Chrysler survival......

[Donziweasel]

Had a "spirited" discussion with one of my bus dealers who is also a Dodge Sprinter van dealer about the future of Chysler. Facts are that Chrysler is in SERIOUS trouble. They have no fuel efficient vehicles in thier lineup, Dodge trucks aren't moving and Jeep is in a rut. Just wondering what the general consensus is.

I don't want Chrysler to die as I love and own several Sprinter Vans (30 mpg), but I feel it is enevitable. I think they already have one foot in the grave and the other one is slipping.

[Donzi Racer]

First I hadn't heard about it, shows how much I pay attention to what is happening. Hate to hear that. Someone call Lee and see what he is up to these days? The last time he came onboard it looked awfully bleak. Had a boss while I was in college and he had 3,000 shares of Chrysler. It was worth about $3 a share. I was telling him to sell sell sell, it is going under. He did not and of course it turned around and his shares went way up. So somebody get Iaccoca and see what will be. Hope it works out. Tom

[Donziweasel]

Funny thing is that Chrysler is not traded publically. It is owned by Cerebrus Capital Management (80.1%) and Diamler A.G. (19.9%) and is a private company. This could also work against it's survival.

[BUIZILLA]

Freightliner will save the Sprinter line... :wink:

[motorcity]

Their is still talk here in Detriot that Renault/Nissan is still interested in Chrysler.

[Donziweasel]

Mercedes makes a version also. Even the Dodge Sprinter has a Mecedes Turbo diesel in it. Great engine. Have had NO problems with them and I have one pushing 250000 miles.

[BUIZILLA]

speaking of surviving.... the US Postal Service is in dire straights.... they don't even have enough money locally to keep their trucks and vans running, if they break and it costs more than $1000 to fix it, it gets parked... no joke...

[Donziweasel]

Their is still talk here in Detriot that Renault/Nissan is still interested in Chrysler.

I've heard that also, but I think thier interest has cooled since GM became interested.

[Donziweasel]

they don't even have enough money locally to keep their trucks and vans running, if they break and it costs more than $1000 to fix it, it gets parked... no joke...

Jim, what brand of vehicles are they running?

One big problem with Chrysler is the Dodge trucks. They WERE a big money maker. Now, the full sized stuff is not moving. The Dodge truck is the oldest full sized platform out there. Thier suspension is very dated and not even in the same calibre as Ford or Chevy. I wouldn't be surprised if they do not have the money for R/D to make a new one that is competitive with the other two.

[gcarter]

I've been a MOPAR fan for more than 50 years. Many times over that period of time, they just didn't do things very well...you know; quality, styling, etc. But when they got it right, it was MAGIC!
Too many things to list...early hemis, 426 hemis, Torqueflight transmissions, mid '50's Imperial limousines, Cunningham sports cars, the Ram Chargers drag racing team, mid '60's altered wheelbase sedan hemi powered funny car teams, original Chrysler 300 series two door hard tops, torsion bar front suspensions, tail fins, Vipers, Vipers winning Daytona and LeMans, and many, many more things.
If they merge w/GM (probably their best bet), I hope there's an attempt by GM to preserve their integrity and history. Not worried about Jeep (how many different companies have owned Jeep??? I saw a list recently and it was pretty long....and always it was "JEEP").

[BUIZILLA]

GC, prime example...., they have 20 24' Navistar straight boxes with DT466E engines, VGT turbo's (variable electric controlled geometry vanes) last Friday 14 of them were parked, 2 for turbo reasons, I have both turbo's in my shop right now, they have busted wheels, no repair parts available, Navi wants $2200 exchange EACH, my price was $1800 each, I have them in stock, Navi is on national backorder... the pisser is the budget will only allow for one to be fixed, next month, the second can get fixed in December... maybe... the other 12 vans will stay parked until after the first of the year, these are 2004-2005 trucks...

[DonziJon]

For all you Nay Sayers and Negative Thinkers: OBAMA will Solve this problem in a cocaine heartbeat. He will NATIONALIZE the auto industry for the Good Of The NATION. :nilly::nilly: Postal John

[gold-n-rod]

Lee "I-a-cukoo" is dead.

The USPS is dying, too. Who really needs it? The die-hard capitalists of this country ought to be supporting it to be privatized. Trouble is, who'd take it over? No one, that's because Fred-X, Oops-PS and email have the market cornered. Telcoms and newspapers aren't far behind. Technology marches on. Honestly, can you reallly say you couldn't survive w/o your landline, daily paper and the day's mail delivery? Didn't think so! Welcome to the future.

Finally, CryCo will be parceled out and sold to the highest bidder(s). Even Stevie Wonder saw that coming when Cerebrus bought 'em.

[mphatc]

Don't rule out the privately held companies . . the only profitable car truck manufacturers on the planet right now are privately held . . . They could sell off tons of there physical assets, go small and come out on top . .

Mario

[roadtrip se]

I've heard that also, but I think thier interest has cooled since GM became interested.

Greetings from Detroit.

Actually DW, the Nissan offer came in after the GM offer. The offer is 20% and Chrysler becomes part of the Renault-Nissan alliance.

The GM offer is basically stillborn, because GM can't and won't be able to come up with the credit to do the deal. Heck, they can't even come up with the cash to finance their car sales for their dealers via GMAC, because they already sold part of it to Cerebus.

If the GM deal dies, it is a blessing to Michigan and the supplier base that supplies Chrysler, because the general consensus is that GM would grab the Chrysler cash horde and run. The only pieces that would not be redundant would be the Jeep line and the mini-vans, everything else is redundant and most likely toast, along with a bunch of jobs.

The Nissan deal is actually a more viable one because Ghosen has already shown that he can turn a carmaker around and the the technology that Chrysler could tap into via the alliance would help re-energize them. There is already a deal in place for a Nissan-sourced small car for Chrysler based on the Versa and a Nissan pick-up via the Ram platform. This deal probably dies on the vine too, because the greedy bastards at Cerebus want out of a business they should have never entered in the first place and won't sell just a stake.

The real truth here? GM is probably in bigger trouble than Chrysler. Nobody in their right mind would look at this deal as strategically correct. They are just looking to get their hands on Chrysler cash. Problem is, they would probably burn through it all trying to absorb Chrysler operations. In the mean time the Rencen HQ, Hummer, and AC Delco are all being offered for sale.

Truly a boon-doggle. Anybody want to buy a house?

[BUIZILLA]

so what would happen if GM agrees to give up GMAC to Cerebus, in exchange for Chrysler itself? GM gives up a credit hound to gain a cash hound?

[roadtrip se]

so what would happen if GM agrees to give up GMAC to Cerebus, in exchange for Chrysler itself? GM gives up a credit hound to gain a cash hound?

Reality stands. GM can't do it in todays credit markets and the common assumption in town here is that they would burn most of Chrysler to the ground.

Cashless, creditless exercise, maybe...

[BUIZILLA]

one of my nieces husband's family owns 3 longtime dealerships in the Knoxville area, one is a Chry/Jeep store, one is a GMC/Poncho/Buick store, I think one is a Mitsi store.... they ARE a tad concerned today..

[gold-n-rod]

Anybody want to buy a house?
A house? Hell, you can buy the RenCen!!!!!!
http://images.travelnow.com/hotelimages/s/000000/000026A.jpg

[Donziweasel]

Don't know what will happen, but Chrysler continues to sink with no help in sight. I hope they make it. I am with George. Chrysler is an American icon. The hemi's of the 60's. Even the new hemi stuff is pretty cool. I like the new Challenger. It will be a sad day if they sink, especailly the amount of jobs that will be lost.

[VetteLT193]

I've been a MOPAR fan for more than 50 years. Many times over that period of time, they just didn't do things very well...you know; quality, styling, etc. But when they got it right, it was MAGIC!
Too many things to list...early hemis, 426 hemis, Torqueflight transmissions, mid '50's Imperial limousines, Cunningham sports cars, the Ram Chargers drag racing team, mid '60's altered wheelbase sedan hemi powered funny car teams, original Chrysler 300 series two door hard tops, torsion bar front suspensions, tail fins, Vipers, Vipers winning Daytona and LeMans, and many, many more things.
If they merge w/GM (probably their best bet), I hope there's an attempt by GM to preserve their integrity and history. Not worried about Jeep (how many different companies have owned Jeep??? I saw a list recently and it was pretty long....and always it was "JEEP").

The best things Chrysler has done are all about guts. They went in swinging and made things happen. GM is the opposite of that idea... For example, look at the new challenger or the old Viper when they came out. from concept to production there was not a long time period. Compare that to the C5 corvette (started in 1988, built in 1997) or the new camaro (it's been years and they still aren't out)

GM will kill Chrysler if they have that attitude.

[Craig S]

The new Dodge truck is nice, 'course the market has moved on.

I can understand why Nissan would want them. I don't understand what GM would get out of it.

[DonziJon]

Anybody remember back in 1981 or so when Harley Davidson convinced Congress to TAX THE SNOT out of All Imported (Read Japanese) motorcycles over 700cc? The tax was passed on in the Sale Price to the consumer. The TAX decreased a little each year and expired after five years. The first year was pretty hefty.

I guess it worked because Harley is still in business. Probably only slowed down the Japanese a little.

Funny thing about Honda. Back then they could sit around the conference table and come up with a bran NEW motorcycle idea....I think it was the VF-750......With NO common parts with other models, It was on the test track and running 90 days later. :cool!: Postal John

[BUIZILLA]

October 23rd, 2008
GM hints at more job cuts
Posted: 09:43 AM ET
By Chris Isidore
CNNMoney.com senior writer
NEW YORK (CNNMoney.com) — General Motors expects to meet or exceed its target for a 20 percent reduction in salaried employment costs, but a letter to executives Thursday signaled that a worsening sales outlook will bring additional cost and staffing reductions.

The letter, sent out by Bill Tate, the head of human resources for GM North America, informed executives that GM is taking some immediate steps to reduce costs. They include suspending its matching contributions to 401(k) as of November 1 and also suspending tuition reimbursement and adoption assistance as of the end of the year.

Final numbers on the early retirement program announced this summer are not yet available, said GM spokesman Tom Wilkinson, as many who signed up are still within a window during which they can change their mind. The final figure is due on November 1.

[Tidbart]

Let em die. They haven't consistently made a quality product since the early 70's. IMHO

B

[Donziweasel]

The only reason I could see for GM's interest is to absorb market share. One less company to divide sales with. Since many products between the two are comparable, 1 ton pickups, Durango and Jeep vs. Tahoe and Suburban, etc.. I see GM killing most of the product line.

[roadtrip se]

Let em die. They haven't consistently made a quality product since the early 70's. IMHO

B

but typical of the uninformed and supposedly, uneffected.

The failure of Chrysler, who has made some great product over the last ten-fifteen years including the Minivan, the Jeep, the 300, the Challenger, the Viper, the Hemi and V10, and a pretty solid truck, would mean an additional 50-60,000 people without jobs. And we haven't started talking about their suppliers.

That IS a lot of jobs.

Interesting thing I have also noticed on my trips to Florida. A lot of midwest folks vacation and retire on the west coast and in places like Orlando. I wonder how the tunes will change, if something happens and this plays out like it might, and suddenly people see the impact beyond just Michigan? I doubt these 50-60,000 people will be coming to Florida any more if they are standing on the unemployment lines, and when does it stop? Probably not for awhile, as these things have a domino effect.

Loss of manufacturing jobs isn't good for anyone in the US.

[roadtrip se]

Bill Vlasic, writing in today's New York Times: "The failure of General Motors, Ford and Chrysler would have far-reaching economic and social consequences. Together, the automakers employ more than 200,000 workers in the United States and provide health care and pensions to more than a million Americans. In addition, their operations are lifelines to 20,000 auto dealers and countless suppliers, and the source of major tax revenue to states and local governments."

[Donziweasel]

Todd, I agree, the implications of Chrysler going under are huge. We are not just talking about the factory workers, but administration, dealers, companies who produce parts that Chysler does not produce themsleves, service workers, tire companies, finaincial companies. It would be way more far reaching than we even realize right now.

[boxy]

Let em die. They haven't consistently made a quality product since the early 70's. IMHO

B

I'd have to disagree with that statement.

In the last 10 years I've owned a SLT 1500 QuadCab, a Durango, a Liberty, and a Caravan.
My parents and my sisters have owned three Neons, a 300M, a PT Cruiser, a couple of Grand Cherokees, and a Grand Caravan.
Not once were we ever let down by any of the vehicles, I'm not sure how we ended up with so many Chrysler products, but it just happened. Unfortunately we have also moved away from Chrysler, they stopped making stuff that suited us.

[gcarter]

I think I've decided to climb on the Ghosn bandwagon. He did do some remarkable things with Nissan.
Something funny to think about......what if we were to see Frog cars on the road here again because of it??:nilly::nilly:

[onesubdrvr]

I think I've decided to climb on the Ghosn bandwagon. He did do some remarkable things with Nissan.
Something funny to think about......what if we were to see Frog cars on the road here again because of it??:nilly::nilly:
My understanding, is that the only reason they aren't here now, is because of pushing regulation for making their computer ports access locations and plug styles (I forget the regulation #), but a buddy of mine who is the fleet manager for town of palm beach was talking to me about it. Basically Renault didn't want to re-tool to meet requirements, was (and still is) making a killing in Europe, so decided to stay there. BTW, my first car was a 1981 Renault LeCar - at a time I was building drag engines for VW's, I was driving around in my LeCar,.... FUN car, rag-top, and as I grew up on the beach in Florida, it couldn't be beat.

Wayne

[joel3078]

Anybody remember back in 1981 or so when Harley Davidson convinced Congress to TAX THE SNOT out of All Imported (Read Japanese) motorcycles over 700cc? The tax was passed on in the Sale Price to the consumer. The TAX decreased a little each year and expired after five years. The first year was pretty hefty.

I guess it worked because Harley is still in business. Probably only slowed down the Japanese a little.

Funny thing about Honda. Back then they could sit around the conference table and come up with a bran NEW motorcycle idea....I think it was the VF-750......With NO common parts with other models, It was on the test track and running 90 days later. :cool!: Postal John

John you should love this one. This year I bought a mint 1985 VF700S (700 version of the V45 Sabre). Always wanted one as a kid and loved the story of sleeving a 750 to make it a 700 to avoid the import tax. Honda's way of telling Harley blow me!

I have a 2007 hemi 1500 quad cab. No problems with it. Had a 2000 Dakota quad cab no problems with it either other than it couldn't tow my black widow very well. It would be sad to see Chrysler and the Mopar stuff go away. What would happen to all those new Charger cop cars!

[Donziweasel]

Did a little more research. Cerebus is shopping Chrysler hard. They want out. Sales are down 25% in the first 9 months of the year. Sounds like they want to break it up since offers for the whole thing are not really coming.

The deal they want with GM is a trade. Chrysler for GM's 49% stake in GMAC finaince. Chrysler is sitting on 11 billion in cash GM wants, and probably desperatly needs.

Nissan/Renualt is another option. Chrysler is already working with them on several projects and the companies have close ties.

No one has yet stepped up to the plate though.

[BUIZILLA]

can Jeep split off and survive on it's own again?

[Donziweasel]

can Jeep split off and survive on it's own again?

Hmmm.....interesting. Jeep is definetly a distinctive and popular brand. I also think they make a decent vehicle. The only problem is parts. Jeep relies heavily on Chysler. For example, the v-8 Hemi. It is the the Jeep Grand Cherokee. If GM trades for Chysler and kills it, then Jeep will either have to manufacture it's own parts, or, buy them off other manufactures. Designing thier own engines, tranny, transfer cases, etc... would be ugly finaincially. Not sure they can do and remain competitive in this economy.

Nissan is interested mainly in the Dodge 1/2 truck platform and Hemi.

By Chrysler buying them, it may mean thier demise. After reading what I did today, I really think that Chrysler may live on in some form, but the Chrysler brands (Chysler, Dodge, Jeep) are going to become extinct.

Also read that when companies disappear, there vehicle lose value so fast it will make your head spin. Oldsmobile was an example. When GM ditched it, any Olds on the road immediatly lost 50% value, with much more to come. Worth hardly anything at all now. Buyer be ware.

[gcarter]

I don't think Jeep has ever been on its own. When I was a kid, they were part of Willis, but that wasn't the beginning. Then there was either Nash, or Studebaker, or Packard, or whatever made up American Motors. Then Chrysler.
I think there was a total of 6 or 7 owners.
And many times there were many other propriety engines and transmissions.

[BUIZILLA]

http://www.allpar.com/weblogs/2008/10/16/chrysler-has-more-for-gm-than-minivans-and-jeeps/

[Donziweasel]

Jim, good read. I agree on many points, but disagree on some. The statement about the best light duty and commercial grade pickups I think is off. The Dodge 3/4 ton and 1 ton truck platform is the oldest of the big three. I personally do not think it is up to GM or Ford's standards.

When the GM and Ford 1/2 ton deisels engines and new 1500 and F-150 come on the market in the next year and a half, Dodge will be really left behind in the 1/2 ton market.

[Donziweasel]

Carl, while I voted that they won't make it, Chrysler has been down and out before. They do seem to fight back when everyone thinks they are down. Problem is not necessarily Chrysler, but Cerebus, who wants out of the auto manufacturing business BAD! Just matters to what lengths they are willing to go to make that happen.

[Carl C]

Carl, while I voted that they won't make it, Chrysler has been down and out before. They do seem to fight back when everyone thinks they are down. Problem is not necessarily Chrysler, but Cerebus, who wants out of the auto manufacturing business BAD! Just matters to what lengths they are willing to go to make that happen. Exactly, it has become clear that Cerebus wants out and they are willing to do whatever it takes even if it means breaking up the company and selling rights, nameplates and assets. Makes you wonder what they were thinking when they bought Chrysler. Who will buy a Chrysler product now that it is almost certain that the company will not exist much longer? I don't see a merger....more like a garage sale. More bad news for Michigan, the former number one boating state:garfield:.

[roadtrip se]

Nobody is commenting that is actually involved in this, just the media churning a story because they smell blood in the water. Yes, there are some facts mixed in, but a lot of connect the dots going on too.

No doubt that the face of Chrysler is going to change, but I sincerely doubt Cerebus is going to part the thing out. It isn't in their best interests of securing a short term ROI to go into fire sale mode. As for the product? Some of it is good, some of it is crap, but EVERYBODY's sales are in the dumpster, so this noise is just the cherry on top.

I would ask for some sensitivity to this cirmcumstance. On a personal level, I am seeing the results of this stuff every day. I have had appointments with people, business friends of mine, where I showed up at their cube and it was empty and the person gone with no warning. I have seen moving boxes in the hall ways waiting for the next round of layoffs. The buildings have every other light turned off and the HVAC is cranked off at noon roasting or freezing everyone as a result. People have taken a dive off of the tenth story balcony in an atrium to their deaths. It is not pretty and the loss of jobs impacts the entire economy, but when you see it for yourself and it impacts your friends and their families, it is a bit different.

As I said earlier here, the hidden truth is that GM is probably in more of a hurt than Chrysler. If things don't turn sooner than later, Ford could probably be the only one left standing intact. Consumer Reports just gave them some great press yesterday for quality improvements, a repeat of last year. They did shelve their small diesel truck plan this week, but these kinds of decisions have been reversed before.

[Carl C]

[quote=roadtrip se;473825) People have taken a dive off of the tenth story balcony in an atrium to their deaths. [/quote]:eek: Wow, if that's true, that is really horrible.:frown:

[TBroccoli]

Chrysler in Newark, Delaware just announced the plant will be closed by the end of the year. About 1,000 employees will lose their job. Bummer.

[Carl C]

Chrysler in Newark, Delaware just announced the plant will be closed by the end of the year. About 1,000 employees will lose their job. Bummer. Yeah, keep buying those Toyotas, guys.:mad:

[Donziweasel]

Didn't hear Ford had shelved the turbo deisel for the F-150. Bummer. Was hoping it would make it into the Expedition. Would replace Boo Boo's Expedition with it. Wonder why they dumped it? It is already a working engine that has been around for a while in Land Rovers.

[Donziweasel]

Can't find anything about them shelving it. Did find some stuff that it was going to be in the Expedition, Navigator, E-series vans, and a smaller option for the Superduty. Specs were impressive- 340hp, 430 lb-ft. Hell, might even switch back to Ford vans if the do proceed with it.

Official name of the truck was the F-150 Mule.

[BUIZILLA]

the V6 Powerstroke in the CF chassis is a helluva workhorse, it's extinct now, parts are already being slowly dropped from production or discontinued, but I haven't seen one failure yet.. I saw one the other day towing a 30' gooseneck, with a 15-18 ton excavator, and he was running every bit of 65 mph in the left lane, in fact he passed me... he had to be grossing 55,000#... I couldn't believe it..

[Donziweasel]

Found it-

http://www.autoblog.com/tag/ford+f-150+diesel/

Man, that sucks. Would have been a great powerplant in the F-150 or Expedition. 430 lb-ft is pretty damn impressive in a 1/2 ton.

[Donziweasel]

Interesting article about the ne 4.5 GM diesel for the 1/2 ton market. Over 300 hp and over 500 lb-ft. Looks like Toyota is dropping thier 1/2 ton diesel as well. Read more about Ford. The are watching and waiting, and have not killed it yet. Watching for what? Probably to see how GM's does with thiers.

http://www.pickuptrucks.com/html/news/gm/fullsize/newdieselsfromgm.html

[BUIZILLA]

GM still touts the anomoly that diesel is .20 to.050/gal cheaper than gasoline in their projections.... they project 135,000 mile cost breakout with that factor.... ohhhhhhh, how wrong they are... right now at +.70 factor it's more like 235,000 mile cost breakout.... if your damm lucky... :nilly:

i'm going back to gas

[Donziweasel]

For me it is not about breaking even. I think in the mountains and at high elevations you will see substantial savings over gas, especailly towing. Also, more power at my altitude with forced induction vs. na.

While savings aren't there, I guess the market will be those who tow, need extra power, and those who just want one to be cool. For me, it is both!:yes:

[chappy]

Anyone else hear that the Dept. of Energy is looking to free up 5 billion to "loan" GM to push a deal through with Chrysler?

[chappy]

http://www.businessweek.com/ap/financialnews/D9434G0G0.htm

Here's the link for my post above.

[roadtrip se]

Editorial from Daniel Howes of the Detroit News. He specializes in the auto industry and is usually spot-on in his assessments of the business.
My view? I can't support this, even with the alternative looming and the impact it will have on folks I work with on a daily basis. There has to be a better way....

Fed help for GM merits tough terms

However Detroit's creative destruction ends -- in a combined GM-Chrysler, in one automaker or none at all -- Michigan will never be the same.

It will be poorer, in perception if not reality. The state's principal industry, Detroit's surviving automaker(s), may end up being wards of the federal government. Michigan's debatable status as guarantor of the middle-class American dream will be irrevocably tarnished, especially if one or more automaker goes bankrupt and undercuts the promise of union protections on the job and in retirement.

This is the real reckoning, a jarring comeuppance that makes the Japanese automotive invasion of a generation ago look like a warm up. At some point, the laws of economics that Detroit's automakers, labor and the politicians spent years ignoring are poised to exact retribution because they always do, eventually. That's why they're called laws.

General Motors Corp., Ford Motor Co. and Chrysler LLC have spent at least the past three years feverishly trying to right-size their business, to reach landmark contracts with the United Auto Workers, to repair badly damaged brands by fielding better cars and trucks. It's all necessary, but not sufficient, if scared consumers stop buying, credit tightens and the pinch of too much debt, not enough revenue and too little cash pushes the companies to the brink.

Which is where they are.

Conventional wisdom holds that a would-be GM-Chrysler deal, under negotiation with Chrysler's owner, Cerberus Capital Management LP, can't get done without help from the Treasury. That American taxpayers are emerging as the lenders of first (and only?) resort says as much about the few financial options of Detroit as it does about the political climate, where public ownership stakes in private industry are justified because the alternative is worse.

A preliminary study by the Ann Arbor-based Center for Automotive Research estimates the failure of Detroit's automakers would cost "hundreds of billions" and eliminate as many as 2 million jobs at the automakers, their suppliers and related businesses. The pitch: It'll be cheaper, less economically disruptive and more politically salable to throw Detroit a Treasury lifeline now than suffer the consequences and clean up the mess later.

Fair point, but the guys atop GM, Ford, Chrysler and the UAW with their collective hands out should be prepared to accept some onerous conditions in exchange for the federal dough -- up to and including putting their jobs, legacies and golden parachutes on the line.

How, the feds should ask, do we measure success? By keeping you out of bankruptcy? Or by setting targets for sales, market share and profitability? That's anathema in this town, which abandoned quarterly earnings guidance because it would hold management accountable for things it could control and things it could not.

Why should the taxpayers have faith that the CEO-led crews who drove these companies to the front door of Treasury, with the undeniable help of skyrocketing oil prices followed by a historic credit crunch, are the right crews (and captains) to drive the automakers back to profitability?

What assurances will the taxpayers get that saving Detroit, or part of it, with their money will result in stronger survivors with more balanced product lines able to operate effectively whether oil is $60 a barrel or $140 a barrel?

How can Treasury justify financing automakers that insist on paying their hourly workers a rich premium over the nation's prevailing manufacturing wage when it's that premium -- and the accumulated benefits that go with it -- that contributed to Detroit's financial predicament?

And how do you square a bailout, because that's what it would be, folks, with the fact that for thousands of Chrysler employees facing the end of the line, their tax dollars would be used to support a company that plans to give them the ax anyway?

Cruel irony doesn't begin to describe it, any of it, but it's a start.

Daniel Howes' column runs Tuesdays, Thursdays and Fridays. He can be reached at (313) 222-2106, dchowes@detnews.com or detnews.com/howes

[Ghost]

I think they are doomed, with or without bailout money. If not Chrysler, at least one of the big 3 will go under. Eventually unemployment will undercut the UAW enough that they will radically renegotiate, or (believe it or not) new companies will spring up non-union. (If the labor is there, and the demand is there, it will happen.)

What part of "turning a profit" as a fundamental requirement for a business do all these people not understand? If it costs more than people are willing to pay for it, it won't sell. Selling it by force to taxpayers is criminal. And unsustainable.

No bailout money! Imagine if everyone had 3 shiny new cars in his closet. When things slowed down, no one would buy a new one. NOR SHOULD HE. That's essentially where we are--we have exhausted the demand for new cars.

The bailout is the equivalent of having the police come to your house, put a gun to your head, and MAKE YOU BUY ONE. Except it's worse--you don't even get a new car in the process.

What a screw job. Marketplace laws are an extension of physics. The bailout is the financial repeal of the law of gravity. It can only fail. And it will make things more painful when that failure happens. This $hit is pure insanity and people are buying it.

[BUIZILLA]

As far as product lineup goes with the Big 3, my opinion is that Ford is best positioned to emerge very strong... they seem, IMO, to have all the right bases covered for market share, regardless of your buying needs. I don't think they need to add, or drop anything. The other 2 have some serious homework to do... I'm serious when I say that.

[Donziweasel]

Buiz, I agree. I read somewhere that the Ford Focus is the best selling domestic car right now. The F-150 is still the best selling 1/2 ton. Fusion is a nice package. For the SUV market, the Explorer and Escape are very popular. Mustangs are hot in the performance car market. Mazda and Volvo are also solid Ford Companies.

Ghost, I agree- no bailout. Damn economy is turning the US into socialism. I don't want to see the US Government own any companies, especailly car companies. Read somewhere that the best alternative is for Chrysler to die and for GM to declare bankruptcy, weather the storm, and rebuild. Hell, airlines are in and out of bankruptcy daily. Works for them, why not GM?

[gold-n-rod]

Read somewhere that the best alternative is for Chrysler to die and for GM to declare bankruptcy, weather the storm, and rebuild. Hell, airlines are in and out of bankruptcy daily. Works for them, why not GM?

Well, for one, millions of late-model car owners are relying on Chrysler and GM to honor their warranties. Airlines don't have that.

Also, the airline industry doesn't have so many layers of suppliers backing them up. Yes a few, but not to the extent that the automakers do.

[zelatore]

As far as product lineup goes with the Big 3, my opinion is that Ford is best positioned to emerge very strong... they seem, IMO, to have all the right bases covered for market share, regardless of your buying needs. I don't think they need to add, or drop anything. The other 2 have some serious homework to do... I'm serious when I say that.


Look! Buiz and I agree!

Somebody make a note of this :)

[Donziweasel]

Oct 28th@ 5:45 PM mountain time Don. :kingme:

[Donziweasel]

Also, the airline industry doesn't have so many layers of suppliers backing them up. Yes a few, but not to the extent that the automakers do.

I don't know Gold-n-rod, hell of a lot of parts from MANY different manufactures in a commercial jet. Some airline are utilizing two different manufactures, Airbus and Boeing, making parts inventory a nightmare. I read somewhere that Airbus alone uses parts from 100's of manufactures. WHat happens when you tell your suppliers you aren't going to pay for them anymore because you are bankrupt? I have first hand experience in this. Delta felt my services were worth it and paid me anyway.

I think this is one reason Southwest has been so successful, one plane, 737. One inventory of parts, one type of aircraft for mechanics to learn to service and repair, etc......

[Ghost]

Well, for one, millions of late-model car owners are relying on Chrysler and GM to honor their warranties. Airlines don't have that.

Also, the airline industry doesn't have so many layers of suppliers backing them up. Yes a few, but not to the extent that the automakers do.

I hear you, and I know it will be painful, AND there is an issue with warranties and such. But if it isn't viable, it really isn't viable. If it is viable and just needs cash in the short term, it should be able to get a loan.

And as wrong as it was in the old Chrysler bailout, at least it was a loan and not a handout. Shouldn't there be a specific "NO LOANS TO CHRYSLER" two-time loser clause? Doesn't this tell people that bailouts don't work? IF we hadn't bailed them out in the first place, maybe Ford and GM would be healthier than they are now. They would be if they ran their businesses well, and they'd have had a leg up without the bailed-out Chrylser to compete with. Or if Chrysler had been able to get a loan from private industry, it would have cost them a lot more, and Ford and GM still would have had a leg up competing with Chrysler, who was paying high interest.

Let me try a different angle that I think makes this more clear. Handouts are just off-the-charts ridiculous, but let's even look at loans and loan guarantees and taking ownership of questionable securities for a minute. Anything lent has both a borrower but also a lender. People are looking at all this stuff as if the government is the source of money. Some are looking at it as a tax. Both of these are the wrong way to think of it.

You're a taxpayer, as am I. Unless you're one of the folks who pays no taxes, this is personal. People need to look at it THIS WAY, because THIS IS THE WAY IT REALLY IS:

Background:
Both sides of the political aisle and the criminal Fed are responsible for the mess, pushed by artificially low interest rates for 20 years, gov't borrowing, and Wall St and the banks. People borrowed recklessly. Rating agencies and financial instrument insurers played an end game around insurance regulations with credit default swaps, and so on. And these folks all got paid and paid big in the short term. They have that cash.

Fast Forward to Today:
Now, the $hit is hitting the fan. In order to help the ailing banks, who will no doubt go misbehave yet again, they need to sell off a bunch of junk securities, otherwise the accounting rules are in the way.

So, the government comes to you, puts a gun to your head, and makes YOU BUY IT. It's junk, and because no one will buy it on its own, they are coming to you under threat of imprisonment or death and making you "buy" it. And you have to buy it at a price someone else sets, and you don't agree to. That's not a purchase, that is THEFT.

Further, they are still artificially keeping interest rates low. They want people to lend money for lots more risky ventures to keep the economy artificially pumped up a while longer. The banks won't do it. They say it's a bad credit risk--something it was their job to say for the last 10-20 years, but didn't.

So once again, the government makes you lend YOUR money to the risky ventures. Banks won't. But your ally, the government, will compel you to lend your money. And you don't even get to make your own deal. In the real world, you would be charging 12-15% interest because of the risk. But you can't. They are making you lend your money, at rates they set, for risky ventures that will fail. THIS TOO IS THEFT.

You've already taken it in the shorts with your investments. Your job is at risk with the failing economy. You may be upside down in your house and in debt all on your own. But they are forcing you to take your cash and lend it out to risky ventures no one in the market will lend to, and do so at super cheap interest rates not based on the risk. Or flat GIVE it away to failing businesses that make bad decisions.

Nothing is stopping private citizens from giving money away to Chrysler or any other business if they want to help. Do whatever you like. But you have to consider this as personal because it is. They are doing it to YOU, a citizen. They are doing it to ME too.

I have enough challenges. Why can't I take what money I have and invest it in what I think is the safest thing I can? Nope. They are forcing me to lend it to people (and even GIVE it away to people) to prop up their failed businesses and investments. It's criminal.

Fast Forward to Tomorrow:
Many or most of the risky businesses will fail anyway. I will lose my job and have to get something that pays a lot less. I will still need to pay my bills. And instead of being able to at least take a nut or two I squirreled away and invested wisely while things were cheap, mitigating some of the financial pain, I will lose every penny they made me give away. Also, the people whose business default on loans will leave me holding nothing, no payback. And the crappy securities that they made me buy from Wall St, because no one would freely buy them, will become worthless. In short, they will take pretty much everything I have and leave me with nothing, to cover the mistakes and misbehavior of others.

These ventures are mostly going to fail. And if not and they are actually viable, they should be able to get loans, at market rates, to tide them over. And the people willing to make those loans should be paid handsomely for taking on those risks.

Pouring more money into failing ventures is EXACTLY WHAT WE SHOULDN'T DO. Rather, we should be pouring it into new ventures that we think will not fail. So what if people's warranties on their cars don't get honored? It sucks, sure. But those things *should* be bonded. And if not, so what? So they lose $1200 or so on average in the value of their warranty, which they can then go buy from a 3rd party warranty company, and they're only out $1200 instead of being out $20,000 to $50,000 for paying for the bailout.





Now given all of that, tell me why:

I should be compelled to give away my money to failing ventures because they outsource their suppliers in multiple layers?
And tell me why I should be compelled to lend my own money out to bad credit risks, at low rates?
(This turned into a bit of a rant--directed at the idiots who put us in this mess, not at you. The outraged tone is intended for the guilty, and for those who are complicit in the bailout.)

[Craig S]

I agree with ya about not propping up a dead horse, but we really don't have a government run directly by the people.

And...about your comment on guilt by both sides of the aisle, I think it interesting (as I'm a liberal) that the Republicans took the brunt of the blame.

Now onto more important matters...should I be worried about the honoring of the powertrain warranty on the Dodge truck? Or should I trade for a Challenger R/T with a receiver hitch!

[gold-n-rod]

I don't know Gold-n-rod, hell of a lot of parts from MANY different manufactures in a commercial jet. Some airline are utilizing two different manufactures, Airbus and Boeing, making parts inventory a nightmare. I read somewhere that Airbus alone uses parts from 100's of manufactures. WHat happens when you tell your suppliers you aren't going to pay for them anymore because you are bankrupt? I have first hand experience in this. Delta felt my services were worth it and paid me anyway.
I think this is one reason Southwest has been so successful, one plane, 737. One inventory of parts, one type of aircraft for mechanics to learn to service and repair, etc......


I was referring to carriers (thought you were, too) NOT manufacturers. I haven't been paying attention. Do the plane manufacturers play the bankruptcy game like the carriers do?

[Donziweasel]

My deal with Delta was interesting. I move people to Salt Lake City when the airport is shut down due to weather for Delta. I was sitting on a 7,000.00 bill a few years ago when they declared bankruptcy. Bankruptcy law says that all exsisting contracts must be honored. I was never under contract, it was an on demand scenario. They refused to pay the bill. Next time the weather hit, they called for busses. I told them to bite me. They said if I showed up at the airport they would have a check ready for me. I told them ok, but I want the check to include the aging bill plus the charges for that days run due to the fact that I had suspended their account. They agreed. Very few times does the little guy win against a big corporation. This was my small victory and it tasted oh so good. Now Delta pays thier bills on time and in full due to the fact that I told them if they ever tried to screw around on a bill again I would never move another soul for them.

[Ghost]

Well done playing the cards while you had them. Nice that they were willing to stiff you as long as they had nothing to lose. I HATE that airline--I've had nothing but trouble with them.

[Donziweasel]

Thanks Ghost. It was a nice victory. I am glad I retained their business because of last year. We broke the all time snow record for JH and had quite a few days of airport shut downs. I bet I did close to $100,000.00 in bus runs to SLC. I bet they were glad I didn't drop them as well. If they can't get people out, or in, it creates a domino scenario. People become stuck for days because Delta will not allocate additional aircraft when the Airport opens back up. People scheduled to leave the day the airport opens back up, get out. This who missed thier departure day because of weather get stuck. There are times when the roads are closed also and I can't get to SLC either. Jackson is booked solid. Becomes ugly. People have no way out, no where to stay, etc....When I can go, I usually take a load down (one coach holds 48 passengers @ 75.00 per passenger) and a load back up. Might run 6-7 busses a day. You would think I would be estatic, but when the weather is bad enough to shut down the airport, I worry about my equipment going over the road in a blizzard. While the coaches are set up for it using "trade" secrets and 30+ years of trial and error, they are still 45,000 pound coaches in a blizzard.

In the end, the money is nice, but they need me more than I need them. They learned that the hard way.:)

[Donziweasel]

Ghost, your gonna love this. Read today the Gov is going to finaince the GM takeover of Chrylser. What the hell?????? GM can't afford to aquire it on thier own, SO the gov is going to fund them to buy a private company??????? I feel sick.

[zelatore]

Aside from the pain of the government backing the deal, I really don't want to see GM own Chrysler. They'll kill 'em off, sure as anything.

[Ghost]

Ghost, your gonna love this. Read today the Gov is going to finaince the GM takeover of Chrylser. What the hell?????? GM can't afford to aquire it on thier own, SO the gov is going to fund them to buy a private company??????? I feel sick.

Wow. This is going to get really messy, and I do mean messy, when they take bailout money and then consolidate. Lots of longtime experienced labor up in MI, among other places. When a company takes painful action on its own to stay in business, it is a fight with labor but the company can at least claim it is just the reality of business.

Once the camel's nose of tax money gets into the tent, people will be more than outraged when their tax money went to bail out the company that is buying another and eliminating their jobs. After all, as taxpayers funding this, how much say do WE have in how things are run? In who gets cut? Etc.

"This business will get out of control. It will get out of control and we'll be lucky to live through it." -Fred Thompson as the Admiral in "The Hunt for Red October"

[Donziweasel]

If GM acquires Chysler, I read this morning, it will cost 35,000 jobs, including 12,000 in Michigan alone.

[roadtrip se]

my home in Michigan is going to be worth more as kindling and/or already on fire, than it is on the market. But there will be a whole lot of people in much worse of a predicament than us running around Detroit, when and if this goes through

When I checked the trade rags late last night, the government money was not a done deal. I can't stand the taste of this, as I have never seen a government program that wasn't full of waste and beaurcracy, not to mention just plain stupidity.

Maybe this will be different. As much as I can't stand the save the persecuted little man rhetoric of Dingel and Levin, they do fight for the auto industry in Michigan. Maybe, sanity will prevail and these guys will make sure there are ways to account for the cash and get the government out when appropriate. What a cluster.

I would still rather see Nissan get a piece and Chrysler stays somewhat independent. The jobs would still be gone, but maybe not as deeply. Interesting thing, my days spent at Nissan and Infiniti over the past couple of weeks have been complete chaos. You would think they are going out of business, by the way they are behaving. Everybody in the business seems to be running around with their hair on fire in a panic.

[gero1]

yazeeemoto

[Ghost]

I just noticed that the poll answers should have a choice E, (All but A above).

Meaning, they will get bailout money, merge with GM, and still not survive...

[motorcity]

The lastest news

http://www.wxyz.com/news/story.aspx?content_id=5c184bd4-5c23-4f56-bf3c-454bcdeb8076

[Craig S]

That last paragraph ain't too rosy!