Larry Burns ought to make many people in the supply base feel unsettled. That's because Burns and his global team are working on a transformation of the auto industry, one that will have profound implications on what many companies make—or don't make. Don't make because they refuse to face the changing reality, and so they cease to exist. Of course, Burns and his crew ought to be making plenty of other companies feel a keen sense of anticipation.
Burns is the vp of R&D for General Motors. And the team in question is working on developing fuel cells for vehicles that are potentially—and I think probably—going to replace internal combustion engines. And while some people imagine that this is a Jetsons' dream, let me point out: (1) there are many people out there who don't who the Jetsons are; they have been born and raised in a culture of pervasive advanced technology, so using hydrogen as a fuel isn't anything that they'd think necessarily out of the ordinary; (2) these folks at GM are already developing, engineering, prototype building, testing, and preparing for productionizing fuel cells. On May 1, I was part of a small group who had the opportunity to drive a modified Chevy Electric S-10 pickup that was equipped with a fuel processor and fuel cell stack. What happens is that low-sulfur gas goes into the truck's gas tank; it goes through a series of catalysts that, with the addition of air and water, "crack" the hydrogen out of the hydrocarbon. This hydrogen is then sent to the fuel cell stack, which then transforms the hydrogen into electricity (25 kW). The electricity is then used to power the electric motors that move the truck. As Kenneth D. Cameron, program executive, R&D and Planning, GM, noted, "This isn't the most elegant way to do this," referring to transforming gasoline into hydrogen on a vehicle rather than pumping H2 into a tank in a way analogous to what you do at your local service station (they could have the reformer at the gas station). But (1) while this was nearly unthinkable not all that long ago, GM is sticking to its word and proving it—and it should be stressed that this little drive was the first time in history that any people who weren't on the GM program have driven a vehicle like that and (2) what some would dismiss as "rocket science" probably is rocket science (Cameron, incidentally, flew on the space shuttle three times.)
Burns said it straight. They are working to create "affordable, profitable, high-volume fuel cell vehicles." He's talking about mass production in 2010. Lest that start a train of thought about the bad sequel to 2001, realize that that's just 7.5 years from now. Burns et. al. are working on gasoline reformation, transforming natural gas into hydrogen, and transforming water (through electricity) into hydrogen. "We want to remove the automobile from the environmental debate," Burns says. The exhaust is H2O, not something troubling to environmentalists. But said another way: There is a monosource of energy for powering cars and trucks right now: Oil. Not only are there environmental implications of burning that in internal combustion or Diesel engines, but look only to the Middle East to realize the economic implications and potentially destabilizing ramifications. Fuel cell vehicles can change that debate, as well.
Clean. Efficient. Reliable. Economic. All good, right? Well, if you make engine blocks, heads, pistons, crankshafts, camshafts, etc., it might not be such a good thing vis-à-vis your present business model. Right now, 50% of the suppliers to GM's fuel cell program are non-automotive. Does this mean that traditional suppliers are doomed by the fuel cell? Not necessarily. While there is a lot of focus at companies on the products they build (e.g., pistons), what will become increasingly important is to focus on process (e.g., precision casting and machining). It's not necessarily what you make, but what you do that will be the differentiator in the future. And the future is, well, upon us. Just ask Larry Burns.