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The 2010 Ford Fusion hybrid will get 39 miles per gallon.

The 2010 Ford Fusion hybrid will get 39 miles per gallon.

It is worth mentioning that auto CEO’s did give Congress assurance that they would not use this bailout money to sue states over their emission standards. It is a big about turn for the auto industry – almost everything they have been against now they have to be – for, one of the auto CEO’s did say that they thought electric cars were the way forward – as everyone has a plug – hybrid-electric is a good step, until battery life improves – at the moment we have car batteries that can go 240 miles without recharging – but they are heavy – and they weigh a tonne literally – though there is car battery technology being developed in Japan (always Japan) that is half the weight 450 lbs – their car companies quite sensibly work with the battery companies – the Japanese are also working on bringing down recharging times to about a half an hour.

Environmental groups are disappointed that money put aside to aid automakers to produce more fuel-efficient cars is now going to fund their operations.

Although the bill promises the money for retooling plants will be replenished in the future, environmentalists are skeptical. And they’re also upset the bailout doesn’t ban automakers from suing states that set tougher emissions limits than federal rules.

“We know they need help retooling their factories, and we feel very strongly that if those funds are going to be diverted and not replenished, Congress is walking away from their own commitment to fuel efficiency,” says Phyllis Cuttino, head of the U.S. Global Warming Campaign for the Pew Environmental Group.

The Energy Independence and Security Act of 2007 called for increasing fuel efficiency to 35 miles per gallon by 2020. In exchange for agreeing, automakers would get $25 billion in loans to help revamp their plants. They waited over a year for Congress to allocate the money. Now, some will go to the bailout.

“The funding Congress is considering now is just a Band-Aid, and it diverts funds originally intended to help the Big Three and other companies produce more fuel-efficient vehicles,” says Michelle Robinson, director of the Clean Vehicles Program for the Union of Concerned Scientists. “Those funds should be replenished when the new Congress convenes in January.”

INTERACTIVE GRAPHIC: A state-by-state look at auto industry jobs

What particularly irks environmentalists is that the automakers will continue on their quest to stop individual states from enacting their own emissions rules.

Roland Hwang, vehicle policy director for the Natural Resources Defense Council, said, “The White House has decided they want to hold up this entire bailout bill in order to remove this litigation provision. We’re very disappointed.”

Still, even though they aren’t getting money to increase fuel efficiency, high gas prices have forced the automakers to revamp their lineups in favor of more fuel-efficient cars. As Congress debated the bailout bill Wednesday, Ford showed off its 2010 Ford Fusion hybrid in Marina del Rey, Calif., and said that at 39 miles per gallon, it will be the highest-mileage midsize car.

“We’re going squarely after the imports with this,” says Frank Davis, executive director for North American product. The goal: “not only to compete but lead.” It’s exactly the pitch that Detroit needs to win the hearts of a skeptical Congress and American public, and the environmental lobby. Ford has not asked for loans now. General Motors and Chrysler say they need loans to stave off bankruptcy filings.

While it makes a play for environmentalists, the new hybrid will also be aimed at being a commercial success for Ford. Davis says it should add up to 25,000 sales of Fusions a year. While pricing isn’t set, the hybrid system is 30% less expensive than the last generation, like that in the Ford Escape hybrid SUV.

Ford plans to spend $14 billion in the U.S. on advanced technologies and products to improve fuel economy in the next seven years, it told Congress in the business plan it submitted as part of the bailout consideration. It plans a pure electric sedan by 2011.

Source: USA Today

Mr Obama’s spokesman, Robert Gibbs, said yesterday that the plight of automakers was one of a number of issues discussed in a two-hour meeting with Mr Bush to discuss the transfer of power at a time of war and financial crisis. Other issues included housing, mortgage foreclosures, and, more generally, “the need to get the economy back on track”.

The parlous state of the American car industry was highlighted last Friday when General Motors – the biggest US car manufacturer – reported a $2.5 billion net loss for the third quarter, bringing its total losses to nearly $57 billion since the beginning of 2005.

Ford Motor Company’s $129 million quarterly loss, meanwhile, brought to nearly $24.5 billion the deficit it has run up since plunging into the red in 2006. The privately-held Chrysler LLC is also thought to be fast running out of cash – one reason, analysts believe, why its parent, Cerberus Capital Management, was so eager to sell Chrysler to General Motors.

The New York Times, citing unnamed people familiar with the discussion, said that Mr Obama went into his post-election meeting with Mr Bush primed to urge him to support emergency aid for the car industry.

The Bush Administration is reluctant to give carmakers access to the bailout fund, even though the Democrats say it could legally do so.

Linking the issue with the Colombia free trade deal could delay any move until after Mr Obama’s inauguration on January 20. US union leaders oppose the agreement because of numerous murders of trade unionists in Colombia at the hands of right-wing paramilitary squads closely linked to the Colombian armed forces.

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