Well hey there. As we enter the last week of June/ first week of July more changes to the auto industry are coming down the wire. As of yesterday, 6 of the biggest automakers have announced plans to cease production of all diesel-running vehicles in the US by 2010. What does this mean for the future of diesel; anybody’s guess at this point. This may be a hot button issue in regards to saving money on gas because diesel engines can get up to 30% higher gas mileage than a standard fuel vehicle. The issue that the auto companies are facing is the price of Diesel engines. On average many components of a diesel engine can drive the retail price of the vehicle up as much as $8,000, something auto companies aren’t willing to place any bets on (and who can blame them in this market). So far GM, Ford, and Chrysler as well as Japan’s Honda, Toyota, and Nissan are the companies I am talking about here. This is of course excluding German automakers such as BMW, Audi, Mercedes, and Volkswagen, all of whom are still producing diesel fueled engines in the US market. What we have yet to see is if they will follow in the example of these other 6 companies. Something I wonder, does this move away from diesel pave the way for the massive onset of the electric car? I guess we’ll be able to tell by next year.

In other news, the Italian automaker Fiat (which bought out Chrysler earlier this year) has announced plans to begin reintroducing themselves into the American market by 2011. Specific plans are at this point nothing more than speculation; I wager that we will hear much more on this in the coming months.

Finally I’d like to end today’s article on a positive note (something I so rarely get to do). Do you remember the American Recovery and Reinvestment Act (ARRA)? This was one of the first moves of the Obama administration in an effort to combat unemployment and stimulate the economy when it was signed into law on February 17. This agency has released a progress report regarding the release of funds into the economy. You can check out the specifics here www.recovery.gov . As far as the Department of Transportation: the agency is claiming that the massive infrastructure overhaul that was promised in campaign season last year, is being delivered upon with up to 50 percent of the highway reconstruction funds having been allocated within the first 150 days. This is very good news for the economy as it will definitely combat unemployment in a big way. You can read more about this on the DOT blog at http://fastlane.dot.gov .

Awesome news today! Today marks the first time that GM has started test drives for the pre-production Chevy Volt extended range electric car. This comes just one day after the company announced that by October, GM will have 4,000 less salaried executives and other employees (probably taking the advice of smart people for a change). While the real deal won’t be available for you to purchase until late next year, It is pretty much safe to say that the day of the electric car has finally come… well, sort of. The Lithium Ion battery has actually not yet been proven to work in a high-volume hybrid car, but this is something that they’ll work out in time for the big release next year (hopefully). GM says that they plan to build around 80 prototypes of the vehicle to use for testing throughout the next year. We will actually have affordable electric cars on the road in a year’s time. Am I the only one that’s excited about this? I’ll include a picture c/o GM at the end of the article.

In a follow up to an article I wrote last week concerning the Cash for Guzzlers bill under consideration in congress: The bill passed through both the House and the Senate. As of 4:30 yesterday President Obama signed the bill into law. This voucher program will go into effect next month (5 days) and will provide assistance to any owner of a gas-guzzler wishing to purchase a more fuel-efficient car. Any person that is interested in acquiring one of these vouchers (and believe it or not, these aren’t limited to just drivers of SUV’s and large trucks) can access a brand new government website www.cars.gov to find out if they are eligible.

That’s all for this week. It’ll get better, it has to.

Apparently there is this argument that big SUV’s and big trucks are a major profit maker, especially for the big 3 in Detroit. Now I will be the first to admit that earlier in the decade this was an absolute truth. Somewhere around 2003, everything was about bigger and better. While it was true 6 years ago, time tends to change everything. This has obviously in these past couple of years proven to be false due to the economic downturn and almost entire halt of the lucrative Big Truck market. Increasing concern for the environment, and to be quite honest, practicality in regards to the price of gasoline has driven this argument into obscurity. However, if there was any doubt in your mind about this, there was a study released from the University of Michigan Transportation Research Institute that basically confirms what I just said. They insist that the Detroit 3 would be more likely in increase their profits, and less likely to lose money if they geared their production to meet fuel efficiency standards that far exceed future government regulations. This isn’t a new concept: the idea of making a prediction based on a trend, and making decisions that will bring success in the future. Honestly, I can’t say whether or not these auto companies have made the necessary changes (only time will tell us I suppose), but it does force me to beg the question, Why didn’t they respond to people’s warning that this economic downturn would occur years ago? The study also sheds light on this by adding that for these companies to become viable again in the future, they are advised to replace existing management teams. Sounds smart to me, replace the people who refused to listen to THEIR OWN researchers for THREE DECADES.

In other news today, Japan is seeing a restructuring of its major auto companies’ leadership. Toyota announced today that the current president is stepping down and being replaced by the grandson of the company’s founder. Toyota claims that the company will strive to remain economically viable in the future by weeding out production of oversized cars, and focusing on their production of smaller more fuel efficient vehicles. Sound familiar?

On top of Toyota’s announcement, the ONLY Japanese automaker to actually post profit during this recession, Honda, has announced that they are replacing THEIR president. It just goes to show, if you are a higher-up in the auto industry, don’t count on the success of your company to be an indicator of the safety of your job. (ouch.) That’s all for now..

Here’s another interesting piece of auto industry news I happened across today. You may be familiar with a piece of legislation that has been discussed for a few months now and was voted on by the House of Representatives yesterday. This legislation is nicknamed “Cash for Guzzlers” and entails pretty much what you would expect given the title. This bill would allocate 1 billion dollars to a voucher system for car owners who wish to trade in “gas guzzlers” for a smaller, more fuel-efficient vehicle. Each owner would be eligible to receive 4500 dollars towards their purchase of the new vehicle. A novel idea, I mean, I think this would be a nice way to stimulate the populous: encouraging them to simultaneously buy an American vehicle and reduce their carbon footprint (which regardless of whether or not you like Al Gore, actually is an important issue).

Some lawmakers are calling this legislation just another attempt to bail out the auto industry. Bailoutbailoutbailout. Maybe the government is giving to much money to failing businesses, I’m not here to make any judgments Regardless of this squabbling, the bail.. I mean bill passed the House by just 24 votes and now moves into the Senate where it will probably die a painful and public death. This voucher system (if passed) would be in effect until November of this year.

In other news, a new car manufacturer called V-Vehicle will soon be opening its doors in Louisiana. This is just the latest from the Louisiana Economic Development team, and should do wonders for the (approximately) 1400 people it will employ. This company is another step in the right direction, as they will specialize in the production of high gas mileage vehicles. It’s got to worth something, I mean.. T. Boone Pickens attached his name to it as one of the chief investors. That guy is so much fun.

That’s all for this week. Wish me a happy birthday! (tomorrow)