Jim Press, President and Vice Chairman, Chrysler LLC took questions from the Western Automotive Journalists (WAJ).

Press was asked about Chrysler’s contentious relationship with their suppliers. Press explained the new path Chrysler was planning to take with suppliers.

 

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Jim Press, President and Vice Chairman, Chrysler LLC took questions from the Western Automotive Journalists (WAJ).

The questions answered were:

1. Is the Dodge Viper for sale and how would the sale be done?

2. What about the GEM? Isn’t Chrysler the largest manufacturer of electric vehicles?

3. How is Chrysler aligning the dealers with the retail sales?

 

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Jim Press, President and Vice Chairman of Chrysler LLC talks about the reality of the auto business.

Chrysler is trimming dealers, reducing production. GMAC, General Motors and Chrysler’s financing arm, just announced that they are laying off 60% of their employees.

How will Chrysler survive and be profitable?

 

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Jim Press, President and Vice Chairman, Chrysler LLC, used to work at Toyota.

Press takes us through the beginning of Toyota coming to the United States to being the biggest auto company in the world.

What are the similarities between Toyota and Chrysler?

 

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I sat down with Jim Press, President and Vice Chairman of Chrysler LLC at the Western Automotive Journalists (WAJ) meeting.

Press talked about the billions of dollars needed to fund the Lithium-Ion battery, which will make the electric car viable.

The billions needed for the battery are in a loan guarantee that is part of the energy bill stuck in Congress. Which Presidential candidate does Press think is more positive on an energy policy?

 

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Ever since General Motors told Reuters that there were two companies interested in buying Hummer the race has been on to figure out who it is.

Tata Motors recently purchased Jaguar and Landrover, and their PR group says, “As a policy, Tata Motors does not comment on such matters”, but most assume there would be no interest there.

Mahindra was asked if they were interested, “There has been a lot of speculation. I want to say categorically that we are not pursuing Hummer. We are pursuing our own models strategy and we do not want to tarnish our green warriors strategy.”
- Mr. Anand Mahindra, VC & MD, Mahindra Group’s quote published in India ’s leading daily, The Times of India.

Rebecca Lindland, analyst for Global Insight thinks “there is more brand equity than people think, and it would be global. If you look at LandRover and Hummer the miles per gallon are not that far off from each other, but the brand image of Hummer is not aligned like LandRover is.”

In the Reuters article General Motors Middle East Managing Director Terry Johnson said, “For sure, there has been interest from various parties within the Gulf … there is a precedent in the cases of Aston Martin, Ferrari or Daimler and those kinds of solutions could be very realistic solutions.”

Lindland thinks the Middle East is the place to look, and that it would be a consortium, not an auto company. Ford Motor Company has sold Aston Martin to a consortium led by Prodrive founder David Richards and a couple of international investment groups headquartered in Kuwait.

Either way, at least General Motors won’t be standing on the cobblestone street singing

Hurricane Gustav is bearing down on the Gulf of Mexico, making CIBC warn motorists that they should brace for gasoline to spike to over $5 a gallon as storms are shutting down oil production in the region.

Gas prices may go up, not because of the price of oil, but because the supply of motor refined gasoline! We still have oil, but we don’t have refineries to refine the oil into gasoline.

A Shell spokesperson told me that so many people stopped to fill up their tanks before leaving that about ten percent of the gas stations ran out of gasoline. A Chevron person said that the usual 3 hour trip to safety is taking 8 hours.

For days now Hurricane Gustav has been building and the anxiety has grown with it. Oil companies have been evacuating employees for over four days, getting everyone to safety. They are also securing the platforms and refineries.

This involves closing the safety valves located below the surface of the ocean to prevent the release of oil or gas. During Hurricanes Katrina and Rita, the shut-in valves functioned 100 percent of the time, efficiently closing in production from wells and resulting in no major spills from the Outer Continental Shelf. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.

According to Minerals Management Service (MMS), the U.S. Gulf Coast accounts for about 25 percent of domestic oil production and 15 percent of natural gas output. The Gulf Coast also is home to nearly half the nation’s refining capacity with Louisiana owning seventeen of those refineries. EIA data says that the Gulf (PADD 3) accounts for 32% of US gasoline production.

MMS reported on August 30, 2008 that approximately 76.77 % of the oil production in the Gulf has been shut-in. Estimated current oil production from the Gulf of Mexico is 1.3 million barrels of oil per day. It is also estimated that approximately 37.16 % of the natural gas production in the Gulf has been shut-in.

FEMA has just come on television, August 31, 2008, and said that 96% of the production in the Gulf has been shut-in. Refining that oil gives 25 gallons of motor refined gasoline. That’s 43 million gallons of gasoline each day that we’re not producing.

During Hurricane Katrina and Rita emissions waivers were given so that fuels could be transported to different regions of the United States that usually required boutique fuels.

We can also import motor refined gasoline from other countries, but this adds about $15 a barrel. It is cheaper to bring oil over to the United States and refine it than to ship it over refined.

When Hurricane Katrina and Rita hit in 2005 oil companies scurried up North to buy ethanol. According to John Urbanchuk, LECG, there is a 517 million gallon surplus of corn ethanol. EIA says we use about 400 million gallons of gasoline a day. Urbanchuk says that in the first six months of 2008 6.8% of gasoline was blended with ethanol.

Could we use that surplus of ethanol to increase the supplemental ethanol blend from 6.8% to 10%? We could if we had the blending and storage capacity, but according to Urbanchuk we don’t have that ability. Urbanchuk says the industry can increase this to 8.4% in the very near term, but that won’t help today.

We have been conserving gasoline, Americans are using 200,000 barrels per day less than they did a year ago. Unfortunately, they are going to need to conserve more, or we will be dipping into the 20 day supply of gasoline, or the Strategic Petroleum Reserve.

On a longer point of view, the only increase in domestic production has been through deepwater oil drilling in the Gulf. If these extreme hurricanes keep happen every three years there will be less incentive to drill.

It’s exhausting, financially and emotionally, to clean up and start over again, and it takes time away from bringing new fields on board.

When oil companies make a business decision to drill in the Gulf it is based on a weekly production output. If oil companies have to factor in being unproductive a week to a month because of hurricanes the business case isn’t as viable.

From Free Market to Socialism to a Welfare State.

There will be no bailout from the government for the Big 3. The reality is that even if one of the Big 3 were to go under America would survive. It appears that unless you screw up so badly that you could take the rest of the nation with you, you don’t get help from the government. The problem with the Big 3 is that they have slowly decreased the number of union and salary workers in the United States, so them going under won’t hurt the United States the way the subprime mortgage has managed to do.

In the ’70s the government gave Chrysler a bailout. Chrysler came back in unheard of fashion and the government actually made money off the deal. They should be so lucky with this welfare scam called a bailout to the subprime lenders that have taken this great nation of ours down to a financial level that most of have never seen before.

Even worse than giving the bottom feeders a bailout is that, like second hand smoke, they have infected the rest of the economy with a financial cancer that is spreading into the arteries of the automobile industry. In the ’70s Americans bought 15.4 million vehicles. General Motors market share was 46%, with a total of 7,097,287 cars and trucks, the best total vehicle sales year for GM.

In 1978 General Motors employed 876,000 people, almost 500,000 in the United States. Now, in 2007, General Motors employs 265,886 worldwide with only 112,457 in the United States.

The Department of Transportation started keeping track of miles per gallon for corporate average fuel economy (known as CAFE) reasons back in 1978. From those files I have found that back in 1978 the big 3 made up 90 percent of domestic made cars, with General Motors, Chrysler, and Ford each carrying 30 percent of the domestic made car market.

I am stressing domestic made cars because back in 1978 domestic made cars meant they were made, actually produced, in the United States of America.

Fast forward to 2007. General Motors still represents 30 percent of the domestic made cars, while Chrysler represents 11 percent, Ford 20 percent, Honda 16 percent, Toyota 15 percent and Nissan 9 percent.

Once again, I am stressing domestic made cars not trucks. I am stressing domestic made cars because now, in 2007, domestic made cars means North America, which includes Mexico, Canada and the United States. The more jobs auto manufacturers can shift to Canada and Mexico the less they have to pay in medical premiums.

There are people that don’t want socialized medicine in the United States because they say it is socialism and the United States is supposed to be a free market capitalist society.

I am not making excuses for any mis-management that any auto company has done to themselves. The Big 3 have been working in what is supposed to be a free market society. Even after the mortgage bailout that has already been given, there is a possibility that Freddie Mac and Fannie May maybe nationalized and their debt lumped into the national debt. The side effects of the weak economy, the slumping dollar and the increase in gasoline prices are showing up in the automobile industry.

Don’t be surprised if one of the Big 3 dies. If they do, second hand smoke will be a contributing factor.

Listen to Lou Ann Hammond talk to John Batchelor on KFI, Los Angeles:

 

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Glenn Denomme, chief engineer, hybrid powertrain programs explains the difference between a straight hybrid and a two-mode hybrid

Combine the advanced technology with a proven transmission that optimizes city and highway driving.

Of course you can’t have advanced technology without new anagrams and new technology words, such as EVT, controls, power electronics, regen braking , NiMH battery, auto stop, silent mode, electric mode.

Denomme explains how it all works while integrating a HEMI with MDS, another fuel saver.

But what is the difference between the gasoline version, and the hybrid version when you compare apples to apples? The only way you can do that is to compare the 2009 Chrysler Aspen 5.7 liter 4X4 J-package with NAV against the Chrysler Aspen hybrid.

When you do that there is a $3,550 difference, but the gas mileage (see below) of the hybrid is 5 miles per gallon better.

You can only compare E85 to gasoline with a 4.7-liter engine, as E85 only comes in the 4.7-liter engine.

Price:
Gasoline:
MSRP Price
$42,020*
(Comparable gas price Limited 4X4 J-package with NAV)
Hybrid:
MSRP Price
$45,570*
E85:
$41,385
*includes destination
(According to Chrysler: The manufacturer’s suggested retail price (MSRP) for the new 2009 Dodge Durango HEMI® Hybrid is $45,340, including $800 for destination. Additionally, customers are expected to receive an estimated tax credit of $1,800 for either the Chrysler Aspen or Dodge Durango)

Towing Capacity:
Gasoline:
8,750 lbs (5.7-liter)
Hybrid:
6,000 lbs
E85:
7,250

Fuel Economy:
Gasoline:
city/highway:
13/18
Hybrid:
city/highway:
19/20
E85:
9/12

Engine:
Gasoline:
horsepower: 5.7-LITER HEMI MAGNUM, OHV, V-8 with MDS
Total Output: 335 hp @ 5650 rpm Torque: 370 @ 4200
Hybrid:
5.7-liter HEMI V-8 engine with MDS
Total output, when combined with the advanced two-mode hybrid system, is 385 horsepower and 380 lb.-ft. of torque.
E85:
4.7-liter Flex-Fuel[1] V8 with five-speed automatic transmission
Total Output: 303 hp (226 kW) @ 5650 rpm Torque (estimated SAE net) 330 lb.-ft. (447 N•m) @ 3950 rpm

 

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John Soule, Sr. Product Manager, Michelin talks about the differences the air in your tires (known as PSI) and how it affects your cars miles per gallon (MPG).

Soule took the time to show me that you can have an 8psi difference in your tires and not have it register in your tire pressure monitor system. That 8 psi difference, we calculated, was worth one extra mile per gallon on our Ford Escape hybrid.

Basically, Soule must agree with Senator Obama - keep your tires inflated at the correct psi and you will save the nation a lot of gasoline.

 

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