REPORT: Largest American Axle plant to idle as work shifts to Mexico…choking GM‘s demand for American Axle components (accounting for 74% of the floundering supplier’s sales). Founded in 1994, American Axle will start moving the facility’s production to Guanajuato, Mexico over the summer. More than 500 of the 700 workers at the Detroit complex will be laid off indefinitely, and only 232 of the company’s most seni…

DetNews columnist warns of the dangers of nationalizing GM…GM, UAW/UnionsDetroit News columnist Daniel Howes has penned a commentary on what he believes the “mind-numbing” future could be if the White House and the United Auto Workers end up with majority control of General Motors.Howes fears that a government-and-UAW-controlled boardroom would end up an echo chamber, with both parties worried mainly ab…

Michigan Screws Up Laid-Off GM Factory Worker Unemployment, Forces Payback [Carpocalypse]…Unemployed former GM factory worker Greg Eddy has his share of problems, but thanks to Michigan’s inability to calculate unemployment benefits, he’s now also getting less money and a whopping $2,400 bill. After Eddy lost his job with GM — twice — he decided to go on unemployment while heading back to school at ITT for a degree in communications….

REPORT: GM won’t pay dealers for franchises, will buy back parts, vehicles…GMIn a special broadcast to dealers yesterday, General Motors’ sales chief, Mark LaNeve, explained that the automaker would buy back unsold new vehicles and parts from dealerships slated to be phased out by the end of 2010, but GM wouldn’t pay off dealers for their franchises.As reported earlier this week, GM plans to cut it U.S. dealerships by …

GM makes the case for testing E15 ethanol blend…GM has long been a proponent of using high-level ethanol blend, E85, in motor vehicles. But, with all of the talk of putting E15 or E20 (gasoline with 15 or 20 percent ethanol blended in) into the national supply – see these earlier posts about the EPA, the Minnesota Ag Department, the Secretary of Agriculture, and the Underwriters Laboratories…

First Camaro Crap-Out Comes 40 Miles From Dealership [Chevy Camaro]Maybe worse than the first Camaro wreck is the first Chevy Camaro breakdown. This “p**sy magnet” Bumblebee-yellow Camaro lost all electrical power and coasted to a stop with a scant 40 miles on the odometer. The ecstatic new owner, a forum fan-girl by the name of BUMLB, was crushed when the car conked-out cruising through a parking lot at a leisure…

AFS Trinity brings “150 mpg” plug-in hybrids to Capitol Hill for some sweet stimulus cash…an old GM plant and build “hundreds of thousands of plug-in hybrids” that could be sold for just $8,000 more than the non-hybrid versions. Gallery: AFS Trinity Cross Country Trip with XH-150[Source: NYT]Filed under: Emerging Technologies, EV/Plug-in, Hybrid, Legislation and PolicyAFS Trinity brings “150 mpg” plug-in hybrids to Capitol Hill for s…

Chevy Volt: First Drive? [Vaporware]We’d love to drive the Chevy Volt test mule like Wired and others, but we’re pretty sure the Volt PR team is afraid of us. As well they should be. We actually have readers. [Wired]

Saturn’s death could hurt GM CAFE numbers…part of GM. One of the primary reasons that Saturn is being disposed of is poor sales. There is, however, one exception to that sales record: hybrids. So far, Saturn has accounted for about a quarter of GM‘s sales of hybrids. Saturn also had the best CAFE numbers of any GM division, thanks to the absence of any full-size body-on-frame vehicles o…

Killing Saturn Kills 25% Of GM Hybrids [Carpocalypse]…of GM hybrids. Damned if they do… [AutoNews via AutomobileMag]

(Source: The Infrastructurist)

Fiat and Magna emerge as serious bidders for Opel…GM is said to favor a single bidder, which may improve Fiat’s chances somewhat. Union officials and policymakers in Germany, on the other hand, have voiced concerns over the Italian automaker’s plans, saying they welcome the alternative plan from Magna. It should be interesting to see how this all plays out in the coming weeks.[Source: Automotiv…

Deal Would Combine Financing Arms Auto lenders Chrysler Financial and GMAC would be combined under a proposed Chrysler restructuring plan.

GM Offers U.S. a Majority Stake  GM outlined a new turnaround plan that would leave the U.S. government controlling the auto maker, as it set up a showdown with bondholders that could determine whether the troubled American icon lands in bankruptcy court.

Statement from GM Bondholder Committee’s Advisers Here is the statement from advisers to ad hoc committee of GM bondholders:

Billion-Dollar Baby: We Drive the Chevrolet Volt…wheel of GM‘s last best hope: the electric Chevy Volt.

(Source:  The Brookings Institute)

Transit agencies across the US are facing service cutbacks and fare increases in order to close their budget gaps. The largest, New York’s Metropolitan Transportation Authority (MTA), is no exception. In its 2009 budget, the agency proposes painful service cutbacks and fare increases to help cover a projected deficit of around $1.5 billion. Meanwhile, the state senate failed to unite around a rescue plan last week. And while Washington did provide $8.4 billion in stimulus funds for transit this year (with over $1 billion allocated to the MTA), this money can be spent only on capital improvement projects and not to finance gaps in day-to-day operations.

An op-ed by the Brookings Institution’s Robert Puentes and Emilia Istrate offers recommendations for closing the MTA’s budget gap. They recommend raising state support to national levels and urge the federal government to step aside and empower metropolitan agencies to spend their federal money in ways that best meet their own needs, such as operating expenses. Over the long term, some form of federal competitive funding for operating assistance also might provide the right incentive – or reward – to states and localities to commit to funding transit.

Extract from the op-ed:

Why the disconnect?

The response in Washington is predictably stubborn: Recovery money cannot be used for operating expenses because operating is not a federal role.

You would think that the pressure of this policy would lead to transit agencies that are self-sufficient – where passenger fares pay the full costs of operating the system. 

But large metropolitan transit agencies generally “recover” only about one-third of their costs from subway riders and about one-quarter from bus passengers. The MTA has the highest cost-recovery ratio among all subway operators – its fares pay for two-thirds of operating costs. 

For large bus systems, the MTA’s New York City Transit ranks second only to New Jersey‘s in terms of the share of operating costs paid for by riders. The Long Island Rail Road is the seventh among the 21 commuter rail systems in the country, recovering from fares close to half of its operating costs.

So what should be done to close the MTA’s budget gap?

For one thing, lawmakers in Albany need to recognize that the state contributes a lower proportion of the MTA’s budget from its general revenue than other states provide to their transit agencies from general revenue. In New York, about 4 percent of all the MTA operating costs are covered by the state budget; in other states, transit agencies are getting closer to 6 percent.

Raising state general fund support to national levels would be a good place to start helping the MTA. 

Another idea is to get Washington to help. Not in doling out more money, but in stepping aside and empowering metropolitan agencies to spend their federal money in ways that best meet their own needs.

Click here to read the entire article.

 (Source: Autobloggreen & Reuters)

We first heard about a proposal to ban cars powered solely by fossil fuels way back in 2007. According to Finance Minister Kristin Halvorsen, the plan “is much more realistic than people think when they first hear about” it and is still very much in the works. Still, it’s highly unlikely that the proposal would come to fruition due to opposition from current Prime Minister Jens Stoltenberg.

“The financial crisis also means that a lot of those car producers that now have big problems … know that they have to develop their technology because we also have to solve the climate crisis when this financial crisis is over,” she said.

“That is why we would like a ban from 2015,” she said, during an exhibition in Oslo of electric and biofuel-powered cars during which she raced a red and white Mitsubishi electric car around a course against several other politicians.

(Source: Public Discourse – The Witherspoon Institute)

It might seem as if nothing could be less important to social conservatives than transportation. The Department of Health and Human Services crafts policies that affect abortion, the Department of Justice and the Federal Communications Commission play crucial roles in determining how prevalent obscenity is in our society, but the Department of Transportation just funds highways, airports, and railroads, or so the usual thinking goes. But decisions about these projects and how to fund them have dramatic and far-reaching consequences for how Americans go about their lives on a day-to-day basis. Transportation decisions have the power to shape how we form communities, families, religious congregations, and even how we start small businesses. Bad transportation decisions can destroy communities, and good transportation decisions can help create them. 

Sadly, American conservatives have come to be associated with support for transportation decisions that promote dependence on automobiles, while American liberals are more likely to be associated with public transportation, city life, and pro-pedestrian policies. This association can be traced to the ’70s, when cities became associated with social dysfunction and suburbs remained bastions of ‘normalcy.’ This dynamic was fueled by headlines mocking ill-conceived transit projects that conservatives loved to point out as examples of wasteful government spending. Of course, just because there is a historic explanation for why Democrats are “pro-transit” and Republicans are “pro-car” does not mean that these associations make any sense. Support for government-subsidized highway projects and contempt for efficient mass transit does not follow from any of the core principles of social conservatism. 

A common misperception is that the current American state of auto-dependency is a result of the free market doing its work. In fact, a variety of government interventions ensure that the transportation “market” is skewed towards car-ownership. These policy biases are too numerous to list exhaustively, but a few merit special recognition: 

-If a state is interested in building a new highway, the only major regulatory obstacle is completing an Environmental Impact Statement (EIS). After this, the federal government will typically pay for a large portion of the project, and leave the details of its planning and construction to the state’s Department of Transportation. If a state or municipality is interested in a transit project like a subway, a streetcar, or a bus system, however, not only must it complete an EIS, it must also clear a barrage of regulatory hurdles, including a cost-effectiveness analysis, a land-use impact analysis, and a comparison with other transit systems. None of these requirements is necessarily bad in itself (though many of these regulations were designed only to make it harder to build transit systems), but highways aren’t subject to any of them. Naturally, states therefore find it easier to channel transportation dollars into highways. 

-As a 2003 report by the Brookings Institution points out, “federal funding for highway projects is more secure and generous than for transit projects; making highway projects easier to finance.” The Department of Transportation will typically match 80% to 90% of state funds directed towards highway repair or construction. Those same funds directed towards transit usually receive less than a 60% federal match, and carry further burdensome requirements for local funding that highway projects do not need to meet. 

-Zoning requirements in most municipalities mandate that shops and houses must be separated. It is widely illegal to build the old small-town main street with the mix of shops, houses, and apartments that many find charming (so charming that some of these towns have been turned into tourist attractions). Furthermore, in most states it is mandatory for new schools to be built next to hundreds of acres playing fields, and thus far away from residential neighborhoods (see this report and this paper for a fuller discussion of policies that affect travel to school). These and similar regulations ensure that there are no shops or schools—that is, major household destinations—within walking distance of the average American’s home, which in turn requires the average American to own and use a car, not merely to commute to work but to perform basic tasks like picking up a gallon of milk or sending the kids off to school in the morning. 

Clash of the Titans: Fiat reportedly squaring off with European Union over mergers…interest in GM‘s European subsidiary Opel, Marchionne is now asserting that would consider the possibility, but that no offer had been made to date.[Source: The Detroit News | Image: Andrej Isakovic/AFP/Getty]Clash of the Titans: Fiat reportedly squaring off with European Union over mergers originally appeared on Autoblog on Mon, 27 Apr 2009 14:…

 More cuts across the board: General Motors to slash dealers, plants and employees…GM, Earnings/FinancialsGeneral Motors’ spate of announcements this morning was bad news for enthusiasts (e.g. the shuttering of Pontiac) and even worse for GM‘s debt-for-equity swap (without a 90% take-rate the automaker is bound for CH 11). But for dealerships and workers, GM‘s re-revised restructuring plan is going to hurt… hard.In addition ..

(Source: NPR’s Planet Money)

 Even pirates need a business plan. J. Peter Pham, an analyst of African affairs at the James Madison University, looks at the economics of guns, captains, and $2 million dropped into the sea in waterproof containers. Plus, Per Gullestrup, CEO of Danish shipping company Clipper Group, has dealt with pirates first-hand — he says they’re tough negotiators.  When he ironed out the ransom details with the pirates, he had 3 demands:

1. The pirates showed “proof of life” (that the crew was still alive)
2. That they could drop the money from the air (faster than getting it there in a tug)
3. That the pirates fill up the ship with fuel.

 For a related story on NPR’s Planet money, click here.

(Source: Streetsblog)

Ultimately, SAFETEA-LU’s greatest failing may have been its failure to articulate a truly multi-modal vision for the nation’s surface transportation network. Essentially a continuation of 1950s-era policies, it repeated the same-old same-old about a need to complete the Interstate highway program, directing billions of dollars to state DOTs to pour asphalt and expand roadways. Nowhere did the legislation suggest a need to adapt to a future in which American dependence on automobiles and fossil fuels must be dramatically reduced. That’s the challenge faced by Congress today.

Less of this...

 Transportation funding from Washington has been heavily weighted toward highway spending ever since President Eisenhower first proposed the Interstate Highway Act in 1956. SAFETEA-LU, 2005’s federal transportation bill, was no exception. It provided $244.1 billionover five years, its revenues raised by the federal gas tax and directed to the Highway Trust Fund, which has both highway and mass transit accounts. $40 billion a year went to highways, most of which was used to expand and upgrade the Interstate highway system; some $10 billion went annually to mass transit.

The $10 billion in public transportation funds is distributed by the Federal Transit Administration (FTA) for a variety of uses. The FTA administers the urban areas program, which allocates money to metropolitan areas for transit system capital expenses, as well as a rural areas program that helps states pay for rural transit. SAFETEA-LU also included a fixed-guideways formula, aimed at keeping mostly older rail transit systems like those in Chicago or Boston in working condition. Finally, the New Starts/Small Starts program allowed the FTA to fund competitive grants for major capacity expansion such as new subway or bus rapid transit lines.

More of this...

 SAFETEA-LU provided for $40 billion in annual funding from the highway account, the traditional federal source for financing Interstate highways. But under the law, money from the account could actually be spent on more than just roads. Roughly $6.5 billion per year was allocated to the “Surface Transportation Program.” States were allowed to use this money to fund transit and “bicycle transportation and pedestrian walkways.” The “Congestion Mitigation and Air Quality Improvement Program” — about $1.7 billion a year — went to projects likely to reduce pollution, and specifically forbade funding “a project which will result in the construction of new capacity available to single occupant vehicles.”

There’s one problem, though. The federal government may allow such funds to be spent on non-auto uses, but that’s rarely the case.

That’s because, while each metropolitan area has a federally-mandated Metropolitan Planning Organization (MPO) whose role is to establish priorities for transportation investments, state departments of transportation have ultimate discretion over how national highway funds are used. The inevitable consequence? Asphalt-happy DOTs usually choose to invest highway funds in roads, even when MPOs advocate for improved transit or bikeways. According to Transportation for America, only five states — California, New York, Oregon, Pennsylvania, and Virginia — have taken advantage of the flexibility of these funds. The rest have spent the vast majority on auto infrastructure.

What’s more, SAFETEA-LU made it easy for states to build roads and hard for them to build transit projects. While funds for new roads were simply distributed to states based on a formula, new transit lines had to undergo the rigorous New Starts process — competing with other projects from all over the country — before winning a share of federal dollars. There was no such required audit for road projects.