Michigan Delegation and Obama Support Auto Industry Loans; Bush and McCain: No Guarantees
Throughout July, bipartisan Congressional delegates from Michigan urged leaders to provide up to $25 billion in loan guarantees to auto manufacturers, at an estimated cost of about $3.75 billion. The loans, which would be made directly from the U.S. Treasury over a 5 year period at below-market rates, would allow automakers and parts suppliers to retool old factories to produce more fuel-efficient vehicles. The stimulus package was authorized in the December 2007 energy bill, but did not include any funding for the loan guarantees.
In a letter to U.S. Department of Energy Secretary Samuel Bodman, Congressman Dingell wrote, “It is essential for the Department to undertake this effort with urgency. Providing the domestic automobile industry with targeted and timely assistance will help stimulate the entire economy.” According to Mr. Dingell, vehicle sales account for approximately 4 percent of U.S. gross domestic product.
Senator Debbie Stabenow, who said she won an agreement from Senate Majority Leader Harry Reid to back $6 billion in loan guarantees, also won support to add $300 million in funding for advanced battery research. “There is a tremendous sense of urgency about this. This is a big victory for Michigan,” said Ms. Stabenow.
Democratic presidential candidate, Barack Obama, also supports the $4 billion aid package proposed by Michigan’s congressional delegates. In a letter to the UAW, Mr. Obama wrote, “By providing tax credits and loan guarantees for our automakers and by expanding consumer tax incentives for ultra efficient vehicles, I will provide real solutions necessary to help this industry compete and win in the global economy.”
Mr. Obama’s rival, Republican
presidential candidate John McCain, and President Bush have repeatedly
rebuked the idea of loan guarantees for the automakers. Mr. McCain
recently remarked that he fears “predicting failure on the part
of the automakers when they’ve made strides on things like labor
agreements” could be detrimental, and that a $5,000 consumer tax
credit for fuel-efficient vehicles combined with a $300-million
prize for battery research should be sufficient to ameliorate
the auto industry’s difficulties. Just recently, however, Mr. McCain
has clarified his position and now says he supports the loan
guarantees. In a statement released by his campaign, "I
believe we should fund it and take action that will assist
Detroit and its suppliers in making it through this difficult
time of transition."
Both candidates made a number of visits to Michigan this summer, and have spoken with auto industry executives, including General Motors CEO Rick Wagoner and Ford CEO Alan Mulally. Most recently, Mr. Obama made a major speech on energy issues in Lansing, Michigan, where he again pledged support of loan guarantees and predicted 1 million plug-in hybrid vehicles like the Chevrolet Volt could be on the road in 6 years. Obama supports an overall package that allocated $150 billion in federal spending to create 5 million green collar jobs, while promoting renewable fuel use and factory retooling.
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All Eyes on the Volt
GM and Ford work with utilities on plug-in infrastructure
General Motors employees will get a sneak preview of the much-hyped Chevy Volt in September at the automaker’s 100th anniversary celebration. Rumor has it that the
eyes of the world will get an opportunity to see a near-production
version of the Volt when GM unveils it at the L.A. International
Auto Show in November or the Detroit International Auto Show
in January.
The assembly for the
Volt is still scheduled for GM’s Hamtramck plant near Detroit.
Moreover, the Volt's 1.4-liter turbo engine, which is also planned
for the new Chevrolet
Cruze compact car, may be built at a new $326 billion, 530,000
square foot UAW plant in Flint, Michigan, depending on GM’s negotiations
with state and local tax officials.
While preparing to unveil
the Volt, GM announced it would collaborate with the Electric
Power Research Institute (EPRI), a group of over 30 electric
utilities with operations in the U.S. and Canada, to work on
electric vehicle infrastructure and promote plug-in hybrid electric
vehicles. Arshad Mansoor, Vice President of EPRI's Power Delivery & Utilization sector, said, "This collaboration is critical in the development of standards that will lead to the widespread use of electricity as a transportation fuel."
The coalition has a
long list of issues to address, including ensuring safe and convenient
vehicle charging, raising the public awareness and understanding
of plug-in electric vehicles, working with public policy leaders
to enable a transition from petroleum to electricity as a fuel
source, and the role utilities could play in owning and leasing
the batteries used in plug-in cars and creating a market for
recycled but still-powerful lithium-ion battery packs from older
electric cars.
Ford announced a similar
collaboration with EPRI in March.
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FORD:
More Efficient Engines, Small Car Transition
Ford Motor Company expounded on Alan Mullaly’s transformation plan to shift to smaller, more fuel-efficient vehicles and crossovers in July. Under the “One Ford” plan, six European vehicles will be introduced in North America by the end of 2010, including the European Transit Connect, the European Ford Fiesta (four- and five-door versions), the European Ford Focus (four- and five-door versions), and another new European small vehicle that is currently unspecified. As previously announced, Ford will alter existing products in the following ways:
- The 2009 Ford F-150 will have more than a 7 percent improvement in fuel economy,
- The 2010 Ford Fusion, Mercury Milan, and Lincoln MKZ will be introduced with improved fuel economy,
- The Mercury Milan and Ford Fusion will have hybrid versions on sale in early 2009,
- The Ford Taurus and Lincoln 7-passenger crossover will have EcoBoost engines by mid-2009, and
- The Ford Explorer will have EcoBoost
technology which, along with weight savings, improved aerodynamics, and six-speed transmissions will provide up to 25 percent greater fuel economy by 2010.
Ford has also developed powertrain plans that prioritize fuel economy. For example, the U.S. version of the 2010 Ford Fiesta is likely to have a 1.4-L four-cylinder engine that could deliver 40 mpg. The EcoBoost engine is at the center of these plans because it combines turbo-charging and direct fuel injection to deliver good performance with fuel economy. Eventually, the EcoBoost will allow Ford’s 3.5L V6 engine to raise output to more than 290 to 390 horsepower. Until that is available, Ford has given its 2009 Escape and Mariner models a new 2.5-liter four-cylinder engine with intake variable cam timing for enhanced fuel economy and performance.
Transmissions will also improve fuel economy: a new six-speed
front-wheel drive transmission developed with General Motors will offer 4 percent better fuel economy. And, a new rear-wheel drive transmission will deliver 4 to 6 percent better fuel economy in the 2009 F-150.
Ford will also adjust its manufacturing by building small cars from its global C-car platform at the Michigan Truck Plant and the Louisville Ford Explorer plant; converting its F-series pick-up plant in Mexico to produce the Fiesta small car by 2010; and adding new hybrid technology to its Escape and Mariner Hybrids at its Kansas City assembly plant.
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GM: The New Chevy Cruze
GM is expecting to introduce the new Chevy Cruze to the U.S. as a replacement to the Chevy Cobalt, complete with a new 1.4-liter direct-injection turbocharged four-cylinder engine. The new small car will be unveiled at the Paris Auto Show in October. It is scheduled to go on sale first in Europe in March 2009, where it will be available with 1.6-liter and 1.8-liter gasoline engines and a 2.0-liter turbo diesel.
GM will invest $350 million in the Lordstown UAW plant to tool up for production of the new global compact sedan and other small cars. GM plans to spend an additional $150 million to build the 1.4L turbo four cylinder engine in Flint, Michigan.
The new engine will
generate 140 horsepower and, when teamed with a manual transmission,
will offer a 9 mile-per-gallon increase in fuel economy. The
engine will produce an estimated output ranging from 99 kW
to 104 kW (120 hp to 140 hp) and torque values of 175 Nm to
200 Nm (129 lb-ft to 148 lb-ft). The two camshafts can be
adjusted independently of one another. At medium load, the
intake valves are closed late, which is good for low fuel
consumption. At low engine speeds and high loads, on the other
hand, the engine works with a higher valve overlap to improve
the torque curve. Key features include a turbocharger integrated
into the exhaust manifold, full variable valve timing, thermal
management, flow-controlled oil pump, and a reinforced crankshaft
and connecting rod.
In related news, GM has announced that it will replace the Chevy Aveo with either the Groove or Trax minicars in the U.S. by 2011. In April 2007, GM unveiled the Groove, Beat and Trax concept minicars in New York. Last November, the automaker said it would start production in 2009 on the Chevy Beat to sell it overseas, but that it will not sell the Beat in the United States.
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GM Brings Solar Roof to Maryland Transmission Plant
UAW also Makes Solar Film at New Michigan Plant
Not to be outdone by a potential future solar-roofed Toyota Prius, GM has announced that it will install a 1.2-megawatt solar power roof installation at its transmission assembly pant in White Marsh, Maryland. The system—which will be set up under an agreement with SunEdison, the solar energy services provider that will finance, install, operate and maintain the system—is expected to be fully operational by the end of 2009. At that point, the 8,700 panels that take up 300,000 square feet of roof space will generate 1.4 million kWh of renewable energy annually and allow GM to displace approximately 20 percent of the plant’s current power purchased from a local utility.
GM is also leasing roof space for the next 25 years to Clairvoyant Energy and Veolia Environment, who will build, own, and operate a rooftop solar installation at GM’s Zaragoza, Spain assembly plant. That project will be the world’s largest rooftop solar installation, and when the project is completed in the fall of 2008, it will have 85,000 solar panels covering about 2,000,000 square feet of roof space. When fully operational, it will generate about 15.1 million kWh of power annually.
Both systems are being supplied by United Solar Ovonics, an Auburn Hills, Michigan company that makes thin-film solar laminates that offers lighter weight, easy installation, durability and real-world efficiency. Due to increased demand, the company has expanded by building two new manufacturing facilities at a UAW facility in Greenville, Michigan.
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