The Plot to Keep the Super-Efficient Engine Off The Market

by
Dave Palmer




A correspondent wrote:

>we were sitting around talking, and he mentioned that his
>friend's father once had a car that got several hundred miles
>to the gallon, but the car company bought it back from him because
>it was using an experimental engine that never should have been
>sold -- the car companies and oil companies were conspiring to keep
this engine off the market.

Hogwash. The first company that came up with a super-efficient engine could QUIT whatever business it was doing and become fabulously wealthy just selling rights to it.

Let's look at this hoary fable in a bit of depth.

OK, first scenario: the brave, lone inventor, who just happens to have engineering knowledge decades ahead of anyone else in the world, tinkers around in his garage and invents the super-efficient engine. Suddenly, the Black Helicopters from MegaOilCorp swoop down (how did they know? Hey, they KNOW, pal...) and offer this brilliant but hopelessly naive inventor a dumptruck full of money for all the rights to his invention. Apparently not understanding the simple fact that he could make a zillion times that much by hanging onto it, he signs a big complicated legal form, one clause of which requires him to keep quiet about the whole thing in perpetuity.

With an evil laugh, the oily suits take the engine back to their Dark Lair and lock it into a safe, never to see the light of day. Brilliant! They've just stifled the threat to their livelihood.

Oooops, except two years later, an automotive engineering student in Kiev stumbles across the same principle, and hands out a press release before the Black Helicopters can get there. The oil company guys suddenly realize their big mistake: they didn't patent the thing, so they have absolutely zero legal recourse. But hey, they're MegaOil, who says they have to obey the law? They arrange to have the kid whacked, his engine dumped in the Black Sea, and all the recipients of the press release paid off. That works just fine, until six months later, when a retired Volvo engineer in Goteborg comes up with the same thing. And so it goes...

Ah, but what if they HAD patented it? Well, the problem there is that patents are in the public record, and there are all kinds of guys who do nothing but look through patent books all day looking for things they can cash in on. So, soon the patent for the engine is discovered, it becomes big news, and then a economics school student writes a master's thesis showing how MegaOil would have increased their stock price by six zillion percent if they'd marketed the damn thing. At the next stockholder's meeting, a group of livid investors corner the exec responsible for the debacle, and cut his goodies off with a dull letter opener.

Next scenario: the engineers at BigCo Motor Corp develop the super-efficient engine. They throw a big party to celebrate, their bosses give them big bonuses, everyone is happy! BigCo will OWN the automotive world! But ut-ooohhhh, there's an evil oil company guy on the BigCo board of directors. He calls up the CEO of BigCo, and the conversation goes something like this:

"Hey, Frank! Great to hear from you, fella! You read our announcement of the new engine?"

"Yes, Tom, and that's why I'm calling. Some of us on the board want you to deep-six it."

(a long, long pause)

"Um, sorry, Frank I didn't quite get that last bit."

"We want you to kill the project. Cone ON Tom, you KNOW that would hurt oil sales."

(another long pause, while the CEO idly toys with a dull letter opener)

"Errrr....Frank, that last time at the Betty Ford clinic, you DID dry out completely, didn't you? Didn't you get the financial report on this? Not only will BigCo's profits go through the ceiling, but we're projecting a 35% INCREASE in oil sales, because more people will be able to afford to drive because of this."

"Yes, but how would THAT look, me supporting something that uses LESS oil? It would be a PR nightmare."

"Frank, did you read my private addendum to that report? The part where I pointed out that the stock price increase in just the stock you personally own will put another $137 million in your pocket next year? Heh-heh, I called my broker before we put out the announcement, and had him buy me 50,000 shares of every oil company on the planet."

"Look Tom, don't try to fight me on this, you'll lose."

"OK, well look, thanks for calling, Frank. I've really gotta go now, the stockholders are throwing me this little ticker tape parade down Wall Street. Let's get together for a round of golf at the club one last time while you're still a member there, and not a busboy. Hey, by the way, did I tell you? I've hired a new pool cleaner. Some kid named Bill Gates."

*click*



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