Saturday, February 28, 2009

A Look at the Dodge Electric Vehicle

The Beautiful Dodge EV

A few months back, Chrysler announced that it was working on three prototype EV's and PHEV's. There was a Jeep model, a Chrysler mini van model and a Dodge sedan. Of the three, the Dodge was the coolest and sportiest and did not resemble an electric car at all. The Jeep looked just like a run-of-the-mill model as did the mini van. However, those two were plug in hybrids that have an ICE and maybe 40 miles electric range as opposed to the all electric Dodge. Don't misunderstand me though as I would love to be able to walk into a dealership and purchase a plug-in hybrid electric vehicle.

The specifications for the Dodge EV are impressive. Powered by a 200 KW electric motor and a 26 kWh lithium ion battery pack, the car will accelerate from 0 to 60 in 4.7 seconds. That is very quick. Its range is reported to be 150 to 200 miles, which seems like a stretch for only having a 26 kWh pack. The Tesla EV uses a battery pack twice as large and its range is 200 to 250 miles. Hopefully, Chrysler's numbers will hold up for us.


"We have some stealthy spy shots of a rolling prototype of the Dodge EV, an all-electric two-seat sports car that is part of the electric-car blitz Chrysler says it will start in 2010.

This is a lightly restyled Lotus Europa--look closely, it’s quite similar. Even though these shots were taken from a distance and at night, we now see for the first time a prominent Dodge crosshair grille. The prototype also has large wheels and is orange and white, in contrast to the yellow-and-black version unveiled earlier this year.

In the back we also see taillights with a definite Dodge vibe, and the contoured door panels seen on the earlier prototype remain. It’s sort of like a watered-down Viper or a sexed-up Stealth.

The Dodge EV is a plug-in that draws power from a 26-kilowatt-per-hour lithium-ion battery pack that shoots volts to a 200-kilowatt electric motor that drives the rear wheels. That engine is rated at 268 hp and 480 lb-ft of torque. Chrysler says the range is expected to be 150 to 200 miles on a charge, and this pocket rocket can go from 0 to 60 mph in 4.7 seconds."

It sure would be nice if Chrysler decided to bring the Dodge EV to market in 2010. They previously announced that one of the prototypes would be offered by then.

Friday, February 27, 2009

GMAC CEO Proves Exactly What is Wrong With Our Society

Alvaro de Molina, CEO of GMAC and perennial lottery winner

Ready to get ticked off? Only two months ago, GMAC received $6 billion in bailout aid under the auspices of TARP (Troubled Asset Recovery Program, aka banking bailout bill). Today, we see how this evil banking company shows its appreciation. Alvaro de Molina received $11.2 million in 2008 ALONE for his fabulous work that necessitated his company needing $6 billion in FREE money.

First of all, is anyone really worth this kind of money? Wouldn't it be nice if all of us could get paid these sums as reward for driving a business into the ground? Obviously, de Molina is not alone as we read daily about the atrocities of CEO's who receive inordinate sums for shipwrecking their companies. I truly am worn out by these stories and wonder what it will take to stop this madness.

From Automotive News:

Auto financier GMAC LLC, the recipient of a $6 billion federal bailout in December, today said CEO Alvaro de Molina was awarded $11.62 million of compensation in 2008 -- which doubled his total compensation from 2007.

De Molina was awarded a $1.2 million salary, $5.81 million of stock awards and $4.8 million of other compensation, offset by option awards of negative $194,000, reflecting the application of an accounting standard.

GMAC said de Molina's compensation was $4.93 million in 2007. He became CEO on Sept. 5 of that year.

GMAC has in recent quarters suffered operating losses in its auto and mortgage units, but in December won its government bailout, as well as bank holding company status that allows it to tap lower-cost funding.

GMAC reported de Molina's compensation in a summary table included in its annual report filed with the U.S. Securities and Exchange Commission.

Differing calculations

Some pay consultants and governance experts tabulate executive pay differently, saying the summary total may be imperfect because it counts options and stock as part of pay when they vest rather than when they are awarded.

About $2.26 million of de Molina's compensation came from the use of corporate aircraft. GMAC said it no longer provides aircraft for business or personal use.

The bailout required private equity firm Cerberus Capital Management LP and General Motors to slash their respective 51 percent and 49 percent stakes in the Detroit-based lender.

In the annual report, GMAC said there remains substantial doubt about the ability of its mortgage lending unit, Residential Capital LLC, to survive. GMAC said it might take a $3.1 billion charge if ResCap were to file for bankruptcy protection and its investment in ResCap equity fell to zero.

Carnegie Mellon Breaks Down PHEV Efficiency, Cost Effectiveness and GHG Reducing Ability

Here is a recent study from Carnegie Mellon that analyzes the effectiveness of a plug in vehicle's ability to reduce fuel consumption, green house gases and minimize overall cost. This seems to be a fairly thorough study, albeit premature as there are NO plug in vehicles available to the masses from the major automakers. In other words, they are using aftermarket installations with varying battery configurations, which will taint the study. We need PHEV's pumped off the line TODAY and then we can more accurately assess the data.

The study basically states the obvious, in my book. Use big batteries, obtain a larger EV driving range and avoid using gasoline at all. Of course, the researchers then tell us this is not practical as the battery pack becomes too costly. However, if we had been manufacturing the batteries that are found in the Toyota RAV 4 EV for the past 10 years, battery cost would be a moot point. Those were Panasonic EV 95 NiMH batteries by the way. They have been proven for years and hundreds of thousands of miles, by the way.

Instead we are relegated to unknown, highly costly Li ion batteries which of necessity skew the findings of this report.

From Green Car Congress:

Best vehicle choice for minimum fuel consumption, cost, or greenhouse gas emissions as a function of distance driven between charges across sensitivity scenarios. Shiau et al. (2009) Click to enlarge.

A team of researchers from Carnegie Mellon University has analyzed the impact of plug-in hybrid electric vehicle (PHEV) battery pack size on fuel consumption, cost and greenhouse gas emissions over a range of charging frequencies (distance traveled between charges). The study will appear in an upcoming issue of the journal Energy Policy.

When charged frequently (every 20 miles or less), using average US electricity, small capacity (i.e., lower all-electric range) plug-in hybrid electric vehicles (PHEVs) are less expensive operationally and release fewer greenhouse gases (GHGs) than hybrid-electric (HEVs) or conventional vehicles, according to the study’s findings.

“Larger battery packs allow drivers to go longer distances on electric power. But batteries are heavy and expensive. Over a range of scenarios—including fluctuating gas prices, new battery technologies or high taxes on carbon dioxide emissions—plug-ins with small battery packs are economically competitive with ordinary hybrid and conventional vehicles for drivers who charge frequently.”
—Prof. Jeremy Michalek

For moderate charging intervals of 20-100 miles, PHEVs release fewer GHGs, but HEVs are more cost-effective, the study found. Large-capacity PHEVs—sized for 40 or more miles of electric-only travel—are not cost-effective in any scenario, according to the findings, although they could minimize GHG emissions for some drivers and provide potential to shift air pollutant emissions away from population centers.

The study, led by Assistant Professor Jeremy Michalek, indicated that the impacts of increased battery weight from larger packs on charge-depleting (CD) mode electrical efficiency and charge-sustaining (CS) mode fuel economy are measurable, with about a 10% increase in Wh/kg and an 8% increase in gallons per mile when moving from a PHEV7 to a PHEV60. This implies, the researchers said, that the additional weight of a PHEV60 results in a 10% increase in operation-related costs and greenhouse gas emissions per mile relative to a PHEV7 for drivers who charge frequently (every 7 miles or less).

The best choice of PHEV battery capacity depends critically on the distance that the vehicle will be driven between charges. Our results suggest that for urban driving conditions and frequent charges every 10 miles or less, a low-capacity PHEV sized with an AER of about 7 miles would be a robust choice for minimizing gasoline consumption, cost, and greenhouse gas emissions.

An increase in gas price, a decrease in the cost of usable battery capacity, or a carbon tax combined with low carbon electricity generation would increase PHEV cost effectiveness for a wide range of drivers. In contrast, a battery technology that increases specific energy would not affect net cost and GHG emissions significantly, and a $100 per ton carbon tax without a corresponding drop in carbon intensity of electricity generation would not make PHEVs significantly more competitive.

These results suggest that research on PHEV battery technology improvements would be better targeted toward cost reduction than improvement of specific energy, and the effect of carbon taxes on the PHEV market will depend on their effect on the electricity generation mix, such as encouraging renewables, carbon capture and sequestration, and nuclear.

...The dominance of the small-capacity PHEV over larger-capacity PHEVs across the wide range of scenarios examined in this study suggests that government incentives designed to increase adoption of PHEVs may be best targeted toward adoption of small capacity PHEVs by urban drivers who are able to charge frequently.

—Shiau et al. (2009)

The study, which was funded by the National Science Foundation and the Teresa Heinz Scholars for Environmental Research Program, points out that targeting drivers with the potential to charge frequently would not limit plug-ins to a boutique market: nearly 50% of US passenger vehicle miles are traveled by vehicles driving less than 20 miles per day.

The researchers used the split drivetrain configuration of a 2004 Prius as the baseline HEV, and examined PHEV versions of it sized for 7, 20, 40, and 60 miles (11, 32, 64 and 96 km) of all-electric range (AER) with comparable performance characteristics.

For simplicity, they assumed an operating strategy in which the PHEVs run entirely on electric power in the charge-depleting (CD) range (i.e., not blended mode), and then switch to operate like an HEV in the charge-sustaining (CS) range. The battery packs used Saft Li-ion cells with 6 Ah capacity and nominal output voltage of 3.6V. The researchers used Argonne National Laboratory’s Powertrain System Analysis Toolkit (PSAT) to model and examine design tradeoffs between battery capacity and PHEV benefits.

The researchers modified the control strategy so that the PHEVs operated in electric-only charge-depleting mode until the battery reaches 35% SOC, after which time the vehicle switches to CS-mode and operates like a Toyota Prius, using the split control strategy with a target SOC of 35% and SOC operating range of 30-40%.

Thursday, February 26, 2009

Introducing the BG (Be Green) Automotive Group

The Peppy BG C100 EV

Here's a new one kids, a company called BG Automotive that I have somehow overlooked until recently. The company is introducing a Neighborhood Electric Vehicle (NEV) model this spring. That's right, no more reason to wait if you want to make a difference NOW.

The model C100 zips you down the road at speeds up to 45 mph and can range up to 120 miles. If you can get by with a second car that need not travel the highway, this is it. Urbanites can actually use this car everywhere as well as carry passengers and cargo. In other words, this is not just another glorified electric golf cart.

From their website:

GM Posts a Staggering Loss of $9.6 Billion in the 4th Quarter of 2008.

GM World Headquarters

General Motors burned through $6.2 billion in cash during the fourth quarter in posting this massive loss and is even now in talks with the Obama administration requesting more money.

The nation's biggest domestic automaker lost $30.9 billion for all of 2008 as it struggled against a U.S. sales slump and a global recession.

For the fourth quarter, GM says it lost $15.71 per share, compared with a loss of $722 million, or $1.28 per share, in the year-ago period.

Excluding special items, The Detroit company's loss was $9.65 per share. On that basis, analysts surveyed by Thomson Reuters predicted a loss of $7.40 per share.

Since December, GM has received $13.4 billion in US Government loans and is now asking for an additional $30 billion. One has to wonder if they even have a chance of recovering sufficiently to ever repay the loans. Auto sales are still down for 2009 with no relief in sight and GM has no real plan for a comeback, in my opinion. Will anyone step up and buy the Hummer brand or will Saturn be able to spin itself off from the parent? What is GM going to do short-term to staunch the flow of cash? Another quarter like this past one would have them on life support.

Wednesday, February 25, 2009

General Motors Now Claims the Volt and Cruze Engines Will Be Made In Flint, Michigan

Wouldn't you know it, one day after I lament that GM will be using foreign made engines, we get this press release.

General Motors has confirmed today that it will still invest approximately $250 million to bring the 1.4-liter 4-cylinder Family 0 engine production to Flint, Mich. The engine capacity for the Chevy Volt and Cruze will be allocated to existing and available floor space in the company’s Flint South engine plant located on Bristol Road.

Preparations to the Flint South plant for installation of new machinery and equipment will begin this Spring. Production of the 1.4-liter engines is targeted to begin in December 2010.

Production of Family 0 engines at Flint South will be GM’s most flexible and competitive engine manufacturing lines in the world, with approximately 150 highly flexible stations that will allow production of multiple 4-cylinder engine families without retooling.

This means that GM will not invest in new floor space at this time due to current capital expenditure constraints and available floor space in existing facilities.

There you have it. You can ignore my previous diatribe about the little four cylinder engine. It is worth noting that the first Volts are due in dealerships at the same time this plant will be ready, so there will be a need to use overseas engines in the beginning.

President Obama Addresses Auto Industry in Congressional Speech

President Obama's address 2-24-09

Last evening, President Barack Obama addressed the joint Houses of Congress and stated the obvious. The United States economy is tanking, but we are Americans and we will pull out of this stupor in no time. Along the way, he described the ills of the auto industry and really did not pull any punches.

"As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices.

"But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it."

Pretty strong words from our Commander-in-Chief, but right on the mark.

Obama continues, "We know the country that harnesses the power of clean, renewable energy will lead the 21st century. And yet, it is China that has launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we've fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea."

"While our economy may be weakened and our confidence shaken, though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover," Obama said.

"And the United States of America will emerge stronger than before," he told a chamber packed with lawmakers, cabinet members and invited guests.

Hats off to Obama's speechwriters, who did not shy away from from the truth, yet balanced the speech with plenty of hope and optimism. I am hopeful that the US automakers will take something from this speech and become the world leaders they used to be.

Tuesday, February 24, 2009

GM Will Not Build Cruze and Volt Engines in US

Well, this is huge. Instead of building the small four cylinder engine for the Cruze and Volt here in the States, apparently, these engines will be shipped overseas. What a bummer. The beloved Chevy Volt will now have foreign batteries as well as a foreign engine. What's the point? I'm better off buying a Prius and having it converted to plug-in power here in the US! If you cannot tell, this news distresses the author.

From Automotive News:

General Motors has scrapped plans for a new engine plant in Flint, Mich., that would have built 1.4-liter engines for the Chevrolet Volt hybrid and Cruze compact.

Instead, those engines will be built in an existing plant in Flint, said GM spokeswoman Sharon Basel.

GM has been hustling to cut costs as it battles to survive. GM and Chrysler LLC presented their restructuring plans to the U.S. Treasury Department last week in an effort to qualify for federal loans. The companies have received $17.4 billion in government loans and say they will need as much as $21.6 billion more.

"Because of capital constraints, we are not investing in new floor space," Basel said.

The change of plans will not affect the launch of the Volt and Cruze, Basel said. GM plans to import the first engines for the Volt and Cruze from Europe, Basel said.

By December 2010, GM's Flint South engine plant is expected to begin building Volt and Cruze engines. The Cruze is due in showrooms in early 2010, and the Volt is scheduled to follow in November.

Basel said GM reassessed plans for the new engine plant after the Chevrolet TrailBlazer and GMC Envoy SUVs ended production in December. The Flint South plant built a 4.2-liter inline-six engine for those vehicles. That engine has been discontinued, freeing up factory space.

Beginning this spring, GM will spend $250 million to modify and retool Flint South to build the new engines.

GM announced the new Flint plant last fall and had started site preparation when sales stalled and GM ran into major financial trouble.

Basel said it is possible that the new plant for the Cruze and Volt engines would be built someday.

Project Better Place

Today I would like to have a look at Project Better Place. The company was publicly launched as Project Better Place, by Shai Agassi on October 29, 2007 but now they seem to go by Better Place instead. The concept for this company is unique and may very well become the industry standard. Better Place is working to build an electric car network using technolgies available today. Their goal is sustainable transportation, global energy independence and freedom from oil. Very admirable goals, in my opinion.

How it works:

Basically, Better Place is building an electric car infrastructure. This entails the electric car, the batteries, the charging stations and locations for battery swapping. Better Place is currently deploying its plan in Israel but hopes to come to California in the future.

The electric car will come from the Renault-Nissan Alliance which is 100% electronic and will be powered by a battery developed by suppliers such as Automotive Energy Supply Corp. (AESC), a joint partnership of Renault-Nissan and Japanese manufacturer NEC and others, like A123. A first prototype of an EV debuted in Tel Aviv in January 2008.

The batteries will be Lithium Ion type and can reliably deliver driving distances of over 100 miles on a single charge and replenish themselves at approximately one minute per minute of drive time. Better Place is hoping that as these batteries become mass produced that the economies of scale will drive their cost down and make it much more attractive to consumers.

The most unique part of the plan is their Battery Exchange program. From their website:

Battery Exchange Stations

"In addition to widely deployed charge spots, the Better Place network will provide fully-automated battery exchange stations. These swap stations are designed to extend the driver's journey beyond the 100 mile range of a fully-charged battery. Because most of today's driving is within 40 miles of the home, a visit to one of these facilities will be infrequent when compared to the number of times we currently have to pull into a gas station.

These Better Place battery exchange stations are even more efficient and convenient than conventional gas stations. Each is roughly the size of your average living room. Like the charging spots, they are fully automated. A driver pulls in, puts the car in the neutral gear, and sits back. The battery exchange station does all the work. The depleted battery is removed, and a fully-charged replacement is installed. In under three minutes, the car is back on the road. It's just like an automatic car wash, a quick, effortless, drive-through experience.

The battery exchange stations will be able to accommodate any Better Place-compliant vehicle. All manufactured batteries will be stocked so that any electric vehicle with a swappable battery, regardless of make or model, can pull in and be serviced."

Finally, the most critical piece of the puzzle in my estimation are the Charge Spots. These are the regular interface points between the electric car and the power grid. If a society is to adopt the electric automobile, then these charge spots need to become fairly ubiquitous. Some of the locations for the charge spots are parking garages, retail spaces, street curbs, as well as within the homes of driver's everywhere.

I sincerely hope Better Place succeeds so that the world will know this technology is feasible and ready for prime time.

Monday, February 23, 2009

Introducing the Miles XS500 All Electric Vehicle

The Miles XS500 Electric Sedan

The Miles Company has been working on a four door all electric sedan which is supposed to make its debut in 2010. It has been called the Javlon, XS500 and now their website names it the Miles Highway Speed Sedan. Whatever you choose to call it, the car promises to be all that.

The Highway Speed Sedan is a quantum leap for Miles as they currently market NEV's (Neighborhood Electric Vehicles), which are limited to top speeds of 25 mph. While these cars are great for running errands, you will tend to avoid busy routes with 35 mph posted limits. If you try to drive the NEV on these streets, you hold up traffic, get honked at and maybe even flipped off! Some states are revising the law to allow these vehicles to travel at speeds up to 35 mph and there is a growing aftermarket for kits that will override the 25 mph limitation. However, the new Highway Speed Sedan is going to solve that problem for you.

The Miles electric vehicle will have top speeds in excess of 80 mph and a range of 120 plus miles. The Miles website also claims a "run time" of 240 minutes, which if accurate, means you could conceivably drive 30 mph for four hours straight. If you live in town and work in town, then the charge should last you almost four days. If you have a 30 or 40 or 50 mile one-way commute, then this car is the one for you. The overwhelming majority of Americans have a commute distance to work of 40 miles or less (round trip). The only limit for this car is when a long drive is needed, greater than 120 miles. This limit is easily overcome with careful planning so that the car can be recharged while eating or at a hotel, etc. Most Americans only travel long distances once or twice a year, so that should not be a factor in deciding to purchase this vehicle. Some options for these long trips include using the family's second car or using a rental car for the trip.

Now for the bad news. The Highway Speed Sedan will be available to consumers at a MSRP of $40,000 to $45,000 depending on options. Most Americans like their options, so I am guessing the majority of these cars will be sold for $45,000. There is good news however. The US Government has already passed legislation that will give a $7500 rebate for the purchase of this car. Some are speculating that Obama will try and increase this subsidy to $10,000 when he is in office. For the sake of fun, let's say we bought the $40,000 model and received a $10,000 rebate. That would mean the car costs $30,000 plus tax. For a four door mid sized sedan, that is still a hefty pricetag, but I truly think it is worth the investment.

The Chevy Volt will retail at almost the exact same price as the Miles car, but the Volt has the advantage of an internal combustion range extender. With the Volt, you never have to worry about range as gasoline stations are ubiquitous. There are other considerations to take into account. An all-electric vehicle has very low maintenance costs and very few moving parts. An internal combustion vehicle has very high maintenance costs and a ton of moving parts. Over the life of the car, you will pay much more for the Volt than the Miles. Oil changes, radiator flushes, tune ups, belts and hoses, etc., etc. You get the picture.

So what do you think? Would you rather have a Volt or a Miles Highway Speed Sedan?

The Subaru Stella EV

The Subaru Stella EV

More good news for those of us who desire alternative energy vehicles. Fuji Heavy Industries (FHI), who make Subarus, will commence delivery of the Stella plug in vehicle this summer. Unfortunately for those of us who live in North America, these cars will be for sale only in Japan.

The Stella EV will have a top speed of 62 mph (100 kph) and a range of 50 miles or 80 km. I presume that Subaru is going to try and keep the cost low for this vehicle as the battery pack only contains 9.2 kWh's of energy. The battery technology is Lithium ion with a nominal voltage of 346V. The 50 mile range is sure to give most commuters some anxiety and the 62 mph top speed may deter freeway use. However, for those individuals who need not travel on roads with posted speed limits greater than 55 mph, this car could be perfect.

I would personally prefer to see this car with a 100 mile range and 70 to 75 mph top speed. These numbers easily cover the overwhelming majority of US commuter's needs. Of course, you would need twice the battery capacity which probably doubles its cost. We need mass production of Lithium batteries to bring their cost down and make the technology more available to the masses.

The next two years are going to be great for alternative energy vehicles. I am personally very excited to see the next years unfold. We will soon have a great choice of electric vehicles at showrooms and also competition for our hard earned dollars.

Thanks FHI and Subaru for giving us one more choice!

From Green Car Congress:

Fuji Heavy Industries (FHI), maker of Subarus, will begin delivery of the plug-in STELLA (earlier post) this summer, according to FHI President & CEO Ikuo Mori in his New Year press conference speech.

More than 100 units are to be delivered mainly in metropolitan areas of Japan. FHI is calling 2009 the “First Year of Electric Vehicle”.

The Subaru Plug-in STELLA Concept combines the electric drive system employed in the R1e (earlier post) with the Subaru STELLA minicar platform. FHI plans to use the plug-in STELLA Concept in the development and test-marketing of the next generation of EVs in Japan in the near future.

The STELLA EV seats four, has a maximum speed of 100 kph (62 mph) and a range of 80km (50 miles) per charge. A 9.2 kWh, 346V Li-ion battery pack drives an electric motor with 40 kW output and that develops 150 Nm torque.

Sunday, February 22, 2009

The Plug-In Saturn Vue May Become a Reality

A few posts back I lamented the fact that with Saturn being effectively downsized into oblivion, we would not be able to see the plug-in Vue. Apparently, I was a bit hasty in this conclusion as we now hear that the Vue is still on track for 2011. This comes as a surprise in light of the fact that the plug-in model is more expensive to manufacture, produce and market. Furthermore, this model will have a higher MSRP and smaller market share. All of this at a time when GM needs to cuts costs at every opportunity.

Let's hope that GM spokesperson Rob Peterson knows what he is talking about, in this interview with

GM spokesperson Rob Peterson advised the following:

Saturn will remain in operations for the next several years through the planned lifecycle of it’s existing product line. As our viability plan showcased, we’re very committed to the electrification of the automobile and continue to develop several hybrid systems and vehicles including the Saturn Vue Plug-in Hybrid.

Plug-in Vue is currently set for 2011. We announced that the Vue launch was moved to 2011 earlier this year.

Saturday, February 21, 2009

The Myers Motors NMG (No More Gas) All Electric Vehicle

The Myers Motors NMG

The Myers Motors NMG all-electric vehicle is one of only a handful available for public consumption. What is unique about the NMG is that it is capable of freeway speeds. There are several all-electric NEV's (Neighborhood Electric Vehicles) for sale but these are limited to 25 mph top speed. In most communities, this limitation will get you run over, honked at or flipped off. Some of the NEV's can now be modified for a top speed of 35 mph, which may or may not be legal in your neck of the woods. But I digress, so let's return our focus on the very cool NMG, which stands for No More Gas.

The Myers Motors NMG began life as the Corbin Sparrow. Corbin had the original idea of a three wheeled all electric vehicle that seated one passenger with room for a couple bags of groceries. The car could travel about 30 miles with a top speed of 75 mph, meaning you could run on the freeway. Of course, you would not be able to travel far on the freeway! Nevertheless, Corbin had a great idea but could not maintain the marketing and quality necessary to succeed.

Dana Myers then stepped in to buy the ailing business and renamed it the NMG. He has worked hard to re-make the vehicle and promoted it well. The product today is a vast step up in quality from the Corbin days and their product support is solid. I have made the trip to Tallmadge, Ohio to visit their facility and drive the vehicle and I must say I am very impressed. It is quick and responsive and oh so quiet. You just cannot beat an all-electric vehicle.

The Myers Motors NMG is marketed towards the daily commuter who needs less than 30 miles range to get there and back. Of course, if you can plug the car in at work, that range may be doubled. I would personally like to see a two seat version and 50 miles range to make it worth the 30 grand selling price. Maybe some day, especially with Li ion prices coming down. Nevertheless, this is another brick in the road on our journey towards living oil free.

The Myers Myers website:

Friday, February 20, 2009

SAAB Breaks From GM and Promptly Files for Reorganization

Here is the first of GM's brands to be released. SAAB has filed papers in Sweden for reorganization, which is similar to declaring bankruptcy. The auto maker also said it would need $1 billion in order to be self-financing although the source of the funds is unclear.

General Motors presented its viability plans to Congress last Tuesday and part of these included offloading some of the GM brands. SAAB and Hummer were two of the lines that needed to sold, Saturn was to be phased out and Pontiac would be slimmed down drastically, only offering specialty vehicles. GM is still pursuing a buyer for Hummer but releasing SAAB seems to prove GM is serious about their business recovery.

SAAB now will work with the Swedish government as well as GM in order to get on their feet and become independent. Of course, like nearly all the automakers, SAAB posted a loss last year and is expected to lose as much this year. The court in Sweden stated that they will have three months to get all their ducks in a row. Not much time, really.

From Automotive News:

Saab is seeking $1 billion (793 million euros) to be self-financing, the company said today after it filed for reorganization under a self-managed Swedish court process.

The General Motors-owned Swedish brand said it will work "to create an independent business entity" and will concentrate production, design and engineering in Sweden.

Saab said it would continue to operate as normal during the reorganization process, with GM and the Swedish government providing some support.

Saab Managing Director Jan-Ake Jonsson said: "We explored and will continue to explore all available options for funding and/or selling Saab. It was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment."

Saab's application for reorganization was filed with the Swedish district court in Vanersborg. Under the procedures, the court appoints an administrator to review Saab and its business plans.

If the court approves the reorganization, the process will run for three months. A proposal for Saab's future will be presented to creditors within three weeks, Saab said in a statement.

Saab estimates that it made a loss of around 3 billion crowns ($340 million) last year and would run a similar loss this year, the carmaker said in documents submitted to the Swedish court today.

"The estimated, still unaudited loss for 2008 amounts to 3 billion crowns. The current outlook for 2009 suggests a similar level of losses and associated funding requirements," Saab said in the document filed with the court.

The company said GM had notified the company that it would not fund further projected losses at Saab, but that it would provide liquidity for the company to pursue a reorganization.

GM Europe's head of communications Chris Preuss said GM was prepared to provide some funding for Saab but the brand needed outside money as well.

He said: "GM has put a substantial amount of money on the table to sustain Saab's operations and to launch the products that are in the pipeline.

"We have asked the Swedish government for loan guarantees for $600 million to give Saab a balance sheet as an independent unit which will allow it to continue."

Preuss said funding for Saab is still intact. "We just need to see how funding can be secured from either government or private sources during the restructuring process," Preuss told Automotive News Europe.

GM's support would also extend to the development costs and tooling for the new 9-5, 9-4X and 9-3X, which will launch in the next 18 months.

GM will also continue to provide technical support to Saab in the future and provide parts through licensing agreements, Preuss said, but there were limits to the support GM would provide.

Preuss said: "(GM President) Fritz Henderson made it very clear that GM will be out of Saab one way or another by the end of this year."

Saab has applied for 500 million euros from the European Investment Bank, which is the long-term lending arm of the European Union. The company also is trying to raise more funds from GM as well as from public and private sources.

Jonsson said reorganization will allow Saab to launch new models while minimizing the brand's liquidity impact on GM.

"With a new 9-5, 9-3X and 9-4X all ready for launch over the next year and a half, Saab has an excellent foundation for strong growth, assuming we can get the funding to complete engineering, tooling and manage launch costs," he said in a statement.

Earlier this week, the Swedish government said it is not prepared to take over Saab after GM said it planned to shed the brand quickly as part of its restructuring efforts.

GM bought half of Saab in 1990 and took full control in 2000. The brand has made a profit only in one year during GM's ownership.

Last year, Saab's global sales fell 25.5 percent to 93,338 units

Industry insiders said there has been a greater interest from outside investors in Saab since GM's announcement that it was looking to offload the brand.

Saab employs some 4,000 people in Sweden, mainly at its plant in Trollhättan in the southwest of the country. Another 25,000 jobs at suppliers depend on Saab.

Thursday, February 19, 2009

Saturn Letter Describes Spinoff Possibility

The Saturn Vue

A letter was sent out last night from Jill Lajdziak, who is Saturn's General Manager, warning customers that the company may be spun off from General Motors. This would be the best case scenario for the plucky auto manufacturer.

As part of GM's restructuring plan submitted to Congress Tuesday, the Saturn brand will be phased out with the last models appearing in 2012. GM is also trying to sell the Hummer line. Eliminating Saturn will reduce GM's production costs, payroll costs, advertising costs, etc., but it sure is bad news for existing, loyal Saturn owners.

Saturn was in the process of producing a plug-in Saturn Vue, but since this financial crisis, I have heard nothing further about its release. In fact, they originally were going to market the plug in version this year but that date has slipped. The last date I heard for this car was in 2010, but it looks like that is in jeopardy. The plug in Saturn Vue was going to be a great car because it could run for about 10 miles solely on battery power. For many folks, this means that the local running around and short errands could be accomplished without gasoline.

Let's hope Saturn can somehow survive.

From Automotice News:

Saturn has begun alerting customers that it may be spun off by General Motors as an independent marketing and distribution company.

In a letter sent to about 1.5 million Saturn owners last night, Saturn said it would have to line up products to sell -- either from other manufacturers or from GM in the role of a vendor -- after GM's current commitment to build Saturn products ends after the 2012 model year.

"The Saturn Distribution Corporation already exists as an indirect subsidiary of GM," wrote Jill Lajdziak, general manager of Saturn, in the letter. "It's the entity with which our retailers have their franchise agreement.

"An independent Saturn would still have its great retailers, and it would continue to source current products from GM through 2011. If successful, SDC at that point would source products from other manufacturers."

A Saturn spokesman confirmed the letter and its contents. The purpose of the letter is to reassure current and potential Saturn owners that Saturn is a viable brand and that GM will back its warranties and product quality, says spokesman Steve Janisse.

The goal of a spinoff would be to find future vehicles "that match the Saturn Brand: fuel-efficient, safe, reliable and affordable," Lajdziak said. "From a retailing perspective, we would build on our core strength of unmatched customer service."

No decisions for 60 days

Meanwhile, Saturn dealers say Saturn asked them on Wednesday to make no decisions about what to do with their stores for at least 60 days. That's because Saturn has formed a study group consisting of Saturn retailers, GM employees and independent consultants to do the "hard-core due diligence" work on what it would take to spin off Saturn, said Janisse.

The subcommittee will study possible sources of future product, either from GM or another manufacturer, which might take over Saturn, Janisse said. Another possibility is for an independent investment company to take over a spun-off Saturn and give it the money to buy product.

"That's what that subcommittee is studying, and they're working day and night on this," Janisse said.

"The goal is within 60 days to have a solid understanding of if the current spinoff option is valid," Janisse said.

But he said a decision might be delayed if the process isn't complete.

In its viability plan submitted to the U.S. Treasury Department on Tuesday, GM said Saturn will remain in operation through the end of the planned lifecycle for all

Saturn products. In the interim, GM said it would be open to the possibility of Saturn retailers as a group or other investors present a plan that would allow a spinoff or sale of SDC. If that didn't occur, GM said it planned to phase out the brand.

Wednesday, February 18, 2009

Survey Shows US Car Owners In No Hurry To Buy New

Here is some some sobering news, albeit expected. A recent survey has shown that the vast majority of current car owners will keep their existing vehicle longer than usual, due to the sour economy. This, of course, is bad news for the slumping auto makers who desperately need buyers. In theory, this weak demand should drive retail prices even lower, so be on the lookout for deep discounts.

From Green Car Congress:

A new study by and Kelton Research found that more than four out of every five US car owners now plan to keep their current car longer, due to the bad economic climate.

According to the survey of US vehicle owners aged 18 and over, 82% reported they now intend to keep their car longer than originally planned. The findings suggest an end to the cycle of frequent new car buying.

In a downturn economy, consumers focus automobile-related efforts on maintaining vehicles, minimizing operational expenses and preserving the vehicle’s overall value.

—Thilo Koslowski, vice president and automotive practice leader at Gartner, Inc.

The trend is even stronger for low income drivers and families. Eight-six percent of consumers with an income of less than $40,000 and families with children indicate they will keep their vehicle longer than originally planned.

Nissan Needs European Loans to Continue Electric Vehicle Project

The Nissan Nuvu electric city car concept

Here is an interesting story. The Japanese motor company, Nissan, is pressing for huge sums of money from the European Investment Bank (EIB). The automaker is in a similar situation as most others, in that is becoming strapped for cash and the banks are not willing to loan large sums of money due to the recent financial crisis.

Eric Nicolas is Nissan's senior vice president of finance and administration and had this to say, "I need money to survive and we are not going to get it from the banks at the moment." Nissan has also held two high-level meetings in recent months with the Luxembourg-based EIB. The thrust of these meetings were attempts to obtain an initial injection of low-cost financing before year-end, according to Nicolas. Also during these meetings Nissan has told the EIB that it needs help towards the billions of euros it will cost to fund the European elements of its global electric vehicle project. This project is being orchestrated in conjunction with French alliance partner Renault.

In a separate application, Renault has already requested 400 million euros from EIB, which could be approved in the coming months.

The bottom line is that if Nissan can not obtain these loans, then the electric project will be halted as well as their current European research and development. Nissan is shooting for an electric car sales debut in 2012, so let's wish them luck. As I have said before, we need all the alternative energy automobiles we can get.

Tuesday, February 17, 2009

Chrysler Claims to Need Another $2 billion

Like GM, Chrysler submitted its plans to Congress today and asked for an additional $2 billion in loans. Chrysler originally asked for $7 billion and was given $4 billion, but since December, the market has worsened and changed their forecast.

Chrysler is reducing fixed costs, production, number of models and selling off assets. Even with all of these actions, it is not enough and so they need more money. Like GM, I wonder about Chrysler's "business as usual" mentality and if they can make radical changes to increase sales. With four upcoming electric vehicles on the horizon, I believe Chrysler can be a success if given a chance.

From Automotive News:

In submitting its viability plan to the federal government today, Chrysler LLC asked for an additional $2 billion beyond the $7 billion in loans it sought late last year and outlined further steps to cut costs.

Chrysler said it will reduce fixed costs by an additional $700 million, cut 100,000 more units of production capacity, discontinue three more model lines and sell $300 million more in assets.

"Since Chrysler LLC's original $7 billion submission, there has been an unprecedented decline in the automotive sector," the company said in a statement. "Based on this, we will require incremental financial support to continue our orderly and effective restructuring."

The Bush administration gave Chrysler only $4 billion of the $7 billion in loans it sought.

The automaker promised to complete its viability plan by the March 31 deadline. Chrysler says it could survive on its own but would be "enhanced through a strategic alliance." That alliance, with Italian automaker Fiat S.p.A., would give Chrysler access to a supply of fuel-efficient small cars.

Highlights of Chrysler's viability plan
• Seek $2 billion more in U.S. loans, for a total of $9 billion
• Reduce fixed costs by an additional $700 million this year
• Eliminate 100,000 units of production capacity
• Cut 3,000 more jobs
• Sell $300 million in additional assets
• Discontinue 3 more model lines
• Submit final plan by March 31
• Begin paying back loans in 2012


Chrysler has been negotiating for concessions with the UAW, dealers, suppliers and debt holders. Chrysler said those concessions have largely been agreed upon. Chrysler's statement said the UAW concessions would make the automaker competitive with transplant manufacturers in the United States.

Last year, Chrysler asked Congress for a $7 billion loan to help it survive until the economy turns around. With auto sales running at an annual rate of about 10 million for the first two months of 2009, Chrysler officials acknowledge that recovery won't happen until 2010.

Congress denied Chrysler's request. The Bush administration provided $4 billion at the end of December. Before today's announcement asking for an additional $2 billion in loans, Chrysler had said it still needs the other $3 billion to survive.

Chrysler suffered a precipitous loss of sales and revenue in 2008. The company's 30 percent sales loss was the steepest among major carmakers in the United States last year.

Chrysler claims its restructuring plan, launched in February 2007, was on track until June 2008. That's when fuel prices soared to $4 a gallon and the credit crisis was gathering momentum. The credit meltdown forced Chrysler's captive finance company, Chrysler Financial, to exit the leasing business in August 2008, costing the carmaker 20 percent of its sales volume almost overnight.

Since launching its recovery plan, Chrysler has eliminated 1.2 million units of capacity and stopped building four unprofitable models. In the process, Chrysler has slashed its work force by 32,000 and cut fixed costs by $3 billion. Chrysler says it has identified more than $1 billion in unproductive assets and already sold $700 million worth.


Chrysler is relying on alliances with other carmakers to rebuild itself.

Chief among those partnerships is a proposed alliance with Fiat, announced in January. Under terms of the deal, Fiat would supply Chrysler with a range of small cars and sub-2.0-liter engines that will help Chrysler meet U.S. fuel economy requirements. Fiat gets access to the U.S. car market for its products, including the Fiat 500 small car, while Chrysler gets access to Fiat's international markets.

The alliance is contingent on U.S. Department of Treasury approval of the $7 billion loan Chrysler originally requested. Chrysler says Fiat will not receive any U.S. taxpayer dollars.

Chrysler has taken other cost-saving measures to meet Treasury requirements, including:

• Suspending its salary merit pay programs for 2009.

• Ending matching contributions for workers' 401(k) plans.

• Making top executives sign waivers banning them from taking incentive compensation or golden parachutes.

• Eliminating retiree life insurance.

GM Tells Congress It May Need up to $30 billion

General Motors gave Congress its dire outlook today and it wasn't pretty. Business has been in the category of "worst case scenario" since December with no signs of letting up. Instead of being able to turn things around with the $13.4 billion in loans it has received thus far, GM claims to need more. In fact, they claim to need about $30 billion.

Negotiations with the UAW are ongoing and the auto giant has stated it will slash tens of thousands more jobs, but will it be enough? What if the current sales slump persists throughout 2009? How many billions will it take then? Unless GM can change its business as usual mentality, I don't see the company surviving.

From Yahoo News:

General Motors Corp., presenting a dire outlook for the future, said Tuesday it may need $30 billion in total government financing to weather the economic downturn and would cut 47,000 jobs worldwide and shutter five more U.S. factories in a massive restructuring plan.

The automaker is already surviving on $13.4 billion in federal loans and said in a plan submitted to the Treasury Department that it would seek an additional $16.6 billion if economic conditions worsen, but it could achieve profitability in two years and fully repay its loans by 2017.

The U.S. automaker presented its turnaround plan to the Obama administration as it worked to win concessions from the United Auto Workers union and bondholders to dramatically resize the company. The UAW said it reached a tentative deal with GM, Chrysler LLC and Ford Motor Co. on contract changes but discussions were still under way about how the companies would fund union-run trust funds that will take over the companies' retiree health care obligations starting next year.

GM said it was making progress but had not yet achieved all the concessions from union workers, debt holders, dealers and suppliers that the Bush administration sough in the loan terms provided last December.

President Barack Obama's administration will review the plans from GM and Chrysler LLC but could pull the loans if they don't approve the turnaround plans by March 31. The review could be extended into April, but if the government demands the money back it would force the companies into bankruptcy.

GM predicted it could run out of money before the March deadline and said it is seeking the additional funding under a worst-case-scenario projection, as U.S. sales have plummeted to a 26-year low and auto sales have fallen in other parts of the world.

In December, GM said it might need a total of $18 billion in government financing but only got a commitment of $13.4 billion, including $4 billion that the automaker received Tuesday.

GM wants to receive an additional $2 billion in March and $2.6 billion in April. The company has a $4.5 billion revolving line of credit that must be refinanced in 2011 but now believes that private funding won't be available, so the automaker is asking the government to lend the money.

If market conditions deteriorate, GM says it may also need an additional $7.5 billion revolving line of credit to stay afloat, for a total potential request of $30 billion.

GM said it reviewed the potential costs of a bankruptcy filing, but said it was a poor option. If GM was forced into Chapter 11 reorganization proceedings, the company said the only credit available would be from the government, and the cost could reach as much as $100 billion.

GM's plan details extensive cuts. The automaker would reduce its U.S. manpower from 92,000 salaried and hourly workers at the end of 2008 to 72,000 employees by the end of 2012. Worldwide, it envisions slashing 47,000 workers, including 37,000 hourly workers and 10,000 salaried employees.

In its Dec. 2 plan to the Bush administration, GM said it would cut the number of plants from 47 in 2008 to 38 by 2012. But the new approach goes further, cutting an additional five plants by 2012 to a total of 33 facilities.

GM's brands would be reduced from eight to four — Chevrolet, Buick, Cadillac and GMC — as the automaker said in December.

The company is considering a sale of the Hummer brand and a decision could be made by the end of March. The Saturn brand could be phased out by the end of 2011. The company is also considering its options for the Pontiac and Saab brands.

GM said all of its major U.S. vehicle launches from 2009 to 2014 would be high-mileage cars and crossovers.

GM To Get Next Installment of $4 Billion From US Government

General Motors has apparently proven their mettle and will get the next round of government financing. A White House aide leaked this news ahead of today's deadline.

GM has already received $9.4 billion in government loans and this will be their final installment according to the bill that was signed before this past Christmas. Chrysler is expected to receive another $3 billion as well, but we have not heard their decision.

President Barack Obama has decided to launch a government task force for restructuring the U.S. auto industry instead of naming a "car czar" with sweeping powers.

As reported this past weekend, he is appointing Treasury Secretary Timothy Geithner as his "designee" for overseeing auto bailout loans and as co-head of the new high-level panel together with White House economic adviser Lawrence Summers, a senior administration official said on Sunday.

What will happen after they receive this next round of government loans? Will this be enough to right the ship or will it take much more drastic measures and paradigm changes to cure their ills?

Monday, February 16, 2009

Honda Insight Sales Off To A Blazing Start in Japan

The 2009 Honda Insight

Can the Japanese keep up this sales pace? They have sold 10,000 units to date, which is double their monthly target. Apparently, the Japanese love their Honda Motor Company and consider the new Insight to be a valuable purchase. The Japanese economy is in the same boat as the rest of the world, so these sales figures are somewhat surprising.

Can these sales figues be maintained? The US sales premiere is scheduled for April.

From the Nikkei:

The environmentally friendly Insight “had a buoyant marketing start,” although Honda and other automakers have been hit by the global economic woes, a Honda official said...Consumers appear to have been attracted to the Insight due to its affordable sticker price, industry analysts said.

But it remains unclear whether orders for the Insight will continue growing at the pace Honda has enjoyed so far, given the current state of the Japanese economy, the analysts said.

Happy President's Day

Whether you had to work today or not, I would like to wish you a Happy President's Day! Let's consider the great men who worked tirelessly in the past to protect our freedoms and liberties as well as helped make this nation great.

Tomorrow is a big day for US auto companies as they present their strategic plans to Congress, outlining thier roadmap to success. Even the UAW, GM and Chrysler resumed talks yesterday, proving that all sides are motivated to make this a prosperous trip. I will be sure to post the very latest as events unfold tomorrow. Let's hope that GM and Chrysler have done all that is possible for them to receive their next round of loans. Especially Chrysler, who has plans for not one, not two, but four different electric powered models.

Sunday, February 15, 2009

GM Considers Chapter 11 Bankruptcy as Viability Option

Are you ready to become upset? General Motors now claims that it may have to use the bankruptcy route in order to stay in business. On Tuesday, GM and Chrysler are both scheduled to report to Congress on their progress and plans to reverse their misfortunes and turn their companies around. The reason they need to justify themselves is in order to receive the next round of government loans.

Now, the part of all this that is disturbing is knowing that GM was given 9.4 billion dollars only to go bankrupt two months later. Of course, asking a company that is losing billions of dollars every month to right the ship in sixty days is also a stretch. Maybe Congress will consider this as they review their viability plans and cut them some slack.

As a devil's advocate, let me pose this question. "Is General Motors threatening Chapter 11 bankruptcy just to force Congress's hand into giving them more money?" GM states there are two options at this point, obtain another round of loans or file bankruptcy. What do you think Congress will do? Would they dare let the once proud American icon become bankrupt? As of this writing, GM's sales have not recovered and they are still bleeding cash, which means their loan in December has not accomplished much.

From Automotive News:

General Motors, nearing a Tuesday deadline to present a viability plan to the U.S. government, is considering as one option a Chapter 11 bankruptcy filing that would create a new company, the Wall Street Journal said in its Saturday edition.

"One plan includes a Chapter 11 filing that would assemble all of GM's viable assets, including some U.S. brands and international operations, into a new company," the newspaper said. "The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked."

Citing "people familiar with the matter," the story said that GM could also ask for additional government funds to stave off a bankruptcy filing.

GM declined to comment, the story said.

GM and Chrysler LLC face a Tuesday deadline to file restructuring plans to the government in exchange for receiving $17.4 billion in federal loans.

Automakers have struggled as U.S. auto sales have tumbled amid a recessionary economy. U.S. auto sales in January tumbled to a 27-year low.

GM has been in talks with bondholders and the UAW to get an agreement on a restructuring that would wipe out about $28 billion in debt for the auto maker, sources have told Reuters. However, it appears unlikely a deal could be reached by the Tuesday deadline, they said.

GM has already announced plans to cut 10,000 salaried workers worldwide, or 14 percent of its staff, impose pay cuts for most remaining white-collar U.S. workers and has offered buyouts to its 62,000 U.S. workers represented by the UAW.

In addition, it is trying to sell its Hummer SUV and Swedish Saab brands and is reviewing the status of its Saturn brand.

Talks Between GM and UAW Break Down

Ron Gettelfinger, UAW President

Well, this is truly not a good sign of things to come. General Motors has until this Tuesday (the 17th) to offer Congress its plans for restructuring and viability and one part of this plan was to reduce wages and workers. The UAW has stubbornly refused to concede anything and now they have left the negotiating table altogether.

One of the major issues was retiree health care and indeed, GM owes the trust fund about 20 billion dollars. Isn't it fascinating how we banter about these mind boggling numbers? It has now boiled down to a game of chicken, where the first party that blinks will lose. In order to receive more Federal loans, GM and Chrysler must prove their business strategy and viability, but without union concessions, this will be a difficult task, don't you think?

Tell me how you feel about the unions. Are you for or against the auto union and why? Will the UAW cause GM to file Chapter 11 bankruptcy? More on that topic in my next post.

From Automotive News:

Talks between the UAW and General Motors aimed at cutting costs and debt at the struggling automaker have broken down over union concerns about retiree healthcare, a person briefed on the talks said on Saturday.

A parallel set of talks between Chrysler LLC and the UAW over similar concessions were continuing over the weekend but little progress had been made in the past week, a person briefed on those negotiations said.

The breakdown of talks at GM and the stalled negotiations at Chrysler come with just three days remaining until both automakers must submit new restructuring plans to the U.S. government as a condition of their $17.4 billion bailout.

At GM, the UAW negotiators walked away from the bargaining table because of differences over how to pay the health care costs of retirees. No high-level negotiations were underway as of Saturday afternoon, although some working-level discussions continued, the person familiar with the talks said.

"It doesn't seem like the stakeholders are really prepared to give a whole lot," said independent auto industry analyst Erich Merkle. "It's a high stakes game of poker right now."

GM declined to comment directly on the state of negotiations with the union. "We are committed to talks with our stakeholders and to meeting the February 17 deadline," GM spokesman Tony Sapienza said.

Chrysler said it was also committed to meeting the terms of the federal bailout, which requires both automakers to reduce factory labor costs and the amount owed to a UAW-affiliated trust fund.

"We continue to engage all of our stakeholder groups as we work through this process," Chrysler said in a statement.

The UAW is owed some $20 billion by GM, money pledged to a healthcare trust fund for retirees. It faces demands from the company that it surrender a claim on half of that amount in exchange for stock in a recapitalized GM.

But the union has balked at saddling retired workers with additional risk. GM's bondholders, who are being asked to write off some $18 billion in debt in exchange for GM stock, have also held out for better terms, people briefed on the talks have said.

GM has received $9.4 billion from the U.S. government and has been pledged another $4 billion if it can demonstrate it can be made viable at a time when U.S. auto sales are near 30-year lows.

Chrysler has been given $4 billion in emergency funding from the U.S. Treasury and is seeking another $3 billion.

If GM cannot win agreement from the UAW and creditors to reduce its debt, analysts say the Obama administration will face a politically tough choice: either pump billions of dollars more into the struggling automaker or steer it toward bankruptcy.

The stakes are similar at Chrysler, which faces continued scrutiny over the question of whether it has the scale and cash to survive the deep recession in the U.S. market on its own.

Saturday, February 14, 2009

New Stimulus Package Contains Plug In Incentives

The final bill as approved will contain more plug-in perks for those who purchase an electrified vehicle and even those who have their current vehicle converted. Plug-in car advocates consider this a major victory and indeed, this should provide automakers an incentive to rush these vehicles into production.

Nearly all the major automakers have electric vehicles in the works. Chrysler has a whopping four models scheduled for production and Chevrolet has the Volt. Ford has a couple models and Toyota has announced two. The earliest we will see a production model is late this year, as Toyota begins placing a Prius type plug-in hybrids into company fleets. Several of the announced plug in cars will debut in 2010, including the Volt, which is eligible to receive $7,500 in government rebates.

What is desperately needed now is for the troubled automakers to speed up the process bringing these much needed vehicles to market.

Detailed article from Green Car Congress:

The $787-billion stimulus bill (HR 1, the American Recovery and Reinvestment Act) that emerged from the joint House-Senate conference committee this week provides funds for a large range of transportation-related projects. It also made significant changes in the current plug-in vehicle tax credit program, including increasing the limit from a program total of 250,000 vehicles to a maximum of 200,000 plug-ins per manufacturer.

The US House of Representatives passed HR1 on Friday morning, on a partisan 246-183 vote. No Republicans voted for the measure, and seven Democrats voted against it. The Senate is expected to vote on the bill Friday as well.

Tax Credits for Plug-ins

Under current law, a credit is available for each new qualified fuel cell vehicle, hybrid vehicle, advanced lean burn technology vehicle, and alternative fuel vehicle placed in service by a taxpayer during the taxable year. In general, the credit amount varies based on technology, weight, fuel efficiency, and other factors. The credit generally is available for vehicles purchased after 2005. The credit terminates after 2009, 2010, or 2014, depending on the type of vehicle. The alternative motor vehicle credit is not allowed against the alternative minimum tax.

A credit is also available for each qualified plug-in electric drive motor vehicle placed in service—qualified being a four-wheel, on-road vehicle equipped with a grid-chargeable battery pack of at least 4 kWh capacity.

The base amount of the plug-in electric drive motor vehicle credit is $2,500, plus another $417 for each kWh of battery capacity in excess of four kilowatt-hours. The maximum credit for qualified vehicles weighing 10,000 pounds or less is $7,500.

This maximum amount increases to $10,000 for vehicles weighing more than 10,000 pounds but not more than 14,000 pounds, to $12,500 for vehicles weighing more than 14,000 pounds but not more than 26,000 pounds, and to $15,000 for vehicle weighing more than 26,000 pounds.

Once a total of 250,000 credit-eligible vehicles have been sold for use in the United States, the credit phases out over four calendar quarters.

The House bill made no provisions modifying the current credit. The Senate version made substantial changes, expanding the type of vehicles qualifying for a credit, adding a credit for PHEV conversions, and doubling the 250,000 vehicle limitation to 500,000.

The conference agreement follows the Senate version with substantial modifications. Provisions include:

  • A maximum credit of $2,500 is available for electric drive low-speed vehicles, motorcycles and three-wheeled vehicles.

  • A 10% credit, up to a maximum of $4,000, for the cost of converting any motor vehicle into a qualified PHEV. Minimum capacity of a qualified battery is 4 kWh. Plug-in conversions made after 31 December 2011 are not eligible.

  • The conference agreement limits the maximum credit to $7,500 regardless of vehicle weight. The conference agreement also eliminates the credit for low-speed plug-in vehicles and for plug-in vehicles weighing 14,000 or more.

  • The conference agreement replaces the 250,000 total plug-in vehicle limitation with a 200,000 plug-in vehicle per manufacturer limitation.

  • Changes to the plug-in credit are effective for vehicles acquired after 31 Dec 2009.

Department of Energy

EERE. The conferees agree to provide an additional $16.8 billion for the Department of Energy’s Energy Efficiency and Renewable Energy program, instead of $18.5 billion as proposed by the House and $14,398,000,000 as proposed by the Senate.

Funds under this heading include:

  • $2.5 billion for applied research, development, demonstration and deployment activities to include $800 million for projects related to biomass and $400 million for geothermal activities and projects.

  • $2 billion for Advanced Battery Manufacturing grants to support the manufacturing of advanced vehicle batteries and components, as proposed by the Senate, instead of $1,000,000,000 as proposed by the House. The conference agreement does not include the Advanced Battery Loan Guarantee program as proposed by the House. The Senate bill carried no similar provision.

  • $300 million for the Alternative Fueled Vehicles Pilot Grant Program (funding for the acquisition of alternative fueled vehicles or fuel cell vehicles, EPACT 2005, 42 USC 16071), instead of $400 million as proposed in the House bill. The Senate had originally proposed $350 million.

  • $400 million for Transportation Electrification, instead of $200 million as proposed in the House bill. The Senate proposed $200 million in report language.

Fossil Energy. The conferees agree to provide an additional $3.4 billion for the Fossil Energy Research and Development program, instead of $2.4 billion as proposed by the House and $4.6 billion as proposed by the Senate.

Funds under this heading include:

  • $1 billion for fossil energy research and development programs;

  • $800 million for additional amounts for the Clean Coal Power Initiative Round III Funding Opportunity Announcement;

  • $1.52 billion for a competitive solicitation for a range of industrial carbon capture and energy efficiency improvement projects, including a small allocation for innovative concepts for beneficial CO2 reuse;

  • $50 million for a competitive solicitation for site characterization activities in geologic formations; and

  • $20 million for geologic sequestration training and research grants.

The conference agreement does not include $2.4 billion for Section 702 of EISA 2007 (a provision to carry out fundamental science and engineering research on carbon capture and sequestration), as proposed by the House. The Senate bill contained no similar provision.

Innovative Technology Loan Guarantees. The conference agreement includes $6 billion for the cost of guaranteed loans authorized by section 1705 of the Energy Policy Act of 2005, instead of $8 billion as proposed by the House and $9.5 billion as proposed by the Senate. This new loan program would provide loan guarantees for renewable technologies and transmission technologies. The $6 billion in appropriated funds is expected to support more than $60 billion in loans for these projects.

Funds under this heading include $10 million for administrative expenses to support the Advanced Technology Vehicles Manufacturing Loan program. The House bill and the Senate bill included no similar provision.

General Services Administration

Energy-Efficient Federal Motor Vehicle Fleet Procurement. The conference agreement includes $300 million for the acquisition of motor vehicles for the Federal fleet as proposed by the Senate, instead of $600 million as proposed by the House. The conferees “remain hopeful” that domestically produced plug-in hybrid-electric vehicles will be commercially available in sufficient quantities before 30 September 30 2010, such that these funds could be used to acquire this technology for the Federal fleet.

Each vehicle purchased must have a higher combined fuel economy, as measured by EPA, than the vehicle being replaced and the overall government-purchased vehicles must have an improved fuel economy at least 10% greater than the vehicles being replaced.

Department of Transportation

The conference agreement provides $1.5 billion for supplemental discretionary grants instead of $5.5 billion as proposed by the Senate. The House did not include a similar provision. These funds are to be used to award grants on a competitive basis for projects across all surface transportation modes that will have “a significant impact on the Nation, a metropolitan area or a region.” Other funds under this heading include:

  • $27.5 billion for highway infrastructure instead of $30 billion as proposed by the House and $27.060 billion as proposed by the Senate.

  • $8 billion instead of $300 million as proposed by the House and $2.250 billion as proposed by the Senate for capital assistance for high-speed rail corridors and intercity passenger rail service.

  • $1.3 billion instead of $800 million as proposed by the House and $850 million as proposed by the Senate in capital grants to Amtrak.

Federal Transit Administration

Funds under this heading include:

  • $6.9 billion for transit capital assistance instead of $8.4 billion as proposed by the Senate and $7.5 billion as proposed by the House. Within the total amount, 80% of the funds shall be provided through the Federal Transit Administration’s (FTA) urbanized formula; 10% shall be provided through FTA’s rural formula, and, 10% shall be provided through FTA’s growing states and high density formula. In

  • $750 million for investment in fixed guideway infrastructure instead of $2 billion as proposed by the House.

  • $750 million for capital investment grants instead of $2.5 billion as proposed by the House. The funds will be distributed on a discretionary basis for New Starts and Small Starts projects that are already in construction or are nearly ready to begin construction.

Environmental Protection Agency

The amended bill provides $300 million for Diesel Emission Reduction Act (DERA) grants as proposed by both the House and the Senate.

Friday, February 13, 2009

GM VP Gives An Update On The Production Status of Chevy Volt

The Chevy Volt

Jon Lauckner, GM VP of Global Program Management, answered some questions relative to the production status and future plans for the Chevy Volt. The Volt appears to be on schedule and should hit showrooms late in 2010. Hopefully, GM will produce the cars in sufficient numbers to meet the demands. This is the greatest fear of all who are following the Volt, that there will not be enough supply at the outset.

The Chevy Volt qualifies for a $7,500 tax credit, which will make its $40,000 price tag more palatable.


I recently had the chance to speak to Jon Lauckner. He co-conceived the Volt with Bob Lutz and is GM’s VP of global program management.

What is the current state of mule development?
Frankly, its complete. We’ve built all of the cars that we intended to, around 33 or 35, and we are done with the hardware building phase. The cars have all been delivered to the Milford proving grounds and testing and development is ongoing.

What we learn from that particular hardware phase will be used for the hardware phase that is upcoming. Around the middle of this year we’ll build our integration cars which not only feature the drivetrain components of the Chevy Volt which we’ve had in the mule cars. Those mule cars were built in Cruze-bodies. Our integration cars are where we integrate all of the pieces together whether they’re drivetrain related or the interior and exterior the car altogether in a series of prototypes. We’ll probably have the first ones completed when it gets warm here next summer.

These will look like Volts?
Yes they will be built off of prototype tools. Those will be tested for a short period of time and then we move to the plant. Then we’ll build our product and process validation vehicles. Those will be built in the plant, on the line using the real assembly documents and all the correct tools in a true production setting. Now it will be at a very low volume to start with but that is the final phase. You’re moving from the prototype production into the high volume production facility and getting that ramped up for start of production.

And that low level production will be at the Detroit-Hamtramck plant?
Correct. And when I say low volume production, keep in mind that’s a high volume plant, so the line rate when its running full production runs very high. We carve out some space in that line by leaving some empty slots and then we put a car in there and we send that down the line and people start to develop the skill to assemble that entire vehicle.

And that will start late in 2009?

No that starts in the beginning of 2010. Sometime around the first or second quarter.

Do you have some retooling to do now in D-HAM?
Sure we need to have all the machinery and equipment in place to build the Volt before we start our production and process validation vehicles. We have to go into that plant and take out equipment and bring in new equipment because its a different car than those that are built there to day. We have to reconfigure all the equipment that’s in the plant so we can build the Volt.

Are you still going to build others cars at that plant alongside the Volts?
I believe that’s still the plan but we continue to still refine what we’re going to do with our manufacturing footprint as we see how the volumes progress. So the plan is we’re still going to have another product or so in that plant, but I cant tell you that for sure.

If you were just building Volts there, what would that plants total annual production capacity be?
Well over 200,000 units.

So if the world demands over 200,000 Volts annually you’ll able to do it?
We would be able to do it in that facility or it may make more sense to put the Volt in another facility. We have to see when we get there exactly what makes the most amount of sense.