Toxic battle brewing over a new breed of automobile refrigerant HFO-1234yf; Greenpeace Germany sounds alarm; German Environment Minister calls it “highly risky economic and technical adventure”

June 12, 2009 at 2:07 pm

(Source: R744.com &1234facts.com)

In a letter sent to German OEMs on 27 May, Greenpeace Germany is attacking the global car industry for deliberately or recklessly downplaying the formation of highly toxic hydrogen fluoride from HFO-1234yf by several magnitudes. A review of a SAE scientific paper supported by global OEMs revealed that at the correct rate of HF concentration “all passengers would die with close to certainty”.

The manufacturers are touting that HFO-1234yf meets the automotive industry’s needs for a cost-effective, commercially viable low global warming potential (GWP) replacement for R-134a refrigerant.

Some of the stated benefits of HFO-1234yf include:

  • lower lifetime greenhouse gas emissions
  • dramatically shorter atmospheric lifetime
  • compatibility with current automotive a/c systems
  • superior cooling efficiency
  • best ease of adoption
  • safety for mobile applications

In the early 1900’s, CFCs provided the first form of refrigeration. As their ozone-depleting potential became recognized, the Montreal Protocol was adopted by many nations to begin the phase out of both CFCs and HCFCs. HFCs were developed to fill the void and while they were non-ozone depleting, they did have global warming potential.

“It is unknown to us if this is a factual error or if there are manipulative intentions behind this misinformation. Fact is, however, that the (correct) rate of HF concentration from the refrigerant 1234yf in a passenger compartment will not be around 150 ppm (depending on the vehicle) but will be a multitude of that. At these concentrations all passengers will die with close to certainty,” the Greenpeace letter, sent to the boards of all car manufacturers united in the VDA on 27 May, reads.
“As a result, the claim that 1234yf will be an alternative is not only wrong but also life threatening; the legal consequences not calculable,” the letter continues before calling on all carmakers to point out this dangerous misinformation in the automotive industry and correct the calculation.

Greenpeace refers to a peer-reviewed SAE Paper presented by Roberto Monforte, Fiat, at the SAE World Congress in Detroit on 21 April. The paper, obtained by R744.com, states that if 0.55 kg of HFO-1234yf are completely released in an accident and exposed to a flame inside the passenger compartment of a Pontiac Grand Prix model the concentration of highly toxic hydrogen fluoride will not surpass 150 ppm (parts per million). HFO-1234yf would therefore not pose a higher risk to the passenger than the currently used refrigerant R134a.

A calculation strongly rejected by Greenpeace and external industry sources, who suggest that this figure might be understating the actual formation of HF by up to 1000 times. If 0.55 kg of 1234yf are burned, 0.39 kg of HF will develop. Calculated on a cabin volume of 3m3 (weight of air 3.6 kg), a concentration of 100,000 ppm would occur, or 10.7%. As opposed to 150 ppm, this 1000 times higher concentration would be enough to kill busloads of humans. Even with varying vehicle types, the HF rate inside the compartment could be hundreds of times higher than that assumed in the SAE paper. Click here to read more about the Greenpeace argument.

In the middle of this fiasco, Environment Minister Sigmar Gabriel has raised his voice to warn the German automotive industry against a “highly risky economic and technical adventure” with an untested, flammable, and toxic refrigerant 1234yf. Moreover, manufacturers should not expect the EU R134a phase-out schedule to change, but rather choose CO2 now as the most energy-efficient and safe alternative available.

German Environment Minister: Untested 1234yf an “adventure”In an interview with ACE, a leading automotive club representing the interests of 550.000 Germans, the Environment Minister Sigmar Gabriel has taken a clear stance in favour of CO2 in the currently hotly debated question of which refrigerant to choose for future car air conditioning systems:

“Fact is: With CO2 there is an environmentally friendly alternative to R134a available, and it has been proven in real life,” Gabriel stated. “The VDA has to know what it does to strengthen its credibility or not,” he referred to the clear commitment to CO2 already issued in 2007 by all carmakers united in Germany’s automotive association VDA. The Environment Ministry would continue to support CO2 (R744) as not only the most ecological option, but also that with a significantly higher energy efficiency, as measurements by the Federal Environment Agency have proved.

Untested chemical “high adventure”
Gabriel also issued a clear warning to the automotive industry to not use untested alternative refrigerants. The currently discussed flammable and toxic chemical 1234yf would be a completely new substance not yet fully investigated by public authorities for its ecological and health risks. As a consequence, manufacturers deciding for 1234yf would embark on a “high economic and technical adventure”, Gabriel concluded.

The Minister warned the German automotive industry against a further use of R134a in cars after 2011. According to Gabriel, the EU MAC Directive, prescribing the use of refrigerants with a Global Warming Potential of below 150 in future passenger cars, will not be changed. Carmakers should acknowledge that he would hold on to the agreed phase-out schedule starting in 2011, with a gradual ban of R134a until 2017. As a result, from 2011, the deprivation of type approval for cars using the climate-damaging refrigerant would be enforced as originally scheduled.

Volvo Technology to Lead New York Commercial Vehicle Infrastructure Integration Development Program

June 11, 2009 at 11:27 pm

(Source: Green Car Congress)

The New York State Department of Transportation (NYSDOT) has selected Volvo Technology North America to lead the development and demonstration of an advanced Commercial Vehicle Infrastructure Integration (CVII) program. A contract awarding this program to Volvo Technology is being finalized by the state.

The program will demonstrate VII applications for commercial vehicles along key transportation corridors in the greater New York City region. Test corridors, utilizing 5.9 GHz dedicated short range communications (DSRC), include 13 miles of the New York State Thruway Authority’s I-87 Spring Valley Corridor and 42 miles of NYSDOT’s I-495 Long Island Expressway.

VII is an advanced ITS (Intelligent Transportation System) technology using infrastructure similar to that of 915 MHz based systems such as E-Z PASS but with the capability of very high-speed, high-capacity data communication using an on-board communication device that is integrated with the electronic information and control systems of the vehicle.

Visual and audible information is available to the driver from the VII network, and the vehicle can communicate information to the VII roadside infrastructure as well as other vehicles, creating smart vehicles operating along a smart highway and transportation system, NYSDOT notes.

VII development has focused almost exclusively on passenger vehicles. While a number of major light vehicle manufacturers have been directly involved with the VII technology development under the leadership of the USDOT, the commercial vehicle industry has not been sufficiently represented, NYSDOT said. The Volvo-led effort for the state of New York, funded by the I-95 Corridor Coalition in cooperation with the Federal Highway Administration, is the first VII program exclusively devoted to developing and demonstrating the technology for commercial vehicles.

The Volvo-led program will test enhanced vehicle security, demonstrating driver identification and verification using TWIC (Transportation Worker Identification Credential, an identity card issued by the Transportation Security Administration) and biometric readers to restrict vehicle operation to authorized drivers only. The program will also test the ability to gather real-time information about important vehicle safety components, such as brake condition.

The goal of national Vehicle Infrastructure Integration (VII), which uses high speed, high capacity wireless technology, is to enhance highway user safety by allowing smart vehicles and highway infrastructure to communicate information to the driver. VII technology can provide a wide range of communications to the driver including safety warning of potential hazards and general traveler information.

For commercial vehicles, such high-speed, wireless communications can also be used to improve vehicle productivity and contribute to improved fuel efficiency and reduced CO2 emissions.

Click here to read the entire article.

Kuwaiti Oil Minister reportedly says OPEC won’t increase production until prices hit $100/barrel

June 11, 2009 at 10:25 pm

(Source: Autoblog, Bloomberg & ThisDay)

America might get most of its oil from Canada, but the moves that Organisation of Petroleum Exporting Countries (OPEC) makes still reverberate here. Thus, a statement by the Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah to reporters yesterday probably won’t help decrease domestic gasoline prices any time soon. OPEC’s al-Sabah said that the organization will not consider increasing production until the price of a barrel of oil reaches $100.

Crude oil traded in New York has climbed almost 60 percent this year, after plunging more than $100 in five months at the end of 2008 as the global recession curbed demand for fuel.

Oil futures rose above $71 a barrel yesterday for the first time in seven months, and traded at $71.18 as of 9:14 a.m. on the New York Mercantile Exchange.

OPEC had in the wake of the record oil plunge noted that its revenue had been adversely affected, a development which prompted members countries to set back 35 of the 150 projects due to come on line in the next few years to expand supply. OPEC predicted stronger demand as it decided May 28 in Vienna to keep production quotas unchanged. OPEC agreed at three meetings last year that the 11 members with production quotas would reduce output by 4.2 million barrels a day.

OPEC Secretary General, Abdalla El-Badri , had stated that falling prices of crude oil would not only affect investments in both the upstream and downstream, but will delay future investments.
He raised fears that if the present situation does not change, it will lead to cancellation of future investments and automatically affect oil supply to the market.Following the recent price rally, OPEC at its May 28 meeting agreed to leave outputs at their present levels. Lead producer, Saudi Arabia had predicted that oil prices would likely rise to around $75 a barrel by the end of the year on the back of growing demand in Asia .

OPEC President, Angola ’s Oil Minister, Botelho de Vasconcelos had noted that oil should be between $70 and $75 a barrel to cover the costs of production.OPEC’s Director of Research, Hasan Qabazard , had at an Energy conference a fortnight ago expressed fears that oil prices could fall again because fundamentals were still weak.The OPEC scribe had noted that oil markets were still weak, pointing out that the current price “rally may be unsustainable in the short term because the “rally is driven by funds rather than fundamentals”.  However, United States investment bank, Goldman Sachs had stated that a potential economic rebound alongside production cuts by the OPEC could prop up price to $85 a barrel by the end of the year and $95 a barrel by the end of 2010.

TransportGooru Musing:

1.  The power of the cartel and its influence in manging the oil prices can only be countered with sustained investments world over in alternative fuel technologies such as electric vehicles ( like in US, Japan and Europe) and hydrogen technology (Norway has a solid lead here).

2.  The developing economies are going to have a tougher time in this round compared against the previous years, especially with the recession still showing its strong grip in many countries.  Especially, for China and India high oil prices can be crippling as they are battling to out of the recession.

3.  Speculative trading in the markets should be reined in (a very hard to execute.  Period.

4. Above all, the only real sense of control remaining for ordinary people against this oil mafia is to simply repeat what they did in 2008 – stop driving unless it is really, really necessary.  If there is a transit alternative, park the damn car and take the bus or train.   Try and find if you have a carpool option available in your city.  It might be ridiculous to think about this “shun your car” as an option here. But the secret lies in the “power of one” –  as an individual your contribution might be negligible but if done effectively in every community it can make a serious impact.

GAO says Plug-in Vehicles Offer Potential Benefits, but High Costs and Limited Information Could Hinder Integration into the Federal Fleet

June 11, 2009 at 5:32 pm

(Source: U.S. Government Accountability Office)

The U.S. transportation sector relies almost exclusively on oil; as a result, it causes about a third of the nation’s greenhouse gas emissions. Advanced technology vehicles powered by alternative fuels, such as electricity and ethanol, are one way to reduce oil consumption. The federal government set a goal for federal agencies to use plug-in hybrid electric vehicles–vehicles that run on both gasoline and batteries charged by connecting a plug into an electric power source–as they become available at a reasonable cost. This goal is on top of other requirements agencies must meet for conserving energy.

In response to a request, GAO examined the:

(1) potential benefits of plug-ins,

(2) factors affecting the availability of plug-ins, and

(3) challenges to incorporating plug-ins into the federal fleet. GAO reviewed literature on plug-ins, federal legislation, and agency policies and interviewed federal officials, experts, and industry stakeholders, including auto and battery manufacturers.

Increasing the use of plug-ins could result in environmental and other benefits, but realizing these benefits depends on several factors. Because plug-ins are powered at least in part by electricity, they could significantly reduce oil consumption and associated greenhouse gas emissions. For plug-ins to realize their full potential, electricity would need to be generated from lower-emission fuels such as nuclear and renewable energy rather than the fossil fuels–coal and natural gas–used most often to generate electricity today. However, new nuclear plants and renewable energy sources can be controversial and expensive. In addition, research suggests that for plug-ins to be cost-effective relative to gasoline vehicles the price of batteries must come down significantly and gasoline prices must be high relative to electricity.

Auto manufacturers plan to introduce a range of plug-in models over the next 6 years, but several factors could delay widespread availability and affect the extent to which consumers are willing to purchase plug-ins. For example, limited battery manufacturing, relatively low gasoline prices, and declining vehicle sales could delay availability and discourage consumers. Other factors may emerge over the longer term if the use of plug-ins increases, including managing the impact on the electrical grid (the network linking the generation, transmission, and distribution of electricity) and increasing consumer access to public charging infrastructure needed to charge the vehicles.

The federal government has supported plug-in-related research and initiated new programs to encourage manufacturing. Experts also identified options for providing additional federal support. To incorporate plug-ins into the federal fleet, agencies will face challenges related to cost, availability, planning, and federal requirements. Plug-ins are expected to have high upfront costs when they are first introduced. However, they could become comparable to gasoline vehicles over the life of ownership if certain factors change, such as a decrease in the cost of batteries and an increase in gasoline prices.

Agencies vary in the extent to which they use life-cycle costing when evaluating which vehicle to purchase. Agencies also may find that plug-ins are not available to them, especially when the vehicles are initially introduced because the number available to the government may be limited. In addition, agencies have not made plans to incorporate plug-ins due to uncertainties about vehicle cost, performance, and infrastructure needs.

Finally, agencies must meet a number of requirements covering energy use and vehicle acquisition–such as acquiring alternative fuel vehicles and reducing facility energy and petroleum consumption–but these sometimes conflict with one another. For example, plugging vehicles into federal facilities could reduce petroleum consumption but increase facility energy use. The federal government has not yet provided information to agencies on how to set priorities for these requirements or leverage different types of vehicles to do so. Without such information, agencies face challenges in making decisions about acquiring plug-ins that will meet the requirements, as well as maximize plug-ins’ potential benefits and minimize costs.

The recommendations are listed below:

  • To enable agencies to more effectively meet congressional requirements, the Secretary of Energy should, in consultation with Environmental Protection Agency (EPA), General Services Administration (GSA), Office of Management and Budget (OMB), and organizations representing federal fleet customers such as Interagency Committee for Alternative Fuels and Low-Emission Vehicles (INTERFUEL), Federal Fleet Policy Council (FEDFLEET), and the Motor Vehicle Executive Council, propose legislative changes that would resolve the conflicts and set priorities for the multiple requirements and goals with respect to reducing petroleum consumption, reducing emissions, managing costs, and acquiring advanced technology vehicles.
  • The Secretary of Energy should begin to develop guidance for when agencies consider acquiring plug-in vehicles, as well as guidance specifying the elements that agencies should include in their plans for acquiring the mix of vehicles that will best enable them to meet their requirements and goals. Such guidance might include assessing the need for installing charging infrastructure and identifying areas where improvements may be necessary, mapping current driving patterns, and determining the energy sources used to generate electricity in an area.
  • The Secretary of Energy should continue ongoing efforts to develop guidance for agencies on how electricity used to charge plug-ins should be measured and accounted for in meeting energy-reduction goals related to federal facilities and alternative fuel consumption. In doing so, the Secretary should determine whether changes to existing legislation will be needed to ensure there is no conflict between using electricity to charge vehicles and requirements to reduce the energy intensity of federal facilities, and advise Congress accordingly.
  • The Administrator of GSA should consider providing information to agencies regarding total cost of ownership or life-cycle cost for vehicles in the same class. For plug-in vehicles that are newly offered, the Administrator should provide guidance for how agencies should address uncertainties about the vehicles’ future performance in estimating the life-cycle costs of plug-ins, so agencies can make better-informed, consistent, and cost-effective decisions in acquiring vehicles.
  • Once plug-in hybrids and all-electrics become available to the federal government but are still in the early phases of commercialization, the Administrator of GSA should explore the possibility of arranging pass-through leases of plug-in vehicles directly from vehicle manufacturers or dealers–as is being done with DOD’s acquisition of neighborhood electric vehicles–if doing so proves to be a cost-effective means of reducing some of the risk agencies face associated with acquiring new technology.

Click here to read or download the entire report.

Breaking News: Swedish television reports Sweden car firm Koenigsegg to buy Saab

June 11, 2009 at 3:43 pm

(Source: The Jakarta Globe)

Swedish luxury sports car maker Koenigsegg will buy Saab Automobile from US giant General Motors with the backing of Norwegian investors, Swedish television reported on Thursday.

The buyers have signed a letter of intention to buy Saab, SVT said on its website, citing anonymous sources and naming Koenigsegg and added that the negotiations could last for months.

“We are getting close to a deal done, but there are some final steps to be taken,” a source close to the matter told AFP, but would not confirm the identity of the leading bidder.

Both Saab and its parent company GM declined comment. Saab was put up for sale by General Motors, which filed for bankruptcy after being brought to its knees by falling demand amid the world economic downturn.  Saab’s reorganisation process began separately in Swedish courts in February.

Koenigsegg, set up in 1994, produces just 20 of its deluxe sports cars a year and sells each one for more than a million euros (1.4 million dollars).

Saab’s sell-off drew a little closer on Thursday after Stockholm announced it had authorised the Swedish Debt Office, which acts as a public bank to the state, to discuss guaranteeing a 500-million-euro loan made to Saab by the European Investment Bank (EIB).

“We have always said that the debt office could start negotiations on guaranteeing the loan when Saab has a new owner,” state secretary for business Joran Hagglund said in a statement.

Media reports had also said Italy’s Fiat was keen on buying Saab, but observers say such a move is now unlikely because of Fiat’s failure to acquire GM’s other European brand Opel.

Opel and its sister marque, Vauxhall, share a lot of technology with Saab.  The Saab automaker — not to be confused with a Swedish defence company also called Saab — sold 93,000 cars worldwide in 2008, according to its website.

It owes 9.7 billion kronor (1.3 billion dollars, 924 million euros) to GM — its largest individual creditor — as well as 347 million kronor to the Swedish government. Other creditors are owed 647 million kronor.

Saab, the automaker, employs about 3,400 people in Sweden. Including suppliers, some 15,000 jobs in the country are believed to be at risk if the company were to disappear.

Click here to read the entire article.

Opting to take the train instead of driving for environmental reasons? Think twice about ‘green’ transport, say scientists

June 11, 2009 at 12:32 pm

(Source: AFP via Yahoo & Science Daily)

Image Courtesy: IOP - Energy consumption and GHG emissions per PKT (The vehicle operation components are shown with gray patterns. Other vehicle components are shown in shades of blue. Infrastructure components are shown in shades of red and orange. The fuel production component is shown in green. All components appear in the order they are shown in the legend.)

Do you worry a lot about the environment and do everything you can to reduce your carbon footprint? Are you the one who frets about  tailpipe emissions, greenhouse gases and climate change?

If yes,  you must be the one who prefers to take the train or the bus rather than a plane, and avoid using a car whenever you can, faithful to the belief that this inflicts less harm to the planet.

Well, there could be a nasty surprise in store for you, for taking public transport may not be as green as you automatically think, says a new US study published in Environmental Research Letters, a publication of Britain’s Institute of Physics.  Often unknown to the public, there are an array of hidden or displaced emissions that ramp up the simple “tailpipe” tally, which is based on how much carbon is spewed out by the fossil fuels used to make a trip. Environmental engineers Mikhail Chester and Arpad Horvath at theUniversity of California at Davis say that when these costs are included, a more complex and challenging picture emerges.

In some circumstances, for instance, it could be more eco-friendly to drive into a city — even in an SUV, the bete noire of green groups — rather than take a suburban train. It depends on seat occupancy and the underlying carbon cost of the mode of transport.

The pair give an example of how the use of oil, gas or coal to generate electricity to power trains can skew the picture.

Boston has a metro system with high energy efficiency. The trouble is, 82 percent of the energy to drive it comes from dirty fossil fuels.  By comparison, San Francisco‘s local railway is less energy-efficient than Boston’s. But it turns out to be rather greener, as only 49 percent of the electricity is derived from fossils.

The paper points out that the “tailpipe” quotient does not include emissions that come from building transport infrastructure — railways, airport terminals, roads and so on — nor the emissions that come from maintaining this infrastructure over its operational lifetime.

The researchers also touch on the effect of low passenger occupancy and show that we are naïve to automatically assume one form of transport is more environmentally friendly than another. They conclude from their calculations that a half-full Boston light railway is only as environmentally friendly, per kilometre traveled, as a midsize aircraft at 38 per cent occupancy.  From cataloguing the varied environmental costs the researchers come to some surprising conclusions. A comparison between light railways in both Boston and San Franciso show that despite Boston boasting a light railway with low operational energy use, their LRT is a far larger greenhouse gas (GHG) emitter because 82 per cent of the energy generated in Boston is fossil-fuel based, compared to only 49 per cent in San Francisco.

Total life-cycle energy inputs and GHG emissions contribute an additional 155 per cent for rail, 63 per cent for cars and buses, and 32 per cent for air systems over vehicle exhaust pipe operation.

So getting a complete view of the ultimate environmental cost of the type of transport, over its entire lifespan, should help decision-makers to make smarter investments.

For travelling distances up to, say, 1,000 kilometres (600 miles), “we can ask questions as to whether it’s better to invest in a long-distance railway, improving the air corridor or boosting car occupancy,” said Chester.  The calculations are based on US technology and lifestyles.

Click here to read the entire article.    Also, you can access the PDF version of the research paper here.

Journal reference:

  • Mikhail V Chester and Arpad Horvath. Environmental assessment of passenger transportation should include infrastructure and supply chainsEnvironmental Research Letters, 2009; 4 (024008) DOI: 10.1088/1748-9326/4/2/024008

F** This! – The Infrastructurist rolls out a brand new portal to fix America’s broken infrastructure

June 11, 2009 at 11:55 am

Image Courtesy: The Infrastructurist

(Source: The Infrastructurist)

Our friends at The Infrastructurist have come up with a clever way to fix the decaying infrastructure of the United States.  They have developed a portal F** This! where you, the Citizen & resident of the community, can become a guardian of public infrastructure.

The Infrastructurist says, “You can keep your city working smoothly. You can post pictures of busted crap–partially disassembled escalators in subway stations, cavernous potholes, permanently dark street lights–and trade snide and insightful comments with your wonderful new F** This! cyberfriends (why can’t your real life friends be this cool?). At the same time, while you’re busy enjoying yourself, we’ll see to it that the appropriate public officials get notified and the problem you identified gets dealt with. Or, if said officials prove useless in fixing the busted stuff, we’ll see to it that they endure at least some small measure of public humiliation. It’ll be fun!”

The website notes that F** This! is still in the early stages of development and sometime soon, the Infrastructruist will organize an official campaign and some neat features that will help bring your complaints to everyone’s attention (assuming, you know, they are deserving of it). At first, the focus will be on New York, but the plan is to expand to other US cities in coming weeks and months.

As suggested in the website, let us poke around and look at a few of the action items that are up there. Explore F** This!’s inner workings. Let them creators know what you think. And a protip: Even if you don’t live in New York, you can scoot the map around and find your town. So give that a try if you’re inclined. The tool that is at use here is from a company called See Click Fix, which I think is very smartly put together. How about you?

What a novel way to get stuff fixed around the country!

New Chrysler Takes Shape As Fiat Alliance Formalized; New CEO Marchionne starts to spin his magic immediately

June 10, 2009 at 5:09 pm

(Source: Dow Jones via Wall Street Journal & LeftLane News.com, WTOP)

Italy’s Fiat is the new owner of most of Chrysler’s assets, closing a deal Wednesday that saves the troubled U.S. automaker from liquidation and places a new company in the hands of Fiat’s CEO.  The deal creates a leaner company known as Chrysler Group LLC, which is not in bankruptcy protection and is free of billions in debt, 789 underperforming dealerships and burdensome labor costs that hobbled the old Chrysler LLC.   The future of Chrysler Group LLC began to take shape Wednesday as its new leadership announced sweeping management and organizational changes.

The announcements came as Chrysler merged its assets with Fiat SpA (FIATY), following a six-week bankruptcy process for the U.S. auto maker. The last hurdle to the sale of Chrysler assets to Fiat was cleared late Tuesday when the U.S. Supreme Court rejected creditors’ objections to the deal.

The completion of the Chrysler deal bolsters President Barack Obama’s administration, which guided Chrysler through bankruptcy and hopes that a concurrent restructuring at General Motors Corp. (GM), which filed for Chapter 11 on June 1, will also be completed quickly.

Chrysler confirmed that its new Chief Executive is Sergio Marchionne, who also serves as Fiat’s CEO. Marchionne replaces Robert Nardelli, who served as Chrysler’s chief for the past 20 months. As reported, Robert Kidder, the lead independent director at Morgan Stanley, will become chairman of Chrysler’s new board of directors. Current Vice Chairman Jim Press will be appointed deputy CEO and special advisor, the company said.

Marchionne said in a letter to Chrysler employees that the company will be more focused and nimble, benefiting significantly from its global alliance with the Italian auto maker.   The new Chrysler Group LLC noted that it would soon reopen Chrysler factories that were idled during the bankruptcy process, costing the automaker $100 million per day.

Under the old Chrysler, the automaker’s three brands – Chrysler, Dodge and Jeep – were all vertically integrated. However, Fiat has now separate all parts of Chrysler—including its Mopar parts division – with executives heading up each division. The new setup largely mirrors Fiat’s management style with its Fiat, Alfa Romeoand Lancia brands.

“The new company moves forward with significant strategic advantages, including a healthy balance sheet, a competitive cost structure, a leaner and more efficient dealer network, sound supplier agreements and significantly improved product quality and operational efficiency,” he said in the letter.

Chrysler, the smallest of the three U.S. auto makers, sought emergency government aid and was forced to file for bankruptcy in recent months owing to a steep decline in sales that drained the company’s cash. Chrysler enters this new chapter of its storied history at a time when the outlook for the auto industry remains bleak, amid continued economic weakness and tight credit conditions. Jim Press – Chrysler’s former co-president – might have been questioning his decision to move from Toyota to Chrysler in 2007 in recent weeks, but the automotive exec’s career is safe as Fiat CEO Sergio Marchionne has named Press the deputy CEO of the reborn Chrysler.

Michael Manley, Michale Accavitti and Peter Fong, all of whom were previously with Chrysler, will run Jeep, Dodge and Chrysler, respectively. Pietro Gorlier, who joins Chrysler from Fiat, will head Mopar.

Chrysler’s swift passage through about six weeks of bankruptcy proceedings was helped by the involvement of the Obama administration’s auto task force, which provided billions in financing and helped negotiate a deal with the company’s stakeholders.

As part of the reorganization plan, the new Chrysler will be 20% owned by Fiat, while more than 55% will be controlled by the United Auto Workers union. Fiat’s stake could increase to 35% if the new company meets benchmarks intended to insure the development of fuel-efficient vehicles in the U.S., and it has the option to become the majority stakeholder once U.S. loans have been repaid. The U.S. and Canadian governments also have minority stakes.

The sale to Fiat SpA marks a victory for the Obama administration, which shepherded Chrysler LLC into Chapter 11 protection on April 30 with the hope that the company would emerge in a matter of months with a new partner.

“This morning’s closing represents a proud moment in Chrysler’s storied history,” said the Treasury Department in a written statement. “The Chrysler-Fiat Alliance has now exited the bankruptcy process and is poised to emerge as a competitive, viable automaker.”

The government will loan the new company $4.7 billion, to be repaid within eight years along with interest and $288 million in fees.

The Treasury had given Chrysler LLC $3.3 billion in debtor-in-possession financing to support the company throughout the bankruptcy process. Chrysler LLC remains in bankruptcy court, as it winds down operations, selling plants it doesn’t want, dispersing payments to debtholders and settling any other claims that were not transferred to the new company. Those actions could linger until next year, if not longer.

As part of the alliance, Fiat will contribute to Chrysler technology, platforms and powertrains for small- and medium-sized cars.

Work begins on nation’s largest mass transit project; Offers new link between New Jersey & New York, doubles commuter rail capacity

June 10, 2009 at 4:25 pm

(Source: CNN)

  • Tunnel will link New Jersey with New York, doubles commuter rail capacity
  • Part of project financed by American Recovery and Reinvestment Act
  • ARC, Access to the Region’s Core, expected to create 6,000 jobs

Image Courtesy: Arctunnel.com

The new tunnel, said to be the largest commitment to any transportation project anywhere in the United States in the history of the Department of Transportation, according to administrator Peter Rogoff of the Federal Transportation Administration, will link New Jersey with New York and eventually will double capacity on the nation’s busiest rail corridor, running from Washington to Boston, Massachusetts, officials said.

Officials participated in the groundbreaking for the $8.7 billion project as commuter trains passed behind them in North Bergen, New Jersey, before entering the existing train tunnel, which went into operation in 1908.

“As we start digging this tunnel, I think that what really it means, we are digging our way out of an economic crisis,” said Sen. Bob Menendez, D-New Jersey. “As we’re getting under way, we’re seeing the dividends of the Recovery Act being paid right now.”

The project — known as ARC, for Access to the Region’s Core — is expected to create 6,000 design and construction jobs.New Jersey Transit says 170,000 passengers now travel through the existing train tunnel beneath the Hudson River to New York each day. When completed, the second tunnel will enable that figure to increase to 255,000 passenger trips. The additional passengers will disembark at a new concourse to be built at Penn Station in New York, 150 feet below street level.

Details, Details, Details: A quick comparision of the House vs. Senate forms of “Cash for Clunkers” a.k.a Consumer Assistance to Recycle and Save (CARS Act) bill

June 10, 2009 at 3:21 pm

(Source: Associated Press, The Detroit News, Streetsblog & Jalopnik)

With the “Cash for Clunkers” bill successfully clearing the House floor, there is a lot of chatter about the fate of this bill in the Senate.   The auto industry and Michigan lawmakers are pushing for quick Senate action on this legislation to boost auto sales, after the House overwhelmingly passed the bill Tuesday.

But it remains unclear when Senate supporters may overcome the objections of Senate appropriators and a group of senators who say the House proposal doesn’t do enough to improve fuel efficiency on the nation’s highways.

The House approved its version Tuesday, 298-199, with substantial Republican support despite the opposition of House leaders including Minority Leader John Boehner and whip Eric Cantor.

Sens. Debbie Stabenow, D-Lansing, and Sam Brownback, R-Kan., introduced a nearly identical bill in the Senate, but had to withdraw an attempt to get a floor vote last week.

Opposition came from members of the Senate Appropriations Committee, which objected to funding provisions of the bill, and from senators who want tougher fuel economy requirements.

Sen. Diane Feinstein, D-Calif., introduced a competing proposal on Monday.   Feinstein’s proposal would require drivers to achieve a 25 percent fuel-efficiency increase before receiving a tax credit for ditching their clunkers. But Michigan Sen. Debbie Stabenow (D) is pushing for a trade-in tax credit that’s very similar to Sutton’s — truck owners would only have to increase their fuel efficiency by 2 miles per gallon to be eligible.  The requirements for car trade-ins aren’t much better under the Stabenow and Sutton plans, with a mere4 mpg increase in fuel economy triggering the $3,500 tax credit.  With Rep. Sutton’s plan winning the House approval this week, Stabenow’s Senate counterpart could potentially get a leg up over Feinstein’s.

While we await the Senate action, I put together a quick side by side comparision of the two bills  (data from Associated Press).

Data Courtesy: Associated Press

Also, our friends at Jalopnik have compiled an awesome visual that simplifies the rs details of this “Cash for Clunkealong” with some great analysis about the worthiness of the program for buyers.

First of all, operable vehicles are required and there aren’t many people driving around with vehicles worth less than $1,500. Many old crappy cars, in fact, can still demand up to $2,500 on the open market. This means you’re going to get, max, $2000 for your trade-in. The least valuable qualifying cars, of course, are actually the more efficient compact vehicles, which makes getting the necessary 10 MPG improvement unlikely.

The second problem, stemming from the first, is quantifying the number of people who actually drive around in cars worth less than $2,500 and can actually afford a new car. Our instinct tells us there aren’t many people. This means people taking advantage of the program will, typically, have to be excited by the prospect of saving $1,000 or $2,000. These people should already have been swayed by intense discounting from automakers in recent months.

Image Courtesy: Jalopnik

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