Review of the Research Program of the Partnership for a New Generation of Vehicles (1994)

In its deliberations, the committee divided issues into two categories. The first category is major issues. The issues that fall into this category require immediate attention by the PNGV. The second category is other significant issues. It includes issues that should be addressed upon satisfactory resolution of the major issues. Inadequate attention to the other significant issues could result in them becoming major issues in the near future.

In any decade-long high-technology, high-risk, and high-cost program (such as the PNGV program) that involves diverse cultures from both the private and public sectors, effective program management is imperative to assure ultimate program success. It is essential that program managers have a detailed master plan that includes all major work plans, major milestones, and required resource levels to accomplish individual program tasks. Program managers must have a clear picture of the progress of the total program in order to properly allocate resources to support priority decisions in a timely manner.

The management challenges in the PNGV program are enormous because of the scope and complexity of the effort and the diversity of the participants. In the committee’s view, the PNGV organizational structure (which consists of the Operational Steering Group and the Technical Team), while suitable for a governing body, is inadequate to perform the required detailed program management function.

In the brief time available for this first review, the committee was not able to consider options for program management organization for the PNGV in any detail. However, the committee offers the following suggestions for consideration in bringing the management structure of the PNGV more in line with the roles required of it.

The government needs a strong program manager who is assisted by a small number of deputies and has full authority and responsibility for managing all aspects

of planning, budgeting, and congressional and public affairs. This program management staff should be housed in one central location, preferably in Washington, D.C.

The key to any good management scheme is the quality and experience of the personnel involved. Every effort must be made to assign and retain high-quality, experienced talent. In particular, senior managers should have proven track records in managing large, long-term, complex programs.

The committee suggests that the current lack of a single industry program manager for the PNGV program can be remedied by appointing a technical director of an integrated platform development team at USCAR. (See section on “Integrated Platform Development Team” on page 47 for further discussion).

Special steps will be required to bring the diverse government projects under one central management umbrella so that the effort can be properly managed, thereby using critical resources in an economic and effective manner. Relevant government projects should be considered and evaluated for participation in the PNGV program. It is essential that PNGV program directives be established that clearly define integrated responsibilities, accountabilities, and authorities.

All existing and prospective participants should know how PNGV program decisions will be made so as to minimize confusion and surprises.

Maintaining separate government budgets in separate government departments would only serve to enhance a feeling of program disunity. Just as all projects need to be brought under one management umbrella, so should all project budgets for major and critical elements of the PNGV program be brought into a single appropriations mechanism defined in a single document, with oversight responsibility vested in the government’s PNGV program manager.

To continue to deal with a large number of congressional committees and subcommittees, each with separate interests, procedures, and line-item detailing, would be time-consuming, expensive, and wasteful. The Clinton administration should identify major and critical elements of the PNGV program and request that the Congress consider assigning these vital PNGV core projects to a single existing authorization/appropriation committee in the Senate and another in the House of

Representatives. If the congressional committees could synchronize their decisions regarding the PNGV program, even greater efficiency could result. In any event, PNGV authorization and appropriation language must be open and flexible, so that the government program manager can have a coordinating role and be able to redirect funding at significant levels between budget cycles without having to seek congressional approval. The committee highly recommends that this be achieved for fiscal year 1996. The committee did not receive sufficient information and did not have time to address interim mechanisms for handling the PNGV program budget for fiscal year 1995.

A management approach that should be considered is the formation of specialized consortia made up of the automotive industry, its suppliers, and the government to develop the most critical and promising technologies needed for success in Goal 3. As noted earlier, the USABC was heralded as a successful model for collaborative technology development. Similar consortia might be considered for fuel cells, thermoplastics, graphite fiber materials, and other technologies where the industry and suppliers are prepared to invest significant funds with matching contributions from the government.

In large diverse and complex undertakings (such as the PNGV), the communication of objectives, responsibilities, schedules, milestones, budgets, and resource allocations is normally accomplished through the circulation of program documents to program participants. This set of master program documents is generally updated monthly or when appropriate and is normally the basis on which program performance and achievements are measured and cost and budgets are controlled. It was disconcerting to the committee that the PNGV is essentially a year into the partnership and was unable to provide detailed and defined program plans, schedules, and milestones to the committee.

As noted earlier, the committee knows of no precedent in the U.S. for the kind of government–U.S. automotive industry cooperation envisioned in the PNGV, and the management, fiscal control, and communications needed to achieve the goals are still evolving. During the review, PNGV participants shared their current program plan, which, in the committee’s view, is of limited specificity and completeness.

In the absence of quantified goals and detailed schedules, and because of the confidentiality of the near-term programs conducted by the industry, the committee was unable to assess the suitability of the timing or adequacy of the industry funding and resources for goals 1 and 2.

While the committee appreciates that plans must necessarily evolve over the life of the program, there is a critical need for an initial, integrated plan at the

earliest possible time. This unified plan should include, but not be limited to, such key elements as objectives, task descriptions, management responsibilities, milestones, resources, schedule, and critical features or metrics that bear on the success of achieving the stated goals of the PNGV program. The committee recommends the creation of these detailed plans to be submitted with the PNGV federal budget for fiscal year 1996.

The process for reallocating resources as the Goal 3 technology focus narrows has not been addressed by the PNGV. The committee observed that government project managers involved in the PNGV program are expecting the resources from the nonselected projects to be shifted in order to fund the development of those technologies that will be applied to the concept vehicle. But the agencies who control the funds anticipate that all promising technologies will be continued past 1997 even if they have no chance of meeting the schedule or economic demands of the Goal 3 vehicle. Mechanisms for resolving these funding issues were not apparent.

As noted earlier, the Clinton administration has stated that it will not seek new R&D funds for the PNGV. Thus, a redistribution and reallocation of funds to the PNGV from existing projects and jurisdictions is imperative if the program is to be effectively sustained.

Each of the proposed PNGV federal projects is covered by different authorization and appropriations language, some of which may make redirection into the PNGV program difficult, if not impossible, without change to the terms of authorization. In those ongoing federal R &D projects under subcontract to industry or universities, the terms of each contract may not allow flexible redirection to PNGV objectives. Moreover, the normal government budget cycle is not conducive to a fast-moving, high-pressure, high-risk venture like the PNGV.

The committee anticipates that delays in funding or in meeting research goals will require funding alterations in the program. The ability to make fund redistribution decisions is complicated by the present funding control, which resides in the various agencies responsible for conducting the individual research projects and the numerous congressional committees to whom they report. The research projects selected from the government inventory may also support an agency mission of defense, public safety, or environmental protection and are not totally dedicated to the PNGV. Consequently, the PNGV manager lacks control over the resources necessary to effectively manage the program.

In examining the PNGV program for funding balance, the committee noted that government and industry technology projects that are related to vehicle integration and to vehicle manufacturing with unconventional materials are minimal through 1997. However, these technologies have long lead times and are critical to the economic viability and consumer acceptance of vehicles developed by the program. The committee recommends additional emphasis in the fiscal year 1996 budget on such manufacturing and vehicle-related technologies.

As noted earlier, the magnitude of the federal funding for PNGV in fiscal year 1994 and fiscal year 1995 must be accepted as is, because the federal components of the PNGV program have been justified and funded under other criteria. Consequently, the magnitude of federal funds aligned with the PNGV program (by virtue of the accounting method that places funds for an existing project in the PNGV umbrella even when the project only partially applies to the PNGV) appears to be much larger than would be required for a lean program to meet the objectives of Goal 3. In addition, the present funding control does not permit program managers the opportunity to conduct an agile development program. The inflexibility of the current structure is of great concern, since it may consume more resources than the total needed for a lean, conventionally funded and managed program to develop a Goal 3 vehicle. The committee recommends the establishment of clearly defined mechanisms in fiscal year 1996 for allocating and managing program resources, for selecting and integrating technologies, and for assessing their total costs and benefits.

In the committee’s view, the success of the PNGV depends, in large part, on a national commitment to the program. The need for such commitment is recognized by the inclusion of the Government Public Affairs Group and the Industry Public Affairs Group in the PNGV organization (PNGV, 1994). Although the benefits of the program—a strong industrial base, fuel savings, reduced carbon dioxide emissions, less air pollution, and lower oil imports—are potentially far reaching, they are spread over society as a whole. The absence of concentrated benefits to particular groups or interests could result in weak public and political support for the project. Moreover, this partnership will take a decade to attain its principal goal. Given the significant turnover that can be expected over the course of ten years among partnership participants in both the public and private sectors, which may erode the institutional memory assets, awareness and support of the PNGV needs to be broadly cultivated and periodically reinforced.

In initiating the PNGV, the Clinton administration stated its commitment to the project as a new national model of cooperation between government and industry. In addition to continued support from the White House throughout the duration of the project, the committee believes that it is important to get other participants involved and vested in the program. A large potential reservoir of support exists among the public for a productive collaboration between government and industry. Tapping into this support will require an active outreach, advocacy, and public education effort targeted at four critical groups —the public, policy makers, media, and the public interest community.

There are many activities the partnership can undertake to strengthen commitment to the project over the long term. The PNGV will need dedicated and experienced staff and resources to build a sustained national commitment to the project.

Public support for the project is crucial for three reasons. First, Americans are paying for the program. Second, they are ultimately responsible for creating a new market for the improved vehicles contemplated by the PNGV. Third, public opinion will judge the success or failure of instituting a cooperative relationship between industry and government. Therefore, the PNGV must undertake actions to create public awareness and support for the program. For example, the PNGV could invite the public to its meetings to maintain open dialogue with interested individuals over the course of the project and could bring all short-term vehicle innovations to the public’s attention and showcase interim achievements whenever possible. It could provide periodic (i.e., annual) documentation to the public detailing project milestones and the importance of the PNGV to technology advancement, the U.S. industrial base, national security, jobs, and the environment. And it could reduce, whenever possible, the proprietary nature of the PNGV to provide the public with an understanding and appreciation for program specifics. USCAR should classify data as proprietary only in those instances where such action is clearly warranted.

The PNGV program may be perceived by some as an attempt by the Clinton administration to shape U.S. industrial policy. The government’s involvement in the PNGV may be seen as undue interference that is contrary to the principles of a laissez faire economy. Others might argue that being competitive in today’s global marketplace demands a new paradigm that emphasizes a much higher level of collaboration than before between the U.S. government and key industries such as the U.S. automotive industry. It was not the committee’s task to reconcile these differing perspectives. However, it is the committee ’s opinion that the PNGV program offers an opportunity to effectively meld both points of view.

The Clinton administration, Congress, and relevant government agencies all have important roles to play in determining the ultimate success of the PNGV. Nevertheless, the traditional American value of entrepreneurship in a market-driven economy must be maintained. The challenge is to find the proper course to steer the PNGV program.

An enduring institutional commitment to the project will be necessary given the numerous governmental participants involved. In order to obtain such a commitment, the administration must cultivate congressional support for the project, especially among legislators serving on key committees. It should construct interagency agreements to establish a framework to share responsibilities and equitably commit resources to the PNGV. In turn, industry leaders should communicate their ongoing support for the project to policy makers. Ongoing peer review of the PNGV program can document the project’s achievements and provide an objective and timely critique.

The media are a mechanism for obtaining public involvement in the program, preparing consumers for PNGV products, maintaining policy makers’ interest, and providing a forum for this new automotive industry model to be evaluated. Because the product may be different from today’s vehicles, the media will be key players in establishing public interest that will support the goals of the PNGV. The PNGV ought to take every opportunity to release published PNGV plans and reports to the media (e.g., PNGV program plan, program review report, etc.).

Technological developments by industry and government that do not compromise proprietary information should be showcased to obtain broad media coverage on interim achievements that lead toward the PNGV program goals. As each project milestone is attained, PNGV ought to develop press releases and have key staff, industry leaders, and government officials available for interviews and photo opportunities. The PNGV could also produce and distribute periodic videos and other visual materials that highlight its accomplishments.

Environmental, community, labor, and other related public interest groups can be instrumental in advocating the project, which, in turn, could enhance public and policy-maker support for the partnership. These interest groups can also provide useful feedback on different technological options that are being considered to attain the program goals. The PNGV should consider developing a process through which public interest groups can provide inputs to the PNGV (i.e., periodic public sessions at research facilities). The PNGV should also consider participating in and showcasing its accomplishments at public events such as environmental expositions and annual Earth Day events around the country.

Although the technological and political obstacles facing the PNGV are formidable, the committee believes that a strong national commitment to the program will enhance its chance of success. Adequate staff and resources will be necessary to establish such a commitment to the program. The many individuals and groups involved each have an important role to play in achieving the program’s goals and ensuring a market for the vehicles developed under this new partnership.

In the committee’s view, bringing Goal 3 technologies to commercial fruition within a twenty-year time frame would require a considerable stretch, but it becomes increasingly more difficult when compressed within the ten-year time frame of the PNGV. The committee strongly believes that the performance and timing objectives of Goal 3 are so demanding that its success could be seriously compromised unless an integrated platform development team is formed at USCAR. The committee did not

have an opportunity to explore this issue in-depth at the meeting but notes that an integrated platform team is not a new concept.

An integrated platform development team would be made up of persons who, in concert, have the full range of skills and expertise needed to manage and direct the technical, financial, and manufacturing aspects of the program. This team must be colocated and given full responsibility and authority for all of the system-level decisions, including those affecting the research efforts in support of PNGV at federal agencies that are required to meet Goal 3 objectives. These decisions also include the setting of key requirements for the performance, cost, and weight of all vehicle subsystems. The automobile industry worldwide is moving toward the use of integrated platform teams because of their proven effectiveness in reducing costs, compressing lead-time, and improving quality of new vehicles.

This type of management and team structure must be capable of making the key technology decisions required to support Goal 3, including those on advanced materials, powertrain, and key subsystems and components (i.e., chassis, suspension, steering, braking, etc.). Such decisions cannot be made wisely without an understanding of implications regarding manufacturing feasibility, packaging, cost, investment level, performance, timing, quality, and infrastructure requirements. If the program is to operate at the pace required to satisfy the objectives of Goal 3 in the time required, the co-located team must have persons on it who jointly possess all of the skills mentioned above.

The present structure of industry’s technical team in the PNGV organization appears to have been effective during the formative phase of the partnership over the past year. It should continue to be effective in managing goals 1 and 2 if it continues to receive the support needed from the three parent industrial organizations (Chrysler, Ford, and General Motors) in technology assessment and transfer. However, the structure is too diffuse and its capability too limited for it to be effective in managing Goal 3. USCAR needs to be able to speak with a single, well-informed PNGV program voice if it is to marshal effectively the diverse technology support and development groups from government, suppliers, and universities.

The committee recognizes that each of the three automotive companies may independently want to pursue applications of the technologies developed as part of Goal 3. The committee is not suggesting that this is inappropriate. Its view is simply that the overall objectives of Goal 3 must be managed by a single platform team. Separate industry teams, if they are formed, would have full access to the technologies developed as part of Goal 3, but the co-located USCAR team would have the full authority and responsibility to set the direction for meeting the objectives of Goal 3. The committee accepts that, at this time, it is premature to make a decision on whether to construct a single baseline USCAR concept vehicle or three concept vehicles that are based upon common PNGV system requirements but produced independently by Chrysler, Ford, or General Motors. This notion also applies to the construction of the production prototype vehicles.

The committee feels that it is critical for the program to adopt an appropriate strategy to determine which technologies will be supported, when, and with what level of resources. It is important that resources be allocated to the most promising of the technologies.

As previously emphasized, the committee concurs that a complete (rigorous) systems analysis is the best process to help define the technologies applicable to meeting the PNGV goals. Automobiles are extremely complex products, and simultaneous improvements in many areas will be required in order to meet the ambitious program goals. As noted earlier, several parallel paths for R&D are being pursued initially, and the technologies required may shift rapidly as the program proceeds. In order to maintain effectiveness, the program will need to develop a rapid analysis and reprioritization process.

The committee also noted that existence of the PNGV has given additional impetus to the efforts of foreign competitors of the domestic manufacturers to improve fuel economy. This fact should be reflected in the priorities chosen and in the resource allocations of this program, both in the near term and long term.

The technology selection process for Goal 3 is based upon the specifications of a mid-sized vehicle, with the assumption that the resulting component and system improvements can be applied with equal effectiveness across the entire product spectrum. Today, this spectrum of passenger vehicles is very wide and is getting wider. It ranges in size from subcompact cars to light trucks and includes a wide variety of shapes and capabilities. As decisions to narrow the technology focus are made, care must be taken not to discard technologies that are not suited for a mid-sized car but are capable of providing improvements that meet Goal 3 requirements in a different segment of the light-duty vehicle fleet.

Manufacturing process improvements will be very important in determining the success or failure of the PNGV to meet its goals. At this time, it is not possible to identify all of the manufacturing improvements that may be needed. Given that Goal 3 is extremely ambitious, there is great uncertainty regarding the basic components that will be needed to meet its requirements. If there is insufficient lead time to develop capable manufacturing processes, the program could miss the Goal 3 intent. Program planners for the PNGV should recognize that manufacturing needs may dictate when technologies must be discarded because of schedule constraints. In addition, the committee noted that there are limited facilities available for the evaluation of large-scale automobile production systems for the development of innovative manufacturing processes. This constraint should be considered in planning the manufacturing development program.

Since no metrics are contained in either Goal 1 or Goal 2, it is currently not possible to measure progress toward achieving these goals. This lack of measures also makes it difficult to make trade-off decisions regarding alternative technologies and appropriate resource allocations that merit short-term investments. Therefore, to effectively manage the current PNGV program, appropriate metrics are required. However, the committee also suggested that it might be appropriate for these goals to be pursued indefinitely, with suitable institutional arrangements to assure this continuity.

A comprehensive systems analysis and program plan is needed for goals 1 and 2 in order to eliminate potential gaps in the technology selection process. This may be difficult to do under the USCAR arrangement, since a major portion of the activity related to these goals is being pursued in a competitive manner within the individual companies.

The fuel economy improvement envisioned in Goal 3, combined with the timing specified, requires unprecedented achievements for success. Although the performance specification requires radical changes in components, vehicle designs, and manufacturing techniques, the timing set in Goal 3 essentially dictates that existing and near-term technologies be harvested. Little time is available for research. Parallel development support for multiple, high-risk technologies is the only way to create a reasonable chance for success, which means massive resources must be applied. If the resources are inadequate, this limitation will lower the chances for success and certainly will force earlier choices between competing technologies, when information on critical characteristics may be unavailable. Decisions of whether to support less-mature technology, which offers high long-term potential, or more-mature technology, with lower potential performance, are very difficult. Uncertainty in the prediction of future development achievements will eliminate less-mature technologies from consideration if the time constraints are too tight.

Goal 3 of the PNGV has two primary risks associated with it: the risk of not meeting the performance goal and the risk of not meeting the schedule. No explicit guidance is provided, nor had any been adopted by the participants, to help in evaluating the tradeoff between these risks. The committee discussed two consequences of this situation. One is the possibility that promising technologies will be underfunded, because they do not show enough potential for meeting the time constraint. The other is that shorter-term technologies may not get adequate support, because they will not meet the performance goals of this program. The participants may want to consider establishing mechanisms to assure that technologies that fall into either of these categories are appropriately supported.

Since technologies applicable to the PNGV exist, and are being developed, in a wide variety of government-supported projects, it has been difficult to assemble a comprehensive description of all this work and determine its relevance for this report.

How large should the research effort be that is associated with the PNGV? No limits have been established. To the extent that the research performed for the PNGV

already has been justified and funded based upon other criteria, the only practical limit, today, is in the resources required to seek out, coordinate, and transfer the applicable knowledge. As more research is started, or continued, using the PNGV as justification, this issue will become of greater concern, and it will be important for the managers of this program to develop a more formal mechanism to justify the technology selection choices being made. Establishing such a mechanism should be seriously considered before funds are requested for the fiscal year 1996 budget.

The committee strongly endorses systems analysis methodology as a decision support and management tool for the PNGV program. Its use has enabled the program to move from a very general statement of goals to a definition of broad technologies that should be pursued at this time. It would be desirable, however, to devote considerable effort to expand this analysis in both depth and scope. A more detailed and rigorous analysis would yield more quantitative information and enable much better technology selection decisions. In addition, a wider scope which would include more infrastructure and in-use considerations that are very important for some of the technologies being considered might be very helpful in this selection process.

As noted above, the manufacturing development activities conducted for Goal 1 may very well pace the progress of the PNGV. The three areas of focus for this goal need to be expanded and much more detail developed in terms of potential contributing manufacturing technologies. This activity deserves very high priority at this time.

The committee recommends comprehensive technology assessment and analysis to assure that the PNGV technology selection is sound and complete. The Goal 3 vehicle should be economically competitive with vehicles that have 2X (or higher) technology and that may be introduced earlier than the Goal 3 deadline by foreign competition.

The committee believes that the current program includes technologies that have an extremely low likelihood of meeting the timing requirements of the PNGV program’s Goal 3. These and other questions were not addressed by the committee in this report, simply because of the limited time available for this initial program review. Currently, a large portion of the limited resources available to the program are devoted to one technology—the hybrid-electric powertrain. The committee has questions about the wisdom of such apportioning of investments at this time. It is the committee’s intention to address these issues in future sessions.

As noted earlier, the search for technologies that are applicable to the PNGV goals has extended to programs in at least seven different agencies and a multitude of government-sponsored laboratories. The committee recommends that other potential sources of technological innovation outside of the government be examined by the PNGV as well. The program also needs to actively seek access to technology in foreign countries; in non-government-supported organizations; and from individual entrepreneurs, to the extent this is practical.

The committee applauds the technology outreach program that has been initiated by PNGV with suppliers to the automobile industry. The committee noted, however, that in the past many barriers have prevented effective use of the technology existing in the automotive supply base. It is particularly difficult to get meaningful participation from suppliers without an established production program with prospects for a component supply agreement. The PNGV may have to develop some innovative working relationships in order to tap this technology source effectively.

Based upon the absence of university research as a line item on the agenda presented to the committee, it appears that the role of university research in support of PNGV goals has not been considered in any depth by USCAR at this juncture. It is important, however, that USCAR consider this matter in some detail before initiating the planned workshops, because the genuine degree of USCAR’s interest in university involvement will drive the degree of support from the university research community and the National Science Foundation for the program.

Both industry and government officials made the point that university research needs to be more relevant to industrial needs. The PNGV program represents an ideal opportunity for testing the new paradigm of industrial relevance. University talent and resources have been a significant factor in achieving the goals of high priority national technological efforts, as has been demonstrated on several major defense- and space-related federal R&D projects.

The systems analysis of candidate vehicle technologies is essential both for defining the specifications for the Goal 3 vehicle and for the timely selection of technology options. However, to gain the support of public and private interest groups, information will be needed on the consequences of the different technologies impacting these groups. The committee noted the need for in-depth analyses to assess changes in infrastructure, capital requirements, shifts in employment, total environmental consequences, alternative safety strategies, and total cost of operation associated with each technology. Such analyses should be performed concurrently with those for the primary vehicle systems. The resulting infrastructure and capital needs analyses will assist in determining the consequences to society of meeting the goals with different technologies.