High maintenance: Tata motors looking to raise £1 billion to keep Jaguar, Land Rover going

May 11, 2009 at 2:45 pm

 (Source: Autoblog)

We don’t know how many times through the millennia one gentleman has told another, “Be careful with her – she’s beautiful, but she’s expensive.” We would like to know if Alan Mullaly offered that warning to Ratan Tata (above) before the latter bought Jaguar and Land Rover (JLR). As with the Blue Oval before it, Tata Motors is about to throw billions at the English luxury marques and it is looking for help doing it.

Tata wanted the British government to guarantee a £340 million loan ($515M USD) Tata received from the European Investment Board. The government refused to underwrite the entire amount, and it was written that the government additionally wanted Tata to invest up to another £400M ($605M) in JLR (on top of the £900M ($1.36B) Tata pitched in last summer) and put £50M ($76B) on the table before it would underwrite anything. The government is also said to have wanted veto power on top executive choices and labor plans. 

European Automotive Industry Outlines R&D Priorities for EU Green Car Initiative

May 8, 2009 at 12:42 am

(Source: Green Car Congress & Newspress, UK)

European automotive suppliers and vehicle manufacturers have united to submit a series of R&D priorities to the European Commission to shape the European Green Car Initiative (EGCI), announced by the EU. CLEPA (the European umbrella membership organization representing the interests of the global automotive supply industry) and EUCAR (the European Council for Automotive R&D from the major European passenger car and commercial vehicle manufacturers) jointly prepared the document.

The Green Car Initiative, a part of the European economic recovery plan, aims to allocate €5 billion (US$6.7 billion) through a Public Private Partnership to bolster innovation in the automotive sector and sustain its focus on environmental progress. The initiative complements the European Clean Transport Facility which, through the European Investment Bank, serves to provide more immediate financial relief to the sector.

The Green Car Initiative concentrates on long-term R&D, largely combining existing projects under a clear policy focus and underlining the importance of a joint approach between industries and policy makers. The CLEPA and EUCAR document is intended to harmonize the R&D directions and priorities of the auto industry, and then to communicate these to relevant authorities and bodies at national and EU level and to other key partners. The scope of the document is adapted and narrowed to the domain of the EGCI, and it does not claim to cover the broad spectrum of automotive and transport R&D.

The R&D domain in the document is structured into four major areas:

  • Mobility and Transport (deploying information and communication technologies (ICT) and Intelligent Transport Systems (ITS) for traffic and transport management, involving vehicles as well as route planning).
  • Energy and Environment (exploring primary energy sources which are renewable, secure, sufficient and environmentally compatible; the electrification of vehicles and the road transport system as a whole; lightweight structures and new vehicle concepts for high energy-efficiency).
  • Safety (ensuring safety of new vehicle concepts and types; development of cooperative systems for efficiency and safety based on communication between vehicles and infrastructure).
  • Affordability and Competitiveness (achieving green objectives at an affordable level, taking into account the availability and use of raw and rare materials; (energy-) efficiency of production processes; handling of alternative materials; use of virtual tools).

All of these areas are equally important and none of them can be considered independent from the others, the organizations note.

Click here to read the entire article.  Here is a copy of the full report in PDF.

Spiffy Ride – French Nuclear Power Cleans Up Eurostar High-speed Rail Network; 3-years ahead of schedule to beat CO2 reduction goals

May 7, 2009 at 6:29 pm

(Source: Green Inc, NY Times)

Eurostar,  the high-speed rail link between Paris, London and Brussels, says it met its carbon-dioxide reduction goals three years ahead of schedule .  In 2007, EuroStar annoucned that it would aim to reduce carbon-dioxide emissions by 25 percent per passenger journey over then-current levels — and do so by 2012. 

Previously, half of the energy in the tunnel came from Britain, which relies more heavily on coal and gas-fired power.
France generates about 80 percent of its electricity from a fleet of nearly 60 nuclear reactors — which produce little CO2. The company said the speedier-than-expected reductions could be attributed to a number of factors — from more efficient train driving and turning off half of all on-board lights, to increasing the number of people riding each train.
But the vast majority of reductions were achieved by switching to France as the primary provider of electricity for trains traveling the undersea tunnel between Britain and Paris, according to a spokesman, Richard Holligan.  
Not content with its progress, Eurostar is now moving ahead to raise its target to further cut emissions because it had already reached its original goals.  The new target: reducing CO2 emissions by 35 percent per passenger journey by 2012.

I plans to achieve its new reduction target by improving the efficiency of its air-conditioning and heating systems, further reducing the energy consumption of its lighting systems, and introducing more tools to assist drivers to drive the trains efficiently.

Note: Europeans are leading by example in the fight against global warming by switching to technologies that yield “green” power, while folks in the US are still bickering over “clean coal”.   We have a long way to go!

“Cash for Clunkers” Update-2: More details on the Energy & Commerce Democrats Agreement

May 6, 2009 at 3:13 pm

As reported in yesterday’s post, the House Energy and Commerce Committee Chairman Henry A. Waxman, Subcommittee Chairman Edward J. Markey, Chairman Emeritus John D. Dingell, Congresswoman Betty Sutton, Congressman Jay Inslee, and Congressman Bart Stupak reached an agreement on a “Cash for Clunkers” program that will help the auto industry while cleaning our air. This agreement is based on H.R. 1550, introduced by Congresswoman Sutton, and H.R. 520, introduced by Congressman Inslee.  The fact sheet published on the Committee’s website offers the following detail:

Consumers may trade in their old, gas-guzzling vehicles and receive vouchers worth up to $4,500 to help pay for new, more fuel efficient cars and trucks. The program will be authorized for up to one year and provide for approximately one million new car or truck purchases. The agreement divides these new cars and trucks into four categories. Miles per gallon figures below refer to EPA “window sticker” values

• Passenger Cars: The old vehicle must get less than 18 mpg. New passenger cars with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.

• Light-Duty Trucks: The old vehicle must get less than 18 mpg. New light trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old truck, the voucher will be worth $4,500.

• Large Light-Duty Trucks: New large trucks (pick-up trucks and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg are eligible for vouchers. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.

• Work Trucks: Under the agreement, consumers can trade in a pre-2002 work truck (defined as a pick-up truck or cargo van weighing from 8,500-10,000 pounds) and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class. There will be a finite number of these vouchers, based on this vehicle class’s market share. There are no EPA mileage measures for these trucks; however, because newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality. Consumers can also “trade down,” receiving a $3,500 voucher for trading in an older work truck and purchasing a smaller light-duty truck weighing from 6,000 – 8,500 pounds.

Here is a PDF copy of the Fact Sheet:

President Obama & U.S. House members reach compromise on “cash for clunkers” deal

May 5, 2009 at 3:52 pm

(Source: Detroit Free Press & Image: Jalopnik)

WASHINGTON – The Obama administration and U.S. House members have reached a compromise over a “cash for clunkers” bill that would offer as many as one million vehicle buyers a voucher for up to $4,500 each to spur car and truck sales.

The bill still must pass Congress and its price tag was not immediately available. But the compromise gives the bill backing from Michigan representatives, several automakers and other groups who might have had enough opposition to block it.

The vouchers would apply to passenger cars, trucks and work vehicles. The old passenger cars and trucks being traded in under the plan would have to get less than 18 miles per gallon in combined driving. 

New cars would have to get at least 22 m.p.g. to qualify for a $3,500 voucher; if the new model gets 10 m.p.g. more than the old one, the voucher would increase to $4,500.

New trucks would have to get at least 18 m.p.g., and get at least 2 m.p.g. better than the old model to get the $3,500 voucher and 5 m.p.g. better for the $4,500 voucher.

The vouchers would be available for one year and up to one million customers.

Click here to read the entire article.

 FYI,  NY times has made available the following documents that can help you understand what vehicles are eligible in the competing version of the Cash of Clunkers legislation

List of Eligible Vehicles Under the Rep. Steve Israel Plan (from the American Council for an Energy Efficient Economy)

List of Eligible Vehicles Under the Rep. Betty Sutton Plan (from Representative Sutton’s office)

Chrysler to File for Bankruptcy Following Collapse of Negotiations; President Obama to address the nation

April 30, 2009 at 9:45 am

(Source: Washington Post)

Chrysler, one of the three pillars of the American auto industry, will file for bankruptcy today after last-minute negotiations between the government and the automaker’s creditors broke down last night, an Obama administration official said.

 U.S. officials had offered Chrysler’s secured lenders $2.25 billion in cash if they would agree to writedown the $6.9 in secured debt that the company owed. But a small group of hedge funds refused the 11th-hour deal, forcing an imminent bankruptcy.

An administration official this morning expressed disappointment, saying the holdouts had failed to “do the right thing,” but that “their failure to act in either their own economic interest or the national interest does not diminish the accomplishments made by Chrysler, Fiat and its stakeholders, nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward.”

President Obama is scheduled to address the issue at noon today at the White House.

As talks broke down late last night, it became near certainty that the Obama administration would send Chrysler into bankruptcy under a plan that would replace chief executive Robert L. Nardelli and pump billions of dollars more into the effort, all in hopes that the company could emerge from court proceedings as a re-energized competitor in the global economy.

The U.S. government’s attempt to save the automaker amounts to another extraordinary intervention in the economy and a landmark event in the history of the American auto industry.

Under the administration’s detailed plan for a “surgical bankruptcy,” ownership of Chrysler would be dramatically reorganized, the leadership of Italian automaker Fiat would take over company management and the U.S. and Canadian governments would contribute more than $10 billion in additional funding.

Negotiations between the government and the company’s stakeholders — Chrysler’s lenders, the union and proposed merger partner Fiat — went well into the night, as dealmakers rushed to meet President Obama’s April 30 deadline.

Last night, the United Auto Workers union overwhelmingly ratified the administration proposal to give its retiree health fund the 55 percent equity stake in Chrysler. In exchange, the health fund must give up its claim to much of the $10 billion that Chrysler owes it. Eighty-two percent of production workers and 80 percent of skilled-trades workers voted for the agreement.

While four of Chrysler’s major creditors — J.P. Morgan ChaseCitigroupGoldman Sachs and Morgan Stanley — have agreed to the Treasury’s plan, other lenders, mainly hedge funds, had held out. The holdouts included Oppenheimer Funds, Perella Weinberg Partners and Stairway Capital, two sources said. The last two have funds that invest in “distressed” companies. It is not known what companies ultimately failed to reach agreement with the government.

The hedge funds likely think they could get a better return in a bankruptcy filing or in a sale of Chrysler’s assets, said Sheldon Stone, a turnaround expert at Amherst Partners. The government offer made yesterday would represent a recovery of about 32 cents on the dollar. A recent Standard & Poor’s analysis said the lenders could recover 30 to 50 cents on the dollar.

Put a fork in it? Obama planning to announce Chrysler bankruptcy tomorrow

April 29, 2009 at 6:35 pm
According to a report by Bloomberg citing the usual unnamed sources, President Obama will announce tomorrow that Chrysler will file for Chapter 11 bankruptcy while continuing to work on its alliance with Fiat.

Bloomberg‘s source made it clear that the there are still several loose ends and the plan “is not finished yet,” but it will likely involve Chrysler’s strongest assets being bundled and sold to a new entity. In that scenario, Fiat would become a 20% owner of the Auburn Hills-based automaker, the UAW retiree health-care trust would take a 55% percent stake and the government would gobble up the rest. Essentially, it’s the same out-of-court deal initially proposed, but now, with all the benefits (and hurdles) of bankruptcy protection. 

As part of ongoing negotiations, the U.S. Treasury raised its offer to Chrysler’s lenders, offering them $2.25 billion in cash to forgive $6.9 billion in secured debt, two other people familiar with the matter said. The previous offer had been for $2 billion in cash.

One issue remaining is the U.S. government’s effort to combine Chrysler Financial and GMAC LLC, the lending units affiliated with Chrysler and General Motors Corp.

The idea is to ensure that Chrysler has a well-capitalized credit arm, as required by Obama’s automotive task force, said people familiar with the situation.

Sheila Bair, chairman of the Federal Deposit Insurance Corp., has expressed concern that such a combination would involve her agency guaranteeing its debt, according to two people familiar with her views.

(Source: Bloomberg & Autoblog)

U.S. Cash-for-Clunkers deal reportedly nearing congressional compromise

April 24, 2009 at 1:29 pm

(Source: Autoblog & The Detroit News)

It’s looking increasingly likely that the United States will soon have its own Cash-for-Clunkers program. According to The Detroit News, two bills are currently competing for Congressional votes, and while they would both offer sizable rewards for turning in older vehicles, they vary in what new cars and trucks would qualify for the program.

One bill, sponsored by Rep. Betty Sutton (D-Ohio) would give the largest voucher – up to $5,000 – to purchasers of new vehicles made in the United States. Slightly smaller amounts would be granted for other vehicles made in the rest of North America, and no cash would be granted for the purchase of foreign-made cars. All cars would need to manage at least 27 mpg to qualify, and trucks would need to hit at least 24 mpg.
 
The other bill, sponsored by Rep. Steve Israel (D-New York), would offer up to $4,500 for the purchase of a new vehicle, assuming that the vehicle being traded-in gets 18 mpg or less, and the new vehicle’s fuel efficiency is at least 25% better than average for its class. No distinction would be made based on the vehicle’s country of origin.
Both would require the scrapping of older vehicles to remove them from the roadways and both would give drivers the option of trading in an old car for a bus or subway pass.

In addition to promoting energy efficiency, the idea is to boost new car sales and get vehicles on the roads with updated safety features.

The program could cost as much as $4 billion and help retire at least 1 million older vehicles. Senior congressional aides and members of the Obama auto task force met earlier this month in search of the best way to pay for and structure it.

Toyota spokesman Charles Ing said his company wants legislation to apply to all fuel efficient vehicles and adhere to U.S. obligations under the World Trade Organization.

 

Over the past months, TransportGooru has published a series of articles on this topic, following developments in the US, UK and Germany. For the ones interested in learning about the schemes in Germany (that is now labelled a “roaring success”) and US & UK (the introduction of a similar scheme in the works but still a long way away from getting it done), here is a list of articles that TransportGooru published.

Consumer Assistance to Recycle and Save (CARS) Act revives “Cash for Clunkers” scrapping plan in U.S

Germany plans to extend Abwrackprämie aka “Environmental Bonus”

The bickering starts over the implementation of the Cash for Clunkers legislation

Obama Favors “Cash for Clunkers”

Germany increases subsidy to 5 Billion Euros, tripling incentives for its “Cash for Clunker” (Abwrackprämie) program

Britain mulls implementation of “Cash for Clunkers” scheme to boost ailing auto sales 

Where the US stands in pushing “Cash for Clunkers”- Four bills in Congress; Details Needed

Goodbye, Gas Guzzlers? – Washington Post editorial analyses the keys to succesful implementation of US’ Cash for Clunkers” initiative

Time examines the “Cash for Clunkers” initiative: A Deal to Help Detroit — and the Planet?

Following Germany, Britain introduces “Cash for clunkers”scrappage scheme. U.S. is next?

Following Germany, Britain introduces “Cash for clunkers”scrappage scheme. U.S. is next?

April 23, 2009 at 11:17 pm

(Source: Autoblog, Telegraph UK) 

After weeks of dithering, the Government announced a car scrappage scheme in yesterday’s Budget.  Anyone with a car registered after July 31, 1999 will get a cash incentive of £2,000 to trade in their old vehicle for a brand new one.

However, only £1,000 will come from the Government, with the remaining £1,000 coming from car firms; the motor industry had hoped that the Government would foot the entire £2,000 bill.

Participants will be able to buy any new vehicle, including small vans, rather than just low pollution models. Motorists taking advantage of the scheme must have owned the car for at least one year; it will also have to be taxed, insured and have a current MoT in order to qualify.

About £300 million has been set aside to fund the scheme, to be launched in mid-May. About 300,000 consumers are expected to benefit until the scheme ends in March 2010, unless funding runs out before then.

In the below video, you can hear Mr. Tony Whitehorn, Managing Director of Hyundai UK, welcoming Chancellor Alistair Darling’s ‘cash for bangers’ scheme announcement in the Budget.

Not everyone has been warm to the Chancellor’s scheme. The reactions have been mixed thus far.  However, the RAC Foundation said the scheme risked “consigning perfectly good, and relatively ‘clean’, vehicles to the dustbin”, while CleanGreenCars said the Chancellor’s failure to set a limit on CO2 emissions of new cars bought under the scheme was “senseless”.  A columnist on the Telegraph claims that the Chancellor’s scrappge scheme fails to deliver.
For the ones interested learn about the schemes in Germany (that is now labelled a “roaring success”) and US (the introduction of a similar scheme in the works but still a long way away from getting it done), here is a list of articles that appeared earlier on TransportGooru

Consumer Assistance to Recycle and Save (CARS) Act revives “Cash for Clunkers” scrapping plan in U.S

Germany plans to extend Abwrackprämie aka “Environmental Bonus”

The bickering starts over the implementation of the Cash for Clunkers legislation

Obama Favors “Cash for Clunkers”

Germany increases subsidy to 5 Billion Euros, tripling incentives for its “Cash for Clunker” (Abwrackprämie) program

Britain mulls implementation of “Cash for Clunkers” scheme to boost ailing auto sales 

Where the US stands in pushing “Cash for Clunkers”- Four bills in Congress; Details Needed

Goodbye, Gas Guzzlers? – Washington Post editorial analyses the keys to succesful implementation of US’ Cash for Clunkers” initiative

Time examines the “Cash for Clunkers” initiative: A Deal to Help Detroit — and the Planet?

Time examines the “Cash for Clunkers” initiative: A Deal to Help Detroit — and the Planet?

April 16, 2009 at 12:08 am

 (Source: Time)

A Lot Full of Old Clunkers For Sale

It’s no secret that one of the biggest reasons the U.S. auto industry is teetering on collapse is that, quite simply, Americans have stopped buying cars. U.S. auto sales were down 37% in March from 2008, the latest in a nearly unbroken year-and-a-half streak of falling sales. And if the cratered economy is the main culprit behind backed-up inventory at U.S. car dealers, another is that American automakers have failed to produce the more fuel-efficient vehicles that gas-price-conscious car buyers are beginning to demand. As a result, the U.S. still sends hundreds of billions of dollars overseas for oil — and adds ever more greenhouse-gas pollution into the atmosphere. 

Now what if there were a way to tackle both these problems with one policy: to stimulate demand for American cars while making the U.S. auto fleet cleaner, greener and more efficient? It sounds like the kind of slick two-for-one pitch you might hear from a used-car salesman, but that’s exactly what proponents of a “cash for clunkers” program are promising.

In its broad outlines, the prospective policy — for which a number of proposals have been put forward in Congress — would offer Americans cash rebates of up to several thousand dollars if they traded in an old, inefficient car for a new, greener one. The ailing U.S. automakers would receive a shot in the arm — potentially worth up to 2 million additional sales a year — while polluting cars would be taken off the road and replaced with more efficient ones. (All cash-for-clunkers programs require the old cars to be scrapped rather than resold.) “There are significant environmental advantages and substantive benefits for the auto sector,” says Benjamin Goldstein, a policy analyst for left-leaning think tank the Center for American Progress. “This goes right for the source of the problem, for vehicles sales and for oil use.”

But is cash-for-clunkers really two-for-one? That depends. There are currently two main bills in the House and Senate, which, according to greens, are not created equal. One, sponsored by Democratic Ohio Representative Betty Sutton, allows any car from model year 2000 or earlier to be traded in, without any restriction on fuel economy. In return, car buyers will get $4,000 if they buy a new U.S. car that gets a minimum mileage of 27 m.p.g. and $5,000 if they buy a U.S. car with at least 30 m.p.g. Crucially, the new cars have to be made in the U.S. — foreign brands can qualify, but only if they’re manufactured on U.S. soil, which would disqualify super-efficient vehicles like Toyota’s Prius hybrid, made only in Japan.

Whichever bill is chosen — and others are being circulated as well — a successful cash-for-clunkers program wouldn’t be cheap. Germany’s program may end up costing the government some $6 billion, three times the initial price tag. Since Obama has said that money for the cash-for-clunkers program needs to come out of existing stimulus spending, that might take some creative accounting. But a cash-for-clunkers program, whatever its environmental benefits, would provide the government with a way to aid the domestic auto industry without giving Detroit any more direct handouts. “There’s a lot of justifiable taxpayer reluctance to keep helping the auto industry,” says Goldstein of the Center for American Progress. “Politically this is a viable alternative to sending them additional loan money.”

Click here to read the rest of this article.

Note:  Below is a list of articles on this issue, previously published on TransportGooru.  This compilation of articles offer an insight into state of various “Cash for Clunkers” style programs implemented (or currently being debated) across the globe (Germany, UK, etc,). Stay plugged in to TransportGooru for more on this topic in the days to come.

 Consumer Assistance to Recycle and Save (CARS) Act revives “Cash for Clunkers” scrapping plan in U.S

Germany plans to extend Abwrackprämie aka “Environmental Bonus”

The bickering starts over the implementation of the Cash for Clunkers legislation

Obama Favors “Cash for Clunkers”

Germany increases subsidy to 5 Billion Euros, tripling incentives for its “Cash for Clunker” (Abwrackprämie) program

Britain mulls implementation of “Cash for Clunkers” scheme to boost ailing auto sales 

Where the US stands in pushing “Cash for Clunkers”- Four bills in Congress; Details Needed

Goodbye, Gas Guzzlers? – Washington Post editorial analyses the keys to succesful implementation of US’ Cash for Clunkers” initiative