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

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.

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.

(Source:  Foreign Policy Magazine)

Cartoon Courtesy: Slate Magazine

Outside a small group of nihilists and committed free marketeers who’d have let General Motors go under, no matter the price, few question the necessity of the Obama administration’s plan for the once great American company’s reorganization in bankruptcy. But as a U.S. taxpayer, and therefore one of GM’s brand-new owners, I have my doubts about our ability to manage this new property. Yes, GM’s previous owners proved unable to run a competitive car company in a global marketplace, but is the U.S. government really the best one to transform it? Already, the particulars of the Chapter 11 arrangement lead me to fear that the same sort of internal politics, unthinking nationalism, and generalized aversion to engineering risk that have hobbled GM for decades will continue to haunt its new incarnation.

One place where you won’t hear for-attribution criticism of the “new” General Motors these days is GM headquarters. Perforce they are obligated to display their gratitude with the unfailing enthusiasm that a $50 billion-plus investment in a failing business minimally entitles its benefactors to expect in return. Although the collegial tone of the new rapprochement comes 50 years late, it is heartening nonetheless to see American industry finally welcome Washington’s involvement in matters like safety, fuel economy, and emissions regulation.

Even Robert “Maximum Bob” Lutz, GM’s outgoing product czar and vice chairman, and a fierce critic of government meddling from the “give me back my bullets” wing of Detroit’s old school, has experienced an astonishing change of heart, at the ripe age of 77. Speaking to a gathering of journalists in Motor City the other week, Lutz unhinged every jaw in the house when he shared his thoughts on how the White House automotive task force ought to become a permanent fixture. Of the unprecedented government-industry collaboration the Chrysler and GM bankruptcies begat, Lutz, an ex-Marine attack pilot and near-libertarian known for making his daily commute in a decommissioned Czech jet fighter, quipped: “Jeez, it only took 30 years for somebody to finally figure [government-industry partnership] out.”

Er, right. Thirty years and a couple of epochal bankruptcies.

Questions about the government’s intentions for the new GM Lite already abound. Notably, what will and what should the company’s policies be, now that it is controlled (in theory) by and for the benefit of U.S. taxpayers, who own 60 percent of its shares?

Will GM be underwritten so as to lead the market in the direction of fuel saving and new technologies? Or will it trim its sails and attempt to get by on its sometimes-profitable religion of pickup trucks and SUVs, perhaps ones that get slightly better mileage? GM is still tooled up to build them.

Ever since the 1920s, when GM’s Alfred P. Sloan introduced the precepts of what came to be known as Sloanism — a car for every purse and purpose — a good day at a car dealership was one when you sold someone “more car than they need.” Automobile marketing often appeals to man’s baser emotions. Greed, lust, and envy come to mind, as do excessive horsepower and other costly and unnecessary options that have been larded on to new cars to boost profits for longer than any of us have been alive. So, you can’t help wondering, has the U.S. government entered the business of encouraging people to live out their most insane automotive dreams? Will it labor to create demand for automobiles when and where there is no need, as generations of car companies have done before it?

And where do GM’s new taxpayer/shareholders stand on the matter of outsourcing work to Mexico or South Korea or China or anywhere else, as the old GM did whenever it got the chance? Will Chevy production lines in places like Toluca and Silao, Mexico, come home to the USA? The old GM went in for cheap overseas labor. Has the government now entered the business of using taxpayer money to export jobs? Is this the change we need?

Myriad practical and philosophical quandaries aside, one vital series of questions about the “new” GM — which brands will be kept, sold, or terminated — has already been answered. Chevrolet, Buick, Cadillac, GMC, Australia’s Holden, and South Korea’s Daewoo are to be spared. To be sold: Saturn, Hummer, and Sweden’s Saab are available outright, and operating control of GM’s German division, Opel, is to be sacrificed in a deal brokered by the German government outside U.S. bankruptcy proceedings. For the scrap heap: Pontiac, the venerable division that once claimed to “build excitement.” In limbo: Opel’s English sister brand, Vauxhall.

Click here to read the entire article.

(Source:  Autobloggreen & The Economic Times)

Ratan Tata has stuck to his words.  At the premiere for Tata Nano in the Auto Expo earlier this year, Tata Motors chairman Ratan Tata had said: “By and large we’ve always been a diesel company so we will have a diesel version that will follow this (petrol) variant soon after.”   Now, after 203,000 firm orders, Indian automaker Tata found out that most buyers had opted for the more expensive variants of the Nano: only 20 percent of orders have been placed for the base model. The consequence is that Tata is experimenting with new strategies for the Nano, introducing new variants to make it even more attractive for the local market. One of the most important features will be the introduction of a new 0.8-liter diesel engine, developed by German company FEV.  According to sources in the auto industry, the small diesel engine will have fuel injection systems developed by Bosch, but the rest of the platform is being developed by Tata Motors and FEV.  A 3-door version hatchback Nano, an idea that was originally rejected, is also in the works. Plans for the European versions are, so far, unchanged, but will surely benefit from the diesel variant.

(Source: BBC & CNN Money)

Germany has agreed a deal with Magna International, a Canadian-Austrian car parts maker, to take over Opel, part of the European wing of US carmaker GM.

Talks in Berlin continued into early Saturday before Germany’s finance minister announced a deal.

The German government is expected to provide an immediate loan facility of 1.5bn euros ($2.1bn, £1.3bn).

But 2,500 jobs in Germany could be lost and a UK minister has accepted “there is excess capacity” in GM’s operations.

Finance Minister Peer Steinbrueck told journalists outside the chancellery shortly after 0200 local time on Saturday that a deal had been agreed.  Earlier on Friday, Opel and Magna’s reached a preliminary agreement with GM.

“We have an agreement,” said Mr Steinbrueck, the AFP news agency quoted him as saying, following six hours of talks between German politicians, US government officials and executives from GM and Magna.

Magna, teamed with Russian auto maker OAO GAZ Group (GAZA.RS) and state- controlled OAO Sberbank (SBER.RS), has said it will put more than 500m euros ($700m; £435m) into Opel.

Steinbrueck said the parties involved also agreed on the model of a trusteeship for Opel for the interim period.

Speaking after the marathon talks that started Friday afternoon in Berlin, Magna co-Chief Executive Siegfried Wolf said he expects the deal with General Motors to be signed in five weeks.

Wolf confirmed that Magna will provide the short-term cash demand of EUR300 million to Opel, which was one of the key reasons for the German government to delay the decision on state aid earlier this week. He said the funds would be available Tuesday.

(Source: Times Online, UK)

Fiat has pulled out of talks with the German Government about Opel, blaming “unreasonable” funding demands, but emphasised that it was not withdrawing its bid for General Motors’ European unit, which owns Opel and Vauxhall.

Sergio Marchionne, Fiat’s chief executive, said that Germany had asked his car group to provide emergency funds for Opel, which would expose it to “extravagant risks”.

Mr Marchionne said “The last round of requests which would require Fiat, among other things, to fund Opel on an emergency basis while the German Government determines the exact timing and conditions of interim financing, would expose Fiat to unnecessary and unwarranted risks.”

Mr Marchionne said that he had not been granted full access to Opel’s financial records and so it was unreasonable to ask Fiat to provide emergency funds. Because today’s meeting will focus specifically on Opel, Fiat would not be attending, he said. However, he said that Fiat remained interested in a potential deal with GM.

“We remain committed to finding ways to bridge the expectations of both General Motors and the German Government, but the emergency nature of the situation cannot put Fiat in a position to take extravagant risks,” he said.

Gareth Thomas, the Trade Minister, will attend the emergency talks in Brussels today. A Commission spokeswoman said: “The aim of the meeting is to exchange information and ensure a level playing field for co-ordination.”

(Source: Timesonline, UK & Autocar, UK)

A £2,000-a-car scrappage scheme aimed at kick-starting Britain’s depressed motor industry has hit trouble after a dispute between car companies and the Government over costs.

Manufacturers, including Ford and Honda, have told dealers not to register any new vehicles under the scheme, which is starting today.

Consumers are being offered £2,000 towards a new car if they trade in a motor that is at least ten years old.

The car companies said that they were seeking “clarification” from the Department for Business, Enterprise and Regulatory Reform (BERR) over “administrative” details.

The Government insisted that it had been clear on details of the scheme, under which manufacturers would pay £1,000 and the Government £1,000 towards the cost of the incentive.

However, the car manufacturers want dealers to share the cost.

The eleventh-hour hitch will come as a huge embarrassment to the Prime Minister, who had heavily promoted the “bangers for cash” scheme as the route to revitalising Britain’s depressed motor industry.

Gordon Brown and Lord Mandelson, the Business Secretary, visited a Nissan dealership today to talk to consumers signing up to the scheme.

Mr Brown said the £300 million project would prove “very popular” and “a great help to the British car industry.” It would help the economy to “move forward,” he said.

A BERR spokesman said: “Thirty-eight manufacturers have signed contracts with the Department which set out clearly that manufacturers provide £1,000 and the Government matches it.

“We understand several dealers are unhappy about the idea they should share the costs. The Government also needs to ensure VAT is paid in accordance with the scheme.”

Though the scheme was revealed in the Budget the final details emerged only at a meeting on Thursday, manufacturers said.

However, President of the AA Edmund King has pointed out that the £2000 incentive can be used as a deposit to help car buyers get finance. He added that the scheme would “transform the chances of survival in a crash for thousands of car owners” whose current old cars offer substantially less protection than newer models.

But Friends of the Earth executive director Andy Atkins said the scrappage scheme was “a lost opportunity”.

“A well-designed scheme could have played a limited role in cutting emissions from our roads,” he said. “But, unlike some other countries, the UK scheme doesn’t prevent motorists part-exchanging an old, small model for a brand-new gas guzzler.”

Business secretary Peter Mandelson visited a car dealership today to launch the scheme and said there has been a positive response from the industry.

“I am delighted by the response of the motor industry. Thirty-eight companies have signed up – all the major UK car manufacturers and a number of other companies. This means more choice for consumers and a boost for British brands. 



“The scheme has been met with a flood of enquiries from customers. It will provide a boost to the industry and kick-start sales.” 



The confirmed list of manufacturers who have signed up to take part are: Allied Vehicles, Bentley, BMW, Chevrolet, Citroen, Daihatsu, FIAT, Ford, Honda, Hyundai, Isuzu, Jaguar, Kia, Land Rover, London Taxis International, Mazda, Mercedes Benz, MG Motor, Mitsubishi, Nissan, Perodua, Peugeot, Porsche, Proton, Renault, Rolls Royce, SAAB, SECMA UK, Subaru, Suzuki, Toyota, Vauxhall, Volkswagen, Volvo, Koelliker UK Ltd, Iveco Ltd, Chrysler and Renault Trucks UK Ltd.

(Source: USA Today & Image: Jalopnik)

As the American lawmakers are getting ready to pass the landmark “cash for clunkers” legislation, many of you are still left wondering what this legislation entails and how it will affect you.  The media chatter in the past has offered very little except that the legislation would provide federal vouchers of up to $4,500 for people to trade in their older vehicles for new ones that get better mileage.

Talk of the vouchers has kept some would-be new car and truck buyers on the sidelines, waiting to see whether they’d qualify for government help. So, for the moment, the idea is hurting sales. Based on interviews with lobbyists and congressional offices, the USA Today captured the details of this legislation in a nice Q & A format:

Image: Newsday

Q: What’s the idea behind “cash-for-clunkers”?

A: Supporters say it would replace older vehicles with new ones that use less fuel, are safer and pollute less. And it would give the struggling auto industry a sales boost.

Q: What’s the bill’s status?

A: It’s in a House committee and backed by the president. Senators from both parties are prepared to co-sponsor similar legislation as soon as this week.

Q: Sounds like a sure thing.

A: Not so. Environmental lobbyists, who don’t think it boosts fuel economy enough, might derail it or get it changed enough in the Senate that a compromise would take awhile.

Q: Any groups trying to keep it from being derailed?

A: You bet. Car companies, autoworkers, component suppliers and car dealers, among them. The House bill “will help jump-start auto sales and the U.S. economy, while also providing environmental benefits and increasing energy security,” says Ziad Ojakli, Ford Motor spokesman.

Q: What’s the price tag?

A: About $4 billion. The money is currently proposed to come from Energy Department funding included in the already enacted $787 billion economic stimulus package.

Q: If the House bill becomes law, how would it work?

A: The government would send up to $4,500 to the selling dealer on your behalf, if you:

1. Trade in a car that — this is a key point — has been registered and in use for at least a year, and has a federal combined city/highway fuel-economy rating of 18 or fewer miles per gallon.

2. Buy a new car, priced at $45,000 or less and rated at least 4 mpg better than the old one (gets a $3,500 voucher). If the new one gets at least 10 mpg better, you get the full $4,500.

Example: Trade that well-worn 1985 Chevrolet Impala V-8, rated 14 mpg, for a 2009 Impala V-8 rated 19 mpg and the government will kick in $3,500. Downsize to Chevy Cobalt (27 mpg) or even a larger Honda Accord (24 mpg) and get $4,500.

Mileage ratings back to 1985 are at www.fueleconomy.gov.

Q: What about trucks?

A: It’s more complicated.

For standard-duty models — most SUVs, vans and pickups:

1. The old one must be rated 18 mpg or less.

2. The new one must be at least 2 mpg better for $3,500 or at least 5 mpg better for $4,500.

For heavy-duties (6,000 to 8,500 pounds gross vehicle weight rating):

1. The old one must be rated 15 mpg or less.

2. The new one must be rated at least 1 mpg better for $3,500, or 2 mpg or more for $4,500.

Work trucks (8,500 to 10,000 lbs.) don’t have mpg ratings, so age is the criteria. The old one has to be a 2001 model or older. And only $3,500 is available.

Q: Is it worth it for $4,500?

A: The assumption is that the people most likely to use the program would trade in cars worth less than $4,500. Thus, while not necessarily clunkers, most would be at least 8 years old.

Q: Can I combine these incentives with other offers?

A: Yes. For instance, you could trade for a hybrid and get the voucher, claim the hybrid tax credit and get dealer or manufacturer discounts. You also could deduct the sales tax, if any, on your next federal tax return.

Q: Would I ever see the $3,500 or $4,500?

A: No. It’s an electronic transfer from the government to the dealer. Dealers want to be sure the amount can be counted as cash from the buyer, which would help buyers get credit because they’re financing less.

Q: What does the dealer do with my trade-in?

A: Gives it to a salvage operator. The engine, transmission and some other parts must be destroyed so they can’t be reused. The idea is to cull fuel-thirsty, polluting drivetrains. Operators can resell other parts, however.

Q: What’s to keep me from buying a junkyard car for a few hundred bucks, getting it barely running and trading it?

A: The one-year-in-service requirement noted earlier. Lawmakers wanted to exclude the revival of so-called junkyard dogs, because they’ve already been taken off the road.

Q: What do I get if I recently bought a car that would have qualified?

A: The bill contemplates making the incentives retroactive to March 30, but it’s unclear how to find and junk cars that were traded in that long ago. Some might already be back on the road, driven by new owners.

Q: What’s wrong with environmentalists’ idea that the new car or truck should get much better fuel economy than the House bill currently requires?

A: Opponents say the environmentalists’ fuel-economy improvement thresholds are so high that foreign brands benefit disproportionately, because their lineups tend now to have more small, fuel-efficient vehicles.

But the American Council for an Energy-Efficient Economy complained in a statement criticizing the House bill that the proposal as it stands now is way too lenient.

The council charged that the bill “aims primarily to clear Detroit’s unsold inventory from the storage lots,” rather than to seriously cut fuel use.

Q: How soon could this become law?

A: Depends on how much critics can sway the Senate, and to what piece of legislation this “fleet modernization” bill is attached.

If it becomes part of a larger bill that’s likely to get lots of debate, it could take awhile. If it’s attached to urgent, must-pass legislation, such as an appropriation bill, it could move quickly to the president’s desk.

A current plan is to add the program as an amendment to climate change legislation now being considered.

As proposed, it would be in effect for just one year.

(Source: Detroit Free Press & Image: Jalopnik)

WASHINGTON — Congress appeared ready Wednesday to move forward on a bill to pay people to surrender their old gas-guzzlers for new, fuel-efficient models — but the auto industry hasn’t decided what it wants out of the program.

While backers of a cash-for-clunkers plan announced a deal earlier this month, the final bill has yet to be crafted because of a last-minute dispute between foreign and domestic automakers over incentives for leasing. Environmental groups aren’t thrilled with the compromise, saying it is weighted too heavily toward truck buyers.

But with House and Senate leaders, along with President Barack Obama, voicing support, industry officials say they are hopeful a bill that will boost a lethargic market for new vehicles will get through Congress in weeks. Backers say the compromise would cost about $4 billion — paid for by money from the economic stimulus plan passed earlier this year — and could boost sales by 1.3 million vehicles over a year, according to industry officials.

Owners of cars and trucks that get less than 18 m.p.g. could get a voucher of $3,500 to $4,500 for a new vehicle, depending on the mileage of the new model, but no trade-in value because the vehicles would be scrapped.

“This is a jobs bill that helps the environment,” said Ziad Ojakli, Ford’s group vice president for governmental affairs.

The plan does have several hurdles that will keep some potential buyers on the sidelines. The clunker being traded in has to be kept off the road — meaning it will have no trade-in value beyond the voucher. Far more trucks on the road will qualify for the vouchers than cars: even 15 years ago, only five models of midsize sedans managed just 18 m.p.g.

And while the compromise among U.S. House members was unveiled earlier this month, the actual bill will be kept under wraps until it is introduced with the House Democrats’ plan to control carbon emissions through a cap-and-trade system, expected no later than Monday.

Although cash-for-clunkers programs in other nations have been motivated by environmental goals to improve the mileage of vehicles on the road, environmental groups are lukewarm about the U.S. compromise.

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:

(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.