Quick reality checks: Chrysler, GM, and more
General Motors has not acquired Chrysler - at least not yet.
Chrysler can survive with or without a GM merger. Cerberus has the resources to keep it running.
If GM and Chrysler do not merge, it will not cause them to go bankrupt.
Analysts are unlikely to have prior knowledge of any events. “You will know what happens when they write the press release.” — duster92
Can you trust analysts? Well, consider that up until Chrysler was sold by Daimler, they were still claiming Daimler had saved Chrysler, ignoring any facts that might come up, like massive profits from 1994 until one year after Chrysler was swallowed up and reliable financials became impossible to find. To quote a newspaper article we can’t find now:
“The truth is Daimler did them no favors,” said Jim Hall, managing director of 2953 Analytics of Birmingham, Mich. “They approved products that previous Chrysler management wouldn’t have approved if they were completely drunk and beaten crazy.”
All the publicity is very damaging, especially because the ignorant armchair-theorist consensus is that Chrysler will go bankrupt without the merger; that nobody wants any of its vehicles; and that it has no assets other than the Jeep name. (We’ve already posted the reasons why all that is nonsense.) Still, there is probably going to be fallout from all the speculation. Oh, and to quote BR Miller:
With all the merger, “alliance,” and bailout talk, all customer faith in Chrysler has been shattered. Mix in the fact that Chrysler management was talking about “exceeding targets” and “positive results” while in private they were trying to arrange a merger, and the message to customers is clear: you can’t trust us. Now, the media is spending all its column inches discussing Chrysler as a completely dead company with nothing new in the pipeline to fix its problems.
Automakers are not going to declare bankruptcy to void union contracts. They already pay new employees less than Toyota’s nonunion plants, as far as I can tell from news reports, and veteran workers are not making enough to make the costs of bankruptcy worth the difference. Bankruptcy would cost far more in lost sales and lawyers than it could gain (at least in a few years) in busted-union labor-rate savings, even if the pension plan and health plans could be totally dropped.
Besides, Autoworkers are not, in general, unskilled grunts. They do not build cars like they did in the 1920s at Ford’s Rouge plant. To quote autoworker “st34:”
Most of those assembly line jobs are not easy “pushing a broom” jobs… try working in a plant in the summer when it’s 100 degrees in the building, as the vehicle goes by you have approximately 48 seconds to correctly put all your parts/components on the vehicle or sub assembly, stock your work area, remove dunage/packing material, enter any defects/problems on your terminal and some must make mandatory positive buyoffs on every vehicle into the plant computer system (required for government mandated safety systems). If one part is defective/damaged and does not fit or can’t be used or is stuck in its packaging it puts you behind, people scramble to complete their jobs “in cycle time”. Every job is timed in tenths of a second. Tools start to wear such as philips tips for screws, a DC tool or pneumatic tool will start to fail and run slower increasing your time needed to complete the job but, the line speed remains constant. Some workers must climb inside the car with power tools, and parts complete their man assignments, get out of the vehicle, enter their data, and grab stock for the next job in the 48 seconds.
And then the engineer’s perspective:
I couldn’t do my job without the experience and expertise of the line techs.
That’s not to mention some articles that should be mandatory reading before people start talking about dumping all the union guys… here are just two: Empowered work teams and Engineering the Neon.
Let’s get just a little political for a moment. Regardless of e-mail blasts, I think I can safely say that Barack Obama is not planning to make 60 mpg minicars mandatory, nor will he outlaw any car made before 1980 or having an engine with more than three cylinders. I also believe John McCain will not let GM, Chrysler, and Ford go bankrupt. Let’s be reasonable in what we forward, guys - and let’s run those chain letters by snopes and other anti-hoax organizations a little more often, too!
Finally, all that talk of a big announcement on November 4 — well, so far, that turned out to be a rumor. Perhaps a deliberately orchestrated bit of misinformation — or perhaps something true at the time, but false now. We’ll see tomorrow, but so far, it looks like Chrysler’s independent for a while longer.
The fact that Chrysler is thriving in Canada (where fuel is more expensive and credit is tighter) gives me hope. We can’t have Nardelli and Campi chasing the suppliers away. Cheap overseas parts will be the death of Chrysler.
Well, there’s also the rumored announcement on 11/5, so we’ll have to see if anything happens there, or the mill conjures up a 11/6 date or something.
At this point, still, all I know is Cerberus and GM are/were in very high level talks that are/were more than just tire kicking.
That, and the Detroit Three are at a point where they really, really need to fix things.
Beyond that, I don’t know nuthin’.
This so-called merger will fail, just like the merger with Daimler.
Daimler raped Chrysler and so will GM. Chrysler needs to remain as one and work through its
issues. GM is too big and must become smaller, not larger! Chrysler is the perfect
size and has great new products, from the new Ram,Journey,minivan and Challenger. Chrysler
has a great new Hybrid system and electric cars only 2 years away. New 4 cylinder engines,as well as a new V6 coming.
Cerberus has a responsibility to its community and country to turn this ship around.
Cerberus must go through with making Chrysler a profitable company by
making great products and not piecing Chrysler out.
If the federal gov’t funds billions of dollars for a merger between these 2 company’s,that will cost 200,000 jobs. Then the politicians are idiots! Give them money to keep jobs and create
new products, not lose products and jobs. Hopefully Chrysler stays “Chrysler”!!
Long live MOPAR! Steve…Windsor, Ontario.
I think that President Barack Obama will help out the big 3. Not for mergers, but for growth.
I certainly think Obama will help the “Big Three”. If he is truly serious in helping the American worker and assisting in the retention and creation of production jobs, which is absolutely necessary for any kind of recovery, he WILL find ways to help keep GM, Ford and Chrysler from going belly up.
More and more financial and automotive analysts are coming out of their respective closets; vocalizing their opinion that merger would only serve to help Cerberus and severely damage any real possibility of recovery of the US automobile business, not to mention what it would do to our nations industrial base as a whole.
I have sent emails to all of my legislators and to the White House on this subject. Now I will find out how to get the message through to the Obama camp. Since blocking the Cerberus/GMAC merger (time to call a spade a spade, that’s what it is) will prevent another rip off of the American people by a self-serving financial giant that will do little or nothing to help anyone not in the top “three percent” we hear so much about, his administration should be right there to help. Heck, isn’t that the definition of a Democrat?
Whether it’s too late to save Chrysler is speculation at this point, but its prospects are much brighter now the Cerberus is unlikely to get the government backing for their desire to again defraud the American public.
Most Chrysler dealer employees are already looking for new jobs. If GM gets a hold of Chrysler it will make the Daimler merger look like a slumber party!
Yea…lets all hope this sickening merger dies. And you right Dave. Remember the news paper adds, THE NEXT HUNDRED YEARS. Now these candy butt rich boys at Cerberus put their collective tales between their legs and dump Chrysler with out a fight. Their turning out to be a bigger joke than Daimler.
Yeah Mike I would love to take one of those banners or ads and shove them up there @#!$ And if Obama wants to help the big 3 well he better step in now but he won’t.
He isn’t going to be the president until January. What exactly can he do now? One day after the election, before selecting a cabinet?
PS> You’ll notice he drives a big American car… and he knows what kind it is ;) That said, Democrats are now talking about a second $25 billion loan package, so things ARE moving. This one presumably won’t get held up by the DOE… with the sad-eyed leader claiming to be trying his best to move things along, despite being the one who hires and fires agency bosses.
The sad-eyed bleede…… leader is about the lamest duck I’ve seen in my 65 years on this earth. He doesn’t have enough power with people not directly under his control right now to decide on dinner.
And the people that are directly under his control will all be un-employed in something like 76 days. So just how much do they care?
Bush is correct (amazingly) in stepping back regarding anything not of immediate threat to the security of the United States. His only true remaining duty other than baby-sitting the Oval Office and conducting tours is that of Commander-In-Chief.
Well, eggsactly WHUT kind of big American car is that? Inquiring minds (or weak minds perhaps) want to know! Given the sort of election that we just (IS IT NOT GR8 not TO LISTEN TO CAMPAIGN ADS) came through, I think Mr. Obama could effect a lot of policy simply by coming out and stating what he intends to do.
Bushy? I think he will get the sort of rememberence in history that he enjoys right now. Besides what Mr. Hagan has indicated that he is the lamest “lame duck” he was also lame in pursuit of his agenda that did not suit the country. His intransigence pulled us under, deeply wounded our pride, and cost the lives of some of the greatest of the hope of our future in the modern day heroes that volunteer to go in harms way in the uniforms of our Armed Forces, for a controversial reasoning.
Given a chance to really show that he sees where the deviousness of his policy decisions have lead, he choses now, to NOT do anything to aide the industry that transcends every aspect of our country. Now, he may be right in not supporting Cerberus, however, he will probably NOT be invited to join their board of directors which seems to be old retreaded Republicans who pursued business money without much regard to service connected with people. Just to clarify, this is MY OWN OPINION. And yes, I am being bitter.
What astounds me is that the UAW hasn’t (publicly anyway) raised a finger to block this proposed merger. Their members have a ginormous stake in this. As surely as the sun will rise tomorrow (except for the Seattle area) there will be massive firings on the Chrysler side of the rusty fence should this unholy union be consummated.
And what of the suppliers who’ll go out of business? Trickle down alright, but this trickle will turn into a flood that would make Noah seasick. Who’s going to pick up the slack? Ford? More likely the Japanese. Chrysler MUST be permitted to survive, and short of Cerbe-anus seeing the light the best bet would be a collaboration with Nissan et al. Sorry for the continued beating of the deceased equine but I just had to get that off my chest.
Anyone want a ‘79 St. Regis squad car? LOL
You know….you have to ask yourself, Cerberus has in the past hired Both the Gales from the last real gen Chrysler. They have W Barnhard(spelling)from Daimler/VW, they’ve got the dude from Toyota. All big in the auto industry. And with all that talent the end of Chrysler is what they’ve been there for. They have shut down plant after plant to reduce overhead. They are selling cars and trucks (maybe not as many they want) and still making money. This whole merger stinks of something a little more fishey than we will ever know. I wonder, if this crap with GM goes through, how much will the wheels are Cerberus get in the way of masssive bonus’s?
One thing I have to wonder about is the effect that this proposed effort is likely to have if the merger bites the dust. By essentially putting the corporation up for sale they have already damaged the brand. If it doesn’t work Cerberus has left money on the table. By selling out they have already discounted it. I know it’s hard to keep things like this a secret but they’re loosing money now if they don’t sell out. From what I’ve been seeing in the news it seems likely that this action will kill both companies regardless of how much Cerberus gets from the deal. The money Cerberus says they have was only supposed to keep Chrysler on life support and not GM too. It doesn’t make much difference since there isn’t enough left in either case to develop future products with.
It just looks like a last ditch effort to get out with what they put into it once and for all.
Hey MikeX, this whole thing is about Cerberus getting rich(er) at the expense of Chrysler, GM, their employees, their suppliers and their employees. And you and me for that matter. There is nothing but financial disaster for anyone but Cerberus in the proposed merger of Cerberus and the remaining 49% of GMAC. Cerberus stands to get all the millions of dollars of federal bailout monies that will be heading GMAC’s way. This is important to them otherwise they will have to reach into their own pockets to cover their January expenses. Lord knows, we certainly don’t want the money changers to use their capital to cover their bad business practices when they can use ours.
Meanwhile, everyone else gets what follows the word crank without so much as a kiss from Quayle and company.
Hey John, thanks a lot. Unfortunatly were geting screwed by a what appears to be a bunch of corporate geasers. Not anyone that really loves the suto msrkrt. Especially the Chrysler Corporation.
Let’s review history for a moment: right after WWII, George Mason of Nash understood that there would be a seller’s market for a while in which every manufacturer could sell as many cars as they could build, but that this would soon end and the independents would struggle to survive…so he proposed merging all the little minnows into an ersatz whale. As many of you probably already know this was to be a consortium of Nash/Hudson/Studebaker and Packard (the original format for American Motors)
For this to succeed, they’d have to combine while still healthy because sick companies don’t generally get healthy by joining. And there’s the rub with the GM/Chrysler merger…where is the common sense? There really hasn’t been any applied to this, it’s all about wringing the last drops of blood money out. Just follow the money, in this case to Cerbe-anus’ coffers. When will corporate America ever just do the right thing? After they’ve raped the company who will have a job to buy their products? Myopic gluttonous miscreants.
Y’know, why is everyone fretting over the survival of a *corporate* entity, rather than a living,
breathing, being? Are you guys serious? I like cars, but the companies that make them are still
profit-driven corporations, not fraternal organizations. I refer you to the following:
http://www.counterpunch.org/wright10132008.html
Perhaps a company that allows something like this to happen deserves to die.
Where do I begin? Not to make light of this tragedy but industrial accidents are nothing new, and sadly will continue. This is not the issue here, and if it were then one could make the case that most every industry should shut down to avoid future deaths and injuries. Sorry, not buying into your troll-like attempt to obfuscate the discussion at hand.