So the effects of the recession are starting to hit home after the fall of the stock market, which is a leading not following indicator we are seeing large lay offs and cut back in the transport sector mostly focused on automotive companies.
The beg big 3 in America are the hardest hit, unemployment in hard-hit cities like Detroit and Cleveland is expected to top 10%
via WLNS TV 6 Lansing Jackson Michigan News and Weather – WLNS.COM | Job Cuts Imminent Across Country.
In the UK, we are seeing the effects of the recession as well, Jaguar Land Rover starts a 2 week production stop today only shortly after the Christmas shutdown, along with hundreds of job cuts, Nissan has cut staff and production, Honda has followed suit and Toyota is declaring its first loss in years.
My feeling, coming from an automotive background, that with the cost cutting internally at the companies there is trend to return to the core basics of car design and thus research and development is one of the first areas to be scaled back and budgets reduced.
The economics of this is rational, why spend money on features that are not yet being sold and in essence are not going to be a large option fit? Navigation systems really stayed under 10% fittment rate for years until low cost portable systems came along, what expectation is there for car to car or car to infrastructure communication systems or other in vehicle intelligent transport systems?
Moving out of the vehicle in the States President (soon not be be) elect Obama has made much of his rebuilding America plan to improve transport infrastructure.
The plan as yet is not detailed enough to know if ITS will be at the top of the to do list, but the $175 Billion has not yet been raised and in the scheme of things to spread across a country the size of the United States is probably not that much money, hence my feeling is that money will be focused more on “hard” infrastructure upgrades, road repairing and rebuilding may be above the introduction of traffic management and ITS.
But on the other hand technology can plug the gap if government agencies need to reduce personal costs many cities are using ITS to merge traffic management and security systems to improve efficiency.
With the down turn though many ITS projects may be cancelled and scaled back, however the effect of this will be a surplus of ITS companies bidding for a shortage of projects increasing competition and reducing the amount of money that ITS integrators are willing to charge, this means that there could be an opportunity for traffic planners to implement new and efficient ITS systems at a lower cost, if they can get the project funded that is.
A side point here, I do like looking at other industries to make my point, across the country there is a reduction of training budgets when personnel need to be competitive and sharper than their rivals, going against the rational response to the recession is difficult even for the most successful of companies. But KPMG recently offered their staff the option to take a sabbatical rather than redundancy.
Earlier this month, in an article written for the BBC News website, KPMG associate partner David Knight warned of the pitfalls of sacking staff.
He wrote: “Redundancies can sometimes be seen as a quick fix as employment costs often represent a significant slice of a company’s operating overheads.”
But he warned: “A redundancy programme can lead to problems when the upturn eventually arrives.”
via BBC NEWS | Business | KPMG to offer staff shorter week.
Much the same as cutting ITS projects, a quick fix to the budget but in the long run the ITS system could offer savings that out weigh the capital cost, and if car companies and governments can see the longer term benefits then maintaining funding for projects that could improve fuel efficiency, reduce congestion and increase employment then this can only be a good thing no?
I’m not suggesting that all ITS systems should be implemented and funded over say, repairing very large holes in the road (and trust me in America there are some very large holes), but a careful analysis of the benefits of certain ITS applications before cutting them out of hand may mean that when the up turn comes you are better positioned than those that that cut to the bone.
The i-Travel and connected traveller project 