I believe that being energy independent is not only something we should strive to do for our economic well being, but it should be considered a national security issue as well.  One of the fastest ways we can do this is through the use of electric cars.  I don’t feel that they’re ready to completely replace the ICE powered cars, but given another generation or two of batteries or cheap hydrolisis to create hydrogen for fuel cell powered cars and they will be.  Barring and apocalyptic event we’ll probably be there in 20 years give or take a few.  In the mean time we need to get as far along the electric car path as we can so that when the time comes we’ll be ready to take advantage of the break through.

This blog is devoted to electric cars in general, but more specifically the ENVI division of Chrysler (hence the name of the blog).  I chose ENVI because I think it’s the easiest way for us to get to where we need to be in 20 years.  GM is doing a great thing with the Volt, but it’s very costly for them.  They are making a whole new car from the ground up, including reengineering the components to use the least amount of electricity they can so that the car can go further on the battery pack provided.  That’s 100% custom car, and eventually it’ll be profitable, but not until GM sells a million or so of the thing.

The ENVI division of Chrysler is taking a different approach.  Chrysler is taking currently made vehicles and retrofitting them with an electric drivetrain (the Dodge EV is all new, but it sits on a Lotus Europa frame with new body panels - like the Tesla Roadster - so the costs will be minimal).  Does this mean that the cars aren’t as efficient as they could be?  After all they aren’t optimized for aerodynamics and the components aren’t engineered to use less electricity.

The answer is of course absolutely the ENVI vehicles won’t be as efficient as the Chevy Volt.  That means that they’ll need larger battery packs to go the same 40 miles.  But as far as I can tell that’s the only downside.  Sure you’ll pay for a bigger battery pack, but you’ll also pay less money for more vehicle.  The Chrysler Minivan EV is a simple matter of filling up the underfloor storage with batteries and putting and electric motor under the hood.  The cost of a normal Chrysler Town and Country can aready get up into the 35-40k range, my estimate is that the EV Town and Country will be just a few thousand more.

The best part is that Chrysler won’t have to lose money on every EV sold.  I applaud GM and Tesla for making electric cars as efficiently as they can, but they can’t make them if they’re not around…

Dear Employees,

As this eventful year draws to a close, I’d just like to take a moment and once again express my personal appreciation and thank you for your commitment and dedication to Chrysler LLC. Reflecting back on the year, I’m sure we can all agree that this one stands out for the extraordinary challenges we faced, as well as for the many accomplishments we can look back on.

We are grateful to the U.S taxpayers and the U.S. Treasury Department that they will provide a loan to Chrysler to help bridge the current financial crisis. And we appreciate that the Government of Canada and the Government of Ontario have offered to provide financial assistance as well to protect Canadian manufacturing. This support underscores their confidence in Chrysler’s plan for future viability and their recognition of the importance of the automotive industry to North America.

Despite the difficult economic conditions and financial crisis we faced this year, we continued to make significant progress in improving the fundamentals of our business, while strengthening our focus on customer first and quality period.

We continued to invest in and deliver great new products, launching the crossover Dodge Journey, the exciting Dodge Challenger and Challenger SRT8, the Liberty re-launch and the all-new Dodge Ram, which has received glowing accolades from the media, including a nomination for North American Truck of the Year. We also celebrated the 25th anniversary of our invention of the minivan, which still wears the crown as the world’s best-seller.

Chrysler’s ongoing commitment to safety is evident in government ratings.

For the 2009 model year, more than 88 percent of Chrysler vehicles achieved NHTSA’s highest possible rating - five stars for frontal crash tests.

Eighty-six percent of Chrysler vehicles achieved the Government’s highest rating for side-impact protection.

We continue to boost the fuel economy of our vehicles. For the 2009 model year, 73 percent of our products offer improved mileage compared with 2008 models, with six vehicles offering 27 mpg or better highway fuel economy:

the Caliber, Patriot, Compass, Sebring, Sebring Convertible and Avenger.

And in September, we shocked the industry with the unveiling of our ENVI family of all-electric and range-extended electric vehicles, a major step on the path to national energy security and reduced environmental impact.

We will put our first electric-drive vehicle into production for North America by 2010 with three additional models by 2013.

Our long-range product plan is robust, realistic and green. The plan features 24 major launches from 2009 through 2012. Many of you had the opportunity last week to attend the future products open house in the Design Dome and saw the all-new versions of key models such as the Chrysler 300, Dodge Durango, Dodge Charger, Jeep Grand Cherokee, our electric vehicle prototypes and the sketches of other products like a new fuel-efficient small car. You also had a chance to see the tremendous strides we are making in the quality of our interiors, which will have a major impact on pleasing our customers, as well as the latest generation of our uconnect family of consumer technologies for in-vehicle information, communications and entertainment. Our future plans also include a hybrid Ram truck.

We made steady progress in productivity and quality this year. According to the Harbour Report, we have increased our manufacturing productivity by 32 percent over the past seven years and now equal Toyota as the most productive automaker in North America as measured by hours of assembly per vehicle. Due to a focused product quality improvement effort during the past year, we’ve seen our warranty claim rates drop by 29 percent and the improvement trend continues.

Since the economic downturn began in 2007, we have faced this harsh reality and consistently acted quickly to reduce operating costs, adjust production schedules and prioritize product investment to mitigate the effects of this historic recession and financial crisis. We’ve taken out 1.2 million units of capacity, eliminated 12 production shifts and closed two manufacturing plants. We’ve reduced our fixed costs by $2.4 billion. The difficult restructuring, combined with the recent retirements and voluntary terminations, has reduced Chrysler employment by 32,000 since 2007. We’ve all said good-bye to many colleagues and friends who have served Chrysler so well over the years.

However, these and other difficult but necessary actions have positioned Chrysler to begin 2009 as a leaner, more efficient and focused organization characterized by fewer layers of management with broader spans of control.

We have a realistic and achievable plan to turn Chrysler around and return the company to profitability. With the government bridge loan forthcoming, we’ll have the financial backing to implement that plan. In the weeks ahead we will continue to work with all of our stakeholders to achieve the shared sacrifice that we need in order to achieve long-term viability.

Throughout the government loan request process, I’ve received many letters, calls and e-mails of support from our extended Chrysler family, our customers and many Americans who support the automotive industry. To show our appreciation, we will be placing an advertisement in several national newspapers today, thanking America for investing in Chrysler. A link to a copy of the advertisement is attached.

In closing, I wish you and your loved ones the happiest of holiday seasons.

Enjoy your family time together, wherever your travels may take you. I look forward to rejoining you in January to take on 2009 with a resolve to return our business to profitability and viability.

God Bless you all. Best wishes and warmest regards,

Bob

President Bush today announced that Detroit would gain access to some of the TARP fund.  He is allocating $9.4 billion to GM and $4 billion to Chrysler.  The White House expects officials from GM and Chrysler to sign the papers this morning so they can gain access to the cash later today.

The loan terms are for three years, but if GM or Chrysler fails to present a viable plan by March 31 they’ll have to pay the loans back in full.  Just one of the conditions of the loan.  The automakers are going to have to renegotiate their union contracts and the contracts with any debt they owe.

On many occasions President Bush has said that he disagrees with a bailout, and that in times of good economic growth he wouldn’t approve any kind of bailout.  But during a recession it would be a mistake to let an employer of so many workers fail.

“Government has a responsibility to safeguard the broader health and stability of our economy,” he said. “If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers.”

“In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action,” Bush added.

There were rumors that Bush would only approve a bailout that consisted of a chapter 11 for GM/Chrysler.  The government would provide the two with debter in posession loans to go along with a structured bankruptcy filing.  It is unlikey that GM nor Chrysler would agree to such a deal and would try to raise cash to operate until President Elect Obama took office.

Terms and Conditions

The  terms of this loan are very similar to the bailout that failed to pass in the senate.  The executives at GM and Chrysler must agree to limit compensation (Chrysler’s Nardelli already makes $1 per year) and give up perks like corporate jets.  Both must also issue warrants, which convert into non-voting stock, to the government.

The automakers must also prove that they can be viable by March 31 and will have to submit plans by February 17.  The White House is suggesting that the automakers reduce their debt load by 2/3 and renegotiate their union contracts to be on par with the foreign automakers (who have no unions to deal with)  that they compete with.

While many believe that Chrysler won’t be around in a couple of years, Chrysler is moving ahead with plans to electrify the automobile. And, in a CNN piece, Chrysler took a poke at the Chevy Volt and claimed that it wouldn’t be a one trick pony, or “one electric vehicle company.”

Thus, Chrysler’s big EV plans are to forgo aerodynamics, weight and fancy designs. Instead, Chrysler will begin its EV program by converting traditional Chrysler vehicles into electric vehicles, while achieving the same kinds of performance as a Volt - all at a cheaper cost to the automaker and to consumers.

So, why didn’t GM think of that?

Find the answer at the link

Toyota Motor Corp. is shelving its plans to build the popular Prius hybrid in Mississippi as the slump in the auto industry continues to hobble the Japanese carmaker known for it emphasis on fuel-sipping vehicles.

Toyota’s plant under construction in Blue Springs, Miss., was scheduled to begin production in 2010, marking the first time the gas-electric Prius, which has been on sale for more than a decade, would be built outside of Japan and China.

But Mike Goss, a spokesman for Toyota’s U.S. arm, said Monday that despite investing $300 million in the plant so far, the automaker is delaying production there indefinitely because of the industrywide downturn.

Construction of the plant is about 90 percent complete, and Toyota will finish the building, Goss said. However, the installation of the factory’s equipment and machinery — “the most time-consuming” element of construction, he said — is delayed indefinitely.

Find the rest of the story here

General Motors Corp., anxiously awaiting a government loan so it can continue operations into 2009 said Wednesday it will halt one of its most important projects to save money should a Washington bailout fall through.

The cash-strapped automaker is putting the breaks on the construction of a factory in Flint, Mich. set to make 1.4 liter engines for the Chevrolet Cruze and Chevy Volt plug-in electric car.

Source: msnbc

Last week the senate denied the automakers a $14 billion emergency loan (it was actually coming out of the $25 billion loan that is already promised to them, but not being released) saying that the UAW is to blame because the UAW woudn’t make more concessions.  The stock market and the value of the dollar seem to be going up and down with the news as it comes out.  Bailout likely, stocks/dollar up - bailout fails, stocks/dollar down.  While the majority of people polled are against the auto bailout it would seem that our financial markets support it.

Originally the automakers wanted access to TARP, the $700 billion nest egg that congress set aside for banks if they wanted some of it.  TARP would’ve been easier if it were approved by the treasury a month ago.  Back then the treasury balked at the idea saying that TARP was only for financial institutions.

So congress went into action, held two sessions with the CEOs of Ford, Chrysler, and GM, and after many iterations finally had a plan that most of them agreed on.  They talked with the White House and made sure that the executive branch approved of the deal (really, the executive branch got what it wanted - they wanted the money to come out of the $25 billion loan that was already approved).  Then it breaks down in the senate.

What’s the President to do?  He already had the deal he wanted, then congress said no.  So now it looks like the treasury is going to reverse it’s stance on using TARP to help Detroit.  Why would the president do this?  I think it’s partially because there are no other options, but I also think it’s because he wants to remind congress who’s in charge.  Congress put all kinds of rules in place for TARP and the executive branch is basically ignoring them to help the ailing auto industry.

The senate didn’t pass the bailout legislation yesterday citing unwillingness of the UAW to take pay cuts to bring them inline with the Japanese automakers pay.  Nardelli sent a letter to his employees, here is what it said:

Dear Employees:

We are all obviously disappointed in what transpired in the Senate last night. While a majority of Senate members supported the bridge loan request (52 in total, including 10 Republicans), the required 60 votes necessary were not achieved. While concessions from all key constituents were a condition of the loan, attempts to negotiate specific industry cost concessions during Senate consideration failed, leading to the breakdown.

Despite this setback, we will continue to make our case in Washington that an immediate, short-term bridge loan is critical for Chrysler to survive the current financial crisis and is just as important to the health of the overall American economy. We also will continue our discussions with the White House and with the Treasury Department, and will continue to seek funding options for Chrysler and Chrysler Financial through existing programs including the Troubled Assets Relief Program (TARP).

To that end, we were pleased to see the commitment from the White House in the following statement released today:

“It is disappointing that while appropriate and effective legislation to assist and restructure troubled automakers received majority support in both houses, Congress nevertheless failed to pass final legislation. The approach in that legislation provided an opportunity to use funds already appropriated for automakers, and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds go only to firms whose stakeholders were prepared to make the difficult decisions to become viable, competitive firms in the future.

Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary - including use of the TARP program — to prevent a collapse of troubled automakers. A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time.

While the federal government may need to step in to prevent an immediate failure, the auto companies, their labor unions, and all other stakeholders must be prepared to make the meaningful concessions necessary to become viable.”

I also want you to know that we are in on-going discussions with the presidential transition team, and key members of the incoming administration are aware of the importance of addressing the short-term and long-term viability of our industry and our company.

All of us can help with these efforts. First and foremost, we must eliminate every unnecessary cost in every aspect of our business. While a bridge loan is critical to manage through this financial crisis, we must continue to manage the factors under our control. Continued cost reduction is important to ensure the future viability of the company. At the same time, let’s not forget that we have a solid plan for recovery and viability, great products in our pipeline and the most dedicated people in the business. Let’s all maintain our commitment to each other to work toward a great future for our Company.

I also would encourage every U.S. employee to take a minute today and call the White House comment line at (202) 456-1111, or send a note to the White House at comments@whitehouse.gov. Voice your support for immediate action to assist Chrysler and the millions of Americans who depend on the automotive industry. Urgent action is needed to prevent the failure of this important industry that provides $293 billion in annual economic benefit to this country. Please tell your friends and family to do the same. Together, we will make our voices heard.

Thank you for your continued support.

Bob

Source: Allpar

We all know that the Dodge EV is based on a Lotus Europa.  The yellow car with black stipes down the hood is what we were introduced too.  However, none of us thought that it was a Dodge when we looked at it.  The production car is going to get a face lift, probably something that looks more like the Viper than the Lotus it looks like now.

The spy shots were taken at night, Chrysler is being very secretive and sneaky with testing their new EV.  They don’t want to let the cat out of the bag on this one just yet.  The new face is distinctly Dodge, however, we don’t quite know yet what the rest of the body will look like.

Although Chrysler has not yet said which EV it will make first (they only said that one of them will be produced in 2010, the others will, but not until later), there’s a good chance that it’ll be the Dodge EV.  They already have it up and running and the speed at which it’s received a new body indicates that they’re going to be pushing this one out the door sooner than later.

Assuming that Chrysler gets those auto loans the Dodge EV would hit the lots in late 2010.

With lawmakers drawing closer to a loan deal to save Chrysler and General Motors, Chrysler CEO Bob Nardelli told workers this morning that he is “very encouraged by developments over the weekend.”

“While the situation in Washington remains dynamic, I am very encouraged by the developments over the weekend and the growing interest shown by Congress and the administration to provide needed financial assistance to the three Detroit automakers,” he said in a memo to employees obtained by the Free Press.

He cautioned that “this process is far from over.”

Chrysler has asked for $7 billion by the end of the month and has warned that without immediate help its liquidity could fall below the level necessary to sustain the company through the first three months of 2009.

Source: Freep