Breaking News

Electric Car Makers: Oregon Wants You

In a flurry of electric vehicle activity, three back-to-back announcements this week have placed a spotlight on Oregon’s plans to be the friendliest state in the nation in which to build, sell and buy electric cars.

At a press event on Monday, Oregon’s governor, Ted Kulongoski, was talking up Nissan’s previously announced partnership with the state. According to Nissan, the company plans to introduce its upcoming electric car in Oregon in late 2010.

Not to be outdone, on Tuesday the Norwegian electric car startup, Think, was in Portland being wooed by the state as one of 8 potential places to site their first car manufacturing facility in the United States.

Although Think has been plagued by bad financial news recently, the company’s North American C.E.O., Richard Canny, said he was confident that Think would find the funding to pull through its current financial situation and added, “We believe Oregon could be a really good place for Think to do business.”

Finally, in a first-of-its-kind partnership in the United States, Mitsubishi announced a strategic alliance with Oregon to develop an electric car charging infrastructure in the state. And in a deal similar to the one already in place between Oregon and Nissan, Mitsubishi said it also plans to release its upcoming electric vehicle models the state.

(Last year Oregon had also aggressively negotiated with the Chinese carmaker, BYD, to manufacture its line of plug-in hybrids in the state for sale in the U.S.)

So why has Oregon become a hotbed of activity for electric vehicles all of a sudden? Governor Kulongoski is currently pushing a plan before the state legislature to cut some hefty tax breaks for electric vehicle manufacturers who choose to come to Oregon, as well as provide huge tax credits to purchasers of electric cars.

“My vision has always been for Oregonians to be able to drive from Astoria to Ontario and from Portland to Ashland emission free,” Mr. Kulongoski said. “Families could be making that drive in an emission-free vehicle manufactured in Oregon by Oregonians.”

Sourced via nytimes.com

Feds to back warranties if automaker fails

Minister of Industry Tony Clement

Ottawa is providing up to $185 million to guarantee warranties on vehicles sold by General Motors and Chrysler, as the companies attempt to restructure, and another $700 million to protect hard-hit auto parts suppliers.

Industry Minister Tony Clement said consumers do not have to do anything to receive the federal warranty commitment — if either company were to go bankrupt.

However, Clement said it only applies to new vehicles sold as of Tuesday until the restructuring period is over.

“This is a new program. It matches, very clearly, what the United States has been doing,” Clement said.

“On a go-forward basis, as things become less stable, we felt that this was a way to assure the buyer that if you buy a GM product, or if you buy a Chrysler product, your 5-year warranty for parts and labour and service will be acted upon.”

The program is expected to cost the government $185.3 million.

General Motors Canada welcomed the announcement, and said in a press release, “We remain focused on taking all necessary steps, working with the governments and all our stakeholders to quickly and successfully complete our restructuring in this challenging market.”

Canadian Auto Workers president Ken Lewenza also backed the move.

“There seems to be a pattern — that the Canadian is following whatever the U.S. government does,” Lewenza told CTV’s Power Play on Tuesday. “I would suggest that’s appropriate for them to do that, in terms of the warranty support.”

Last week, U.S. President Barack Obama announced a similar measure saying his government would help consumers by backstopping auto warranties.

Earlier Tuesday, Reuters reported that GM was in intense and earnest preparations for a bankruptcy filing. The move, which would likely also occur in Canada, would allow the company to restructure.

“There used to be a phrase in the auto sector: Too big to fail,” Clement said when asked about the report. “I don’t think that phrase exists anymore in this sector.”

If the company does file for bankruptcy, one analyst says assembly line workers would likely be safe, but not suppliers and dealers.

Bill Pochiluk, president of industry adviser AutomotiveCompass, told The Canadian Press that GM’s assembly plants may be safe because, “from a production standpoint, the product mix in Canada really is quite excellent.”

But he added that filing for bankruptcy may damage the company’s brand and cut into sales.

“One of the reasons to try and keep these companies around as long as possible is the impact that would have on the supply chain,” he said. “It would be dissolving before our very eyes and it might be difficult for anyone to produce vehicles.”

About 12,500 people in Canada work for GM, mostly at assembly plants in southern Ontario.

Clement also announced $700 million in additional help for struggling auto parts manufacturers.

The money will be given to Export Development Canada’s Accounts Receivable Insurance program, which is available to parts suppliers.

Accounts receivable can be one of the largest assets on a supplier’s balance sheet and the recent global credit situation has pinched these companies’ cash flow to a trickle, Clement said.

Canada has more than 650 auto parts suppliers which shipped a combined total of nearly $33 billion worth of supplies in 2007.

Sourced via toronto.ctv.ca

GM and Segway unveil new two-wheeled urban vehicle

At Auto Shows, a New Sobriety Reigns

As the New York International Auto Show opens this week in Manhattan, car makers face a tough task: How to generate enthusiasm about their vehicles at a time when the industry is consumed with talk about bailouts and bankruptcy, and the makers’ budgets are strained.

General Motors Corp. is still showing a full complement of models but has cut its budget for the show in half. (It declines to disclose the figure.) At its booth, the company is forgoing the thick, raised glass flooring it usually uses for its Cadillac display and instead has parked the cars on cheaper aluminum frames.

Honda Motor Co. is using graphic panels made of fabric in place of most of the high-tech LED screens it used in the past as backdrops. It also installed cheaper lighting and carpet. Honda’s approach this time “is to let the vehicle technology speak for itself,” said Charles Schnieber, manager of auto shows and exhibits for Honda’s U.S. unit.

And Chrysler LLC has eliminated its popular test track in the basement of the Jacob K. Javits Convention Center, for which it once trucked in tons of dirt, rocks and logs and where attendees could go for a short spin in a Jeep. Ford Motor Co.’s Volvo, however, will have a test track for visitors to try a laser technology that scans the road for obstacles and brakes the car automatically.

Automotive marketers depend heavily on car shows to generate excitement for their models and bring buyers into showrooms. About half of auto-show attendees buy a vehicle in the next year, industry insiders estimate.

But the New York show, which held its media preview Wednesday and opens to the public Friday, is shaping up as a more restrained affair than in recent years as car makers scale back.

Several auto makers, GM and Chrysler among them, decided against holding dinners where they typically wine and dine reporters, analysts and industry insiders. Companies also are sending fewer executives to mingle during the show.

The New York car show isn’t the only one operating under a cloud. In January, Nissan Motor Co. didn’t participate in the big Detroit show, which took place just after GM and Chrysler were saved from bankruptcy by federal bailouts. Many exhibitors toned down their displays and skipped the glitz they typically deploy.

This fall, the Frankfurt show is expected to be more subdued as well, with Nissan and Honda declining to attend. Later in the fall, the Japan Auto Manufacturers Association will put on a scaled-down Tokyo show because a number of makers won’t be there, including the Detroit Three.

One exception: the Shanghai show later this month. Thanks to continuing growth in the Chinese auto market, most car makers will be there.

In New York, 35 new models are expected to debut, only a handful fewer than last year, show organizers said. It typically takes three or more years for a new car to hit the market, so these models were designed in flusher times.

On Wednesday, Chrysler unveiled a redesigned Jeep Grand Cherokee sport-utility vehicle, GM showed the GMC Terrain “crossover,” and BMW AG presented the X6M, a souped up version the X6, a cross between an SUV and a sports car.

Before unveiling the Jeep, Chrysler Vice Chairman Jim Press rolled onto the stage in a Fiat 500, a minicar made by Chrysler’s intended alliance partner, Fiat SpA. The U.S. government has given Chrysler until May 1 to sign a binding agreement with Fiat. “We don’t see any reason why it’s not going to happen,” Mr. Press said in an interview.

Among concept cars to be shown are Ford’s Transit Connect, a boxy delivery van refitted to carry kids and strollers, and the IQ from Toyota Motor Corp.’s Scion division.

GM will show the PUMA — for “personal urban mobility and accessibility” — a two-wheeled electric vehicle developed with Segway Inc., maker of a stand-and-ride scooter.

This year’s show expects to fill the same amount of floor space as last year, roughly 843,000 square feet, said Mark Schienberg, president of the Greater New York Automobile Dealers Association, which puts on the show. From display to display, the emphasis will be on safety, technology, value and fuel economy, he added.

The changed tone reflects a realization that costly stunts — Chrysler once created a fake blizzard to introduce an SUV — prompted far more media hype and one-upmanship than sales. Moreover, they worry that any hint of excess could risk turning off consumers by seeming out of sync with the times.

In the past, “manufacturers decided to use these shows for real grandstanding,” said Geoff Day, a spokesman for Daimler AG’s Mercedes Benz-USA. “It probably wasn’t the best investment.”

These days, the emphasis is on getting show-goers to sit in vehicless, said Timothy Peters, GM’s assistant director of global auto shows. “It’s absolutely one of the best ways to convince people to buy your product,” he said.

Sourced via wsj.com