Monday, March 30, 2009

Chrysler Faces Shotgun Marriage To Get Additional $6 Billion - Death Threat

Additional funds contingent on completion of Fiat deal

If the feds took a tough stand with GM in forcing Rick Wagoner to resign, Chrysler could be in for a dose of even stronger medicine.

As reported by the Detroit Free Press, the auto task force is willing to provide Chrysler with an additional $6 billion, but only if the company can complete the much-discussed alliance with Fiat by the end of April.

If Chrysler can’t come to terms with Fiat, Chrysler will be deemed non-viable and will get no additional government assistance.

Is she going to come with the deal?

The government’s requirements are to be formally announced sometime March 30.

The task force wasn’t satisfied with the restructuring plan Chrysler submitted Feb. 17.

In manufacturing productivity, it found Chrysler has not invested enough in common architectures and flexible capacity.

Under the proposed alliance, Fiat would own 35% of Chrysler and provide four small-car programs, two engines and two transmissions that are worth an estimated $8 billion to $10 billion.

The first Fiats would reach U.S. dealerships in 2011 (We can't wait).

If Chrysler and Fiat deliver what the task force requested, the administration will take steps that could help their alliance succeed. These include a government-funded program to back warranties of both Chrysler and GM, and a previously announced $5 billion in aid to assist the two automakers with payments to their suppliers.

Do you think it will be called FiatChrysler like DaimlerChrysler?


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Monday, March 23, 2009

Tata’s Nano to hit India’s streets in July 2009

Snub-nosed vehicles will be priced starting around $2,000

MUMBAI, India - The world’s cheapest car will retail for just over $2,000 and can be yours — if you live in India - and are very lucky. Tata Motors said on Monday.

The Nano, a pint-sized vehicle designed to make car ownership accessible to millions of the world’s poor, finally goes on sale in India next month. Whether it will revolutionize the global auto industry — or turn around its manufacturer’s fortunes — has yet to be seen, and other automakers will be watching closely to see how consumers respond to the car. So will environmentalists (of course, sigh, the environmentalists).

Here is the Nano showing some attitude!

Tata Motors unveiled the Nano Europa, a slightly more robust version of the Indian model, at the Geneva Motor Show this month, with a planned launch of 2011.

The company is now designing a version of the Nano that meets U.S. safety and emissions standards and should be ready for launch in about three years, Tata said.

The Nano, with a starting retail price of 112,735 rupees ($2,233) is a stripped-down car for stripped-down times: It is 10.2 feet (3.1 meters) long, has one windshield wiper, and a 623cc rear engine.

The four-seater can travel up to 65 miles an hour (105 kilometers an hour) and gets 55.5 miles to the gallon (23.6 kilometers per liter). The Nano does not have air bags or antilock brakes — neither of which is required in India — and if you want air conditioning or power windows, you’ll have to pay extra.

Tata said the car emits less carbon dioxide than most motorbikes.

Priced like a gadget or a piece of jewelry, the Nano will be sold not just at Tata car dealerships across India, but also online and at electronics and clothing shops owned by the Tata group of companies.

The "bra" is the first of an extensive line of accessories coming soon for the Tata Nano.

“It is a proper car,” said Hormazd Sorabjee, editor of Autocar India, a trade magazine. He said the designers made clever compromises to keep costs down, scrimping on the plushness of the seats, but offering a comfy suspension and ample interior space.

The Nano should make global automakers stop loading their cars with costly gadgets (and safety features) people don’t really want, he added.

“Finally, it’s going to make people realize they should be building cars that people need,” he said. “This is where multinationals have failed.”

Some automakers have already started following suit. Bajaj Auto, Renault and Nissan teamed up last year to make a car that wholesales for $2,500 in India by 2011.

Production of the Nano has been scaled back from initial targets — and the rollout has been delayed six months — because Tata Motors had to move its Nano factory from West Bengal to the business-friendly state of Gujarat. Violent protests by farmers and opposition political party leaders over land at the initial site forced the company to change plans.

Ya see - violent protests do work!

The new factory, which will be able to produce up to 500,000 cars a year, will open by year’s end, officials said. Until then, Tata Motors can only produce 50,000 cars a year from an existing plant in Pantnagar, in the northern Indian state of Uttaranchal.

Ratan Tata won’t speculate whether this is a Henry Ford moment for India. Ford famously paid his factory workers enough so that if they saved carefully, they’d be able to buy their own Model T.

The average salary at the Pantnagar factory is 150,000 rupees ($3,000) a year, company officials said. Ratan Tata said most workers there don’t even own motorbikes.

“We bus them to work everyday,” he said.



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