Is Delphi Lamarck's Giraffe?
General Motors is the prime example of an industrial era company (the size and scale of which were only possible through cheap oil and limited competition) living in a period of punctuated economic equilibrium. It's a dinosaur with legacy costs (when the corporation was the chief unit of social organization and employment) that may not last another ten years.
But Delphi, it's chief parts supplier just might.
On the surface, the news looks bleak. Last Friday 470 of 560 workers at Delphi's plant in Coopersville, Michigan signed up for the company's $35,000 buy-out offer. That's $16.4 million in checks, if you're keeping score at home.
But you do what you can to stay in business. Delphi is trying to shed employees and costs. So far, over 9,000 workers have accepted early retirement. What they're retiring too, I have no idea, although I wish them good luck.
For the corporate entity, the question is whether or not it can still exist. Think of Delphi as an over-populated city with crumbling infrastructure and high unemployment. It's just managed to send a few tent-cities worth of its citizens off to someone else's refugee camp. Now what?
Well, Delphi aims to close 25 of its 33 plants in the U.S. But one plant it's going to keep open is a plant in Rochester, New York. Last week, because of the work done at THAT plant, Delphi, "won the first of three rounds of approval from the Department of Energy for a fuel cell that could be available for commercial vehicles or other uses by 2011."
Yes. Yes. I know. You have heard all about fuel cells in cars. But this is nothing like the crap you've heard before about strapping a couple of cannisters of pressurized hydrogen into the back of shiny, futuristic looking, elliptical car that belches water for exhaust. That image, like the "hydrogen economy" itself, is a worse than a pipe dream, it's energy inefficient!
Working the DOE and it's Solid State Energy Conversion Alliance (SECA) program, Delphi and a core group of technology companies are using solid oxide fuel cells to generate mobile, safe, and clean electric power from fuel cells. Only these fuel cells do not run on liquid hydrogen.
Fuel cells need a hydrogen feedstock, and you can get THAT from things like oil, natural gas, or coal. A solid oxide fuel cell uses a hydrocarbon like coal in its solid state to generate electricity. It's clean, quiet, and a lot safer.
But is it commercial? That's the question. It will be interesting to watch. And it's worth pointing out that corporate evolution is both Darwinian and Lamarckian. Nature(or the competitive market) selects against weak organizations. But weak organizations can adapt on the fly and choose new characteristics for the new world in which they must operate.
They can emerge on the far side of a competitive crisis with a whole new corporate DNA and a whole new survival strategy for the world.
What that world will look like is anyone's guess. But an investment in Delphi or other technology companies in the solid oxide fuel cell business is a simple proposition. You reason that the interstate highway network is not going to be replaced with an intercontinental network of trams and trolley cars, but will instead be populated with cars that run on a different fuel in a different engine.
After all, the problem we're facing is a shortage of a certain kind of fuel. An engine that runs on a more abundant fuel, and does so more efficiently and cleanly, prolongs the life of ALL hydrocarbons. It promotes the use of things like coal, which helps bring down the demand for oil.
Of course I could be wrong. But the whole development of distributed power makes sense in much bigger contest. Big networks are breaking down. Scale is difficult to maintain. In energy, that means centralized power generation and distribution via an expensive and inefficient infrastructure will be replaced by localized generation that's both cleaner and more efficient, not to mention more reliable.
I'm not sure if I'm in good company, but the U.S. Army seems to agree. And if ever there was an organization lumbering toward extinction and in need of a genetic overhaul, it's the U.S. Army.
But Delphi, it's chief parts supplier just might.
On the surface, the news looks bleak. Last Friday 470 of 560 workers at Delphi's plant in Coopersville, Michigan signed up for the company's $35,000 buy-out offer. That's $16.4 million in checks, if you're keeping score at home.
But you do what you can to stay in business. Delphi is trying to shed employees and costs. So far, over 9,000 workers have accepted early retirement. What they're retiring too, I have no idea, although I wish them good luck.
For the corporate entity, the question is whether or not it can still exist. Think of Delphi as an over-populated city with crumbling infrastructure and high unemployment. It's just managed to send a few tent-cities worth of its citizens off to someone else's refugee camp. Now what?
Well, Delphi aims to close 25 of its 33 plants in the U.S. But one plant it's going to keep open is a plant in Rochester, New York. Last week, because of the work done at THAT plant, Delphi, "won the first of three rounds of approval from the Department of Energy for a fuel cell that could be available for commercial vehicles or other uses by 2011."
Yes. Yes. I know. You have heard all about fuel cells in cars. But this is nothing like the crap you've heard before about strapping a couple of cannisters of pressurized hydrogen into the back of shiny, futuristic looking, elliptical car that belches water for exhaust. That image, like the "hydrogen economy" itself, is a worse than a pipe dream, it's energy inefficient!
Working the DOE and it's Solid State Energy Conversion Alliance (SECA) program, Delphi and a core group of technology companies are using solid oxide fuel cells to generate mobile, safe, and clean electric power from fuel cells. Only these fuel cells do not run on liquid hydrogen.
Fuel cells need a hydrogen feedstock, and you can get THAT from things like oil, natural gas, or coal. A solid oxide fuel cell uses a hydrocarbon like coal in its solid state to generate electricity. It's clean, quiet, and a lot safer.
But is it commercial? That's the question. It will be interesting to watch. And it's worth pointing out that corporate evolution is both Darwinian and Lamarckian. Nature(or the competitive market) selects against weak organizations. But weak organizations can adapt on the fly and choose new characteristics for the new world in which they must operate.
They can emerge on the far side of a competitive crisis with a whole new corporate DNA and a whole new survival strategy for the world.
What that world will look like is anyone's guess. But an investment in Delphi or other technology companies in the solid oxide fuel cell business is a simple proposition. You reason that the interstate highway network is not going to be replaced with an intercontinental network of trams and trolley cars, but will instead be populated with cars that run on a different fuel in a different engine.
After all, the problem we're facing is a shortage of a certain kind of fuel. An engine that runs on a more abundant fuel, and does so more efficiently and cleanly, prolongs the life of ALL hydrocarbons. It promotes the use of things like coal, which helps bring down the demand for oil.
Of course I could be wrong. But the whole development of distributed power makes sense in much bigger contest. Big networks are breaking down. Scale is difficult to maintain. In energy, that means centralized power generation and distribution via an expensive and inefficient infrastructure will be replaced by localized generation that's both cleaner and more efficient, not to mention more reliable.
I'm not sure if I'm in good company, but the U.S. Army seems to agree. And if ever there was an organization lumbering toward extinction and in need of a genetic overhaul, it's the U.S. Army.
posted by Daniel at
7:12 PM
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