Chrysler's Press Flip-Flops on Prius Funding

When Jim Press was the top executive for Toyota USA, he said that the Japanese government never directly aided the company in the development of the Toyota Prius. Now, as president of Chrysler, his tune has changed. On March 20, Press told BusinessWeek, “The Japanese government paid for 100 percent of the development of the battery and hybrid system that went into the Toyota Prius.”

Toyota spokesman Paul Nolasco told the Associated Press that the comments made by Press are wholly untrue. "I can say 100 percent that Toyota received absolutely no support—no money, no grants— from the Japanese government for the development of the Prius," said Nolasco.

Why would Jim Press flip-flop? American carmakers have long alleged that Toyota has unfairly benefited from government subsidies. Toyota and Honda debuted the first hybrids to the American market in 2000, and today sell 90 percent of the hybrids in the United States. Ford was the first U.S. company to introduce a first hybrid , the Ford Escape, in 2003. General Motors has a number of hybrids in the U.S., although production and sales are very low. Chrysler’s first hybrids—due out in summer 2008—are a pair of 5.7-liter hemi-powered full-size SUVs.

Is Press forgetting that the U.S.-government, under the Clinton Administration’s Partnership for a New Generation of Vehicles, spent more than a billion dollars to produce three 80-mpg hybrid prototypes, including the Chrysler ESX? The vehicles were never put into production. What about the continued work and taxpayer support of the U.S. Advanced Battery Consortium?

Hopes for a clear-cut resolution to the mystery disintegrated when the Chrysler executive tried yesterday to elaborate on his initial March 20th remarks. As Business Week reports, Press said in a statement through a spokesperson, “The Japanese government strongly supported R & D investment in battery development, and the Prius and other Japanese models benefited from that investment.” But BusinessWeek dug up Press’s testimony during a congressional hearing on auto emissions and fuel economy, when as Toyota president he was asked by Rep. Michael Burgess (R-TX) if the Japanese government funded hybrid technology research that lead to the development of the Prius. His response was unequivocal: “No, sir.”