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Ben B.
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Carlyle is gigantic - they manage quite a bit of pension and endowment money. I am not knowledgeable enough on the Michael Moore stuff to qualify the conspiracy, other than to admit that it is fair to say that most wealth in this country accrues to the wealthy and K Street perpetuates this cycle. It's also fair to say that if the money had been spent on rails/subways, etc, it would have accrued to the very wealthy folks at BNSF (Buffet), GE and Siemens. And they certainly have their evil minions in DC as well Stepping back, I think this traunch of ARRA money has done a reasonable job in stimulating domestic investment which will ultimately create jobs (regardless of to whom the return on investment will accrue). Moreover, if these grants can close the gap between the capital cost of a hybrid bus and a conventional bus, it will be an enormously successful program which will diminish future oil imports, keeping money in our economy. Sadly, in this Wall Street driven world (alas, which I'm a part of) that focuses on quarterly earnings rather than long term value creation, private enterprises have failed in making these kinds of long term investments in product advancements. Perhaps the government (imperfect as it is) needs to step in and fill that void. Certainly, if we look at the Asian growth model, the government plays a large role. If you're looking for an example in the hybrid bus realm, check out the $13.5MM order that Maxwell Technologies recently received from multiple Chinese bus manufacturers (heavily subsidized by Beijing). Those orders were not driven by current economics (as Maxwell management gladly concedes), but rather for the manufacturers to generate long term cost reductions through scale. To me, that is the opportunity that the DOT grants present (and I think you would find concurring opinions from the workers at Maxwell, ISE, Enova, Azure, and heck, even GM, regardless of who their financial backers are). Of course the grants aren't perfect. But perhaps they're better than the status quo.
I'll take that bet. GM sold Allison Transmission - the bus transmission division that will benefit from this stimulus - in 2007. Carlyle was the buyer. There *are* some interesting smaller companies that should benefit here too. Enova, ISE Corp, Azure Dynamics... ...they all have their hands in the hybrid bus game to some extent. And then there is the supply chain: domestic battery companies such as Johnson Controls, Saft and Ener1 should benefit (the DOE had to find a buyer for the output of the battery factories that they funded, right?).
I'm assuming they're going to use the Evonik cells for the battery pack (assuming they're ready, of course)? Has anybody heard otherwise?
In the calc I show above, there was a mistake (in how I showed it, not how I performed it). The actual calculation is: 690k cars * 12k miles/year/car = ------------------ 8.28B miles/year 8.28B miles/year ÷ 9.1 miles/gallon = ------------------ 910MM gallons gasoline/year How did you get to 191MM gallons? And the conversion factor between crude and gasoline is 19.5 gallons/barrel (you get other products like kerosene in the refining process).
Assuming the average vehicle drives 12k miles/year, at current crude prices, CfC keeps about $3.25B in the economy per year. (690k cars * 12k miles/year * 9.1mpg * 19.5 gallons gas/barrel crude * $70 barrel). Obviously, many of these clunkers would have been traded in anyway. But, as far as government programs go, it could have been a lot worse.