Obama to GM: Stop producing large trucks and SUVs or Bailout money ends

[briann]

http://www.foxnews.com/story/0,2933,513300,00.html

Chrysler Rolls Out New Jeep After Government Scolding

April 8: Chrysler President and Vice Chairman Jim Press discusses the new Jeep Grand Cherokee at the New York International Auto Show.

NEW YORK —  Chrysler unveiled a new SUV at the New York International Auto Show on Wednesday, but a smaller vehicle grabbed a lot of attention: the Fiat 500 that brought Chrysler President Jim Press to the stage.

"Wouldn't that make a great new company car?" Press said as he stepped out of his subcompact ride. "We're dreaming about the possibilities for the future."

Chrysler LLC needs those dreams to become reality quickly if the Auburn Hills, Mich., automaker expects to survive much longer.

The Obama administration issued a scathing rejection of the company's survival plan March 30 and gave it 30 days to secure a merger with another automaker, most likely Italy's Fiat SpA. Without a deal, the government said Chrysler won't be able to meet an expected increase in demand for small cars, and it won't get any more federal aid, leaving it likely to be liquidated in bankruptcy court.

The White House also scolded Chrysler for having a product lineup heavily weighted with trucks and SUVs, yet the only new product the company is unveiling at the New York show is a redesigned Jeep Grand Cherokee.

Chrysler insists the SUV, which clocks in at 20 mpg in its two-wheel-drive version and 19 in four-wheel-drive, is a crowd favorite and a crucial part of its lineup.

"This is a very important vehicle for us. It's one of the primary legs of the Chrysler stool," Chrysler spokesman Rick Deneau said. "Customers have told us they want this vehicle and that it's the right size."

The 2011 model is 11 percent more fuel efficient than its predecessor, powered by a cleaner and more powerful engine. Still, Chrysler's decision to unveil it just a few days after the government's criticism seems like odd timing to say the least.

But Chrysler is standing by the Grand Cherokee. It's profitable, recognizable and the No. 2-selling vehicle in the Jeep lineup. Grand Cherokee sales fell by almost half during the first three months of the year, but its market share has remained steady, according to Autodata Corp.

"It is one of their most important vehicles," said John Wolkonowicz, senior automotive analyst for the consulting firm IHS-Global Insight. "The market for SUVs has not completely gone away, particularly for smaller ones like the Grand Cherokee."

The automaker expects its tentative partnership with Fiat to plug the holes in its small-car offerings. It hopes fuel-efficient Fiat cars, like the two-seater 500, will sell on this side of the Atlantic.

Press said the car's cameo at Chrysler's news conference illustrates the possibilities of a Chrysler-Fiat partnership.

"It shows you the breadth of our portfolio and the possibilities that this marriage could have," he said.

Later, Press told reporters that Chrysler is working "24 hours a day" to reach a deal, and "at this point in time with Fiat, we don't see anything that would be an impasse or a deal breaker."

But even if an alliance with Fiat goes through, the Italian automaker's vehicles wouldn't make it to the U.S. until 2011. Until then, Chrysler, which is clinging to a $4 billion taxpayer lifeline, has little choice but to survive on revenue from its current vehicle lineup.

"I think it's going to be written up as being out of touch, but from a business standpoint, I think it's the right thing to be doing," Wolkonowicz said of the Jeep's unveiling.

In fact, the new Grand Cherokee's new engine does manage to eke out higher fuel economy on top of additional power. Assuming a customer opts for the 20 mpg Cherokee, that means a driver who logs 10,000 miles in a year will spend about $1,020 on gas at today's prices.

That's on par with the fuel economy of competitors like the Toyota Highlander.

The Grand Cherokee also features an air suspension system that lowers the vehicle at higher speeds to improve aerodynamics and fuel efficiency, while delivering 33 percent better horsepower than its predecessor.

Still, it's no gas sipper. A 2009 Toyota Camry sedan, by contrast, gets 26 mpg and would cost the same driver $785 per year in gas.

The Cherokee is the first of two dozen vehicles that Chrysler, widely believed to be the weakest of the Big Three automakers, says it plans to unveil over the next four years. If the automaker secures a merger along with concessions from its union and other stakeholders, the $6 billion in additional loans promised by the federal government will certainly help it reach that goal.

Karl Brauer, editor in chief of the automotive Web site Edmunds.com, said it may be hard for Chrysler to please both the government, which is demanding greater fuel efficiency from the Big Three, and its customers, many of whom still demand big cars.

"It would be far more foolish for Chrysler to abandon its core competencies in the Jeep brand lineup than it is to come out with a new" Grand Cherokee, Brauer said.

As Wolkonowicz put it: "To some extent, it's refreshing to me to see them not kowtowing to the government."

[~Hanna~]

 

I don't see why they don't set up an office in the white house.....

[cjd]

This article just proves the point that the administration in Washington will force companies like Chrysler to build cars that no one wants. If anything was keeping the lights on in the Chrysler plants it was the Dodge Trucks and Jeep. Both lines feature Trucks, Mini Vans and SUV's which are still very popular. The Fiat merger with Chrysler is like the Daimler one the companies are and were basically incompatible. Most Americans find the idea of mergers with foreign car companies repulsive. I know I do. I bought Chrysler products for years but when it merged with Daimler I switched to buying Fords. Its sad to say but Chrysler Corporation died back in the 90's when they were dumb enough to be absorbed by Daimler. The German designers changed all the best features of the Chrysler cars and took away their identity. Chrysler was having a good run back in the late 90's and should have tried to go on alone. With Fiat or without I think in a very short time all that will be left of Chrysler will be Jeep something that was never really Chrysler's anyway. Walter P. Chrysler would be turning in his grave if he could see how low his company has sunk.

[Abben]

How can an elected official tell any company to stop making products!

[SavetheWest]

Why don't they just improve upon the fuel efficiency and expand their hybrid cars with some actual effort? Why replace what works with something that might work?  Why should it be either or?  Why don't they rerelease some of the old muscle or classic cars too? 

[cjd]

Why don't they just improve upon the fuel efficiency and expand their hybrid cars with some actual effort? Why replace what works with something that might work?  Why should it be either or?  Why don't they rerelease some of the old muscle or classic cars too? 

I have never seen one or drove one but GM has some full size SUV hybrid's on the market. The hybrids are good for people who live in congested places where stop and go traffic is the norm. The gas engine shuts down and the car is able to creep along for short distances on the electric motor and battery power this where hybrids preform the best. One major draw back to most hybrids is that at some point the battery will need to be replaced and its not cheap. The batteries in most of today's hybrids is nothing more then a hundred or so rechargeable D sized flashlight batteries all put together in a suitcase sized holder that should last about 5 years under normal use. Replacement prices range between 3 to 5 thousand dollars so the car would have to save a good deal of fuel to make this cost effective. GM and Ford have given a few of their car lines a 60's retro look GM even tried going back to a 50's look with the HHR that looks like an old delivery truck. I think Ford did better with that idea its retro Mustang was a big seller. The sad fact is until the administration does something in Washington to make people feel secure about finances most sane people will not spend money on a new car unless it is mandatory. GM should consolidate its car lines by getting rid of duplicate models and anything that really does not sell. Close outdated and obsolete plants that are under used and set up new plants that are able to build more then one model. Things like this is where the government should be assisting GM not telling them how to build a car. Chrysler should keep its truck lines and Jeep and really consider getting rid of most of its car lines for a while. Chrysler has been working on a fuel cell system for some years now and have sort of put it on the back burner due to lack of funds. If the administration is so hot on alternate power sources why have they not offered Chrysler some separate funding to complete this project. All and all I think that this administration could not care less about the car companies or what they build they really have  only one goal here and that's to nationalize most of the major industry here in America.

[~Hanna~]

How can an elected official tell any company to stop making products!

Welcome to the new administration.....

[SavetheWest]

Why don't they just improve upon the fuel efficiency and expand their hybrid cars with some actual effort? Why replace what works with something that might work?  Why should it be either or?  Why don't they rerelease some of the old muscle or classic cars too? 

I have never seen one or drove one but GM has some full size SUV hybrid's on the market. The hybrids are good for people who live in congested places where stop and go traffic is the norm. The gas engine shuts down and the car is able to creep along for short distances on the electric motor and battery power this where hybrids preform the best. One major draw back to most hybrids is that at some point the battery will need to be replaced and its not cheap. The batteries in most of today's hybrids is nothing more then a hundred or so rechargeable D sized flashlight batteries all put together in a suitcase sized holder that should last about 5 years under normal use. Replacement prices range between 3 to 5 thousand dollars so the car would have to save a good deal of fuel to make this cost effective. GM and Ford have given a few of their car lines a 60's retro look GM even tried going back to a 50's look with the HHR that looks like an old delivery truck. I think Ford did better with that idea its retro Mustang was a big seller. The sad fact is until the administration does something in Washington to make people feel secure about finances most sane people will not spend money on a new car unless it is mandatory. GM should consolidate its car lines by getting rid of duplicate models and anything that really does not sell. Close outdated and obsolete plants that are under used and set up new plants that are able to build more then one model. Things like this is where the government should be assisting GM not telling them how to build a car. Chrysler should keep its truck lines and Jeep and really consider getting rid of most of its car lines for a while. Chrysler has been working on a fuel cell system for some years now and have sort of put it on the back burner due to lack of funds. If the administration is so hot on alternate power sources why have they not offered Chrysler some separate funding to complete this project. All and all I think that this administration could not care less about the car companies or what they build they really have  only one goal here and that's to nationalize most of the major industry here in America.

Good point!