Well, the San Francisco Chrysler dealer closed up shop and sent all his vehicles back to the manufacturer today. No word of explanation or advance notice, just "business closed" signs on the doors and the cars on auto haulers out in the street.
The local dealer where I am in the burbs disappeared in the middle of the night about a year ago. The cars actually sat there for a few months getting dustier and dustier before they got hauled away.
No matter what Chrysler has in the way of a turnaround plan, it isn't going to do them much good if all their dealers go out of business first. Seems like of all the domestics, Chrysler has historically been hardest on its dealer body.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
In a 30-minute radius of me, the number of Chrysler dealers has gone from about 6 to 1 in the last year to 18 months. That one seems to do a good business in used cars of all brands. They only have a very small stock of new Chryslers/Dodges (they don't sell Jeep). Indeed, after the "0 payments for 12 months" fiasco, Mitsubishi dealers got by quite well for 2 or 3 years selling mostly used cars. Maybe Chrysler dealers can do the same until Chrysler dealer network is pared down to the appropriate size. I just wonder if it will drop below that point. They DO need some dealers to distribute their vehicles if they hope to remain in business.....
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I suspect that the Chrysler dealers that are staying in business are the ones who have figured out how to run on a load of used car sales. Chrysler right now offers fewer interesting models than any other make - even the Koreans are doing a better job.
2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
I think the Big 3 are on their own. No bailout money. But I also think that there is only going to be the Big 2. I think Chrysler is going to go out of business for good and the only ones who are going to survive are GM & Ford. I only say this because Chrysler is privately owned whereas GM & Ford have majority share holders. Just a prediction?
"Relations between Chrysler's current and former owners turned ugly Wednesday when private equity firm Cerberus Capital Management LP accused Daimler AG of "intentionally and materially" misleading Cerberus before the German automaker sold Chrysler last year.
By making the allegations public, Cerberus appears to be conceding that its Chrysler investment hasn't gone well for the New York private equity firm."
Cerberus didn't know what they were buying when they decided to pick up Chrysler- Cerberus thought it could buy it, touch it up a little bit here and there (drop a few models, dealerships, and assembly plants, clean it up a little) and then flip it for a profit.
I don't think Daimler should be blamed for Cerberus' lack of success with Chrysler- anybody with a decent brain should have known that Daimler was looking to dump Chrysler for a reason, and that any buyer would need to put some serious TLC into the brand before it could become profitable again.
The hedge fund quick fixes don't apply to the automotive business, and this is a classic example.
that we think it's funny that Cerberus messed up and is going to have to eat a bunch a cash, would we? With how much so many of us seem to love Wall Street and hedge-funder's on Edmunds here. :P
"Pressured by lawmakers, the heads of Chrysler and General Motors on Thursday said that they would be willing to revisit the merger talks that ended last month as part of a government-funded restructuring."
Hi Steve, I had suggested to my friends weeks ago that combining the big three into a really BIG one would make sense.That way they could stop competing with each other and make a much more efficient and streamlined corporation.There are many ways that this could work out,just as an example: One could build the luxury types, another the Suvs and such and another the hybrids.Funny just last week there was an article in Newsweek suggesting the same thing.Am I too smart for my own good ? (hee hee)
Well, Obama has hired Hillary, so stranger things have happened. :shades:
I don't see the Ford family going along with a 3 way merger since they'd have to give up lots of control, but they may increase their net worth by running to the sidelines.
I could see Nissan joining in on a tie-in some way too.
I hope all of you moochey self absorbed hyper shoppers are happy. Chrysler killed themselves. Once they started selling their dealer's price info for free ads it was only a matter of time before something like this was going to happen. I am encouraged by the future though. You cheap bastards will reap what you sow. You know for this whole thing to work you people can't be so obsessed about a dealer or salesman making a 2-5% margin on a vehicle and give you some ridiculous amount of money for your trade. Its all about having enough of a margin to take care of a customer after the sale. See then you sell more cars and order more cars. Think about it? How many dealers can afford to sell an average price vehicle $25,000 and not make any money. When it comes to service you same mooches expect free loaners, concierge, lattes for your fat [non-permissible content removed] wives, and lets not forget free WiFi too. I can't wait for the future when you scumbags have no where to shop and the average Dealer will be worth billions not millions. HaHa
I should add that my local Toyota dealer DOES provide free loaners, lattes, and Wi-Fi for service customers - including me, with my $12,000 Echo which I bought for $1800 less than the advertised price. And they don't seem to be too stressed out about it either. mwl may just need some stress management techniques, that's all.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
"Chrysler Financial allows dealers to put money into the cash management account and pays them 2% interest. The money is then used to make payments on the loans dealers take out to buy new cars.
In the letter, Mr. Gilman said more than $1.5 billion has been withdrawn from the CMA fund since July.
"Continued significant levels of withdrawals from CMA could potentially force us to temporarily suspend wholesale funding," he wrote. He asked dealers not to withdraw "beyond what's absolutely necessary."
Speaking of Any bets as to whether they ever reopen?
the article I read on this used an "if" in a rather ominous spot, I thought:
That means Chrysler will drop an additional two weeks of production if workers return on Jan. 19.
It also said this, more ominous stuff: Nardelli told Congress the company would end 2008 with $2.5 billion cash on hand. He said the company will owe suppliers $8.0 billion in the first quarter alone.
........He said Chrysler burned through $1 billion a month in the third quarter.
So the cash burn rate even at little ol' Chrysler, half the size of GM and Ford, is roughly the same as those two giants of industry. I guess the question of IF Chrysler plants will reopen in late January will be answered by what the Prez finally decides about giving the domestics some of the financial bailout money. Certainly by the time Obama takes office it will be too late to save Chrysler if nothing has been done up until then. Of course, I am still wondering if Cerberus will drop some money into Chrysler once its back is REALLY against the wall.....
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I thought I heard a rumor on the 'Net that other Cerberus companies had actually qualified for the original financial bailout from the Treasury department.
Certainly, articles on the subject always play up the angle that Cerberus BY CHOICE will not plow any more money into the company.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
A reporter from a large national newspaper would like to know if the recently announced auto industry bailout makes you more likely to consider purchasing a car from Ford, GM or Chrysler? If you are interested in talking to a reporter about this topic, please respond to jwahl@edmunds.com with your daytime contact information by the end of the day today (Friday, December 19).
"GM will bask in the holiday glow of $4 billion on Dec. 29, another $5.4 billion barely two weeks later and an additional $4 billion in February, for a total of $13.4 billion.
Chrysler gets $4 billion on Dec. 29. That's it.
Unless more funding is forthcoming, Chrysler really has no other choice but to determine the best way to go away."
Cerberus to invest $2 billion in Chrysler NEW YORK (AP) - Cerberus says it will invest the first $2 billion of Chrysler Financial profits back into the financing arm's parent automaker.
Cerberus Capital Management LLC says the funding will back up the $4 billion loan Chrysler is getting from the government as part of its rescue package for the domestic auto industry.
But Cerberus says Chrysler's labor costs must be cut to the level of its foreign competitors and its debt restructured.
If that doesn't happen, it says the automaker will not be able to return to long-term viability or be able to repay its government loan.
In order to make that happen, Cerberus says it will offer equity stakes in the automaker to its unions and creditors in exchange for concessions.
It seems the best option for Chrysler may be to simply sell the company for whatever they can get for it. They need major concessions by the UAW (which won't happen) and their creditors to re-negotiate....all by the end of March. :sick:
Chrysler truly is the dead man walking of the domestic auto industry. And the article talks about something that no-one at high levels seems to be willing to say out loud:
Days before the details of White House's half-hearted bailout became known, the CSM analysts spoke of the advantageous dynamics of the new "Detroit 2:" capacity utilization and flexibility will soar (thanks to, ahem, lots of shuttered Chrysler factories) as some two million or more units of vehicle-assembly capacity is removed from the manufacturing base of the now-Chryslerless domestic auto industry.
I have been thinking that for a while. Nobody is taking into account the huge beneficial effect it will have on the remaining automakers if the weakest one fails and leaves the market. Of course, that STILL won't bring Ford and GM totally out of the woods, as we have lost well over 2 million annual sales this year, but it sure is a start.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I think it is crystal clear now that the past several years of 16M+ new car sales was made possible through incentives, rebates, easy credit ,etc. and not by demand. We have too much capacity and the domestic automakers esp. have over produced for a host of reasons. Your post doesn't surprise at all. No one wants to talk about this because of the loss of jobs. Everyone knows it makes sense but no one wants to talk about more Americans losing their jobs.
the best future for Chrysler is to part it out- sell the 'vans and Ram to Nissan, sell Jeep to somebody, anybody, then turn out all the lights and call it quits.
It's been game over for Chrysler for a long time; Daimler basically raped Chrysler...
So said Chrysler CEO Nardelli. The tip-off will come if and when Chrysler plants reopen. I hope they do, and that Chrysler claws its way back to viability again. It would be nice if all three domestic companies survive and, eventually, thrive again. The odds are long, but one can hope.
I've heard that Nissan is going to quit building the Quest minivan (along with Armadas and QX56s). The Canton MS factory is switching over to commercial truck production. link
I could see VW bidding for the Caravans. Unless they decide to redo the Routan in-house after seeing how Chrysler has been building them.
GMAC, 51% owned by Cerberus, is now a bank holding company meaning that they can get TARP money to use for financing car loans and leases. That's going to help GM too. (BNET)
Well, given that Nissan hasn't really been putting much work into the Quest (only a light refresh since its introduction in 2004...) being able to buy the designs off of Chrysler and then reworking it to suit themselves might be a cost-effective way to stick around in the minivan business.
The Quest logs so little in sales, and its resale is far worse than most other Nissans, that it might simply be worth dumping anyways, though.... Nissan hasn't had much luck with minivans.
The Routan is a curious case; I don't see why VW would want to get into a market that is declining every single year due to 7/8 passenger crossovers becoming better and better. Why not just develop their own crossover, or engineer the next Touareg to seat 7?
The Quest has been around since '92 or so, but back until ~'04 it was built by Ford in Ohio for Nissan alongside the Villager. My '99's drive train was shipped over from Japan I think.
I could see Nissan bringing over a version of the Renault Espace vans instead of chasing after the Caravan, but having the factory and tooling set up would be an advantage. And the Caravan brand is still worth something.
The Routan is curious. Lots of minivan fans like me were disappointed that VW didn't do the Microbus concept that they floated a few years back.
hmm, just thought of something. If Chrysler goes dark, maybe I could pick up a Grand Caravan for dirt cheap and take it to the VW dealer for service if a local mechanic got stuck on a problem. Might be worth taking a flyer on. Too bad they quit making the short wheel base one a while back.
"Chrysler is facing a backlash from taxpayers and conservative groups after the ailing auto company took out a series of full-page newspaper ads last week to thank Americans for "investing" in the company through the government's $17.4 billion auto industry bailout plan."
How about if all of the auto companies receiving funds from our tax money cutting back,if not totally eliminating TV ads? Surely dealer advertising should suffice.New models can easily be introduced on the internet web- site.
Comments
The local dealer where I am in the burbs disappeared in the middle of the night about a year ago. The cars actually sat there for a few months getting dustier and dustier before they got hauled away.
No matter what Chrysler has in the way of a turnaround plan, it isn't going to do them much good if all their dealers go out of business first. Seems like of all the domestics, Chrysler has historically been hardest on its dealer body.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I only say this because Chrysler is privately owned whereas GM & Ford have majority share holders. Just a prediction?
By making the allegations public, Cerberus appears to be conceding that its Chrysler investment hasn't gone well for the New York private equity firm."
Cerberus claims it was misled in deal for Chrysler. (Yahoo)
I don't think Daimler should be blamed for Cerberus' lack of success with Chrysler- anybody with a decent brain should have known that Daimler was looking to dump Chrysler for a reason, and that any buyer would need to put some serious TLC into the brand before it could become profitable again.
The hedge fund quick fixes don't apply to the automotive business, and this is a classic example.
2021 Kia Soul LX 6-speed stick
You can read Chrysler's plea to the Congress here. (pfd file)
At Insistence of Testy Lawmakers, GM and Chrysler Reconsider a Merger
I had suggested to my friends weeks ago that combining the big three into a really BIG one would make sense.That way they could stop competing with each other and make a much more efficient and streamlined corporation.There are many ways that this could work out,just as an example: One could build the luxury types, another the Suvs and such and another the hybrids.Funny just last week there was an article in Newsweek suggesting the same thing.Am I too smart for my own good ?
I don't see the Ford family going along with a 3 way merger since they'd have to give up lots of control, but they may increase their net worth by running to the sidelines.
I could see Nissan joining in on a tie-in some way too.
THAT wouldn't last long before it imploded.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Government aid won't save Chysler (Straightline)
I should add that my local Toyota dealer DOES provide free loaners, lattes, and Wi-Fi for service customers - including me, with my $12,000 Echo which I bought for $1800 less than the advertised price. And they don't seem to be too stressed out about it either. mwl may just need some stress management techniques, that's all.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
So whats your point?
In the letter, Mr. Gilman said more than $1.5 billion has been withdrawn from the CMA fund since July.
"Continued significant levels of withdrawals from CMA could potentially force us to temporarily suspend wholesale funding," he wrote. He asked dealers not to withdraw "beyond what's absolutely necessary."
Chrysler Warns Dealers About Loans to Fund Car Inventories (WSJ - may be a flaky link)
Any bets as to whether they ever reopen?
the article I read on this used an "if" in a rather ominous spot, I thought:
That means Chrysler will drop an additional two weeks of production if workers return on Jan. 19.
It also said this, more ominous stuff:
Nardelli told Congress the company would end 2008 with $2.5 billion cash on hand. He said the company will owe suppliers $8.0 billion in the first quarter alone.
........He said Chrysler burned through $1 billion a month in the third quarter.
So the cash burn rate even at little ol' Chrysler, half the size of GM and Ford, is roughly the same as those two giants of industry. I guess the question of IF Chrysler plants will reopen in late January will be answered by what the Prez finally decides about giving the domestics some of the financial bailout money. Certainly by the time Obama takes office it will be too late to save Chrysler if nothing has been done up until then. Of course, I am still wondering if Cerberus will drop some money into Chrysler once its back is REALLY against the wall.....
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
They may have to sell or hock some performing assets to raise the dough to fund Chrysler. They may decide to cut their losses instead.
Certainly, articles on the subject always play up the angle that Cerberus BY CHOICE will not plow any more money into the company.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Chrysler gets $4 billion on Dec. 29. That's it.
Unless more funding is forthcoming, Chrysler really has no other choice but to determine the best way to go away."
It May Not Be Bankruptcy, But Chrysler Deconstruction Inevitable (AutoObserver)
Cerberus to invest $2 billion in Chrysler
NEW YORK (AP) - Cerberus says it will invest the first $2 billion of Chrysler Financial profits back into the financing arm's parent automaker.
Cerberus Capital Management LLC says the funding will back up the $4 billion loan Chrysler is getting from the government as part of its rescue package for the domestic auto industry.
But Cerberus says Chrysler's labor costs must be cut to the level of its foreign competitors and its debt restructured.
If that doesn't happen, it says the automaker will not be able to return to long-term viability or be able to repay its government loan.
In order to make that happen, Cerberus says it will offer equity stakes in the automaker to its unions and creditors in exchange for concessions.
It seems the best option for Chrysler may be to simply sell the company for whatever they can get for it. They need major concessions by the UAW (which won't happen) and their creditors to re-negotiate....all by the end of March. :sick:
And then there were 2......
Days before the details of White House's half-hearted bailout became known, the CSM analysts spoke of the advantageous dynamics of the new "Detroit 2:" capacity utilization and flexibility will soar (thanks to, ahem, lots of shuttered Chrysler factories) as some two million or more units of vehicle-assembly capacity is removed from the manufacturing base of the now-Chryslerless domestic auto industry.
I have been thinking that for a while. Nobody is taking into account the huge beneficial effect it will have on the remaining automakers if the weakest one fails and leaves the market. Of course, that STILL won't bring Ford and GM totally out of the woods, as we have lost well over 2 million annual sales this year, but it sure is a start.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
It's been game over for Chrysler for a long time; Daimler basically raped Chrysler...
I could see VW bidding for the Caravans. Unless they decide to redo the Routan in-house after seeing how Chrysler has been building them.
GMAC, 51% owned by Cerberus, is now a bank holding company meaning that they can get TARP money to use for financing car loans and leases. That's going to help GM too. (BNET)
The Quest logs so little in sales, and its resale is far worse than most other Nissans, that it might simply be worth dumping anyways, though.... Nissan hasn't had much luck with minivans.
The Routan is a curious case; I don't see why VW would want to get into a market that is declining every single year due to 7/8 passenger crossovers becoming better and better. Why not just develop their own crossover, or engineer the next Touareg to seat 7?
I could see Nissan bringing over a version of the Renault Espace vans instead of chasing after the Caravan, but having the factory and tooling set up would be an advantage. And the Caravan brand is still worth something.
The Routan is curious. Lots of minivan fans like me were disappointed that VW didn't do the Microbus concept that they floated a few years back.
hmm, just thought of something. If Chrysler goes dark, maybe I could pick up a Grand Caravan for dirt cheap and take it to the VW dealer for service if a local mechanic got stuck on a problem. Might be worth taking a flyer on. Too bad they quit making the short wheel base one a while back.
Chrysler Faces Criticism for Full-Page 'Thank You' Ads (Fox)
Besides, people coming to Edmunds rely on those car ads to help narrow down their choices.
Pretty awesome design for a Volt competitor.....