CHICAGO –LLC supports President Obama’s proposals to raise fuel-economy standards, lower carbon-dioxide emissions and reduce dependency on foreign oil, but his refusal thus far to rule out permitting states to set their own emissions standards is troubling, says Chrysler Vice Chairman and President Jim Press.
“We look forward to working with the new administration,” Press tells the media following a meeting with Chicagoland dealers to update them on the state ofnow that it has gotten government loan guarantees and has entered into a preliminary agreement to partner with Auto Group.
“But it would be very difficult to adhere to more than one standard and wouldn’t be practical to implement,” Press says. “If you own a car in Nevada with one standard, could you drive it to California with another (stricter) standard?”
Varying state regulations would mean having to build and sell different cars for different states, a costly problem. But Press says there’s a potentially worse scenario.
“We hear that Albuquerque (NM) now wants its own standards,” he says. “I can’t imagine what we would do with different standards not only for different states, but for cities and different communities. We’d hope to maximize (fleet fuel economy) with a balanced regulation that everyone agrees on.”
Press is asked how the government could help the auto industry beyond offering federal loans.
“Tax credits and incentives to stimulate more vehicle purchases, especially high-mileage products,” he says. “Now that gas has gone from $4 to $2 a gallon, my highest days’ supply of unsold vehicles is the small, high-mileage Caliber. My shortest days’ supply is the Dodge Durango.”
Press also hints tax deductions for the interest on financing and rebates for sales taxes paid on new vehicle purchases are additional ways the government could help.
“The ability of our customers to get financing is still our biggest problem,” he says.
Chrysler asked for $7 billion in loan guarantees and has received $4 billion so far. The remaining $3 billion would come after the government approves the auto maker’s viability plan due in mid-February. The decision will come by March 31.
Press says Chrysler plans to add eight new products within the next 18 months and 24 in the next four years, some of which would be either Fiats or vehicles derived fromplatforms, if the tentative deal to swap 35% equity in Chrysler for Fiat technology is finalized.
Under that partnership, Chrysler would look to sell more Jeeps in Europe through Fiat, Press says, but he declines to specify which of the Italian auto maker’s platforms or vehicles could come Chrysler’s way.
“We haven’t decided on platform or production plans. We haven’t determined if we sell Fiats with their name or our name on them or Fiat derivatives. We still have to do due diligence, but we’re looking for more globalization.”
However, he does say a car like the tiny Fiat 500 could make a dent in the U.S. market.
“There would be a market for metro usage and high-mileage commuting, because, for the long term, fuel prices in the U.S. will go up.”
It’s logical Chrysler would build some Fiats at its North American plants that now operate at less than capacity, though Press insists no decisions will be made until after the government approves its viability plan.
But having Fiat as a partner should help Chrysler win support from lawmakers, he says.
“Fiat will accelerate our getting small, high-mileage cars and engines now that there is pressure on to meet stricter (fuel-economy) laws,” Press says. “And by having different cars to build and sell here, it will preserve jobs here and ensure the viability and longevity of a U.S. car company.
“For years, states have offered tax dollars to attract manufacturers, most of them foreign, to create jobs. The government should approve our viability plan, because we’re preserving jobs – the jobs of an 80-year-old U.S. company.”
Meanwhile, Press says Chrysler’s current dealer inventory consists of 20% unsold ’08 models and should be turned to mostly ’09s after February.