June 2008

POLICY NEWS

Plug-Ins Gain Momentum

The Detroit 3 Get Funding for PHEV Projects

At this month's Plug-In Vehicle Conference in Washington, D.C., the Department of Energy announced that each of the Detroit 3 will receive $10 million over three years for projects to test plug-in fleets and speed up mass production of battery technologies.

Earlier in the Conference, which was sponsored by Google.org and the Brookings Institution, Ford Motor Co. President of the Americas Mark Fields stressed that plug-in vehicles needed more government funding. "The governments of Japan, China, Korea, and India are significantly funding the research, development and deployment of plug-in hybrid vehicle technologies," Fields said. "This is a race that we must win. It seems clear that a business case will not evolve, in the near term, without support from Washington."

The Department of Energy's funding will support the following three projects:

• General Motors, the University of Michigan Transportation Research Institute, the Michigan Economic Development Corporation, and the Electric Power Research Institute will work to enhance lithium-ion batter packs, their charging systems, powertrain development, and vehicle integration. The collaboration will also include deployment of plug-in test fleet.
  
  
• Ford, working with Southern California Edison, Johnson Controls-Saft, Inc., and the Electric Power Research Institute, will try to identify a pathway that allows for commercial mass development of PHEVs. The project will focus on testing propulsion system design, controls, and the communications necessary to develop a successful PHEV production program.
  
  
• Chrysler and General Electric will work to demonstrate PHEVs that use a dual-battery storage system capable of 40 miles accumulated electric driving range. The project will develop the dual-battery energy storage system alongside vehicle integration.

The Chevy Volt Gets Board Approval

The General Motors board approved funding for production development and tooling of the extended-range electric Chevy Volt. Formal approval from GM leadership signifies their belief that the technology for the Volt--mainly its batteries--will be ready for volume production by the end of 2010. GM still plans to produce the Volt at its Detroit-Hamtramck Assembly Center.

Further supporting the belief that the Volt is on track, Bob Lutz, GM's Vice Chairman, told Reuters that GM expects the Volt to debut as scheduled and is close to naming a battery supplier. "I would say there's almost no reasonable doubt in our minds anymore that this is going to work," said Lutz, who heads vehicle development for GM. Lutz said GM engineers had shown the current battery packs could power vehicles beyond the company's target. "They've routinely had it to the high 30s, low 40s and they go up hills with it and everything," said Lutz.

Read More :

• Department of Energy Press Release
  
  
• Hybrids require funding
  
  
• Energy Department grants $30M to plug-in vehicle projects

UAW Urges Support for Fuel-Efficient Vehicles Made in the USA

As automakers idle large-vehicle plants while shifting production to car plants, the United Auto Workers calls for new policies and funding to encourage smaller, fuel-efficient vehicles to be made in the USA. In a column in the Detroit News this month, Ron Gettelfinger, President of the UAW, stresses that production incentives “are crucial to creating an environmentally friendly auto industry that enhances our nation's manufacturing base.” Current U.S. policy, however, grants consumer tax credits that fail to “take into account where those vehicles -- or their engines, batteries and other key components -- are produced.”

Mr. Gettelfinger advocates for the following policies:

• A well-designed incentive for manufactures of advanced vehicles and components in the U.S. -- applied evenly to all automakers, domestic or foreign-based – to ease this cost burden of unbalanced trade and health care policies,
  
  
• Appropriations for the low-interest loan program established in the 2007 Energy Bill that encourages production of advanced technology vehicles and their key components, and
  
  
• Support for climate change legislation that includes a provision that would use a portion of the revenue created by the auction of carbon emission permits to fund a major retooling of the auto industry.

For more information, see UAW AtIssue.

Fuel Prices Lead to Changes in Manufacturing

Ford to Shift Truck Plants to Car Production

Ford plant managers and union leaders convened on Friday, June 13 in Dearborn to discuss switching truck factories to produce cars. Retooling could take up to six months and cost $250 million or more, but Ford's CEO, Alan Mulally, seems to think that it is vital to the company's survival in light of rising gas prices. The goal of the transformation is that Ford would produce some of its European small-car segment models in North American plants.

Part of the reason for this change could be that Ford is experiencing success in the U.S. with its smaller cars. In May, the company announced that the new Focus experienced an 88 percent jump in retail sales versus last April and the highest total Focus April sales since 2000. According to a Ford Press Release, "Higher gas prices are accelerating the industry-wide shift from trucks and traditional sport utility vehicles to cars and crossovers. At Ford, April sales for sport utility vehicles were 36 percent lower than a year ago and trucks were 19 percent lower."

Though details of the plan will not be announced until July, one key element expected is to that F-100s, a new lighter and more fuel-efficient version of Ford's F-150 pickup, will be built at the Michigan Truck Plant in Wayne. The Ford Expedition and Lincoln Navigator, which are currently produced at the Michigan Truck Plant, could also be adapted to the F-100's smaller frame.

The slowdown in demand has also prompted for to delay introduction of its new 2009 F-150 for two months.

GM Delays Truck Updates, Shifts Focus to Compact Cars

This fall, GM will debut a Chevrolet compact car, with production scheduled for early 2009. The vehicle will be built in Lordstown, Ohio using a 1.4-liter turbocharged four-cylinder engine. The new engine will be used in Chevrolet, Pontiac, Saturn, Opel and Daewoo automobiles so the Lordstown plant could begin building cars for export.

GM also planned to re-engineer a next generation of full-size pickups and SUVs to go into production in 2013. However, the company has delayed those plans due to poor sales of its larger vehicles. Compared to one year ago, sales of GM's full-sized pickups have fallen by 24 percent and large SUV sales fell 51 percent. As a result, GM is idling four North American truck factories and adding shifts at two car plants.

By delaying any large vehicle re-engineering (which usually takes four years), GM can reallocate funds and engineering resources to develop more fuel-efficient vehicles such as cars and crossovers.

Read More :

• Ford to retool truck plants to build cars
  
  
• Ford delays new pickup in sign of retreat on big vehicles
  
  
• Retail sales for Ford's new Focus up 88%
  
  
• Chevrolet to get a new compact car for sale early next year
  
  
• GM delays truck overhaul

Chrysler joins the hybrid SUV market, prices lower than competitors

As the last of the Detroit 3 to offer a hybrid electric vehicle, Chrysler is pricing the 2009 Dodge Durango Hybrid and the 2009 Chrysler Aspen Hybrid almost $8,000 below their main competitors to gain a foothold in the market. Chrysler’s SUV-hybrids offer the same fuel economy and use the same two-mode hybrid system that powers the Chevrolet Tahoe hybrid, but the Tahoe has a slightly larger V-8 engine and other features, like a light-weight aluminum tailgate. Compared to their non-hybrid counterparts, the Durango Hybrid and the Aspen Hybrid cost about $3,600 more.

"You look at the pay off differently with these types of vehicles," said Jim Hall, an auto analyst with 2953 Analytics of Birmingham. "The payoff comes from increasing your overall fleet fuel economy and adding incremental sales to an existing vehicle."

Considering that Durango Hybrid and Aspen Hybrid buyers are eligible for a $1,800 federal tax credit and could save 200 gallons of gasoline per year (more than $800 at current gas prices), hybrid ownership could prove cost-effective for Chrysler customers within a short period of time. Both vehicles are expected to be in showrooms in August.

Read More:

• Chrysler cuts hybrid cost
  
  
• Chrysler hybrid SUV prices start at under $46,000

Chevy Malibu: New Powertrain, Transmission Offers Performance and Fuel Efficiency

The new Chevy Malibu LTZ offers a 2.4L Ecotec engine and Hydra-Matic 6T40 six-speed transmission to deliver EPA-estimated fuel economy of 22 mpg in the city and 32 on the highway.

The Ecotec engine uses variable valve timing to optimize power and fuel economy. The six-speed transmission offers clutch-to-clutch technology to maximize its performance while minimizing its overall size. Matching the 2.4L engine with the Hydra-Matic 6T40 six-speed transmission makes the LTZ is more efficient because of the engine’s lower operating speed. This reduces fuel consumption and contributes to quieter operation while also improving performance because it allows the engine to always operate close to the optimum speed.

GM also offers the affordable Chevy Malibu Hybrid sedan, which delivers 24 mpg city and 32 mpg higway, according to EPA ratings.

Additional Sources:

• GM’s Chevy Malibu LTZ
  
  
• GM’s Hybrid Malibu

Ford Fusion:  More Power, Better Fuel Efficiency

Later this year, Ford will introduce the 2009 Ford Fusion sedan with more a more powerful engine and a new, fuel-efficient transmission. The 170 horsepower, 2.5-liter four-cylinder engine with variable valve timing found in the new Ford Escape and Mercury Mariner will now be used in the 2009 Fusion. The new six-speed transmission offers a 4-6% fuel economy improvement, which will likely prove to be integral to the car’s success. “With a greater gear span, the [transmission] allows the engine to operate at more optimum combinations of speed and load to meet certain driving conditions,” said Craig Renneker, chief engineer for new automatic transmissions. “The new transmission also enables the engine to run at lower speeds on the highway, which aids fuel economy.”

Ford also expects two new hybrid sedans – the Ford Fusion Hybrid and Mercury Milan Hybrid – to go into production later in 2008.

Read More:

• For adds power to fusion
  
  
• GMT: Six Speed Automatic Transmissions
  
  
• 2008 Ford Fusion Hybrid

Prius Could Be Union-Made in the USA

Toyota is reported to be considering a North American production site for the best-selling hybrid electric Prius. Early in June, a Toyota spokesperson commented on the possibility of making the Toyota Prius in the USA to keep up with strong demand for the popular hybrid.

Toyota has remained silent, but, following reports published in the daily Tokyo Shimbun, rumors have been circulating that the company is in negotiations with General Motors to build the Prius at their joint venture plant in Freemont, California, which uses UAW labor. Given that North America accounts for more than half of the car's global sales, and California is by far the biggest market in the United States, this could be a great move for Toyota. However, the entire Prius supply chain is in Japan, which could prove too costly unless new supplier sources are also developed in the U.S.

Read More : Automotive News: Toyota considering 'Made in U.S.A.' Prius