My letter to President Barack Obama

President Barack Obama
The White House
1600 Pennsylvania Avenue
Washington, D.C. 20500

Dear Mr. President,

I have a proposal to save the government, and therefore the US taxpayer (me), billions of dollars per year in both real, physical infrastructure spending as well as billions more related to the economic burden of congestion. Here’s how:

In the recent “Autopocalypse” unfolding, the US taxpayer has pumped over $15 billion into General Motors. While I am no bankruptcy expert, if GM seeks protection, as seems likely, I believe the taxpayer will see minimal, if any, return on that investment. GM is sitting on a HUGE asset to the public good, namely Onstar. GM has shipped over 16 million vehicles equipped with Onstar and is likely to ship 3 million more this year alone.

Onstar can collect data relating to average speed, weather conditions, incident reports and many other useful bits of data that today the federal and state governments spend billions to duplicate and disseminate to the public (road sensors, traffic monitors, cameras etc.). Due to cost, this information is only captured for the major metropolitan areas and is often an aggregation of sensors, 911 incident data, etc. By the time the DOT, and public sector aggregators transmit that data, it is often out of date. With over 16 million Onstar “probes” on the road today much of this information could be gathered in real-time without added infrastructure costs.

My proposal is to negotiate a non-exclusive right for the government to gain access to information from Onstar, in an obfuscated way, relating to speed, weather (wind shield wipers on / off, etc.), crash, etc. That information could replace physical infrastructure spend on street sensors, cameras, etc. Additionally, it could provide more current real-time traffic, weather, etc. data that both the public and the private sectors could aggregate (like they do now from the DOT) and disseminate to consumers in a way that would reduce commute times and accidents.

The NHTSA estimated “The 2000 economic costs of U.S. highway crashes, excluding the cost imposed on society by travel delays and wage-risk premiums, was $205 billion (Blincoe et al., 2002)”. Having data from Onstar could help reduce accidents, and therefore costs, related to traffic, but perhaps more importantly direct costs related to congestion. Some studies suggest congestion costs as much as $222 billion dollars / year (see: http://www.vtpi.org/tca/).

I think licensing this specific content would not decrease viability of GM, Onstar or any company trying to purchase Onstar assets as Onstar does not currently leverage this data.

So in summary, before allowing GM to sell off Onstar assets or loose this critical opportunity to leverage the money the taxpayer has already spent with GM, please consider my proposal:

· License GM / Onstar sensor / “probe” data (current and future) in an obfuscated way (to protect privacy concerns) – You don’t have to have the IT in place to use it yet, just negotiate the license!
· Save physical infrastructure costs related to congestion information for the taxpayer
· Gain more real-time information related to road conditions, congestion, incidents, weather than ever before
· Leverage the investment made in GM and Onstar by the US taxpayer
· Act quickly before this valuable asset is removed from access.

Thank you for your consideration.

Warmest Regards,

Andrew Poliak

P.S. I think this is a political “freebee” as I can’t think of a constituent you would be disappointing.

The New (Software) Tier 1

With regard to the automotive supply chain, what do you think of Microsoft, BSquare, Elektrobit, Apple, Google, and QNX? Traditionally, you would call these companies Tier 2 suppliers, meaning they supply services, support and technologies to the traditional Tier 1 suppliers — the Delphi, Visteon, Denso, Continental, etc’s of the world. Unless you have been living under a body control system (I didn’t think rock was appropriate), it should be very obvious that the interior electronic automotive supply chain is changing dramatically.

Take, for instance the role of Microsoft, Elektrobit, and Ford in the Sync project. Microsoft and Elektrobit really were the Tier 1 suppliers to Ford. For the next iteration it appears that Bsquare is the new Elektrobit in the mix. The “traditional” Tier 1 was quickly relegated to a contract manufacturer with a very small margin. Rumor has it that the Tier 1 could get bypassed altogether in future versions of Sync. According to this press release from Bsquare (http://www.bsquare.com/about/story.asp?PressID=507) “It used to be that auto makers went to companies like Continental, Delphi and Panasonics and ordered a component with a list of capabilities. "And a black box came back that fit in the dash," Crowley said. "Ford said, 'I'm going to break that cycle. I'm going to do this all myself.'"

What impact does this have to the industry in general? This new software tier 1 model has the potential to be challenging for traditional Tier1s, but also to OEMs given the automotive / economic doom and gloom. Why, you ask? Well obviously this new scenario may well impact traditional Tier 1s since now they are competing with the Flextronics of the world.

But for OEMs, at a time when cash conservation is critical, they are now paying for software up front rather than amortizing the software costs (Engineering, Tools, etc.) over a Tier 1’s piece price. Also, they no longer have such a strong buffer and share of risk for liability, warranty, indemnity (especially in the case of Linux investment), etc..

So what should be done? First, some misconceptions must be addressed. Tier 1 suppliers are, at heart, integrators and buffers for warranty, liability, etc. They are skilled not only in automotive lingo, but in the tough requirements and long term supply of the automotive market. I believe the complexity and cost of integration, version control, maintenance, updates, licensing, etc. are often under valued by car companies. As a result of this, IMHO, the new model of the software Tier 1 will have some growing pains before it matures. That being said, traditional Tier 1s need to embrace a more software-oriented skill set. Also, in the current economy, the temptation is to try to get more money up front from the OEMs. If your business can afford it, resist that urge and use it as a differentiator against this trend.

For OEMs, perhaps holding off a bit on the new world of Linux, Software Tier 1s and upfront investment (by you and your suppliers) in software is in order — at least until the economic situation improves. Let the early adopters of this strategy prove out the model (and risk) before wading in. It will allow you to manage cash in this critical time and keep your suppliers healthy. You know often they don’t just provide infotainment — you depend on them for quite a bit more.

Green is the new black . . . or at least the new strategy to get into the black

Recently a car company mentioned to me that every ounce of current draw in an electric vehicle is essentially "gas" and between the US Governments new focus (and stimulus) on alternative energy sources / improved mileage and potential car buyers still feeling the recent pain of $4 / gallon gas, the entire automotive supply chain is positioning, (or repositioning), themselves around “green” technology campaigns.

Take for example the recent announcements from Bose and Harman Becker around energy efficient audio and infotainment systems:

Bose Energy Efficient Series Automotive Sound System - “30% smaller, 40% lighter, 50% less energy . . .”
http://www.bose.com/controller?event=VIEW_STATIC_PAGE_EVENT&url=/automotive/innovations/energy_efficient_series/index.jsp

Harman Kardon® GreenEdgeTM based audio and infotainment systems – “meeting the needs of energy-conscious customers without compromising performance”
http://www.harman.com/press/general_press.aspx?st=

Not just tier 1 suppliers are promoting Green, but also traditional and upstart car manufacturers and even their respective governments. It is interesting to note that the leader of one of the world’s largest economies, California’s Governator, was not only at CeBit pitching Californian companies, but will be the Keynote speaker at the SAE (Society of Automotive Engineers) World Congress this April. Outside of promoting his legislative track record, such as his Global Warming Solutions Act of 2006 or his Hydrogen Highway and Million Solar Roofs Plan, I think Governor Schwarzenegger’s real agenda has the state economy in mind. California has the largest concentration of electric vehicle startups in the US and includes such well known names as Tesla, Fisker, Zap, Aptera (see video of my coworker beating on an Aptera car), etc. The theme to this years’ SAE World Congress: "Racing to Green Mobility"

Kerry smashing an Aptera EV

With the automotive industry currently experiencing the Autopocalypse (TM – ME) I believe the automotive supply chain is leveraging “Green” to get near term R&D and stimulus dollars while at the same time investing in innovation in order be on the leading wave of the recovery. My guess is that The Governator is the front man in California’s automotive strategy, positioning California as only he can:

California - “We’ll be Baak”

CeBit 2009 - Infotainment Comparison

Wow! CeBit exhibition was down almost 30% from last year and nearly 50% from its peak. And, though I heard official numbers put attendance down only 20% from last year, it seemed to me more like 50%. With the number of backpacks that seemed to emerge on Thursday and Friday, I wonder if attendance was inflated with students.

All of that being said, automotive was well represented with booths and / or attendance by GM, Audi, VW, BMW, PSA and others. Tier 1s, Continental and Harman Becker, each had demonstration systems . . . with the HBAS system far more responsive and impressive (see video comparison)

I would have compared the GenIVI Linux based solution, but as you can see from the HBAS video, Intel is still pushing the QNX based demonstrations as the Linux system doesn't yet exist. ;)

When a license is the "single point of failure"

Last week, at CeBit, I had the opportunity to witness the launch of the GenIVI consortium. Graham Smethurst, of BMW, did an excellent job summarizing the challenges facing automotive OEMs and Tier 1s that led to the creation of GenIVI. The theory is that you can plug-in any conforming middleware (speech rec, navigation engine, etc.) into the GenIVI framework. The ultimate goal of GenIVI being to create standard interfaces to reusable modules. I walked away struggling with only one point: his contention that everything in GenIVI was created to remove any "single point of failure".

The reason I struggled with this point was because of the use of a single OS, Linux, for GenIVI. While there might be many distributions of Linux they all share one thing in common the GNU Public License (GPL). If Linux is the only OS for GenIVI, then it stands to reason that GPL then becomes THE single point of failure. (see my thoughts on GPL in automotive)

If it were me, I would have built GenIVI on an industry standard API like POSIX rather than a specific OS. In this way even the OS licensing could be varietal (GPL, LGPL, BSD, etc.)