Over for Chrysler?

[Captain KRM P5]

http://www.msnbc.msn.com/id/28284256/

every single factory closed for at least a month. how much do you want to bet that 30 days becomes forever? no one knows how financially solvent privately owned chrysler is or is not, and their parent company has a history of dissecting and selling off properties when the going gets tough.

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DETROIT - Chrysler LLC said Wednesday that it is closing all 30 of its manufacturing plants for a month starting Friday as it seeks to counter the most severe downturn in U.S. auto sales in more than two decades.

By extending the traditional two-week holiday shutdown period, the struggling Auburn Hills, Mich.-based automaker can adjust production to slowing demand and conserve cash.

In a statement Wednesday, Chrysler said tighter credit markets are keeping would-be buyers away from its showrooms. The company said its dealers are unable to close sales for buyers due to a lack of financing, and estimate that 20 to 25 percent of their volume has been lost due to the credit situation. Sales in November slid 47.1 percent.
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Chrysler and larger rival General Motors Corp. have warned they could run out of cash within weeks without financial aid from Washington. Chrysler has said its cash will drop to $2.5 billion by Dec. 31, the minimum needed to meet payroll, pay suppliers and run the company. It would have trouble paying bills after the first of the year.

Operations will be idled at the end of the shift on Friday, Dec. 19th shift. the earliest plants will reopen is Jan. 19, 2009. A few plants will reopen on Jan. 26.

Chrysler is seeking $7 billion in government loans as it tries to survive the recession and the worst U.S. auto sales slump in 26 years. For the first 11 months of this year, Chrysler sales are down 27.7 percent to 1.4 million vehicles from 1.9 million for the same period last year.

With the U.S. sales slump expected to continue into January, traditionally one of the slowest sales months of the year, the company has little revenue coming in and must pay suppliers $7 billion every 45 days.

In the case of some plants, such as the Toledo Jeep plant in Ohio, operations will resume January 26, but with one less shift. More than 750 workers are being cut on the second shift at the Toledo North plant, said Dan Henneman, United Auto Workers union official for Local 12.

Chrysler’s Jeep Liberty, Nitro and Wrangler are assembled at the Ohio plants. Sales of the company’s Jeep-brand vehicles fell 41.8 percent in November to 20,302 units.

Henneman said 755 people worked the shift. About 550 workers took a retirement package and 200 will be indefinitely laid off.

General Motors Corp. and Ford Motor Co. have announced extensions of their holiday shutdowns as well.

Chrysler is privately held, with 80.1 percent owned by New York private equity firm Cerberus Capital Management LP.

 

[NVP5White]

http://www.msnbc.msn.com/id/28284256/

every single factory closed for at least a month. how much do you want to bet that 30 days becomes forever? no one knows how financially solvent privately owned chrysler is or is not, and their parent company has a history of dissecting and selling off properties when the going gets tough.

This is concerning, but must be taken in context. I think UAW typically gets two weeks off during the Holidays so this is just an additional 2 weeks vacation...paid, of course. Thanks UAW!

The other worrying news of the day is, well, the lack of any bailout announcement. Bush was supposed to make an announcement Wednesday but didn't. The fact that the Treasury is doing a more thorough investigation than did Congress is both welcome news [for taxpayers] and worrisome [for Chrysler/GM].

IMO, I think GM is facing Chapter 11 restructuring, while Chrysler will elect to go Chapter 7 liquidation.

 

[skylar2ups]

+1

And the only people that are going to miss Chysler are it's workers. Which I do feel bad for.

 

[EMPIRE]

Worse time of the year for anyone to lose their job. It's only going to get worst from here on out

 

[ForceFed]

Nope...Not gone forever...Ford is also Closing 10 plants for an extra week.
Its just due to slow sales from the current Economic situation.

Its cheaper to pay the workers to stay home than to run plants for cars that arent selling or in Immediate need.

Smart moves if you ask me.

 

[skylar2ups]

Nope...Not gone forever...Ford is also Closing 10 plants for an extra week.
Its just due to slow sales from the current Economic situation.

Its cheaper to pay the workers to stay home than to run plants for cars that arent selling or in Immediate need.

Smart moves if you ask me.

Yes but Ford made money this year and Chysler didn't... they are going away, they might keep Jeep but thats it! Maybe just the van too. GM is doing better then Chrysler also.

 

[ForceFed]

I doubt any of them are going away..the gov't will not allow it....Mark my words.

 

[skylar2ups]

I doubt any of them are going away..the gov't will not allow it....Mark my words.

Yeah I guess they would want to protect them. But Chrsyler needs a major change, same with Dodge and GM needs to loose some brands Saturn for sure, and Pontiac seeing as it's just Chevys... and I don't see why they had to make the new Malibu when it is built on the same plateform as the Aura... they make dumb choices. Plus Hummer is for sell! And Ford needs to get rid of Mercury!

 

[ForceFed]

I agree...They need to wittle down their products and focus more.

 

[Captain KRM P5]

I doubt any of them are going away..the gov't will not allow it....Mark my words.

you can bailout a company as often as you want (this would be twice in twenty years for chrysler) but ultimately the consumer is going to determine if the company stays afloat by buying or not buying their products. fact of the matter is, the big three have had the wrong product mix, wrong long term goals, wrong infastructure and vastly unbalanced union relations in comparison to every other auto manufacturer out there.

what kills me is this - chrysler is a privately held company that by law does not have to release any financial statements to the public. no public testament of assets, liabilities, losses, earnings and of course - how they spend their money. parent company Cerberus has billions of tangible cash on hand. so tell me why the American public should be bailing out a privately held entity when there is going to be zero accountability and their own corporate parent is unwilling to inject funds into what they perceive as a failing investment? it amounts to little more than using tax dollars to prop up a bad business. sort of like welfare checks being used to buy booze for an alcoholic - which would be foolish if legal - its publicly funded enabling for a company drunk in its own stupidity.

i'm not against some form of assistance to the industry. i do think that freebies with no accountability and transparency is wrong. we're going to give money into the hands of the same misguided idiots that drove these companies into the ground to begin with. the least we can demand is that the funds are paid back, with interest, and that there is a keen amount of oversight.

 

[Kymerik]

http://www.msnbc.msn.com/id/28284256/

every single factory closed for at least a month. how much do you want to bet that 30 days becomes forever? no one knows how financially solvent privately owned chrysler is or is not, and their parent company has a history of dissecting and selling off properties when the going gets tough.

-----------------------------

DETROIT - Chrysler LLC said Wednesday that it is closing all 30 of its manufacturing plants for a month starting Friday as it seeks to counter the most severe downturn in U.S. auto sales in more than two decades.

By extending the traditional two-week holiday shutdown period, the struggling Auburn Hills, Mich.-based automaker can adjust production to slowing demand and conserve cash.

In a statement Wednesday, Chrysler said tighter credit markets are keeping would-be buyers away from its showrooms. The company said its dealers are unable to close sales for buyers due to a lack of financing, and estimate that 20 to 25 percent of their volume has been lost due to the credit situation. Sales in November slid 47.1 percent.
Story continues below ↓advertisement | your ad here

Chrysler and larger rival General Motors Corp. have warned they could run out of cash within weeks without financial aid from Washington. Chrysler has said its cash will drop to $2.5 billion by Dec. 31, the minimum needed to meet payroll, pay suppliers and run the company. It would have trouble paying bills after the first of the year.

Operations will be idled at the end of the shift on Friday, Dec. 19th shift. the earliest plants will reopen is Jan. 19, 2009. A few plants will reopen on Jan. 26.

Chrysler is seeking $7 billion in government loans as it tries to survive the recession and the worst U.S. auto sales slump in 26 years. For the first 11 months of this year, Chrysler sales are down 27.7 percent to 1.4 million vehicles from 1.9 million for the same period last year.

With the U.S. sales slump expected to continue into January, traditionally one of the slowest sales months of the year, the company has little revenue coming in and must pay suppliers $7 billion every 45 days.

In the case of some plants, such as the Toledo Jeep plant in Ohio, operations will resume January 26, but with one less shift. More than 750 workers are being cut on the second shift at the Toledo North plant, said Dan Henneman, United Auto Workers union official for Local 12.

Chryslers Jeep Liberty, Nitro and Wrangler are assembled at the Ohio plants. Sales of the companys Jeep-brand vehicles fell 41.8 percent in November to 20,302 units.

Henneman said 755 people worked the shift. About 550 workers took a retirement package and 200 will be indefinitely laid off.

General Motors Corp. and Ford Motor Co. have announced extensions of their holiday shutdowns as well.

Chrysler is privately held, with 80.1 percent owned by New York private equity firm Cerberus Capital Management LP.

Thank god. I hope this does become permanent!!!

 

[LinuxRacr]

you can bailout a company as often as you want (this would be twice in twenty years for chrysler) but ultimately the consumer is going to determine if the company stays afloat by buying or not buying their products. fact of the matter is, the big three have had the wrong product mix, wrong long term goals, wrong infastructure and vastly unbalanced union relations in comparison to every other auto manufacturer out there.

what kills me is this - chrysler is a privately held company that by law does not have to release any financial statements to the public. no public testament of assets, liabilities, losses, earnings and of course - how they spend their money. parent company Cerberus has billions of tangible cash on hand. so tell me why the American public should be bailing out a privately held entity when there is going to be zero accountability and their own corporate parent is unwilling to inject funds into what they perceive as a failing investment? it amounts to little more than using tax dollars to prop up a bad business. sort of like welfare checks being used to buy booze for an alcoholic - which would be foolish if legal - its publicly funded enabling for a company drunk in its own stupidity.

i'm not against some form of assistance to the industry. i do think that freebies with no accountability and transparency is wrong. we're going to give money into the hands of the same misguided idiots that drove these companies into the ground to begin with. the least we can demand is that the funds are paid back, with interest, and that there is a keen amount of oversight.

(mswerd)+1!

 

[Scott]

Yeah I guess they would want to protect them. But Chrsyler needs a major change, same with Dodge and GM needs to loose some brands Saturn for sure, and Pontiac seeing as it's just Chevys... and I don't see why they had to make the new Malibu when it is built on the same plateform as the Aura... they make dumb choices. Plus Hummer is for sell! And Ford needs to get rid of Mercury!

Dodge is part of the Chrysler group.
GM has already discussed shedding Saab, GM, Pontiac, Saturn, and Hummer.
Ford is hanging in there. They are strong enough both in America and overseas to keep themselves afloat for now. However, I wouldn't be surprised to see them part ways with some of their more upscale brands such as Aston Martin, Jaguar, and Land Rover.

 

[coolmazda5]

Chrysler's Hidden Coffers...

I was listening to this on the radio yesterday. Interesting, and sad...

When I wrote about the bailout blunders of the auto industry two weeks ago, I thought the Big Three had most likely topped out on the political outrage meter. But that was before the shady story of Cerberus, the uber-connected private equity firm that owns Chrysler, reared its three ugly heads over the weekend.

Buried on the business page of The New York Times Saturday were the details of Detroit's biggest snow job yet--literally as well as figuratively. Turns out that Cerberus CEO John Snow, who spent three-and-a-half lackluster, and some might say lap-doggish, years as President Bush's second Treasury secretary, is leading a who's who of crony capitalists in a lobbying campaign for a taxpayer bailout to "salvage Cerberus' investment in Chrysler."

That's right. Not to save the jobs of Chrysler employees or America's disappearing manufacturing base, mind you, but to prevent "one of the world's richest and most secretive private investment companies" from having to take a relatively modest financial hit and use some of its own capital to prop up the smallest of the major automakers.

Of course, Cerberus is sparing no expense to spare their investors any exposure. Together with Chrysler, it has spent $7 million to hire such high-rent lobbyists as Dan Quayle (who runs one of Cerberus' international units), former Sen. John Breaux (D-La.) and former Bush legislative liaison David Hobbs. Their goal: $7 billion from the auto industry bailout package Congress is working on now and another $8.5 billion in loans from the Energy Department that have already been authorized.

The more I dug into this private duplicity, the more nostalgic I got for the PR stupidity of the Big Three CEOs and their corporate jets. It smells that bad of boondoggle. And even worse, somehow this stink has largely escaped the detection and scrutiny of the bipartisan leadership of Congress. Indeed, both sides seem ready to compound their complicity in the lousy deals that Henry Paulson cut in the Wall Street bailout by handing over billions more to Chrysler without forcing the Snow men at Cerberus to show why they need it.

At a bare minimum, there is something deeply unseemly and unsettling about one influence-peddling ex-Treasury secretary using his special access to personally lobby his even more bank-beholden successor for favors. If I were running the House or Senate banking committees, I would be asking some tough questions about this conflict of interest cornucopia before giving Chrysler a dime--starting with what kind of financial connections Paulson's old firm, Goldman Sachs, has to Cerberus.

But that's the least of it. I am not a finance expert, but what makes this episode so outrageous is that even a casual observer can see what a taxpayer ripoff Cerberus appears to be getting away with--but Congress and the Bush administration somehow cannot or will not. Why are they unable tell the obvious difference between General Motors (nyse: GM - news - people ) and Chrysler? GM is broke, can't get a loan and is actually facing an emergency. Via Cerberus, on the other hand, Chrysler has access to loads of capital, and the only thing collapsing is its credibility.

Source:
http://www.forbes.com/2008/12/09/chrysler-cerberus-bailout-oped-cx_dg_1210gerstein.html

 

[coolmazda5]

I read that they are also working on the new logo:

 

[skylar2ups]

Dodge is part of the Chrysler group.
GM has already discussed shedding Saab, GM, Pontiac, Saturn, and Hummer.
Ford is hanging in there. They are strong enough both in America and overseas to keep themselves afloat for now. However, I wouldn't be surprised to see them part ways with some of their more upscale brands such as Aston Martin, Jaguar, and Land Rover.

I know that it's Chysler-Jeep-Dodge...

Ford doesn't own any part in Aston Martin, Jaguar, or Land Rover anymore... they sold those a couple years back because they saw this coming and they knew that was the only way to keep their heads above water, thats why Ford is doing much better then Chrylser and GM. And why they are not asking for any tax payers money! Ford is just having trouble because of the market, their cars are very good (now) fit and finish, safety, and reliability are all way up from past model years.

They are bringing over euro Fords, and in talks to get rid of Mercury. I think Ford is doing everything right and people are being to hard on them!

 

[skylar2ups]

I read that they are also working on the new logo:

Blahahahahahahahaha

 

[Captain KRM P5]

Ford mortgaged just about everything it had and is sitting on a load of cash they burn through. GM and Chrysler are victims of their own arrogance and distinct lack of foresight since the 1970s. Here is what I think (feel free to disagree) needs to happen for the automakers to turn it around;

1 - United Auto Workers. Sorry boys, the union needs to go. We're talking about a group of people so blatantly short sighted that they'd rather see these companies go under than keep them afloat, and in turn keep jobs for their constituents. If there was even a hint that they were realistically willing to make actual concessions, I wouldn't advocate that. But the fact is they are begging for bailout dollars as much or more than the Big Three are because that would mean - at least temporarily - they'd sit pretty with their existing arrangements and sacrifice nothing at the partial expense of the tax payer. Japanese and Korean car companies run union free factories here in the United States with comparable pay and benefits while the Big Three close down and move jobs to Mexico and Canada. Sadly ironic.

2 - Brand Consolidation and Dissolution. The American car companies are completely punch drunk stupid when it comes to marketing a car. Platform sharing is fine when there is a reason for it. Look at the processes companies take when they build, release and sell a car. Toyota looks at the pluses and minuses and refines the product. GM takes a successful product and figures rebadging and regrilling it for another make is the way to go. Every make should have a purpose. Chevy should be geared for the middle America family car crowd. Cadillac should be a luxury car division. Saturn should focus on inexpensive, economical, no nonsense cars. Pontiac should be a sports car brand. There is no need for a Pontiac G5 or Torrent. Cadillac does not need a pickup truck. Saab does not need its own Trailblazer. GMC and Buick have ZERO reason for existence other than to sell carbon copies of cars made under two or three other names. Same goes for Mercury - kill it. The only reason this hasn't been done already is because the Big Three are afraid of pissing off the dealer franchise owners. Buy the contracts out, offer to swap in another brand that makes money and sells cars and get your heads out of the closed door focus group mentality and into the fast lane to common sense. Sure, people were sad to see Plymouth and Oldsmobile go. But in every sense, those two names were just that - names. Neither one had a unique car to its stable and the brand damage had long killed any hope of anyone reviving former glory.

3 - Management. Clean house, hire people who know what it means to tough it out and people who care about turning a company around. People like Lee Iacocca or Jack Welch. Chrysler has put its faith in a guy who systematically nearly ruined Home Depot and left its stock at dismal levels, who took a massive payout on his way out the door. The way management is hired, paid and not held accountable is a major reason these companies are failing. And now, the government wants to write them blank checks that they'll make decisions with. Bad decisions will not become good decisions based on the amount of money in the bank.

4 - Build better cars. This alone would have not only prevented this mess, but would have kept the competition in check for decades. Quality has come a long way. There is room for improvement. But you have to build cars that people want. Cars that don't rely on decades old technology. Cars that look good and drive good. Not hideous plastic clad amalgrams of geometry like the Aztek or the Avenger. The peceived quality gap keeps consumers away from domestic showrooms. When you are discounting cars and cannot move them while Toyota has no problem clearing lots of full priced cars, you need to know why that is. And Detroit seems mystifyingly clueless.

 

[altspace]

 

[tunersteve]

you can bailout a company as often as you want (this would be twice in twenty years for chrysler) but ultimately the consumer is going to determine if the company stays afloat by buying or not buying their products. fact of the matter is, the big three have had the wrong product mix, wrong long term goals, wrong infastructure and vastly unbalanced union relations in comparison to every other auto manufacturer out there.

what kills me is this - chrysler is a privately held company that by law does not have to release any financial statements to the public. no public testament of assets, liabilities, losses, earnings and of course - how they spend their money. parent company Cerberus has billions of tangible cash on hand. so tell me why the American public should be bailing out a privately held entity when there is going to be zero accountability and their own corporate parent is unwilling to inject funds into what they perceive as a failing investment? it amounts to little more than using tax dollars to prop up a bad business. sort of like welfare checks being used to buy booze for an alcoholic - which would be foolish if legal - its publicly funded enabling for a company drunk in its own stupidity.

i'm not against some form of assistance to the industry. i do think that freebies with no accountability and transparency is wrong. we're going to give money into the hands of the same misguided idiots that drove these companies into the ground to begin with. the least we can demand is that the funds are paid back, with interest, and that there is a keen amount of oversight.

Ken, I totally agree with you. The American public should not be responsible for Chrysler. There is absolutely no reason why big daddy Cerebrus can't bail them out. Why not? My opinion is simple...corruption. Why did they hire Nardelli after he basically ran HD into the ground and had his pockets lined? That right there should tell you something. There were far better and more ethically sound people out there, and that's the best they could come up with? C'mon, that's bulls***.

Dodge is part of the Chrysler group.
GM has already discussed shedding Saab, GM, Pontiac, Saturn, and Hummer.
Ford is hanging in there. They are strong enough both in America and overseas to keep themselves afloat for now. However, I wouldn't be surprised to see them part ways with some of their more upscale brands such as Aston Martin, Jaguar, and Land Rover.

I'm a little bias to Ford, but here's what I thought was gonna happen over the past few years. I honestly thought that GM was going to be the strong one of the bunch. They were turning out cars that were winning awards, fresh designed, and economical. Ford was showing a little too much 'too little, too late' in most of its categories, which made me think they would hold on, but just barely. Now, it seems that GM blew through cash to make things, but didn't think long-term, and basically dug their own grave.

We can't have any of these three go down, because it truly will turn out to kill all of them. It's like each of them have a killswitch to kill the other, don't realize it. If one goes, the suppliers raise prices to cover, leeching cash out of the remaining ones, and eventually crippling them. This isn't gonna be an overnight fix, but a long, hard road to recovery. I really hope that we can see them make it out of this, and learn their lesson (a pipe dream).