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Chrysler Nixes Hybrid SUVs

Two-month life span may set new record

By Truman Lewis
ConsumerAffairs.com

October 29, 2008
Chrysler had barely started building its first two hybrid vehicles and now it's canceling production and closing the plant where they were built. General Motors, meanwhile, is cutting back new product development, possibly delaying the debut of the Chevrolet Cruze.

The Chrysler Aspen and Dodge Durango Hemi hybrid SUVs were unveiled with much fanfare and began arriving in dealer showrooms in August. But SUV sales -- hybrid and otherwise -- have been as dead as a drained Duracell and that has made it hard for Chrysler to keep running its Newark, Del., plant.

The plant had been scheduled to close at the end of 2009 but Chrysler announced yesterday that it will be closed immediately, taking the hybrids with it. No other plant is equipped to build the hybrid SUVs.

GM, short of cash and facing plummeting sales, said officially that it would "postpone" spending on new products in 2009 and 2010. Unofficially, industry sources say the automaker is cutting its spending on engineering and design.

GM hopes to save as much as $1.5 billion with the cutbacks and product delays. The automaker could run out of money next year and is reported to be exploring a merger with Chrysler LLC, which has a much larger cash horde.

The Chevrolet Volt plug-in hybrid and the Camaro muscle car are said to be protected from the cutbacks.

The U.S. taxpayer may be coming to the automakers' rescue. The Treasury Department is said to be considering a move to provide help to General Motors and Chrysler, as they seek a merger. The cable TV business channel CNBC quotes two sources with direct knowledge of the talks as saying the two car companies have asked for roughly $10 billion.

Rep. John Dingell (D-Mich.) is pushing for the bailout, saying the situation facing U.S. automakers is "very, very serious."

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