A staggering 7.2 million paychecks rely on the American car manufacturers alone – more than many countries pay their entire population and the knock on effect on local economies of even small scale lay offs is highly significant. Bowling Green, KY and 200 workers at a local Corvette location are waiting to hear if GM will file for bankruptcy – the effect on the families involved is bad enough but the effect on the local economy of another 200 pay checks not being spent in grocery stores, malls, home improvements and the rest is just another hard nail being driven into smaller, localized economies already struggling with their own issues.

We have to keep positive – Chrysler has already filed for bankruptcy and if GM does, another wave of lay offs are going to happen BUT, and it is a HUGE BUT – perhaps this is what we need to do to get ourselves out of the mess and back on track fast!

The takeover of Chrysler by Fiat will introduce US manufacturers and suppliers to the small car technology that has made Fiat into such a giant around the world with a range of vehicles which are, well to be blunt, very small. Certainly very small compared to the US market!

Small may not suit the US consumer so well, but the technology which produces extremely high gas mileage certainly will and with the economies of scale such a merger is going to produce, prices for greener vehicles will fall (Japan indicates this right now with the new Prius hybrid enjoying 40,000 advance orders for this month alone) and the sooner we get American workers back on the production lines and putting their pay checks back into local economies.

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.

It is pretty bad news for all those who have not invested in a new hybrid car because they are going to be losing out on huge fuel economies and minimizing environmental impact.

But aside from that, the bad news is non-existent because when you compare the 29% drop with the trend for the entire light duty vehicle sector which dropped 41% – in this context, hybrids are stacking up pretty well despite the fierce competition for business and the adverse economic conditions.

January 2009 figures show hybrids took 2.3% of the entire car market but this was flat during February 2009 with no change – compare this to 1.9% for February 2008 and you can see that though a small section of the total market, it is bucking the trend of decline we are seeing elsewhere.

Toyota has been suffering with only the Rx 400h showing positive sales growth up by almost 31% while all other models dropped off.

GM came in second slot for total hybrid sales but management have got to have their attention focused on bringing in the merger/takeover with Fiat after being given enough working capital to get through the next 30 days by the US government (i.e. you the taxpayer).

Nissan, Honda and Ford all reported drops in the monthly sales numbers of their hybrids too but all their falls are less than the drop in volume sales for non-hybrids which are proving a less attractive selling proposition than hybrid equivalents.

With so much happening in DC with GM and Chrysler the executive focus may not be on the green ball at the moment but as Fiat/GM move to closing a deal and resolving the Chrysler issues becomes more problematical, the green issues are taking a back seat but not in the sales leagues.

Chrysler was seriously involved in designing high technology for electric cars and test marketing an electric minivan. However, the merger with Daimler all but stopped the efforts Chrysler was making in the electric drive development. Chrysler did make an electric concept van in 1992 the Electric Power Inter-Urban Commuter or EPIC for short. The EPIC concept had nickel iron batteries.

Chrysler was also trying to create a viable 4door mid size electric vehicle through a program they called Destiny. It used light weight materials and an AC induction motor. It turned out not to be a viable option so they tried other approaches.

Since the mid 1990’s Chrysler has sold more than 35,000 low speed GEM neighborhood electric vehicles worldwide. The GEM is not a full function vehicle and is suited for specific uses. Its top speed is 25mph and allowed only on streets with speed limits of 35mph or less.

Now that Chrysler is no longer part of DaimlerChrysler they have renewed their efforts to develop and market electric cars. They recently unveiled three electric drive concept vehicles. They include an all electric Dodge sports car and a range extended electric version of the Jeep Wrangler and Chrysler Town & Country minivan. All of these vehicles use lithium-ion batteries. Chrysler has said that they will move beyond the concept stage and will market one of these vehicles in 2

However, there is good news for the consumers in all of this turmoil. The auto industry is making fuel economy their top priority. The automakers have been spurred on by the high gas prices and the need to compete with the Japanese and European auto manufacturers. This has also led to the availability of a wider range of green vehicles to choose from.

Hybrid and small fuel efficient cars are being mass produced. The automakers are also starting to design efficiency technologies into most all of the new vehicles and redesigned models. This year consumers were introduced to the first “clean diesels.” Mercedes Benz, Volkswagen and BMW released diesel SUVs and cars that are lower in emissions.

Due to all of the latest technology and innovations, new vehicles produced today contribute less harmful emissions into the environment. The auto manufacturers have introduced a variety of innovative designs to the engines and transmissions. They have also tweaked the body design and are using lighter materials to improve the fuel economy of their vehicles.

Even makers of high performance sports cars, such as Porsche are making improvements in their vehicles to lower fuel consumption. The Porsche 911, which has a direct injection gasoline engine, has reduced fuel consumption by 13%. The auto industry is trying to make vehicles that combine fuel economy with better performance. This is good news for consumers who are in the market for a new vehicle.