(Photo by Robert Heese on Flickr)
Every consumer who has passed a local dealership or watched car commercials on TV knows that the auto industry has been hit hard by the economic downturn. As consumers struggle to keep jobs and pay down debt, automakers are trying to push out overflowing inventories with clever financing. If you need further evidence of the auto industry’s struggles in the current economic crisis, you can look at cutbacks in all-electric vehicle development by Think and General Motors announced over the last month.
Think is a Norwegian automaker that has faced financial troubles in the past. The company has emerged from bankruptcy twice including a restructuring in 2006 that allowed for new car development. Think CEO Richard Canny has said that the company needs $29 million in guaranteed loans in order to stay afloat in the near future. In the meantime, Canny has said that 50% of Think’s staff will be cut and production on the Think City Car and another electric car will halt until company finances improve. Think’s requests to the Norwegian government for financial assistance have been met with deafening silence as legislators try to protect against total economic failure.
General Motors has followed a similar course in halting production on its all-electric Volt but achieved different results. GM is halting completion of a manufacturing plant in Flint, Michigan dedicated to the all-electric sedan pictured above. The company insists that the Volt will be rolling off assembly lines in time for a late 2010 debut but it is difficult to believe this claim. The White House and Congress have stepped in to help one of America’s legacy automakers by providing a $1 billion loan and investing $5 billion in GMAC, the company’s finance arm.
While everyone reading this post would like to see a greater number of all-electric vehicles hit the streets, we need to look at the repercussions of financial difficulties within Think and General Motors. Think’s partners A123 Systems and Ener1 will suffer from decreased orders, creating a tidal wave of financial problems further down the supply line. GM’s new plant in Flint would have enabled autoworkers to learn about the next generation of vehicles on the job. We must hope that these companies stick by their clean vehicle plans through economic hard times, emerging from the other side ready to pump out all-electrics for an increasingly eco-conscious world.
