Episode 103 – GM Bankruptcy, or Not?, Chrysler Threatens CAW, Algae for Fuel

March 18th, 2009 at 12:00pm

Runtime 6:24

GM is not going into Chapter 11, or maybe it is. Chrysler is threatening to pull out of Canada if the CAW doesn’t cut labor costs. Scientists in Australia are researching how to produce biofuel from algae on a commercial scale. All that and more, plus John answers viewer questions about Mercedes-Benz and the Fiat/Chrysler deal in the “You Said It!” segment.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM is not going into Chapter 11, or maybe it is. Chrysler threatens to pull out of Canada. And they’re growing algae to make fuel down in Australia.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Wednesday, March 18, 2009. And now, the news.

What’s going on the industry today? Depends which media source you turn to. Yesterday we reported that Steven Rattner, with the President’s Task Force, said that they did not have a goal of forcing General Motors into bankruptcy. Then the AP reported that GM chairman Rick Wagoner said if GM did go into Chapter 11 car sales would collapse and it would go straight into liquidation. But the Wall Street Journal, which was at the exact same press conference in Washington, reported that Wagoner is actually softening his position and said that GM could successfully emerge from Chapter 11. So what’s going on? GM is having trouble getting concessions from its bondholders and the UAW. So even though Wagoner doesn’t want to go into bankruptcy, he needs the threat of one to get those concessions. That’s why the AP is reporting one thing and the Journal another.

Meanwhile, up in Canada, Chrysler is threatening to pull out of the country (subscription required) if the Canadian autoworkers union doesn’t cut labor costs by $20 an hour to match Japanese transplants. Wardsauto.com reports the CAW is drawing the line at only a 9.5% cut, the same that it gave GM. So, Chrysler is saying it will pull its minivan production out of Canada within 90 days if it doesn’t get more. In the past you could have dismissed that as an idle threat, and I bet cooler heads prevail. But with today’s crisis, Chrysler could pull out of Canada.

More news on advanced battery research. The Michigan Economic Growth Authority granted Mercedes-Benz $7.5 million in tax breaks to build a hybrid R&D center near Ann Arbor, Michigan. According to the Detroit News, the center will employ over 200 people mostly engineers and technicians.

And speaking of electrics, Nanjing Iveco rolled out 10 electric buses that will be used by the Chinese energy company called State Grid. According to Gasgoo,com, the vehicle is based on the Iveco Daily and is the first Chinese-made all-electric light commercial vehicle. The bus can run 220 kilometers or about 137 miles on a full charge and for every 100 kilometers it travels it uses about 40 kwh of electricity.

Scientists in Australia are researching how to produce biofuel from algae (subscription required) on a commercial scale. Ward’s reports that the team is developing new techniques to cultivate the pond scum in salt-water pools. They say biodiesel can be produced from algae at lower cost and with fewer emissions than fossil diesel, plus algae yields more oil per acre than other plants. The team is working to overcome cost, scale and infrastructure challenges to make this algae-based biofuel commercially feasible.

Automakers are switching to electric power steering to boost fuel efficiency, but that’s not the only benefit this technology offers. Ford has developed a new feature called pull-drift compensation (subscription required). This can help keep vehicles going straight down the road during crosswinds or while driving on uneven surfaces. It uses software to control the electric power steering system which automatically compensates for vehicle drifting. This feature is already offered on the Ford Escape and Mercury Mariner, but look for it on many other vehicles in the future.

Coming up next, it’s time for You Said It!

And now it’s time for some of your feedback.

This is “You Said It!” Every day we get dozens of comments and questions from you, our viewers. “You Said It!” gives me a chance to respond.

Dan Clemons wrote in with a comment about the F700 concept car from Mercedes. “Wow!” he says. “That F-700 is Stunning! You can say a lot of negative things about automakers but Mercedes is not one of them.”

Dan, I’m with you. I love the styling of that car.

RideWithWes Twittered in to ask- “What’s the latest news on the Chrysler-Fiat deal, will we really be seeing 500′s in the U.S.?”

Well, ride with Wes, the Chrysler-fiat deal is off to a good start, according to my buddies in Chrysler engineering. Several of my sources at Chrysler tell me they’re off to a good start dealing with Fiat. One told me of a conference call where they asked their counterparts in Italy how they had overcome a certain engineering problem, that the Americans had already solved but wanted to know how Fiat was working on it. He said there was a pause at the other end, then the Italians told them exactly how they solved the problem. He said that set the tone for how this relationship is developing. He said the engineers at Daimler were never that forthcoming and that they deliberately did not share that many ideas with Chrysler. And yes, the 500 will come to the American market. They’re already working on emission-izing it.

Don’t forget that all this week you can enter for your chance to win a GMAC wine and bottle opener. All you have to do is sign-up for our free e-mail newsletter to find the trivia question. I’ll be picking the winner Friday on “Autoline Daily” so sign-up today!

That’s it for today’s top news in the global automotive industry, thanks for watching see you tomorrow.

11 Comments to “Episode 103 – GM Bankruptcy, or Not?, Chrysler Threatens CAW, Algae for Fuel”

  1. G.A.Branigan Says:

    It would be to Chryslers benefit to get out of canada.Don’t get all happy here,they’ll just move it to mexico which I think is their idea from the start.Much cheaper labor and minimal bennies.

  2. pedro Fernandez Says:

    Is it true that the 300 is gonna come with a low-rider option next year?

  3. G.A.Branigan Says:

    LOL,maybe ;}>

  4. pedro Fernandez Says:

    If things stay the way they’re going, pretty soon the illegal migration will be heading south,not north

  5. craigerzgt Says:

    Unfortunately, if Chrysler leaves Canada, it will mean even more people out of work in Windsor, although I don’t believe they’re working at the moment. If it is true that the CAW is offering a cut similar to GM, hopefully Chrysler will settle down in a bit and concede that it can’t demand more than what’s fair.

    I wonder how that Pull-Drift Compensation actually works, and if it feels anything different in its use versus without it.

  6. Salvador G. Says:

    John Mc.,
    It’s there a hint on what exactly that engineering problem was???

    Man, Autoline needs to send someone to Europe to test drive FIAT’s before they get here and I gladly make the sacrifice.

  7. Larry Says:

    Don’t overlook the use of algae for fuel. Some greenies will get lawyers to prevent those poor living souls to give their lives for fuel for ‘the man’s’ SUV’s.

  8. John McElroy Says:

    @Salvador: the engineering problem related to an emissions test where they have to run natural gas through their test equipment, then make sure it’s completely purged from the system. The Chrysler engineers found that a unit designed for detecting leaking gas in a home worked perfectly. It turns out the engineers from Fiat had stumbled onto the same solution. My buddies inside Chrysler said Daimler engineers would have never admitted to coming up with that kind of solution, even if it was what they were using.

  9. Andy Harris Says:

    Hey John,

    Did you know that research for algae biodiesel started in the US? Remember reading about it in National Geographic.


  10. Salvador G. Says:

    Oh Okay!!!, thanks J.M.

    I thought it was something, you know big; a car diffect or something, I guess testing the test equipment is very important too. I dont think it would be consider a huge secret since FIAT gave out so easely but, ok :)

  11. G.A.Branigan Says:

    I think the point that was being made is:Daimler was a partner of chrysler and didn’t show much cooperation between the two in sharing info.Whereas Fiat is not yet a partner and they show cooperation already.