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Obama, GM’s New Chairman

Scott McKain: June 16, 2009, 10:55 AM

If my very future depended upon selecting a single person to sink just one basketball shot, I'm picking Michael Jordan.  If my life hung in the balance, and one individual from our history had to present an oration that would determine my survival, I would beg Martin Luther King to speak on my behalf. 

So, why in the moment of its greatest trial would General Motors – described by now-CEO Fritz Henderson as desperately needing to succeed in two areas: "product and customers" – turn in its time of crisis to someone with 43 years experience at the phone company?  Don't get me wrong. Edward Whitacre, Jr. changed the landscape of that great American institution, AT&T, re-shaping it from a monopolistic giant into a diversified, competitive enterprise.  He took the smallest of the so-called "Baby Bells" – SBC – and created a global powerhouse.

The problem is that what Whitacre foresaw for his company then – colossal technological change and rapid consolidation – is not the immediate future of the automotive industry.  It was never the case that customers didn't want to buy a phone; instead it is that we wanted more of the communication services they had to offer in new and exciting ways.  On the other hand, few of us are thrilled by what we have to endure to purchase an automobile.  GM has become so disconnected from its customers, that we will do just about anything to avoid interaction with them. 

AT&T grew because of the technological advances in their industry – not because it was so customer-centric that it took existing market share from its competitors.  Which, of course, is the very aspect that GM needs to execute to survive. 

When it comes to AT&T Wireless, for example – does anyone doubt that whatever degree of success they've had lately was more dependent upon Steve Jobs than the system that Ed Whitacre established?  Apple's iPhone – and the entire customer experience created by Apple Stores – has driven almost all of the advancements of AT&T Wireless.  If the AT&T stores were regarded as customer focused, why did the vast majority of us go instead to Apple to buy our phones, and only reluctantly endure the AT&T experience?

It is a bit odd that in a time when the Administration is stressing fiscal discipline and reduction in executive compensation that the pick for GM's Chairman is a man who, according to "Corporate Library," left his previous position with a retirement package valued at $158.5 million. Yet, you don't assemble companies like the one AT&T became under Whitacre without knowing your way around all three branches of government. 

That's why the fundamental reason for Whitacre's selection should be painfully obvious – GM is more focused upon a Chairman who can work with governmental overseers than inspire dealers and create products that connect with customers.  For all of CEO Henderson's posturing of the past several days – and he's done a pretty good job at it – it speaks volumes that the selection of GM's Chairman is someone from another industry that, like the car business, was formerly bloated beyond description, took those who sold their products for granted, and often treats those who spend money with them as chattel.

If the Administration really believed what its handpicked CEO was saying – that products and customers make the difference – why not be really distinct in the selection of Chairman?  Why not ask Steve Jobs to lead GM instead of returning to Apple at the end of the month?  It would be interesting to challenge him in a similar manner to the provocation he issued to John Scully all those years ago.  Howard Schultz at Starbucks knows a thing or two about the customer experience.  Alan Lafley is retiring as CEO of Procter & Gamble and he excelled at retailing, manufacturing, customer relationships, and organizational change.  Why insist that Roger Penske purchase Saturn to make his point?  He already knows every aspect of the automotive business – and would be someone who would excite the imagination of every car lover on the planet.

In the final analysis, there is really a solitary reason that this particular type of choice is made – GM has a greater desire to get along with the owners than the customers.  The skill that was sought – like I'd have Jordan take the shot or Dr. King give the speech – is not to direct the corporate strategy to create distinct products and distinctly positive relationships with prospects and customers.  What matters most to those who selected Edward Whitacre is simply the ability to work with the regulators.  And, as becomes obvious, it's now undoubtedly Obama Motors, and not any kind of General, or customer focused, one.

Scott McKain is Vice Chairman of Obsidian Enterprises, recently named one of the "fastest growing public companies" in the country – as well as Vice Chairman of Durham Capital Corporation. In addition, McKain is the co-founder of The Value Added Institute – a think-tank researching the impact that creating enhanced customer experiences has on organizations and how it generates greater client loyalty. His client list for speeches, seminars and consulting is a "Who's Who" of corporations (such as GE, IBM, Phillips and hundreds more). He has appeared on platforms in all fifty states and fourteen different countries. A member of the Professional Speakers Hall of Fame, Scott also makes appearances on FOX News Channel and other major media outlets as an expert commentator. He has authored three books, the latest being Collapse of Distinction – Stand Out and Move Up While Your Competition Fails.  Scott, his wife, Tammy and sons Corbin and Faron Byler live in Indianapolis, Indiana.

U.S. Could Get 10% Renewable Energy by 2020, If Money, Policy Line Up Behind It

Jeff St. John: June 15, 2009, 7:02 PM

Studies claiming that renewable energy could supply a much larger portion of the nation's power needs – if the money and policies can be built to support it – are all the rage these days.

The latest arrived Monday, projecting that The United States could get 20 percent of its power from renewable energy (excluding hydropower) using today's technology by 2020, up from its share of about 2.5 percent today.

The report from the National Research Council says that today's technology could get the country to 10 percent non-hydro renewable energy by 2020 and 20 percent by 2035.

To get beyond that, "major scientific advances, and changes to the way we generate, transmit, and use electricity, will be needed," the report said. That includes large-scale grid storage, a "smart grid" that allows two-way communication and fine-tuned management and other improvements.

But even to get to the scenario allowed by today's technology will require the right mix of pubic policy to encourage renewable energy and the politically tricky matter of building massive new transmission lines to carry it to where it's needed, the report said.

The question of transmission is part of the debate over energy legislation now before Congress. Proposals to give the federal government increased power over siting those transmission lines are part of a broader set of policies for boosting renewable energy and putting a price on carbon emissions through a cap-and-trade program (see Draft Legislation a Boon for Solar, Grid and Come Get 'Em: Gov't Plans to Give Freebies Under Cap-and-Trade).

The report notes that "issues of land use and other local impacts (e.g., noise from wind turbines or potential effects on local weather) will become increasingly important as deployment of renewable technologies grow."

States with renewable portfolio standards – mandates that state utilities supply a certain portion of their electricity from renewable sources by a set date – are coming to terms with those challenges.

California, which is proposing that its utilities supply 33 percent of their power from renewable resources by 2020, is one of them. According to a recent report from the California Public Utilities Commission, reaching that new goal will require seven new transmission lines at a cost of about $12 billion – and that's not even counting the cost of building the renewable power plants to supply the electrons (see California Dreaming: Achieving 33% RPS Could Cost $12B in New Transmission).

It isn't yet clear if the state will meet its current RPS of 20 percent renewable by energy by 2010. As of the latest figures available for 2007, the state's three investor-owned utilities – were supplying 12.7 percent of their power from renewables, according to the CPUC.

Still, one can dream – particularly when one's dreams and one's profits coincide.

For example, Greenpeace and two solar industry groups last month made the bold claim that making electricity from the sun's heat could provide a quarter the country's electricity need by 2050.

But then, that would require spending on such solar-thermal plants to increase by $51 billion every year between now and 2030, and by even more after that, to get there. That would be quite a jump from the $2.8 billion or the report said was being put into solar-thermal this year - a welcome prospect, no doubt, to report co-issuers  European Solar Thermal Electricity Association and SolarPaces, but perhaps a long shot.

Still, there is a benefit to thinking big. According to a February report from U.S. grid operators, getting 20 percent of the country's power from wind - up from less than 1 percent in 2007 – would cost $1.1 trillion for the wind farms and an additional $80 billion in transmission lines.

But getting 5 percent of the country's power from wind by 2024 wouldn't be that much cheaper – about $700 billion for the wind farms and $50 billion in transmission, the report said (see Wind Growth Could Cost Eastern U.S. $80B in Transmission Lines).

When Martin Eberhard Was Non-Personed at Tesla

Michael Kanellos: June 14, 2009, 11:18 PM

Sometimes, that arcane boilerplate language in press releases can be interesting.

Solar thermal vendor Ausra earlier this year announced it was going to switch from trying to build power plants in the desert to selling solar thermal equipment to industrial customers and hospitals for boiling water and making steam. It was a big surprise, but if you look in the boiler plate language at the bottom of their press releases, you can see how industrial steam sort of snuck in there a few months in advance.

And that brings us to the Martin Eberhard versus Elon Musk lawsuit. To summarize: Eberhard says Musk takes too much credit for the idea behind the company, blames Eberhard too much, and made him wait a long time to get a car. Musk says lies, all lies. One allegation that Eberhard really emphasizes is that Musk allegedly wrongly touts himself as a founder.

In any event, I've looked through the official Tesla literature. Musk is not listed as a founder. But you can see Eberhard's rise and fall. In the first press release (May 2006), Eberhard and Marc Tarpenning are listed as co-founders. It's the first sentence in the "About Tesla Motors" bit at the end. The names are even listed in that section before the mention that the car is electric. ("We we are proud of Mr. Musk's continued confidence in Tesla Motors expressed through his strong participation in every round of financing and his leadership on the Board of Directors," Eberhard said in a canned quote at the time.)

By January 2007, the statement about the founders got moved toward the bottom of the corporate bio.Then, in February, in a release about a factory to be built in New Mexico that never occurs, the Eberhard and Tarpenning bit disappears and the corporate bio consists of a soliloquy about Elon Musk. Days later, we are back to Eberhard and Tarpenning, but it's still lower than it was in the past. Just as well. In 2006, Tesla had promised to deliver cars within a year, but it was already having technical problems and delays. The first cars wouldn't arrive until early this year.

Then on July 31, the company issues a press release about its showrooms, a pet project of Musk's. Eberhard and Tarpenning's names are eliminated from the canned company bio.

On August 13, a note goes out from Elon Musk stating that founder Martin Eberhard will become president of technology. Founder? Tarpenning is gone completely.

Of course, in all of this, there is no mention of Tom Gage, founder of AC Propulsion. AC Propulsion already made electric cars and Eberhard originally wanted to sell those to the pubilc, according to various articles. (Here is one, and another.) Tesla ultimately licensed technology from AC. Musk had also earlier contacted Gage about electrifying a sports car.

So who is supposed to get credit for the idea here?

BigBelly Solar’s Trash Cans Find a Dealer in Waste Management

Ucilia Wang: June 12, 2009, 6:04 PM

BigBelly Solar, which makes solar-powered trash bins, is lining up Waste Management as a North American distributor. 

Each trash bin comes with a compactor for compressing trash, a sensor and LED lights to gauge its fullness, and a wireless device to send that information to the garbage collector. A solar panel on top of the receptacle charges a 12-volt battery so that the compactor can work at night.

Before the Friday announcement with Waste Management, BigBelly, based in Needham, Mass., had deployed about 2,500 compactors. Its biggest deal was with the city of Philadelphia, which is scheduled to install 500 of them in its downtown this year. Check out the photo of a BigBelly in Philly in this post, courtesy of our reader Glenn Brooks.

Source: Glenn Brooks

You also can find the bins around Fenway Park in Boston.

Last month, BigBelly said it had raised $3.2 million from undisclosed investors to expand its business.

Lining up Waste Management as a distributor would enable BigBelly to boost its sales. Houston-based Waste Management is a major player in the trash collection and landfill business. The company said it serves almost 20 million municipal, residential, commercial and industrial customers.

Waste Management said it already has installed 15 solar-powered compactors at Patriot Place, a retail and dining space, next to the Gillette Stadium in Foxborough, Mass.

Waste Management would be the only company in the trash collection and processing business to distribute BigBelly's solar compactors. But the deal doesn't preclude BigBelly from selling its compactors directly to cities, public parks and private businesses, said Richard Kennelly, vice president of BigBelly.

BigBelly also could line up distributors who are not in the waste collection industry.

Update: Silver Spring Nabs Cisco’s Ethernet Queen

Michael Kanellos: June 12, 2009, 4:07 PM

Judy Lin, the Senior Vice President of Cisco's Ethernet Switching Technology Group, has joined Silver Spring Networks.

Earlier in the week, we first reported that Silver Spring had nabbed a higher up at Cisco and a source close to situation confirmed the name. The non-personing of Lin at Cisco, in fact, has already begun. She's been removed from the executive bio page at the networking company, which is the equivalent of having your face chiseled off a monument in ancient Egypt.

The melodrama between the two companies will be one of the more entertaining issues in the greentech world. Not as fun as the Elon Musk-Martin Eberhard feud, but the outcome will likely be far more important. Silver Spring makes technology for allowing meters to communicate to utilities. The heart of the company's technology is a networking card. It can be fit into a meter or into equipment at a utility station. The company has signed a massive contract with PG&E to install millions of meters in California. It has been one of the most successful companies in raising VC funds over the past two years.

Cisco, of course, is the king of IT networking and earlier this year unfurled its strategy to get into the energy management and smart grid markets. Cisco will start by controlling power in phones and networking equipment with its Cisco EnergyWise software platform, but will ultimately move into controlling power in buildings.  Both companies are working with Florida Light and Power on a million meter project in Miami. Cisco bought Richards-Zeta Building Intelligence in January and more are expected (I predict Verdiem will be one of the next it will buy).

The Cream of Europe’s Green Startups to Meet in Geneva Next Week

Michael Kanellos: June 12, 2009, 3:16 PM

When it comes to high tech, Europe is often overlooked.

The U.S. mints most of the world's high-tech startups and pulls in the most venture capital. Asia, meanwhile, dominates consumer electronics and manufacturing and has become a huge market in its own right. Europe has a few giants – SAP and Nokia, for instance – but you don't see the same frentic level of activity. Restrictive university policies regarding tech transfer, a greater emphasis on lifetime employment, and regional competition have hindered the industry. Israel, which geographically is not in Europe, is the recipient of more VC funds than any country that is in Europe. As one Brit told me, Cambridge is one of the best technical universities in the world, and one of the worst when it comes to incubating companies.

Europe also doesn't have the same supply of entrepreneurs, said Bernard Vogel, president of the green investment firm Endeavour Vision.

Additionally, U.S. VCs are often wary about investing overseas. Back in the early '90s, Sven Lingjaerde once told me how he wrote letters to two well-known VCs for them to check out this world wide web thing at CERN, the research agency in Switzerland, in the early '90s. "I don't see how you can make money with [the] Internet," one faxed back. He framed it.

To help get around some of these problems, Lingjaerde and a group of entrepreneurs created Tech Tour a few years ago. Tech Tour combs through a nation, ferrets out the most promising companies, and shows them off to a group pf visiting venture capitalists. It can work. Intel once picked up an Italian company it learned about in a past tour. Vogel helped organize next week's clean tech event.

Next week in Geneva, the organization will hold an event that will be slightly different. Rather than concentrate on one country, it will showcase 25 startups from across Europe and Israel. One company exhibiting will be ReVolt Technologies, a Swiss company specializing in the emerging category of zinc batteries. Other companies will show off ideas for fuel cells, marine power, wind and solar.

The event is sold out but names and other information will emerge, so stay tuned.

Beacon Power Lands $2M Flywheel Deal With New York

Jeff St. John: June 11, 2009, 4:46 PM

Beacon Power Corp. (NSDQ: BCON) has landed a $2 million contract with the New York State Research and Development Authority to deliver a 1-megawatt flywheel energy storage system to help regulate the frequency of the state's power grid, with the hope of 20 megawatts of storage to come.

The project calls for Beacon to provide a 1-megawatt flywheel energy storage system for utility NYSEG, but the company hopes to see the project eventually expand to 20 megawatts of storage for utility National Grid,

Beacon's flywheels are used for frequency regulation, which is the task of keeping grid power at a constant 60 hertz, or cycles per second, to ensure its stability. That takes up as much as 1 percent of all the power produced in North America, which mostly comes from fossil fuel-fired power plants.

Beacon has similar frequency regulation deals with grid operator ISO New England and utility American Electric Power (see Green Light post). The Tyngsboro, Mass.-based company is hoping to see those projects scaled up from their current size as well, although ISO New England in November scaled back its plans from 5 megawatts to 3 megawatts (see Beacon Power Seeks to Raise $4.1M).

Other flywheel developers include Active Power Inc. and Pentadyne Power Corp., which are targeting the broader energy storage market. Beacon has said it also intends to target that market eventually.