Posts Tagged ‘Auto Bailout’

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March 30th – President Obama Makes Announcement on GM/Chrysler

September 15th, 2011

President Obama made a much awaited announcement yesterday on the Hill regarding the future of GM and Chrysler.

GM has had its plans and strategies thrown back with the government initiating much greater concessions from the company including the current CEO, Rick Wagoner, to step aside in favor of Frederick “Fritz” Henderson. In a move designed to allay the fears of potential buyers the US government will also from Monday back the manufacturers warranties on the vehicles it sells but it is clear the US government feels GM has something worth salvaging and has agreed another 60 days of working capital financing will be made available.

Chrysler is a much more troubled child with serious financial entanglements, however the US government is again stepping to help with the potential sale of the company to Fiat, the Italian car giant. President Obama announced the provision of another $6 billion to the car giant which is contingent on finding a buyer whether it be Fiat or another potential partner.

The announcement yesterday is very interesting for the comments made by the President on the issues not directly at hand with the survival of these two giants – GM in particular came in for serious mention when President Obama said,

I am absolutely committed to working with Congress and the auto companies to meet one goal: the United States of America will lead the world in building the next generation of clean cars.

Now if the administration is as serious as it sounds on delivering fuel efficient green car technology to the mass market then someone, somewhere will have to be around to produce the technology and manufacture the cars. The scale of the market in green cars is simply enormous and it makes a great deal of sense for USA, Inc to have a share in manufacturing these vehicles for the future instead of allowing the country to slip further into debt down the road by importing cars we could be making right here at home – but first we have to deal with the financial issues surrounding our automobile industry.

A serious reminder that green issues are just like any other – the money issue must be resolved first for everything else to follow on.

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Posted in Eco-Friendly Cars, Gas Friendly Cars, Green Cars

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Another $25 Billion on the Table?

May 12th, 2011

The focus has been on the auto industry bailout which has been dead, alive, is supposed to be dead again but President Obama comes into the White House in 2009 so watch this space, and so this saga goes on and on.

There seems to have been almost no exposure on another $25 billion that is already available in DC for the development of fuel efficient and environmentally friendly cars.

What?  Another $25 billion is available?  Are those sneaky politicos in Washington trying to pull a fast one behind our backs?

Actually not.  A little known loan program has been established by the US Department of Energy to assist in the development of fuel efficient cars but this is not just a piece of pork for the big auto makers in Detroit.

Earlier this month, a meeting was held in DC with the Department of Energy with the Big 3 in attendance but there was something unusual going on here – there has been a stampede of different companies, and many from outside the traditional car makers circle, who have attended precisely because the loan program is open to all companies.

There have been the eco-car makers and developers such as Tesla Motors and some you may not have heard of such as EcoMotors International who have also headed for Washington to try to grab a slice of the pie.  Tesla, based in California in the heart of Silicon Valley has applied for $400 million for R&D involved in a battery system for their existing roadster and a new mid-size sedan that is currently on the drawing board.  EcoMotors International have applied for funding to help develop a two-stroke diesel engine which will produce 100mpg in compact cars.  Other companies such as XP Vehicles have obtained approval for $40 million for development of two electric powered cars.

With venture capital being turned off as a consequence of the Wall Street crisis, the Department of Energy program is offering a lifeline for R&D in the green auto industry.  The issue is whether this is enough and also is it being disbursed appropriately – the Big 3 currently have managed to gobble up $22 billion worth of the money available.

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Posted in Eco-Friendly Cars, Gas Friendly Cars, Green Cars

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