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Chrysler Asking for $7B Bridge Loan from Congress; Production of More Than 500,000 Electric-Drive Vehicles by 2013

Chrysler is asking Congress for a $7 billion secured working capital bridge loan by 31 December 31, 2008 to support ongoing operations as it continues to restructure its business, according to a summary of the presentation to be made by Chairman and CEO Bob Nardelli on 4 December. Like Ford (earlier post) and GM (earlier post), Chrysler cited the “unprecedented” drop in vehicle sales caused by the financial crisis as the fundamental cause of its financial distress.

Chrysler’s viability plan includes 24 major product launches through 2012, including a wide portfolio of hybrid electric-drive vehicles within several categories: Neighborhood Electric Vehicles (NEV), City Electric Vehicles (CEV), Range-extended Electric Vehicles (ReEV), and full-function battery electric vehicles (BEV).

Chrysler’s product plan includes the introduction of the first full function electric-drive model in 2010, along with the two-mode Dodge Ram hybrid, and expansion to additional electric-drive models by 2013. Chrysler will have close to 100 vehicles dedicated to testing and development within the Company, or assigned to Government and business evaluation fleets by the end of 2009. Chrysler plans to produce more than 500,000 electric-drive vehicles by 2013.

The company is currently selling its two-mode hybrid full size SUVs (Aspen and Durango) as limited volume specialty products.

In its submission to Congress, Chrysler also noted that it will continue to improve the performance of existing technology and support for flex fuel vehicles. For the 2009 model year, nineteen Dodge, Jeep and Chrysler models (73% of the product line), will offer improved fuel economy compared to previous models. The company has more than 1.7 million Flex Fuel Vehicles (FFV) on the road, and is on target to meet its earlier commitment of 50% of the fleet being flex fuel capable by 2012.

Chrysler based its projections on three sales scenarios: baseline, higher case and lower case. The baseline scenario uses an industry sales figure of 11.1 million units in 2009, increasing to 13.7 million units by 2102, with the higher and lower sensitivity cases varying by one million units up or down. (In contrast, the GM baseline scenario used a 12 million unit figure for 2009, increasing to 15 million in 2012. The downside scenario for GM is roughly comparable, however, at 12.8 million in 2012, compared to Chrysler’s projected downside of 12.7 million units in 2012.)

Although all the automakers have been suffering declining sales, Chrysler was especially hard hit—especially during the spike in gasoline prices earlier this year—due to the heavy emphasis on light trucks within its product mix. In November, Chrysler saw its sales down 47% from the year before. (Earlier post.)

Chrysler began its restructuring process in 2007, following its acquisition from Daimler by Cerebus. Since 2007, Chrysler has eliminated 1.2 million units of capacity, which represented more than 30% of its previously installed capacity, and will have separated more than 32,000 employees. Over the past 10 months alone, Chrysler reduced its fixed costs by $2.4 billion.

Chrysler ended the first half of 2008 with approximately $9.4 billion of cash. Ongoing declines in sales began depleting the cash reservers. Chrysler now estimates that at year end it will have approximately $2.5 billion available cash on hand.

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Comments

"flex-fuel"?! That's your plan?! Go to bed!!!

Henry Gibson

In the book "Physics for Future Presidents", the costs for operating electric cars with Lithium batteries is clearly presented. The use of lithium batteries in laptop computers multiplies the cost of the electricity used from one dollar to forty dollars. A lead acid battery costs much less for energy storage but weighs more. FireFly technology and othe technology can reduce the weight of lead batteries. There is no economical reason to use lithium batteries in a stationary power system.

Where stationary reliable power is needed all kinds of batteries now can be eliminated by the use of multiple microturbines like the ones from Capstone. The turbines are kept running to supply power all the time and multiple units increase the reliability. There are no worries about starting a backup generator since they are alway running. Grid power can be used as a backup where available.

Microturbines have always been a very low pollution option for city transit busses. It might even be possible to get a such a device with only one moving part to be cheaper than a diesel engine with perhaps hundreds.

ZEBRA batteries use inexpensive materials and may eventually be cost effective compared to lead batteries. Manufacturing costs can usually be reduced if large numbers are needed. They will probably easily keep up a cost advantage over Lithium batteries. The worry about ZEBRA batteries is not about the high temperature because that makes them much cheaper to cool, but that they freeze after a few days of no power. Interestingly enough their energy can be frozen into them for thousands of years until they are thawed.

With the very high energy density of ordinary fuels, it is very cost ineffective to not have fueled powered generators in every car. Single piston units can be quite high power and efficient, but maximum efficiency does not happen at high power. Those who want relatively carbon free driving over long distances will have the option to buy carbon neutral gasoline made from recycled CO2. Such a fuel can now be made at a lower cost than lithium batteries provide.

Any type of hybrid car will improve efficiency significantly, and with the high cost of batteries and electric motor controls and motors, the hydraulic hybrid seems to be the cheapest. The EPA in the US and Artemis in the UK both built and tested very succesful vehicles. It is very obvious to any engineer at least one way to add batteries to make a hydraulic hybid into a Plug-In-Hybrid.

Car buyers rarely select for eficiency or even have the option. High efficiency sometimes comes at very high costs. The fuel cell, the Solar Cell and the Prius are widely known examples. The cheapest automobile transportation for most people is a known working cheap used car and even very expensive gasoline. ..HG..

Lloyd Weaver

A lead acid battery powered EV can be the cheapest ‘peoples’ car. A 19 KWH battery pack is easily affordable and will achieve well over 100 miles in a 4-seat car with high streamlining. For sprightly performance, a 2-speed transmission is a must. With wages stagnating, people need this vehicle to commute with. Charging costs about a cent/mile at 60 mph speeds. Folks will consider them their family car, and if composite fiberglass bodies, they will last a lifetime +. Folks can rent gas-powered cars for long trips. For road taxes, when registered each year, cars can pay on the mileage. There’s no shortage of electricity to fuel EV’s if charged at night, so governments should implement a mileage tax to stay in the road repair business and seriously support EV’s. And a lead acid battery is the only one that is 100% recyclable, even the acid is turned into liquid fertilizer.

Ross

Looks like the last few gaspings of air before they go under for good to me. Yep, It sounds like the big 3 are walking the green mile and may not know it yet.

Ian Bruce

Assuming you were trying to make the vehicle as light as possible, a 19kWh lead acid battery pack composed of Optima D-34's would weigh about 1,700 lbs, and cost nearly $6,000 US.

fred

Cerberus doesnt really understand the auto market. all they saw was a business that could pull in $100 billion in sales a year, but didnt realize that profit was only in the millions due to ridiculously high labor and benefits costs.their plans are a little late, but at least they didnt get bought by GM and dissolved.

Sasparilla

Something Chrysler forgot to mention was not only an emphasis on light trucks but also senior management direction for power / performance in design and marketing (got hemi?). Nearly every vehicle in their line was among the worst mpg performers in their categories (the Caliber being a perfect example) with their emphasis on power. Even with money to breath, Chrysler is by far the most behind the eight ball when it comes to trying to compete in an environment where fuel economy matters.

I think the factory that makes the big Durango and Aspen hybrids (they mentioned) is closing in the next month or two - i.e. no longer produced.

HHN

no more cars for me from these bailout leeches.

HarveyD

HHN:

I took that decision 20 years ago.

We love our Toyotas. Too bad their PHEVs are taking so long to come to the market place.

Could a merged GM-Ford-Chrysler survive if it was to progressively but quickly transition to electrified (PHEVs + BEVs) vehicles?

Would it be better to let the current Big-3 go bankrupt first and start with a single new company?

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