Automotive News Canada - September 2016 - 8

OPINION

09.16

It would be grossly hypocritical
to make the VW scandal about
anything more than cheating
emissions
testing.

Putting the VW diesel
scandal into perspective
by using a pickup truck
JEFF MELNYCHUK

EDITOR-IN-CHIEF

WHILE THE VOLKSWAGEN EMISSIONS SCANDAL IS SUPPOSEDLY
about cheating the U.S. Environmental Protection Agency's (EPA)
tests, the company's reputation on the street is taking a pounding
from something else: selling so-called "dirty diesels" for their
higher-than-allowed levels of nitrogen oxide (NOx) emissions.
Should VW get a punch in the proverbial mouth for cheating
the tests? No doubt, but people driving a Dodge Ram Hemi or
Ford EcoBoost pickup - there are far more of those vehicles on
Canadian roads making daily commutes than TDI vehicles -
should in no way be wagging their fingers in disgust.
How about a dose of perspective. Compared
to a Jetta TDI, a Dodge Ram Hemi or Ford
F-150 EcoBoost can easily weigh twice as
much, meaning that roughly double the earth's
resources were used in the construction with
much more energy consumed in the process.
Truck tires are twice the size, too, so when it's
time for a new set, it's double the rubber and
even more energy used.
And how about those engines. Does anyone
actually think that a four-cylinder TDI rated at
about 4.5 l/100 km actually pollutes more
than a Ram Hemi or EcoBoost V-6 that has to
push around twice the weight? The EPA estimates that 2.3 kilograms of carbon dioxide is produced per litre of gas burned (2.6
kilograms for diesel). If a Ram Hemi or F-150 EcoBoost only consumes 9.0 litres to go 100 kilometres - a lofty goal - and travels
20,000 kilometres a year, that's 1,800 litres burned (then multiplied by 2.3 kilograms) and 4.1 metric tonnes of CO2 emitted.
That "dirty diesel" TDI will likely dump less than half that
amount into the air.
If this is about the environment and TDIs are "dirty," then what
does that make a Ram Hemi or an F-150 EcoBoost? Where's the
outrage for Ford or Dodge? Or more pointedly, the outrage for
every vehicle on the road that's bigger and gets poorer fuel economy than a TDI, or any car still on the road after 10 years? But
that's really not the punchline. Pollution comes from consumers
choosing wasteful vehicles and driving them as far and long as
they want and in any sloppy manner they see fit. Their lifestyles
are, ironically, the pollution problem.
So, let's just all limit the VW scandal to cheating as opposed
to the environment, because if we don't, no one is safe from
scrutiny and responsibility. - ANC

Does anyone
think that
a TDI Jetta
is worse than
a 6,000-pound
pickup with
a V-8 engine?

EST. 1925.

PUBLISHED WEEKLY BY CRAIN COMMUNICATIONS, INC.
KEITH E. CRAIN, EDITOR-IN-CHIEF
K.C. CRAIN, GROUP PUBLISHER
JASON STEIN, PUBLISHER AND EDITOR

PUBLISHED WEEKLY BY CRAIN COMMUNICATIONS, INC.

NEWS DEPARTMENT
JEFF MELNYCHUK, EDITOR-IN-CHIEF, 506.854.5024, JMelnychuk@autonews.com
JOE KNYCHA, NEWS EDITOR, 204.648.5733, JKnycha@autonews.com

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Email: rgreer@crain.com

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When it comes to "innovate or die,"
guess what most companies choose
HYUNDAI'S UNIQUE APPROACH
to introducing the Genesis luxury brand in Canada, without
separate brand dealers or even
Genesis cars in Hyundai dealerships, underscores how almost
every aspect of the automotive
industry copes with change and
the pressure to succeed.
Generally speaking, that
would be with innovation and a
penchant for making things better; not just the vehicles themselves but how they're built,
sold, serviced, financed and
disposed of at the end of their
life cycle.
A hybrid plan of sorts,
Genesis will leverage Hyundai's
existing dealer body with the
manufacturer using it to sell
directly to consumers.

Hyundai trying to sell a new
brand of luxury cars is new
enough, but the approach
of taking the cars to buyers
- rather than having dealerships - shows the type
of innovation required in the
auto industry.

NEWS EDITOR,
AUTOMOTIVE
NEWS CANADA

JOE KNYCHA

COMMENT
Buyers and browsers visiting
Hyundai dealerships will not see
Genesis cars for sale on their
lots or in their showrooms.
Instead, an online concierge
service will arrange the delivery
of cars to customers' doors for
road tests and sales. Similarly
for service, cars will be picked
up at a location of the customer's choosing and when service
is completed, delivered back to
the customer. They'll never have
to shop for or service their
exclusive luxury vehicle amid
promotions that scream "cheap
wheels."
Starting with just two models, a midsize sedan and a
large one, the Genesis brand
will add compact and midsize
crossover utility vehicles (tall
wagons) and a compact sedan
to the mix before it establishes
a network of 33 brick-and-motor dealerships devoted to the
brand in about five years.

Will it work? No one will
know until someone tries it.
It's the kind of unfamiliar
territory on which those who
excel in the world of automotive
have grown accustomed to
adapting.
Far from fearing change they
revel in it.
Is it change for the sake of
change?
Whether it's Unifor President
Jerry Dias insisting the Detroit
Three automaker s invest more
heavily and strategically in
Canadian plants ahead of
increasing hourly wages for
workers who rely on those
plants to feed their families, or
a Manitoba dealership group
developing a system to sell
vehicles 100 per cent online, or
any of the thousands of innovations that have made cars
cleaner, more efficient, safer,
longer-lasting and accessible
than ever, vehicles themselves
and the industry that supports
them seek to improve and innovate every time the territory
becomes unfamiliar or the path
ahead uncertain.
Faced with the maxim that
says, "Innovate or die," most of
those working in automotive will
choose to innovate first.
The industry's track record
bears that out. - ANC

The true cost of purchasing
a "cheaper" mould from China
AS MOULD MAKERS SERVING
the automotive market, Unique
Tool & Gauge's goals are
aligned with OEM/Tier 1 customers, namely to produce
quality parts with the best
piece-part cost sustained over
the life of the program.
However, the decision whether
to source a mould from North
America or from China often
rests on initial acquisition costs
alone.
Direct labour costs are low
in China, and are a small fraction of the wages we pay experienced, more productive North
American mould makers. The
Chinese government continues
to devalue its currency at an
artificially low level relative to
the U.S. dollar in order to successfully compete for manufacturing versus North American
mould makers. This drives
Chinese competitiveness.
The effect? David Palmer,
Chairman of the Canadian
Association of Mould Makers,
was quoted last year in
Canadian Plastics magazine,
"An estimated 150,000 tooling
jobs have been lost in North
America since 2000 due to
offshoring."
Unique Tool & Gauge Inc.
began working in China more
than a decade ago, and we
developed relationships with a
number of higher quality mould

PRESIDENT & CEO,
UNIQUE TOOL
& GAUGE INC.,
IN WINDSOR, ONT.

DARCY KING

GUEST OPINION
builders, as the company
needs to source moulds in
China when customers require
it of us.
In 2016, the number of
quotation requests we see
requesting "China or low-cost
country" is growing. Sourcing a
mould in China, however,
involves compromises that are
an everyday fact of life.
For both initial design and
mould construction, we usually find that re-work is needed.
We trace this additional time
needed due to manpower
issues and practices. The simple fact is that the value of an
individual employee isn't recognized in China like it is
here. Turnover is rampant and
our Chinese partners spend
significant time training and
retraining their workforce. The
North American mould makers
we compete with, like us, feature highly skilled work forces,
with experience levels of three
to five times that of our

Chinese partners.
Our supply chain is complex. We control all material
inventories, obtain certifications, audit them and conduct
metallurgy tests. Why? Material
substitution is a significant and
growing problem.
Additionally, China moulders
don't guarantee their work.
Why would they? They know
the cost and timing needed to
send a mould back to their
shop isn't worth it. We, like
other North American mould
builders who work in China,
guarantee our work.
Finally, Automotive Tier 1
companies and Tier II moulders
continue to classify mould
makers as suppliers of commodities. Their sourcing
approach splits initial mould
cost and the cost to service it
during production into two distinct and separate categories,
and not analyzed in concert.
They count only savings on
mould acquisition instead of
focusing on finished piece part
cost over the life of the program.
North American mould makers have a vested interest in
the success of their product
throughout the entire product
life cycle, and that's the real
difference between the cost of
a mold built here and one
made in China. - ANC

Table of Contents for the Digital Edition of Automotive News Canada - September 2016