Engine Economic Issues

From GICL Wiki
Revision as of 14:41, 24 April 2012 by Lap5379 (Talk | contribs)

(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to: navigation, search

Contents

Team Anonymous

Economic Impacts

  • Positive
    • Despite the terrible economy some small engine businesses, such as McHenry Small Engine, have managed to stay afloat by incorporating non-traditional business practices into daily operation. "We repower a lot of equipment," Staley said. "Instead of buying a new piece of equipment, we can rebuild the small engines, save them money."

[1]

  • Negative
    • Diesel (as well as gasoline-electric hybrid) automobiles are typically sold at a higher price point than their petrol-only counterparts with the difference typically being several thousand dollars. While it is often believed that paying a higher price ultimately leads to more savings, "it’s clear that, for most of these vehicles, drivers would need a decade or more of 15,000-mile annual driving before seeing any savings," which is an unlikely amount of annual mileage. It may be a better decision to buy a lower priced gasoline car.

[2]

Scope of Internal Combustion Engine

The level to which the internal combustion engine has a large impact on the economic climate of the world and domestic. Just last year there was a total amount of passengers in the United States:

  • 618,115,245 passengers traveled by air Demestic[3]
  • 149,247,881 passengers traveled by air Globally[4]
  • 16,207.0 Millions gallons of aviation fuel used[5]

Besides people internal combustion moves our goods from one place to another in 2007 alone:

  • Truck and rail moved 213,411,000 tons of goods
  • Truck and water moved 74,421,000 tons of goods
  • Rail and water moved 44,979,000 tons of goods[6]

Internal combustion engines move us and our goods around the world or around the block. Without internal combustion engines we would not have a global economy.

Created by Team Table 3

Positive Economic Impact

Link to Article

This article is from the Center for Automotive Research (CAR) in Anne Arbor, Michigan and discusses the positive impact the auto industry has on jobs and the Gross Domestic Product for Americans. It also discusses what the negative impacts would be on the economy if one or all of the major three Detroit automakers (General Motors, Ford and Chrysler) shut down.

As of September 2008, 732,800 jobs were provided by the motor vehicle and parts industries and the Detroit Three employed 239,341 of these jobs by the end of 2007. The automotive industry is a significant multiplier on the American economy, such that when it is not doing well, the whole economy suffers. In conclusion, automobiles powered by internal combustion engines have had a significant positive impact on our modern day economy. They increase the amount of jobs for Americans, and supporting industries, they raise American's personal income and as a result increase the income taxes paid to the government to sustain our society.

-Team Crankshaft


The automotive industry in the American economy is the backbone for the American Dream. Second to houses, automobiles are the most important asset a citizen can have, allowing them to get to and from work and other places as necessary. With the development of the internal combustion engine in the 19th century a direct relationship between the internal combustion engine and the automobile industry formed. Resulting from this was the design, manufacturing, and production of the automobiles to launch them into the economic position they hold today. A study conducted by the Center for Automotive Research in 2003 suggests that the American automotive industry was the largest in the world at that time, grossing over three times as many sales in cars than the runner-up. During 2002 the automotive industry accounted for 3.3% of the National GDP of the United States. While 3.3 seems like a very small number it represents a very large part of the economy considering what the United States has come to produce in the last decade. Of course some time has passed between 2003 and the present 2010 but the automotive industry still continues to rise. For example on April 26th, 2010 the Ford Motor Company posted their first quarter profit of $2.1 Billion on strong sales. Each one of the vehicles they sold each had a newly built internal combustion engine, and without those the company would not even exist. The internal combustion engine is a lifeline for both the automobile and the American economy.

The articles linked below are the Center for Automotive Research's Study as well as the Ford Motor Co's 1stQ proits:

Center for Automotive Research

Ford Profits

-By Chris Carrero, Team Team

Positive economic impact of internal combustion engines

The largest economic advantage of the internal combustion engine is quite simple really; they provoked the widespread purchase of automobiles everywhere. As the article "Why Internal combustion?"[7] details, internal combustion engines solved most of the predominant problems comsumers had with automobiles in the early 1900's, which, combined with Ford's ingenuity, caused them to become widespread throughout the U.S. and the world. And of course, the argument as to why automobiles are an economic benefit is even easier to explain; they are directly responsible for one of the largest expanses of the economy to ever exist[8].


Team Table4 / "Care Bear Stare"

Negative Economic Article

Article Link

This is a very good article explaining the pollutants that engines put into the atmosphere each year. Spark ignited engines are major CO, NOx, and VOC contributors. The article talks about studies performed in California in 1996 and shows how many tons of each pollutants are output by IC engines each year. In recent days we see the control being placed on emissions of automobiles today to try to minimize the amount of pollutants being introduced into the atmosphere. We are also seeing the introduction of hybrid and electric vehicles to help with the pollutant issues.

-Table 4


From an economical standpoint, the internal combustion engine has a positive impact on the U.S. in every way, except when it comes to our dependence on foreign countries for fossil fuels. The rise of internal combustion engines required a suitable fuel, where Petroleum became the leading solution. Since the United States doesn't occupy land where Petroleum is plentiful we rely on foreign government, some of which are hostile to the U.S. 65 percent of the worlds known petroleum is located in the Persian Gulf region of the Middle East [9]. Events in these regions have a huge impact on oil prices and consequently our economy. This leaves the U.S. at the mercy of another countries issues and in at risk to national security. Unfortunately this dependence will only cease when our country finds an alternative source of power, possibly rendering internal combustion engines obsolete.

-TEAM

http://www.infrastructurist.com/2009/08/03/as-long-as-the-economy-depends-on-cheap-oil-dont-hold-your-breath-for-a-recovery/

Economic Pros

related article: http://www.marketwatch.com/story/snap-on-profit-gets-boost-from-emerging-markets-2011-04-21

• Snap-on Inc.'s /quotes/comstock/13*!sna/quotes/nls/sna SNA -0.52% first-quarter earnings soared 53% as the tool maker Thursday reported strong sales in emerging markets and its finance arm swung to a profit. •The company controls a big chunk of the professional tool market, where it competes with Stanley Black & Decker Inc.'s (SWK) Mac Tools unit and Danaher Corp.'s (DHR) Matco. • It gets more than half its sales from the U.S. and from the auto sector, but has sought growth in emerging markets and higher-margin segments such as power generation and aerospace. • The company reported a profit of $56.2 million, or 96 cents a share, up from $36.8 million, or 63 cents a share, a year earlier. Net sales increased 12% to $693.7 million. • Analysts polled by Thomson Reuters recently forecast earnings of 92 cents a share on revenue of $685.1 million.

With constant use of an internal combustion engine it will eventually require maintenance. This provides an economic pro for the tool making industry. Snap-On is just one of the many companies whose tools are used in the repair of the internal combustion engine and benefits economically from it.

By David Pepple Team FLINGER DINGER

Internal Combustion Engine created current economies’ dependence of crude oil.

The dependence of crude oil has become a long fought quest that started more than a century ago. Crude oil, before becoming fuel for cars and internal combustion engines, was first looked upon as a better source of illumination. It was less flammable and cheaper than other substances such that after its discovery, its demand gained slow momentum. However, it was after the creation of the first automobile by Ford Motor Company that crude oil’s demand went rocketing high. Therefore, internal combustion engine played a major role in creating the current dependence on crude oil. Current economies are centered towards crude oil’s availability more than any other natural resource, and countries go to war just to fight over it. In this article, it is explained how the current United State economy would not recover if it is structurally dependent on cheap oil. Looking at the larger picture, the current dependence on crude oil would not have been there if internal combustion engine had depended on some other type of fuel.


-Table 4 Care Bear Stare *_*

The Rising Price of Gasoline

A report by the Government Accountability Office, entitled "Motor Fuels: Understanding the Factors That Influence the Retail Price of Gasoline", explores the causes of the increasing price of gas. From the report:

    "A number of key factors cause the retail price of gasoline to vary over time. First, and most importantly, gasoline price changes are caused by changes in the price of 
crude oil. The trend in gasoline prices has generally tracked the trend in crude oil prices, although the two do not necessarily rise and fall in lockstep. Second, gasoline
prices vary because of changes in how much gasoline we demand relative to the supply. Third, federal and state requirements calling for special gasoline blends to improve 
air quality can make it more costly to produce gasoline, thus increasing its price. Fourth, seasonal factors affect demand and supply, and hence, the price of gasoline. 
Fifth, changes in taxes levied on gasoline have affected gasoline prices over the past decade, but because federal and state gasoline taxes remained relatively constant in
recent years, they have not significantly contributed to recent volatility in gasoline prices. Sixth, changes within the petroleum industry, such as mergers, can also cause the 
price of gasoline to change over time."

GAO Report

- Team Table 3

Negative Economic

The article can be found at http://money.cnn.com/2009/05/14/news/economy/jobless_claims/index.htm

Last year our country faced a crisis in the domestic automotive industry. At this time last year, Chrysler was filing for bankruptcy and GM was in the midst of a government sponsored restructuring plan. What was once a booming industry started in our country by Ford, was now a mess of debt and joblessness, much of this do to fierce competition from overseas competitors. What all of this led to was the highest unemployment rate this country has ever seen. Over 637,000 people filed for unemployment in a single week and the total number of open claims reached 6.5 million. This rate of unemployment can be blamed on a number of things that were wrong with our economy, but in a country where the majority or our lives revolves around transportation, mainly from IC engines, it is no wonder that when that industry went south, so did the entire economy.

by Corey Stanko, Team Crankshaft

Negative Economic Impact of the Internal Combustion Engine

FossilFuelsEnergy.jpg (http://www.roperld.com/science/graphics/FossilFuelsEnergy.jpg)

The article is available at http://jayhanson.us/page84.htm

Domestic fossil fuel reserves are being rapidly depleted, and it would be a major drain on the economy to import 100% of US oil. Within a decade or two US residents will be forced to turn to renewable energy for some of their energy needs. Proven US oil reserves are projected to be exhausted in 10 to 15 years depending on consumption patterns (DOE 1991a, Matare 1989, Pimentel et al. 1994, Worldwatch Institute 1992), and natural gas reserves are expected to last slightly longer. In contrast, coal reserves have been projected to last approximately 100 years, based on current use and available extraction processes (Matare 1989).

Without fossil fuel reserves in the US it would cost more money to import it from external areas. It would cost more to run and maintain the current internal combustion engine systems that we currently use. This would be economically negative because the US would have to use more money in researching alternative fuel sources and the current gasoline combustion engine would eventually become obsolete.

By Anthony Tompkins Team FLINGER DINGER

Current Economic Role and Future of the IC Engine

Currently, most automotive manufactures have been producing hybrid electric vehicles. These types of automobiles have become very popular and believed to be the future of the automotive industry. Unfortunately, this may be far from the truth. According to an analysis conducted by Davis Fleming and Thomas Privott, because of the much higher cost to manufacture and resulting increased retail price, hybrid electric vehicles only provide financial benefit to the consumer when fuel prices are much higher than the current value, or after many years of use. And even at this point, the benefit is not outstanding. A hybrid vehicle cost nearly $1500 per year as compared to the average of $900 for an internal combustion vehicle.

Because of the effort to produce a more efficient and environmentally friendly engine, many companies have developed completely new designs for IC engines. These engines provide better fuel economy and many can be produced at a lower cost than the current comparable model. By lowering cost and offering incentive to purchase these types of engines, Engine manufacturers will provide a boost in the economy as well as a more environmentally friendly engine. According to Car and Driver Magazine, many of the engine manufacturers are developing direct injection, turbocharged engines using variable valve timing to produce high horse power engines in a smaller form while improving fuel efficiency. Some manufacturers have already implemented these designs and are quickly growing financially.

By Team Spark Plug

---

Team Eight Economic Issues

Positives

The use of internal combustion engines in automobiles has been shaping the way working America operates since the early 1900’s. Although the automobile was initially marketed to only aristocratic consumers, Henry Ford began a revolution upon his initiation into the transportation market. Ford was the first automobile producer to design towards the common consumer. His main concern was to create a car that would be affordable for all. This new availability of convenient transportation would continue to benefit the American working class for years to come.

It has been said that “Henry Ford freed common people from the limitations of their geography.” This directly translates to an economic benefit for consumer and business alike. The automobile allowed for the common man to expand his horizons, being able to travel greater distances in order to get to work, purchase local goods, etc. Prior to the development of an affordable vehicle, many citizens were restricted to live within reasonable distance of their place of employment. With this newfound freedom, however, cities began to sprout suburbs just minutes up a nearby highway in which workers could live comfortably and still be able to get to work on time. The construction of these fast-paced highways alone created jobs, not to mention the land and property development in and around the city and highway. All of these economic innovations were a direct result from the increased use of automobiles employing internal combustion engines.

source: http://l3d.cs.colorado.edu/systems/agentsheets/New-Vista/automobile/

Negatives

The major economic concern that arises when considering Internal combustion engines is the high demand for fuel and the limited supply. This imbalance has caused gasoline prices to steadily rise over the past ten years with most recent prices reaching over four dollars per gallon in areas of the United States. These high prices are forcing many Americans to cut back spending in other areas. In the 1990s fuel prices were very moderate and the American economy was in a period of strong expansion. This lead many Americans to buy larger SUVs with lower gas mileage capabilities. When gasoline prices were lower and the economy was rapidly expanding, the cost of fuel to power ones vehicle was not a concern. However, in our current economy, many people are stuck with these same vehicles that were bought in the 90s. With gasoline at three to four dollars a gallon, it can cost over $100 for just one tank of gas in many of these SUVs. This excessive expenditure had added an extreme burden to many American budgets. Such a burden has caused a dramatic reduction in excess spending which draws the economy down.

   The true concern is that even with higher fuel prices, studies have show that nearly 72 percent of driver have not made any adjustment to their level of fuel consumption. This means that Americans on average are spending three to four times the amount on fuel as they were on ten years ago. With this staggering increase, there has been a dramatic cutback in money distribution to other areas of the economy. This cutback only fuels the problem and causes the economy to get worse. This problem is also extended into cutbacks in the economic ‘multiplier effect’. When some buys a movie ticket and then that money is used to pay the theater staff and they go to the grocery store and buy produce which provides money to local farmers who then spend more money on farm equipment and facilities ect. The cycle continues and money in circulated and multiplied within the unites states. However, with most oil being extracted and purchased form other parts of the world, the money being spent on gasoline is transferred out of the country. Unlike the multiplying cycle where money is circulated and compounded within the United States, a single transaction of a fuel purchase immediately eliminates that money form the cycle. With less money to spend, some may cut back and not go to the movies, which has a chain effect in the opposite direction. This lack of spending now hurts the employees of the theater, the grocery stores, the farmers and the farm equipment dealers and so on. The multiplier effect is dramatically reduced and thus is the strength of the economy.

Source: GASOLINE PRICES, CONSUMERS, AND THE ECONOMY,Lars Perner, Ph.D. Assistant Professor of Clinical Marketing University of Southern California, Los Angeles, CA 90089-0443, USA [[10]]






References