up against teams like McLaren Ferrari, Red Bull,
I mean.

Speaker 2 (01:01:17):
Red Bull, Red Bull was really good out of the box.

Speaker 1 (01:01:22):
Red Yeah. I don't recall how that all. But remember
they were buying they they bought an existing team, renamed it,
and I'm not trying to make excuses or anything like that.
But I mean, look at the Hoss team, other American
team in Formula one reason it surprised a lot of
people its first year, and then they always have what

(01:01:44):
they call the sophomore year. Every team falls flat on
its face the second year because it hasn't had three
years of preparation to get to that point. So uh yeah,
if if Cadillac doesn't suck for the first three years,
people are gonna go, oh, this, this is good. And
if GM doesn't pull the plug, you know, if it

(01:02:05):
sticks to it, Cadillac could rise again to be a
standard of the world.

Speaker 3 (01:02:11):
Look at it this way. It's still less money than
what they spent on Cruise.

Speaker 2 (01:02:15):
That's true, because I was going to say they maybe
didn't get the matter of this is the year of autonomy.

Speaker 1 (01:02:19):
In fact, maybe that's why Cruise got act I had
to pay for the Formula One.

Speaker 2 (01:02:23):
Now that's something, so okay, let's wrap it.

Speaker 1 (01:02:29):
Let's wrap it up. Jeff Gilbert, thank you so much
for on the show.

Speaker 2 (01:02:33):
Always good to see Gerry.

Speaker 1 (01:02:34):
You're going to be gone for the next two weeks.
You have a terrific vacation.

Speaker 3 (01:02:38):
Count those you're in Europe, I will okay, all right

Speaker 1 (01:02:41):
And we invite all of you back next week