Chrysler Abandons Electric Vehicle Program After Pocketing Taxpayer Bailout

During the federal government’s bailout of the auto industry earlier this year, Chrysler Corporation received $15.3 billion in taxpayer money to keep its factories humming–partly in exchange for the company’s aggressive plan to produce a fleet of electric vehicles. Now that the money is safely in the Chrysler coffers, however, the automaker has announced a new plan to disband its electric vehicle team and to produce only a token number of electric cars.

In testifying before the Senate Banking Committee in December 2008 while asking for the massive bailout, Chrysler’s then-CEO Bob Nardelli told Congress: “A key feature of Chrysler’s future is our capability as an electric vehicle company” and “we expect that 500,000 Chrysler electric-drive vehicles will be on the road by 2013.”

But that was then, and this is now. In the past 11 months, Nardelli has taken another job and Chrysler has changed its game plan after pocketing billions of taxpayer dollars. Yet as recently as June 10, the new Chrysler CEO Sergio Marchionne said, “Work is already underway to develop new environmentally friendly, fuel-efficient, high-quality vehicles, including Chrysler’s electric-vehicle program.”

In spite of those glowing predictions, just days ago Marchionne announced that Chrysler plans to dismantle most of its electric-vehicle capacity and reduce its production goals for both full-electric vehicles and plug-in hybrids. Marchionne claimed that Chrysler’s electric-vehicle division will have approximately the same number of employees, he also said that he now expects annual sales of only 28,000 to 56,000 electric vehicles by 2014–a small fraction of Chrysler’s original goal of putting half a million electric vehicles on the road by 2013.

According to the policy team at Friends of the Earth, a leading environmental group, Chrysler’s decision to reduce its electric car production by more than 90 percent will put an estimated one million extra tons of carbon dioxide into the atmosphere every year beginning in 2014. In response, Friends of the Earth has started a petition drive to send Chrysler a message and to remind taxpayers that, because of the bailout, they now own 10 percent of the company.

Consumers who sign the petition pledge to boycott Chrysler products unless or until the company lives up to its promises to taxpayers and Congress.

Personally, I think the message should be even stronger: Either use the money to carry out the programs and strategies it was intended to finance–or give it back.