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Honda Suppresses Alt Fuel GX Automobiles as Company Refuses to Sell CNG Cars to Spokane

September 29th 2008

Technology - Honda gpx
Honda GX

This story is adapted from the just released The Plan: How to Save America When the Oil Stops—or the Day Before (Dialog Press). Buy it here.

Japanese Honda is suppressing its own alternative fuel technology and denying its cars and home refueling devices to Americans eager to get off of oil. Honda, it seems, is going slow on its alt fuel vehicles, fearing the public will continue to abandon its more profitable gas guzzling SUVs such as the Honda Pilot. The Pilot is one of the most fuel inefficient vehicles on our nation’s highway.

Nowhere is this suppression strategy more visible than with the Honda GX, sometimes called “the greenest car in America.” Honda has ensured GX is also “the most unavailable car in America.” In fact, Spokane Community College has been trying to purchase just one for more than a year and Honda at the corporate level refuses to sell them even one car. Home-based or community-based fueling is one of the answers to energy independence.

During the first decades of the automobile, in the early 20th century, there were no gas stations. The network Ford and Edison tried to create for their electric car in 1912 was designed so home-based wind turbines and small kerosene generators could recharge the batteries. This home generation was to be augmented by overnight recharging in local garages connected to the local electrical utility, and slim streetside “Electrants” to be as common as parking meters.

Unfortunately, the electric car was subverted by the very company that actually controlled the technology, the Electric Vehicle Company. That company thought it could make more money selling less efficient but more ostentatious and muscular internal combustion machines.

Now America is witnessing a similar subversion by one of the best and most enlightened car companies in the world, Honda. The carmaker’s code word for this effort to keep alt fuel cars from selling too swiftly is: “No infrastructure.”

Honda’s CNG vehicle, the Civic GX, has been dubbed the “greenest car in America,” by the American Council for an Energy-Efficient Economy and other environmentally conscious groups. The GX became a cause célèbre for many alternative fuel devotees because it held out the prospect of true energy independence by detaching from the gas station umbilical cord. Not only does the GX achieve good equivalent mileage of approximately 24 MPG with a range up to 220 miles, the vehicle uses no gasoline, just common household natural gas. Most importantly, the GX was designed to work with a compact home refueling unit called the Phill, made by a company called Fuelmaker. The home refueling device after tax credits would only cost a few thousand dollars and pay for itself as the user weaned off oil. The dynamic benefit of the Honda GX was a non-oil consuming vehicle that could connect to a supply line as easily as any home grill or any other gas appliance.

But then a clear and present solution to oil dependence suddenly began to go bad. First, the vehicle was deliberately made less attractive. For example, Honda has earned a reputation for outfitting its cars with some of the finest audio systems and GPS navigation units on the highway. But these were not available with the GX. The stereo was whole steps behind gasoline-based Civics. Nor was GPS available. The company will not explain why it dumbed down the GX, especially since many upscale drivers wanted the vehicle.

Deliberate lackluster was only the beginning. Quickly, consumers from California to Florida began going public with horror stories about trying to install Phill units in their home. In many cases, the installation could not be done. Customers complained they were treated shabbily. Most extraordinarily, Honda inexplicably refused to sell the car in most states. In fact, Most Honda Civic GX cars were sold in just two states, California and New York, and those in large part were to small fleets.

Fuelmaker, manufacturer of the Phill, also refused to sell the home refueling unit to most of its existing dealers for other CNG products. Withholding the Phill would be like withholding razor blades from razors. This automatically negated much of the available market.

Ironically, at the same time, Fuelmaker has aggressively sold the refueling appliance in France through Gaz de France, in Italy through Alpengas IMI, in Switzerland through Holdigas, in Poland through GZOG, in Finland through Gasum Energiapalvelut Oy, in the Czech Republic through Milox and Vitkovice Cylinders, in the Netherlands and Belgium through Teesing, and in Lithuania through SG Dujos. In China, Fuelmaker sealed a five-year $65 million distribution deal through CornerStone International Trading Company at a special ceremony, clicking wine glasses with photographers snapping pictures. Indeed, by spring 2008, Fuelmaker had sold about 3,000 of its easy-to-use Phill units worldwide. About two thirds of those were sold in France.

But only 300 Phill units were sold in the U.S. as of spring 2008. Fuelmaker’s dealer support website for the Honda Civic GX shows dealers in only two states, California and New York—even though Honda enjoys about a thousand thriving dealerships around the country.

Who has controlled the stock of Fuelmaker and the distribution of the Phill? Answer: Japanese Honda.
Officials at Spokane Community College were amazed when Honda refused to sell the school a small fleet of the Civic GX cars, either directly or through local dealers. Spokane sits on a major natural gas line. School officials and city leaders became convinced they could become a proud regional epicenter in the national movement to get off oil by systematically switching their school-owned vehicles to CNG. Students and faculty could join in. The ideas were first outlined by this author during a series of 2007 speeches advocating a “Green Fleet Initiative.” School enthusiasm prompted interest by the Spokane city government as well.

Proponents envisioned Phill units installed at the school and at city locations to be shared with the public, and then quickly adopted by home users. This would follow the same technology route as personal computers which migrated from corporations to homes of employees and then back to widespread commercial use. Eventually local alt fuel enthusiasts planned to convince the local Postal Service, as well as large nearby UPS and Fedex hubs, to switch to CNG. Integral to the idea was that the college would train a bright cadre of CNG automotive mechanics to service the Civic GX. Graduates of the mechanics program could not only service locally, but they could fan out and export their expertise around the nation. There was talk of turning the entire city into a CNG vehicle zone accenting both home and shared neighborhood refueling which would gradually move Spokane away from oil.

Oil switch organizers in Spokane spoke of expanding east and west to create a CNG corridor stretching from Denver to Seattle. Spokane Community College supporters then hoped to replicate the movement in other community colleges, the perfect sponsors for such regional initiatives. Greg Stevens, human resources director for the college and one of the spearheading personalities behind the CNG fleet idea, quipped in an email, “For us, this potential partnership is a no-brainer.”

What happened? Why did Spokane’s ideas never get beyond the talking stage?

Answer: Honda refused to sell the cars—not even one. Despite months of phone calls and emails with senior Honda alternative fuel executives, partial starts and false starts, Honda CNG officials declined to meet with Spokane officials or even say yes to the sale of a single vehicle. Dealers in Spokane answered that they simply could not get the cars from Honda. After about ten months of frustration, the idea simply died.

A Honda executive in charge of CNG and GX development was asked point blank, “Is your company even interested in selling these CNG cars as fast as you can to as many as you can? Are you enthusiastic about this vehicle?” His answer: “No comment.”

Honda can revel in congratulations and accolades from the green movement because the Civic GX and the Phill independent refueling device represent a potential turning point in the effort to kick the oil addiction. But throughout the CNG vehicle advocacy community, Honda is snickered at and quietly ridiculed for its refusal to proliferate its own alternative fuel vehicle. The company continually repels the urgings of eager consumers and the CNG industry, claiming there is “no infrastructure” to refuel the car, that is, few CNG gas stations—even though the car was designed to be home refueled. Honda also claims there is no demand for the automobile. Yet it declines to advertise the vehicle to consumers or permit sales to those who manage to learn of it on their own.

“They are amazing,” lamented one long-time CNG vehicle advocate during a late August 2008 interview. He added, “Honda makes so much hay about its CNG car, but they don’t want to sell them.”
There are 8 million CNG vehicles in the world. Iran is currently retrofitting 20 percent of its national fleet annually in a government mandated program to cope with sanctions over their nuclear program. Argentina has a cheap and easy retrofit program. In Utah, those eager to get off of oil and onto the cheaper CNG are self-retrofitting. Natural gas makes sense as a bridge technology to immediately switch off of oil and the gas station. Hence, Honda’s GX should b a perfect right now answer to the fuel crisis.

Why would Honda hold back on its own marvelous technology? Japanese Honda has understood that if it mass produces the GX and allows the Phill unit to be sold, the public will flock to the GX as fast as they have been fleeing from Honda SUVs and similar gas guzzlers. While Honda makes some of the most fuel-efficient and well-engineered cars in America, the Japanese company also makes some of the nation’s most conspicuous gas guzzlers, such as the Honda Ridgeline crossover pick-up which only achieves about 15 mpg in the city, the snazzy S-2000 sports car at 18 mpg and the Pilot midsize SUV at about 16 mpg. In July, 2008, sales of the Pilot, manufactured in Alabama, posted a 47 percent drop over the previous year, just 7,486 compared to 13,136 in July, 2007. Pilots were down more than 21 percent for 2008. Sales of other Honda gas guzzlers plummeted as the market for such vehicles by all makers completely collapsed in mid-July, 2008. When the market for SUVs collapsed, SUV leasing programs by a gaggle auto companies nearly all terminated during a several-day period in July, 2008.

Shortly after the July 2008 sales decline became known, Honda’s answer to the fuel crisis was not increase the supply of GX cars, but to suddenly stop production altogether. On August 28, 2008 Honda alt fuel manager Eric Rosenberg sent a letter to GX dealers, a copy of which was obtained by this reporter. Rosenberg’s letter makes clear that the company is restricting sales and production of the GX, and that as a result, shortages will be created. Indeed, while many experts expect the fuel crisis will become more intense by mid-June 2009, Honda is already preparing, some ten months in advance, to create a vehicle shortage for its alt fuel GX.

“As you already know, production of the 4-door Honda Civic at the East Liberty, Ohio Factory is scheduled to move to the new Greensburg, Indiana Factory,” writes Rosenberg. “This change will result in an interruption of Civic GX supply during the first portion of calendar year 2009.  …the Greensburg plant is scheduled to resume GX production in June, 2009. This unusual break in production during a model year is something that cannot be avoided.” No explanation was given for stopping the Ohio plant’s production except that “the quota had been met.”

“Given this schedule,” the letter continues, “American Honda anticipates that demand for the remaining East Liberty production of 2009 Civic GXs will surpass available supply. Therefore, American Honda's Alternative Fuel Vehicles (AFV) Department will again use the recently introduced "GX Order Allocation Program.” We have a very limited number of GX vehicles available from the December build so your wholesale opportunities will be severely limited.” Rosenberg’s letter than lays out a mere three-day window, from September 9, 2008 to September 12, 2008, in which dealers will be allowed to order a quota of GX cars. Sources report that Honda may increase the monthly quota to 180 per month, but that is unconfirmed.

There are more than 250 million gasoline vehicles on America’s roads, with about 1.5 million being added each month. Hence, the release of just a few dozen natural gas cars, primarily in New York and California, assures that little or no dent will be made in the nation’s dependency on oil. By contrast, General Motors, often scorned by green car advocates, will commence mass production of the extended range electric Volt in November 2010 when battery supplies are expected to be ramp up. Unlike Honda, GM has promised to manufacture and sell as many hundreds of thousands of Volts and other electrified vehicles to as many as it can as quickly as it can at the best price that it can. No Honda-style quotas will be employed to stop sales, GM officials have promised this reporter. More than 100,000 eager car buyers have already signed up for the Volt and GM is promising to deliver Volts and other electrified models to every one of them as fast as physically possible.

T. Boone Pickens has earned a national reputation for advocating a switch to CNG. But there are few vehicles to switch to because Honda is the only carmaker that produces CNG passenger models for the American market, and then only at a rate of about 90 GX vehicles per month. Honda and the other major carmakers produce CNG passenger cars and trucks, but only for other countries.
Japanese Honda’s suppression of alt fuel technology in America was documented in this writer’s just released book The Plan, How to Rescue Society the Day the Oil Stops--or the Day Before. Just as the book was shipping, and during the additional research for this investigation, Pickens purchased Fuelmaker for a reported $17 million. The August sale 2008 is expected to dramatically unlock the Phill devices Honda kept off the market.

Indeed an exchange of early September 2008 auto dealer emails obtained by this reporter reveals that a public CNG fueling station for Broward County Florida is being approved for fleets. Broward County encompasses Ft. Lauderdale where Nova Southeastern University has expressed an interest in converting to CNG and other alt fuels. Also in Ft. Lauderdale, the country’s largest chain of auto dealerships, AutoNation, has expressed enthusiasm at the top for supporting, selling and even refueling alt fuel vehicles including the Honda GX—if the Japanese company will permit them to be sold.

For now, Honda has discussed resuming production in June 2009 and adding a few dozen cars per month as a token gesture. But for now, nothing is certain except that the company will probably answer inquiries by claiming gas stations do not exist for the home-refueled vehicle, and that there is no demand for such a car. It is unknown if Honda will erase the exclusion zone around Spokane and finally permit anyone there to purchase even one.

Edwin Black, who has always driven Honda cars,  is the New York Times best selling investigative author of IBM and the Holocaust, Internal Combustion and his just released book, The Plan: How to Save America When the Oil Stops—or the Day Before (Dialog Press), from which this article is adapted. More information about The Plan can be found at www.planforoilcrisis.com.

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If you are a Honda employee, dealer, fleet official or private customer, The Cutting Edge News welcomes copies of internal emails or documents involving the Honda GX. The source of all submissions will be kept as a journalistic confidence. Send all such info to HondaGXinfo@thecuttingedgenews.com.


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