Comments on: Chrysler vs BMW: survival

By: Dave

Dave — Thu, 01 Jun 2006 17:45:03 +0000

Some companies do sit on cash – those who know they’ll need it in lean times. GM has a massive cash reserve, believe it or not.

Chrysler’s biggest profitmaker then was probably Chrysler Credit, a massive moneymaker not unlike GMAC (except of course it didn’t do home mortgages). Now it delivers its massive profits directly to Daimler in Germany.

Regarding the current losses, how does that have a bearing on pre-merger Chrysler? Back then they were intensely profitable, and didn’t have to use expensive Mercedes parts in each car. I doubt the LX is as profitable as the LH – there’s a reason Mercedes cost so much and yet don’t earn Mercedes itself any profits, quite aside from the archaic management of their factories. The third generation LH would have been rear wheel drive and Hemi powered – just like the current ones – but I believe it would have been much cheaper to make, albeit less capable in turns.

By: Lloyd

Lloyd — Thu, 01 Jun 2006 17:38:06 +0000

Well, I checked my last Chrysler annual report, the last one before the merger. Sure enough, assets exeeded liabilities by 11.5 billion dollars. But cash? Nope. Mostly value of plants, tools, inventory, future tax credits, consumer loans, etc. (Plus there was a big unfunded pension liability not included.) Companies don’t sit on cash! They invest it or pay it to stockholders (or these days, to CEOs who retire).

Here’s an interesting tidbit from the news today:

“Nissan, Toyota and Honda each earned more than $1,200 before taxes on every vehicle they sold in North America in 2005. In contrast, Chrysler Group earned $223, while Ford lost $590 and GM lost $2,496 on each vehicle. This reflects differences in health care and pension costs, as well as rebates and low-interest financing used to cut inventories.”

By: Dave

Dave — Wed, 31 May 2006 00:36:17 +0000

“I keep seeing that “12 billion dollars in cash.” Where do you get that? Chrysler’s finances were so bad at the time, they had to merge to stay afloat. And that’s Lutz saying that in his book.”

I see that in every report that was published at the time – well, between $8 and $14 anyway, and by the way, I don’t recall seeing that in Lutz’s book.

Optima – yes, and very comfortable generic Japanese/Korean. Nicer than the Camry whicih is the BEST SELLER in case you hadn’t noticed.

Ram vans – no question and I said I don’t balme them for killing it off, though investment might’ve been nice.

I never said Chrysler lost money BEFORE the merger becasue they had to support Mercedes.

I’m tired of this…