Chrysler (Fiat) breaks pledge on electric cars

(PRWatch) Reuters recently reported that Chrysler’s new foreign owner, Fiat, has disbanded its “Envi” environmental division “dedicated to rushing a range of electric vehicles to showrooms.” This “marks a major reversal for Chrysler, which had used its electric car program as part of the case for a $12.5 billion federal aid package.”

Indeed, a pledge to become more innovative and make electric cars more readily available to consumers was a major part of the case for taxpayer assistance that then-CEO Robert Nardelli made to the US House Committee on Financial Services in his testimony on behalf of Chrysler on November 18, 2008 and December 4, 2008. For example, in his December statement, Nardelli said, “. . . we expect that 500,000 Chrysler electric-drive vehicles will be on the road by 2013.”

And, in a December 15, 2008 interview with CNN Money, Lou Rhodes, Chrysler’s Vice President for Advanced Vehicle Engineering, insisted that “electric cars aren’t just a side-show or a public relations move for Chrysler, but a major strategic move.” Those statements were part of Chrysler’s push for the Auto Industry Financing and Restructuring Act of 2008, which would have provided $14 billion in emergency loans to the Big Three automakers; the bill passed the House, but was filibustered by Senate Republicans in December 2008.

Despite the inability to overcome a filibuster of this bailout plan, the Obama administration sought to aid the industry in other ways, including by awarding a $70 million grant as part of the American Recovery and Investment Act of 2009 to develop hybrid electric trucks and minivans, as part of the administration’s commitment to electric vehicles and energy independence under its green economy plan.

Despite these investments and Chrysler’s prior promises, its new foreign owner, Fiat (which purchased the company’s assets and debt after Chrysler filed for Chapter 11 bankruptcy protection), has fired the company’s Envi brain trust, and now FIat’s CEO, Sergio Marchionne, says “I do not believe much in EVs and I think that electric cars would represent just one or two per cent of Chrysler`s sales by 2014″ (or roughly 60,000 cars), a far cry from the half a million originally pledged. But Fiat did decide to keep Chrysler VP Lou Rhodes on to oversee its meager “commitment” to EV, saving at least one American (executive’s) job.

So, Fiat broke Chrysler’s promise to the American people, but why would the Italian automaker care about American taxpayers or building a green economy in the states? Just one more reason to question the bailout of companies rather than American workers themselves.

This Guest Blog was prepared by Steve Horn, a new intern with CMD who is majoring in political science and legal studies at the University of Wisconsin in Madison.

via Chrysler (Fiat) Breaks Pledge on Electric Cars | Center for Media and Democracy.