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Let them fail!

Sources: GM to shut most US plants up to 9 weeks
AP Sources: GM to close most US factories for up to 9 weeks this summer to reduce inventory

Article link.

DETROIT (AP) -- General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, two people briefed on the plan said Wednesday.

Thousands of workers could be laid off but would still get most of their pay because their United Auto Workers union contract requires the company to make up much of the difference between state unemployment benefits and their wages.

More at link.
 
GM Won't Make Debt Payment, Sending Stock Lower

Article link.

General Motors is unlikely to make a $1 billion debt payment due June 1 because it expects to be in the process of restructuring its debt through a voluntary exchange or bankruptcy court by that point, a spokeswoman for the automaker said on Wednesday.

More at link.
 
A short "Sum Up" moment:

http://corner.nationalreview.com/post/?q=NDU2OGI5NjFjY2Y1MDBkZGNiMTNhNzM2NDVmOWU3NDM=

GM to Default on Its Debt  [Stephen Spruiell]

So says the WSJ. Just yesterday it was reported that the Obama administration had approved the company for $5 billion in additional loans. I wonder if the check already cleared.

Update: Link now goes to the story. The government will hold GM's hand through the bankruptcy proceedings. Why couldn't we have done this in December? What did taxpayers get for the $13.4 billion we invested in the company?

Update II: An economist e-mails:

    The White House will not be surprised by this. In fact, the White House is behind it. This is what it means when a company is encouraged to “ask bondholders to make sacrifices” to ease the pain for union members.

and Glen Reynolds (Instapundit) asks:

better question: What did the people who approved the investment get?
 
Chrysler could file bankruptcy next week
Alliance with Italian automaker Fiat would happen under protection

http://www.msnbc.msn.com/id/30366383/

By Micheline Maynard and Michael J. de la Merced
updated 7:06 p.m. ET, Thurs., April 23, 2009

DETROIT - The Treasury Department is preparing a Chapter 11 bankruptcy filing for Chrysler that could come as soon as next week, people with direct knowledge of the action said Thursday.

The Treasury has an agreement in principle with the United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing, said these people, who asked for anonymity because they were not authorized to discuss the case.

More at link.
 
With some venture capital.....oh wait, um if inefficient companies like GM fail and clear the market....oh, wait, um, if competitors are not subsidized by our customers tax dollars......oh, crap!

http://blog.wired.com/cars/2009/04/we-drive-the-ap.html

We Drive the Aptera, and It's a Real Car
By Chuck Squatriglia EmailApril 21, 2009 | 4:42:54 PMCategories: Electric Vehicles 

Aptera5

If you're the kind of person who loves to be the center of attention, the Aptera 2e is the car for you. The three-wheel, two-seat electric car draws a crowd everywhere it goes.

We discovered this Tuesday as we drove the 2e around downtown San Francisco, where the car literally stopped traffic. People pointed. They snapped pictures. They asked "What is it?" and "How much?" One person asked, in all seriousness, if you can drive it under water. Another asked, perhaps inevitably, "Can it fly?"

"It flies right past gas stations," replied Paul Wilbur, president and CEO of Aptera Motors. The line came out so quickly you get the impression he's used it before.

But as odd as the 2e looks -- and we'll get to that in a moment -- it's a real car that rolls silently into driveways by the end of the year.

The 2e is about the size of a Honda Civic on the outside and a Honda CRX on the inside. It seats two people in relative comfort and has enough room to haul three sets of golf clubs or 22 bags of groceries. Wilbur knows this because he loaded that many in there himself.

Amenities include air conditioning and a navigation system. A video camera with night vision provides a 180-degree view of what's behind you because the back window is really narrow. The production model will have power windows, power locks and front and side airbags. We drove a prototype that had seen some miles, but for the most part it had the fit, finish and comfort you'd expect from a compact.

Aptera4 Downtown San Francisco is no place to see what a car can do, especially when a nervous chief marketing officer keeps telling you you're driving a $1 million prototype. But the 2e reminded us a lot of a Civic in terms of acceleration and handling. The accelerator pedal has a lot of travel and it takes getting used to, but once you punch it, the car moves with authority. The ride was a bit stiff and there's no power steering, but the 1,700-pound car was nimble in traffic.

The 2e doesn't have a transmission; power flows from the motor directly to the front wheels. A knob on the dash lets you select from three driving modes. D1 limits output to maximize range. D2 is for normal driving. D3 offers brisker acceleration. Wilbur says the 2e will do zero to 60 in "under 10 seconds," which is on par with the Civic and Toyota Yaris, and says it tops out at 90 mph. He claims the car "handles like a bat out of hell."

"It's got no lean," Wilbur said. "It's completely flat."

Wilbur was coy about the 2e's specs because they're still working on the car, so all we can tell you is it has a 13-kilowatt-hour lithium ion battery. Plug it in to a standard 110-volt, 10-ampere outlet and it'll recharge "overnight." Up that to a 220-volt, 30-ampere outlet and you're good to go in four hours. Wilbur says the battery is good for 100 miles with two people, 250 pounds of stuff and the AC going full blast.

"We're guaranteeing 100 miles of range," he said. He figures the battery has a useful life of six years, at which point Aptera may offer them to solar- and wind-power generators for energy storage.

As for the looks, well, you'll either love it or hate it. The 2e doesn't place form over function, form is function. Everything about it was designed to maximize efficiency and squeeze every mile possible from the battery. Aerodynamics is key to that, Wilbur said, because 50 percent of the power a car uses at 55 mph is needed to push the air aside. Reduce drag and you reduce your energy needs.

Wilbur says the engineers considered making the 2e a conventional four-wheeler but scrapped the idea because the added weight and rolling resistance killed efficiency. "We lost 34 percent," he said. "To recover that, the car would need a battery 50 percent bigger."

That slick body is made of a proprietary honeycomb composite material, and Wilbur claims it's six times stronger than steel. The 2e is currently undergoing crash testing, but Wilbur says it exceeds federal side-impact and roof-crush standards.

We won't see a production model for another couple of months. It will be a little more square when viewed from the front, a concession made to increase interior room and allow the windows to roll down. That's a smart move, because the car we drove could be called "cozy" and the windows don't open.

The engineers have reworked the battery pack, which is located in a sealed compartment under the seats, to move it forward and shift the center of gravity toward the front. Wilbur says the production car carries 70 percent of its weight on the front wheels, which "is excellent for traction and handling." They also brought the front wheels eight inches closer to the body and raised the ride height a bit.

Despite the tweaks, the car became more aerodynamic, and Wilbur says the production car will have a drag coefficient of 0.15. That will make the 2e the most aerodynamic production car in history, topping even the General Motors EV1.

Aptera plans to start production by the fourth quarter and says the car will have a list price between $25,000 and "the low 40s." Something more specific will be nailed down once the company gets closer to the launch date, Wilbur says. As for what it'll cost to drive, Wilbur says you're looking at about a 1.5 cents a mile.

Wilbur says 3,500 people have placed $500 deposits for a car, which will be offered only in California to start. Florida and Texas are next on the list, with a national rollout to follow in late 2010 or early 2011.

The Aptera will be built in Southern California, and Wilbur says the factory will be able to turn out 20,000 cars a year.

Photos: Jim Merithew / Wired.com

 
News Toronto & GTA
Thousands of CAW workers protest at Queen's Park

Article Link.

Thousands of CAW retirees amassed on the front lawn of Queen's Park today to demand pension protections as GM and Chrysler engage in do-or-die negotiations with American and Canadian governments.

Inside the Legislature, Premier Dalton McGuinty called for a national summit on pensions.

McGuinty has said his government will not put additional taxpayer dollars into the $100 million Pension Benefits Guarantee Fund, although it falls far short of what’s required to compensate retired auto workers if GM or Chrysler go bankrupt.

Meanwhile, Ontario Economic Development Minister Michael Bryant says talks between the CAW and failing auto giant Chrysler have had some success.

"The positive news is that progress has been made," Bryant said today.

"I'm feeling more confident than not right now."

The two sides met through the night and Bryant said he had spoken with CAW President Ken Lewenza both last night and this morning.

"There are many pieces that need to be put together," Bryant said.

"The US Treasury has to sanction a deal, the Canadian government has to sanction a deal. Everybody has to see that cost savings have been achieved.

Union and management need to come to a deal and Fiat needs to say that this is a deal worth doing."

But despite those hurdles, Bryant said there is still hope Chrysler can avoid bankruptcy.

And Bryant said even if Chysler or General Motors does wind up in either Chapter 11 protection in the US or under the Companies' Creditor Arrangement Act in Canada, the pensions of retired workers would not immediately vanish.

Retired auto workers demonstrated by the thousands at Queen's Park today, demanding their pension benefits be protected under any deal to bailout the carmakers.
 
Ford posts $1.4B loss, but it burns less cash

Article link

By Sharon Silke Carty, USA TODAY
DETROIT — Ford (F) posted a $1.4 billion net loss for the first quarter Friday, a huge swing from the profit it posted in the first quarter last year, but the automaker said it is burning less cash.

The automaker says it still plans to break even in 2011 without government assistance. But that could change if there's an uncontrolled bankruptcy among one of Ford's major competitors or large suppliers, CEO Alan Mulally said on a conference call Friday.

More at link.
 
APRIL 24, 2009, 3:59 P.M. ET

GM to Shed Pontiac, Close More Plants
http://online.wsj.com/article/SB124060030328753755.html

General Motors Corp. is readying plans to shed its Pontiac brand, shutter more factories and launch a bond exchange aimed at eliminating billions in debt, people familiar with the matter said Friday.

The auto maker, facing a June 1 federal deadline to dramatically restructure or go bankrupt, is preparing early next week to detail the progress it has made on the stepped-up recovery plan demanded by the Obama administration. GM is expected to announce plans to eliminate or sell its poorly performing Pontiac brand, according to several people who have been briefed on the plan

More at link (with subscription).
 
Chrysler, CAW still talking over concessions
Last Updated: Friday, April 24, 2009 | 11:59 AM ET

Article link.

Chrysler and the Canadian Auto Workers continued talking Friday to try to hammer out a deal on union concessions as part of an effort to keep the company afloat.

A CAW spokesman said the two sides are close to an agreement and he expects an announcement after union leaders meet later in the day. Negotiations have been going on since Monday.

Chrysler faces a government-imposed deadline of April 30 to win concessions from its workers in Canada and the United States, to persuade lenders to swap debt for equity and to cement a technology-sharing alliance with Fiat that would give the Italian automaker a 20 per cent stake in Chrysler.

The CAW is hoping to reach an agreement this week so members can vote on it before the deadline.

Failure to meet the deadline would mean an end to further government financial aid and probably bankruptcy protection, perhaps ending in liquidation of the company.

Chrysler is demanding a reduction in labour costs of $19 an hour. If there isn't a substantial reduction, Fiat has said it would abandon the alliance and the Canadian government has said it would provide no further government money to Chrysler.

More at link.
 
[/quote]

A $19.00 reduction in wages, just goes to prove they were always overpaid along with their CEO's for really doing sweet F... all.

There's no way a person should be paid $40.00 ph for picking screws from a tray and putting them in a hole and probably accompanied by a Robot because it might be too laborious.

It's to bad Society can't give a bit of attention to our Teachers,Nurses,Firemen,LEO's and our Armed Forces, who earn their livelyhood by their Intelligence,Sweat of their Brows and their Very Lives.

Oh yeah ! their Union is going to make up the difference of their UIC cheque for the nine weeks they are shut down.

Sung to the tune of (Don't Cry for Me Argentine) as the members of the poor laid off workers of the CAW & AAW on their march to the Manpower Offices.

Cheers.
 
FastEddy said:

It's to bad Society can't give a bit of attention to our Teachers,Nurses,Firemen,LEO's and our Armed Forces, who earn their livelyhood by their Intelligence,Sweat of their Brows and their Very Lives.

I would like to add to your list: Corrections, Coast Guard, Paramedics, and Peace Officers:
http://www.gg.ca/honours/medals/hon04-esm_e.asp
 
FastEddy said:


A $19.00 reduction in wages, just goes to prove they were always overpaid along with their CEO's for really doing sweet F... all.

Its not all in actual wages - most of the costs are in the form of non-salary benefits...
 
Opinion from the Star:

http://www.thestar.com/comment/article/624245

Union, Big 3 negotiated their demise

Apr 26, 2009 04:30 AM
Angelo Persichilli

During last week's negotiations with Chrysler, Canadian Auto Workers president Ken Lewenza complained that 7 per cent of the total production cost is getting 100 per cent of the criticism. He is not completely right.

First off, I suspect that the percentage share of the labour cost is higher than what he states. In fact, I believe he includes in the calculation only the $43 to $44 of the normal hourly compensation, not the $60 to $65 of all-in active hourly labour cost. These are numbers from the CAW; others believe the total labour cost is $70 to $75 per hour.

Second, it's not true that criticism is only being directed against the unions. U.S. President Barack Obama fired the top management of General Motors and has harshly criticized all the top managers of the Detroit auto industry.

Third, shareholders and bondholders received no criticism but are being hit hard in their pocketbooks.

Fourth, Canadian taxpayers have already paid a lot of money to keep the auto industry alive and to defend the jobs of thousands of Lewenza's members who, based on normal economic standards, should have been unemployed long ago. That's a privilege that has not been accorded to thousands of other Canadians in other industries who already are collecting Employment Insurance and, in some cases, not getting even that.

This criticism is not directed against the autoworkers, but against the unions for what they did in the past in cahoots with sloppy auto industry management. It was greed (unions) and incompetence (management) that led to immediate salary and benefits gains for the workers and hefty bonuses for the management, mortgaging the future of their industry.

Now that the chickens have come home to roost, the unions and management want to present the bill to all Canadians, who already are struggling to make ends meet, to pay for benefits that the rest of us don't have, never did have and never will have.

For example, average salaries for bricklayers and carpenters range from $24 to $28 per hour, while the total package ranges from $35 to a maximum of $50. They, too, are unionized and I'm sure their work, at times under severe weather conditions, is no less valuable than the work performed on an assembly line.

I understand the frustration of auto workers who now see their benefits bargained away in talks with the Big Three. But there are two questions: First, how did they end up in this mess? Second, who has to pay for it?

Let me start with the first question.

It all started in the 1950s when the auto industry was strong and profitable. Unions and companies sat around the table and bargained collective agreements that split the profits between the shareholders and the workers. For a few decades, there was no problem because profits were consistent enough to keep shareholders and unions happy.

The first real signs of trouble appeared when international competition began cutting into exports and then into sales in North America. Foreign automakers were able to build better cars for a cheaper price. To make things worse for the Big Three, the industry was wounded by the energy crises of the 1970s and this decade when oil prices jumped sharply, making their products even less competitive.

Instead of reacting to the competition, Detroit executives put their heads in the sand, believing that almighty America was above any competition and that their products would always be best. So while the Americans in Houston developed the technology to build cars for the moon, in Detroit they were not even able to build competitive taxi cabs for Toronto streets.

It was in this environment of presumption and greed that auto executives and union leaders sat around the bargaining table in the late 1980s and into the '90s.

The problem was that while their predecessors in the '50s and '60s bargained on how to split the profits, in the '90s they bargained on splitting profits they didn't have.

To renew their collective agreements, the unions always used the tactic of targeting the wealthiest of the Big Three to get the best deal and impose it on the other two that could not necessarily afford it. This tactic of skimming the best and pretending that all three companies were on the same economic footing created a gap between remuneration and the real value of the work done.

Auto executives, in order to cover up for their inability to reform their industry, and to protect their big and undeserved bonuses, succumbed to the ever-increasing demands of the unions and bought labour peace with money they didn't have. They promised generous salaries, holiday packages, special medical assistance and, of course, lucrative pensions they were not able to sustain. Chrysler's pension fund is at 86 per cent of its capacity and is $1 billion short, while GM's fund is at 80 per cent of its capacity and $3.5 billion short.

This happened because their calculations were based on gains from investments in the bubble market. They gambled and they lost. Furthermore, in 1992 Bob Rae's provincial government allowed some "flexibility" in maintaining the pension funds of two companies that "could not go under" – Stelco and General Motors. That probably explains the bigger deficiency in GM's pension fund compared with Chrysler's.

So since the 1990s, the unions and the auto industry, in some cases with the permission of government, have negotiated salaries and pensions they could not sustain.

I understand the frustration of Ken Lewenza and his members about facing the possibility of not getting what they bargained for. But does he understand how millions of Canadians who are unemployed or on the verge of becoming jobless feel when they are asked to pay to protect the benefits of his members, benefits that they themselves don't enjoy?

Angelo Persichilli is the political editor of Corriere Canadese. His column appears Sunday.
 
mariomike said:
I would like to add to your list: Corrections, Coast Guard, Paramedics, and Peace Officers:
http://www.gg.ca/honours/medals/hon04-esm_e.asp

By all mean's, and note, they were not mentioned because of lack of importance, but only because they are extentions or variations.

Cheers.




 
Instead of pouring money down the drain, we could have not bailed everyone out and got this powerful stimulus package instead!

http://www.thepolitic.com/archives/2009/04/27/bailing-out-poorly-run-companies-is-poring-money-down-the-drain/

Bailing Out Poorly Run Companies is Poring Money Down the Drain

April 27, 2009 · By Greg Farries

Disturbing fact of the day from the latest issue of Claremont Review of Books:

    The bailouts did not create the financial meltdown, but it is a good bet that they have contributed to the depths of our current problems and the stock market sell-off. We have robbed healthy companies of funds to pour money down the rat hole of failing industries like General Motors. For the cost of all federal bailouts, we could have suspended the corporate income tax for a year, which would have been a powerful stimulant to growth.[Emphasis mine]
 
Obama could've given every person enough money to pay their mortgage. The banks would have still gotten their money and everyone would have kept their house.

They should do the same with the automakers, give everyone a cash voucher for a new fuel efficient car. The union keeps their jobs, the company make more (and better) cars, and no one needs a loan to get one. Everyone wins.

OK, it's too simplistic and sensical. There has to be a catch there somewhere why it wouldn't work.

Other than the banks not making billions more in interest from the same taxpayer that bailed them out, and the guv'ment telling the auto companies and unions how to do bid'ness. ::)
 
The comments on the link are telling as well. Virtually no one believes for a second that Government Motors will be profitable in any real sense, the Obama administration will use Enron like accounting tricks, mandated purchases of Government Motors cars for State and Federal contracts and punishing regulatory burdens against competitors in order to make "GM" seem like a viable company.

Perhaps the best advice is to invest in a mechanically sound used car (the more recent the better) and learn how to coax every last kilometer out of the beast, since it must last for at least 4 years and possibly 8....

http://tigerhawk.blogspot.com/2009/04/gm-bankruptcy-and-test-for-american.html

The GM bankruptcy and a test for American socialism
By TigerHawk at 4/28/2009 08:00:00 AM

Larry Kudlow via Glenn Reynolds:

What is going on in this country? The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they’re getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they’re getting 40 percent of the stock. Huh? Did I miss something here? And Uncle Sam will have a controlling share of the stock with something close to 50 percent ownership. And no bankruptcy judge. So this is a political restructuring run by the White House, not a rule-of-law bankruptcy-court reorganization.

Look at the bright side, Larry. The federal government and the workers will own one of our largest and most storied industrial companies. That has never really happened before. In other words, the governmental restructuring of General Motors is a social experiment that will shortly teach us two things: Whether businesses can be managed to a profit when in the hands of bureaucrats and union officials, and whether American consumers will trust such people to stand by the products that they make. I, for one, am eager to learn the answer, because it will tell us what we should and should not do about health care.
 
Chrysler saved from the market. Too bad about us.....

http://www.slate.com/blogs/blogs/kausfiles/archive/2009/05/03/obama-s-first-debacle.aspx

Obama's First Debacle?

1) NYT's Sanger and Vlasic, with what must be willed credulousness, describe how President Obama's "hard line" against Chrysler gives them the "leverage" they will need going into the GM negotiations. Hard line? On Saturday, Micheline Maynard, also of the NYT, described how the United Auto Workers is slated to get a deal of unprecedented sweetness in the Chrysler bankruptcy. Despite all the press releases, the union didn't give up that much, apparently--the word "lucrative" is even used:

    Chrysler’s pension liability will shift from the defunct company to the new one, these people said, and workers will continue to have a lucrative contract.

    Despite the concessions, Chrysler’s most senior workers, like those at Ford, still have healthy wages and benefits; bountiful health care coverage, at least until it is adjusted; and subsidies to help bolster unemployment benefits they receive while plants are closed, as they will be at Chrysler for weeks until the sale is final.

    That carryover is unusual, Ms. Dowd said, since the buyers of assets in bankruptcy cases normally try to purchase them free and clear of their existing liabilities.

    It also means the union will not have to come to terms with Fiat once it takes over the company, or risk having its contracts abrogated.

Does the Sunday New York Times read the Saturday New York Times? 

2) Sanger and Vlasic also give us a boastful, macho quote from Rahm Emanuel:

    “G.M. is very different than Chrysler,” Rahm Emanuel, Mr. Obama’s chief of staff, said Friday. “But I suppose the one lesson for G.M., and all the other players, is that this is a moment when a Democratic president said, ‘I am really willing to let a company dissolve, and there’s not going to be an open checkbook.’ There’s got to be real viability.”

Huh? How was Obama "willing to let [Chrysler] dissolve"? Seems like the opposite. And "real viability? Has Chrysler really achieved "viability"? This is at best an open question. Here are Chrysler's new sale figures. They're grim. Chrysler sold 1,320 Sebrings this month, for example--compared with almost 7,000 a year ago. The Sebring is is the mid-sized car that's supposed to compete with the Accord and Camry. How about the lower-end Jeep Compass? 712 sold. "These are the stats of a dead car company." It's not like Chrysler has lots of appealing new models in the pipeline.

That appears to be the part left out of the Obama administration's self-aggrandizing deal spin: Who is going to buy the New Chrysler's cars? Consumers "in new markets around the world," say Sanger and Vlasic, with a straight face. Is Steve Rattner going to call and bully each and every one of them? At best Chrysler won't have new products to sell for 18 months, when in theory (and only in theory) Americans will be lining up to buy tiny FIATs.

If Chrysler fails in the marketplace again two or three years from now, after billions more in government subisidies, won't that reflect badly on Obama and his "economic team"? WIll it then appear to have been better to let Chrysler go into an actual, non-prearranged, non-jawboned bankruptcy, in which it would likely have been liquidated or in which the UAW would have had to make far more substantial concessions, like workers in other bankruptcies? The government could have assumed some of the U.A.W.s pension and health care liabilities (which it will probably end up doing, in part, in any case). But Chrysler's demise would have been a real cautionary example that gave the administration leverage in the GM negotiations (which may be what the U.A.W. was really scared of). Chrysler's rapid departure would also have opened up market share for GM--and for Ford, which is not wildly healthy itself.

Maybe Steve Rattner has saved Chrysler the way he saved Blender. 2:53 P.M.
 
Chrysler HQ Designed To Convert Into Shopping Mall

Article link

The Chrysler headquarters building is a spectacular sight from I-75 in Michigan. But the Auburn Hills edifice and its sprawling campus sit in the middle of one of the most economically depressed areas in the country. When the building was erected in the early 1990s, it was designed so it could be repurposed into a shopping mall without too much modification if the perennially troubled Chrysler should go out of business. But there is no interest in another shopping mall in a commercial corridor where unemployment and foreclosure rates are both above 20%, and one of the best-performing malls in the state, The Somerset Collection, sits 15 minutes away in Troy, Mich.

Yup, government bail-outs for a corporation that actually has a long-term corporate strategy of planning for failure.    ::)
 
More cold water being thrown on the hypemobiles. Of course the Administration will continue pour taxpayer dollars into these projects and push them on the market regardless of real world performance (unlike the Clinton era's $800 million dollar "Project for a New Generation Vehicle" extravaganza, where the Detroit three concluded they had technology but no viable product, so the first Hybrids sold in North America were Japanese).

Look for angry and dissapointed customers wondering why their GM (Government Motor's) "plug ins" don't get anywhere near the advertized MPG.

http://www.wired.com/cars/coolwheels/news/2009/05/plugins0506

Plug-In Hybrids: More Hype Than Hope?
By Scott McCredie  18 hours ago
 
Seattle Mayor Greg Nickels speaks at the unveiling of one of the plug-in hybrids the city added to its fleet last year. Although advocates say the cars can deliver triple-digit fuel economy, those in Seattle's test fleet are actually averaging about half that, leading some to question the technology.

Seattle has outfitted more than a dozen Toyota Prius hybrids with new plug-in technology to squeeze even better fuel efficiency from the eco-wonder.

City officials were intrigued by data suggesting they could cut their fuel consumption in half by using batteries charged directly from the grid. If claims are to be believed, drivers would routinely see 100 mpg using readily available battery packs installed in the trunk.

Just over a year after performing the conversions, the city says it is thrilled with the cars. The plug-in Prius hybrids have used less gas and emitted less CO2 than their conventional counterparts. But the tests also have put a big dent in the plug-in promise.

Having racked up some 17,000 miles, the plug-in Prius hybrids are averaging just 51 mpg. That's raising uncomfortable questions about the value and effectiveness of plug-in technology, even as President Obama pledges to have 1 million of them on the road by 2015.

"Getting 51 miles per gallon sounds fine compared to most gas cars," railed Seattle Times columnist Danny Westneat. "But it's a black eye for a technology that trumpets it will get twice that."

Greentrepreneurs routinely cite 100 mpg as the new benchmark for eco-conscious drivers, and even Wired magazine touted the figure in a cover story last year. But it's more than a psychologically comforting number. It's a figure we can achieve with current technology, proponents argue. Even President Barack Obama became a cheerleader when he recently told Jay Leno on the Tonight Show that "it's spectacular what is being done now with plug-in hybrids. And potentially we could see cars getting 150 miles to a gallon of gas."

Such claims are not exactly false: Careful drivers have achieved 100 mpg behind the wheel of plug-in hybrids. But the Seattle fleet test, and others like, suggest that "real world" may be far smaller. The results may in part highlight industry hype, but more significantly they point to the many non-technological factors that come into play in wringing better fuel efficiency from plug-in hybrid cars, most notably driver behavior.

Seattle has racked up more than 17,000 miles testing 14 plug-in hybrids in the past year. The fleet has averaged 51 mpg, a figure that critics say a joy-riding teen with a lead foot can do in a conventional Prius. Idaho National Laboratory is seeing similar results among the plug-in fleets it is monitoring nationwide.

"It sounds like they're not plugging them in," said Paul Scott, a founder of Plug-In America. "I don’t know how you would drive one and get such bad mileage."

It's an important question, because General Motors and Toyota are among the automakers promising to have plug-ins on the road as early as next year. The results of these early fleet tests suggest EV advocates and automakers will have to tell people how to drive the cars most efficiently because they may not catch on if consumers don’t see the fuel efficiency they’re promised.

"This is a very sensitive time for plug-in hybrid technology," says Ric Fulop, founder of A123 Systems, which manufacturers the Hymotion plug-in conversion system that the test fleets are using in the Prius.

Plug-ins improve upon the fuel economy and low emissions of conventional hybrids by relying more heavily on electricity to get around. You can recharge the batteries from a wall socket and get as many as 30 miles on a charge if you keep it below 35 mph. At higher speeds, the electric motor assists the gasoline engine, delivering 100 mpg or more.

So far the only way to get one has been to pay someone to convert your hybrid. That can costs as much as $10,000 or more, and so far only hardcore advocates and early adopters have taken the plunge.

Seattle decided to give the technology a try in March 2008 after the U.S. Department of Energy agreed to subsidize the program. The city, which maintains a fleet of 300 conventional Prius hybrids, converted 14 of them to plug-ins. They're used by a host of municipal and county agencies, which have the cars in their general motor pools or assigned to specific employees.

The city and Idaho National Laboratory have closely monitored how the cars are used and what sort of fuel economy they’re getting. At first glance, the 51-mpg average appears lackluster. A 2009 Toyota Prius is good for 46 mpg, according to the Environmental Protection Agency, and it isn’t unusual to get 60 or even 70 mpg in one. Still, city officials put a positive spin on the results.

"You have to be impressed with what you're seeing," said Scott Thomsen, a spokesman for City Light, a utility that has added several plug-ins to its fleet. "Sometimes drivers are getting 100 mpg in a stretch. This shows what the vehicles can do in real world driving conditions, not a test track in the middle of Arizona with consistent conditions."

Thomsen notes the plug-ins are outperforming the city's conventional Prius hybrids by at least 11 mpg, so they're emitting about 25 percent less CO2.

Idaho National Laboratory is seeing similar results with the 104 plug-in hybrid vehicles it is monitoring in 22 states. The cars have logged more than 300,000 miles in the past year and returned an average of 46 to 51 mpg, said Jim Francfort, principal investigator for advanced vehicle testing activities at the lab.

To be fair, you can get triple-digit fuel economy in a plug-in hybrid. James Morrison, a Seattle-area entrepreneur and EV enthusiast, let me take his plug-in for a spin. He spent a $10,000 to have a local firm install a Hymotion system in his 2009 Prius, which sports a license plate reading "MPG-XXL."

As I get in, he proudly notes that he's already gone 479 miles and barely put a dent in the tank. So far he's getting 99.9 mpg. He resets the trip computer and we set off through downtown Bellevue, and then roam the suburbs. Peeking at the fuel economy gauge, I see we’re getting between 100 and 160 mpg. It’s exhilarating. Merging onto Interstate 405, I hit the gas and cruise for several miles. The fuel economy dips into the 60s. Still, by the time we pull into Morrison's driveway, I’ve averaged 115 mpg.

So what gives with all these fleets struggling to get half that?

EV advocates have a simple answer – the drivers aren’t being told how to maximize fuel efficiency, and they’d don’t care because they aren't paying for the gas.

To get the most from plug-in hybrids, EV advocates say, you've got to us a light touch on the accelerator, mind your speed and plug it in at every opportunity to keep the batteries fully charged.

"Drive impact is really huge," said Francfort. "Aggressive driving effects the mileage of all cars, but with plug-in hybrids there’s more of an impact."

Keeping the cars charged is also key. If the battery runs down, the gas engine must work harder – the battery becomes dead weight – and that cuts efficiency. Seattle officials discovered the plug-ins were tooling around with dead batteries nearly one-third of the time. The cars with fully charged batteries got 50 percent better fuel economy than those with dead ones.

That highlights another issue: The widespread infrastructure needed to keep plug-in hybrids and the electric cars most automakers are working on doesn't exist yet. Startups like Better Place, Coulomb Technologies and Ecotality are working on it with help from automakers like GM and Nissan. In the meantime, drivers like Morrison say they ferret out electrical outlets in parking garages and behind buildings so they can plug in as often as possible.

EV advocates are quick to note the Prius wasn't designed to be a plug-in hybrid, and in fact makes a lousy one. The biggest problem is the electric motor is too small, so the car relies more heavily on the gasoline engine. Cars designed from the ground up to be plug-in hybrids, like the plug-in Prius that Toyota is working on or the Saturn Vue plug-in – will almost certainly offer far better fuel efficiency.

Plug-in advocates say Seattle's fleet results are no reason to pull the plug on the cars. The technology is sound, they say, and it will deliver spectacular fuel economy - but only if people are told how to get the most out of cars with cords.

"I agree with anyone who says 100 to 150 mpg is out of line," says Dan Davids of Plug-In America. He was among the first people to convert his Prius with a Hymotion kit, and he’s averaged 75 mpg. "That’s been hyped too much. But we shouldn’t indict the technology. It’s a people problem."
 
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