Chrysler: Taking Taxpayer Money and Running Away From Cleaner Cars

chrysler_chart.png(Chart: Chrysler Restructuring Plan)

When Chrysler asked the government for a second round of bailout money in February, it submitted a 177-page restructuring plan that vowed to usher in a new era of fuel-efficient vehicles at the famously gas-chugging automaker.

The
chart above, taken from that restructuring plan, shows six models of
electric and hybrid cars labeled "ENVI," the name of the company’s
cleaner-car unit. Chrysler told the White House it would apply
"electric-drive technology … across all three brands (Chrysler, Dodge
and Jeep)," and touted its goal of putting 500,000 cleaner vehicles on the road by 2013. Some environmentalists invoked the news to suggest Chrysler should receive more taxpayer aid.

The Obama administration ultimately rejected Chrysler’s plan as too weak, setting the stage for a bankruptcy filing and a new marriage with Fiat. But the government still holds
a 10 percent stake in Chrysler and has little chance of recouping its
billion-dollar bailout of the automaker — which makes the company’s
decision to disband its "ENVI" unit all the more alarming to fuel-efficiency advocates.

"It’s certainly a bad sign for Chrysler that they emerge from bankruptcy and immediately shift into reverse on
clean cars," Dan Becker, founder of the Safe Climate Campaign,
said in an interview. "It doesn’t bode well for their future, and it’s
a terrible way to thank the American people for investing billions of
dollars in their future."

Chrysler’s about-face on cleaner cars was first reported by Reuters,
which noted that Fiat chief Sergio Marchionne was knocking down
Chrysler’s 2013 cleaner-vehicles projections from 500,000 to 60,000. A
company spokesman noted that electric vehicle development was not
canceled outright but "absorbed into the normal vehicle development
program."

Still, Chrysler’s restructuring plan was not the only rosy prediction turned on its head. The company received
$70 million in Department of Energy grants in August to produce hybrid
pickup trucks and minivans, only to cancel that project this month.

"It’s
a sign of Chrysler being tremendously out of touch with where the
market is going," Lena Pons, transportation policy analyst at Public
Citizen, said in an interview. "They’re going to find it difficult to
compete without having at least the engineering capacity [to produce
EVs]."

Given that the bailout money is already out the door,
the Obama administration has little or no recourse to hold Chrysler to
its early vow. But the taxpayers who helped rescue the company are
still free to register their disappointment.

  • DJB

    Chrysler is one of the most ridiculous car companies in operation. Their MOST efficient vehicle, the Sebring mid-sized car, gets 21 city MPG and 30 highway MPG (fueleconomy.gov). This is obviously pathetic, and says nothing about the full life cycle environmental impacts of material mining, car manufacture, land use impacts (e.g. parking), and disposal, AND nothing about the safety impacts to cleaner transportation of more cars on the road.

    Talk is cheap. Car companies should be judged based on what they put out, not the concept cars they make in Photoshop.

  • walker o

    Any fuel savings here in the usa is absorbed by compensatory use in asia. Carbon footprints of individual is not the key. The key is figuring out how much a policy will affect the pumping of oil out of the middle east oil reserves. Can anyone image that they won’t pump those reserves dry? Thus peak oil will have a bigger impact on mpg in the end anyways and we will have produced the same amount of co2 emissions. The only only thing that will change that is 1 . cold fusion or 2. massive reductions in fertility rates in industrialized nations (or nations that export their offspring to industrialized nations). Cold fusion is a dream and policies to reduce fertility are taboo. We are screwed unless we get lucky or people decide to take on population growth.

  • great, this good information. thanks.

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