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Global Warming
By Gale
Global warming or more acurately Climate Change is the theory that average temperatures around the world have begun to rise, and will continue Read more...
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Carmakers Must Cut Co2 Emissions
By Ghosn
Carmakers must take the lead in reducing carbon dioxide emissions to fight global warming, but one industry alone cannot solve the problem, said the chief of Renault and Nissan Sunday.
Carlos Ghosn, the CEO of Renault SA and Nissan Motor Co., said that there was debate in Europe and the United States on possible legislation to enforce cuts in carbon dioxide emissions. While the auto industry must take the lead, the exec called for an ‘integrated approach’ to fight global warming concerns.
"You are not going to fight emission by singling out on one industry because carbon dioxide is emitted by many industries. If you want to fight global warming, we need to have an integrated approach," he said at the start of the two-day World Economic Forum on East Asia, an assembly of government and business leaders to discuss the region's growth.
Ghosn said that the car industry needs to make a “significant and reasonable" contribution to reducing carbon dioxide, one of several greenhouse gases that are causing a rise in global temperatures. "The car industry has to step up and make its contribution first so there is no suspicion that you are going for an integrated approach because you don't want it to happen," he said. "This is not jockeying for position between one industry
and another. This is taking care of the planet."
As the auto industry focuses on the development of hydrogen-powered cars which emit no more than water vapor and do not spew carbon dioxide, Ghosn said that carmakers must also ensure that the production of hydrogen does not contribute to pollution. Though the cuts will not affect the Nissan spoiler and other auto accessories, the enhancement of the crucial parts will cost automakers a fortune. Vehicle emission cuts are part government’s efforts to slash greenhouse gasses.
The United Nation’s treaty caps the amount of carbon dioxide that can be emitted from factories, and power plants in industrialized countries. The treaty will expire 2012. At present, developing countries like China and India are exempt from the obligations. This is why both the U.S. States and Australia have declined to join the treaty.
In June, President George W. Bush proposed that the 15 biggest emitters of greenhouse gases hold meetings and set an emissions goal. However, each country would be able to decide independently on how to implement it.
Separately, the Japanese automaker said that it will purchase more components from China and India. This was announced after profit declined for the first time since 2000. Ghosn said the automaker will raise global component purchases from low-cost countries to as much as 24 percent of the total, from as much as 14 percent now.
“Frankly, we have no choice,'' Ghosn added. “If you don't transfer part of your supply to extremely competitive countries, then there is no way you are going to be competitive in the market.'' Purchasing auto parts made in countries where wages are five percent of those of Japan would help boost profit margins.
“Cheaper parts are key to carmakers cutting their overall costs,'' said Yoshihiro Okumura, the general manager at Chiba-gin Asset Management Co., which oversees the equivalent of $365 million in assets. “They especially need to buy parts for cars they sell in emerging markets in the local markets - to do otherwise makes no financial sense.''
According to data compiled by Bloomberg, the company’s operating margin of 7.42 percent is lower than Honda's at 7.68 and Toyota's at 9.35. “When you reduce your purchasing cost, sourcing is one of the tools,'' Ghosn said. “The more sourcing toward low-cost countries, the more it's going to help you.''
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