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2008 Issues Archive
26 November 2008
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Q&A
It’s not often that PE readers get to debate the great issues of the day on the same timescale as the US Congress. And, as you might expect, engineers have proved quicker to decide and more insightful than the senators and representatives who have been wondering what to do with the problem that is Detroit. We the PE people…
Actually, speed of decision-making shouldn’t be confused with decisiveness: respondents to our Q&A survey this time seem just as nonplussed as the legislators and the industry itself about what to do about mega-corporations teetering on the brink. It’s not easy.
Take, for example, the question of whether manufacturers such as carmakers should be allowed to receive funds from the government in the same way as public money is being used to prop up the banking system. Yes, say 52% of engineers. And No, say 44%. Which is a pretty split result even before you get into the detail about whether the car firms should share the banks’ cash, or get a separate fund of their own.
The urgent point about all of this is that at least one of the big US-owned global car giants, General Motors, says it’ll run out of cash within the next few months. Should the group be allowed to go bust, we asked?
A lot of engineers are quite tough about this. Yes, said 54%, let GM go. Several people said that, however sad it was for individuals or long-loved brands, the group was tottering and sentiment would be misplaced. Unlike banks, where the whole system underpins business as a whole, there were other carmakers around. GM had competed and lost: get over it.
But 35% disagreed and a further 11% were unsure about whether GM should be allowed to go into bankruptcy – if it comes to that. Many of them pointed to the huge repercussions across supply industries, and to the suddenness of the events.
Parallels with experience at British Leyland were drawn on both sides of the argument: BL’s decline had been long-drawn-out and much prepared for, though in the end it had been let go. Maybe GM was similar.
A parallel question reinforced this. Some people are saying that the automotive sector is too important to national economies to be allowed to fail. Did readers agree with this? By a 50% to 40% majority, they don’t. The UK, several people pointed out, was an example of an economy that had survived the departure of big domestic OEMs.
The first proposal for a “rescue package” for the big Detroit carmakers was a
$25 billion fund tied to the development of environmentally friendly cars. We asked whether, now that the carmakers’ needs had become more urgent, this link to spending on green technology should still be insisted upon. This gets a decisive thumbs-up, by 72% to 25%. What was the point, asked several, in rescuing companies and not getting them to change at the same time?
There’s less certainty – but still comfortable majorities – in the next two questions. If the US bails out its big carmakers, should the European Union do the same for its firms? Yes, say our 385 respondents, by a majority of 61% to 31%.
And Yes, too, they say to the idea that any US hand-out should also go to the “transplant” manufacturers such as Toyota, Honda and Hyundai, which appeared to be excluded from the original “green” rescue package.
One of the points being made over on the European side of the Atlantic is that rule changes on emissions and fuel efficiency mean that carmakers are in for substantial expenditure at a time when money is tight. We asked whether, in the light of these concerns, the EU legislators should be postponing their proposals for tighter limits on CO2 emissions until such time as the carmakers are back in better health.
No, say PE’s engineers, rather decisively: by 73% to 24%, they think putting off emissions regulations would be a bad thing. There was quite a bit of background comment here to the effect that carmakers are temporary, but global warming could well be permanent, unless action is taken.
Our readers then get even more decisive. By a majority of 82% to 9%, they reject the idea that the disparity in performance between Ford and GM’s European and North American arms proves that global companies don’t work. Nonsense, said a few: just because European car buyers don’t buy gas guzzlers to quite the same extent as Americans doesn’t mean anything.
So far, it appears, recession is something that happens to other people. We asked whether our readers had been affected by the short-time working or idle days that had been instituted across a lot of the automotive sector, and elsewhere, in the past few weeks. Only 6% said Yes, they were affected, and at least as many said that workload was as high as it had been before.
Green pressures as well as market changes mean that carmakers still need to design and build new vehicles, of course, so was the automotive industry still a good career for an engineer to take up? Yes, by 86% to just 4%, say readers, some of whom come from the industry already.
So does that mean that professional engineers, as distinct from production workers and others, are to a degree immune from the worst excesses of a recession? We didn’t ask that question: it might be tempting fate. But several people noted that engineers with relevant qualifications still seem to be remarkably employable. Long may that continue.
JP
© PE Publishing, 26 November 2008
