It's all about trying to save as many jobs as possible. Also trying to do as much as possible to save the US auto industry without a complete government takeover. Right now, our money is only dragging out this saga. At least Presidents Obama and former President Bush can save they tried to save GM and Chrysler the best they could without any help from Congress.
In the end, I don't see GM making it either. If I were GM, after watching Chrysler negotiate with their bond holders, I would be very afraid. GM has about 8 times more debt than Chrysler.
Unfortunately, I'm thinking its probably 50/50 at best that the Mopar plants ever reopen. This bankrutcy isn't likely to be a 60 day thing and time is Chrysler's enemy right now.
Not only does Fiat have financial problems, they have some real quality problems. J.D. Powers European quality survey lists Fiat dead last in their ranking of Euopean Cars. In that respect they're a good match for Chrysler. "FIX IT AGAIN TONY".
I agree and the bond holders are starting to dig in. Some of them stand to benefit more from a Chrysler liquidation. They could care less about Chrysler and the workers. They are trying to recover the money they lent. It's their right as the debt holder.
The longer they are in bankruptcy, the easier it will be for Fiat to walk away from this deal.
Some secured lenders object to quick sale of Chrysler
May 4, 2009 - 10:12 am ET UPDATED: 5/4/09 10:58 a.m. ET
NEW YORK -- A minority group of Chrysler LLC secured lenders has objected in bankruptcy court to the quick sale of Chrysler to a new corporate entity led by Fiat S.p.A.
The group of about 40 banks and hedge funds holds about $3 billion of the $6.9 billion in secured loans that Chrysler has with the banks.
....Chrysler's new corporate entity, led by Fiat and its proposed 20 percent stake, would be considered the lead bidder for Chrysler's assets in a bankruptcy court auction.
The automaker asked U.S. Bankruptcy Judge Arthur Gonzalez to set a hearing as soon as May 21 to approve a $2 billion sale of most of its assets out of bankruptcy that would clear the way for a merger with Fiat, according to documents filed with the court.
The court has set a May 15 deadline for competing bids, according to Bloomberg News.
Just further evidence that this whole 30-60 day timeline is pure fantasy. The debtholders are going to be fighting over this one for a loooong time.....
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
"Chrysler's "Employee Pricing Plus Plus," program ended just days after the carmaker declared Chapter 11 bankruptcy. That program combined cash rebates with price reductions and cut-rate financing for qualified customers.
The new sales program is expected to rely heavily on giving dealers cash incentives, which means that customers will see big price reductions at the dealership, said Jessica Caldwell, an industry analyst with the automotive Website Edmunds.com."
"Not everyone sees bankruptcy as a disaster for Chrysler sales. Some customers are optimistic, focusing more on the possibility of a Fiat deal and on the fact that Chrysler isn't going out of business, said Scott Painter, chief executive of Zag.com, an automotive buying service provider, and Truecar.com, an auto pricing Website.
Interest in Chrysler, Dodge and Jeep products has actually gone up, he said."
Bankruptcy will delay Chrysler's 2010 model launches, exec says By DAVID BARKHOLZ
"A picture of The Chrysler Town & Country minivan--and all 2010 models will be delayed because of the automaker's Chapter 11 filing. ChryslerChrysler LLC will be late getting its 2010 vehicles to market because of the automaker's Chapter 11 bankruptcy filing, Chrysler manufacturing chief Frank Ewasyshyn testified today. The current shutdown of plants and stresses on suppliers also threaten to delay the 2011 models next year, Ewasyshyn said.
The changeover to 2010 models is delayed while Chrysler tries to emerge from bankruptcy within the next 30 to 60 days, he said.
Once Chrysler returns to production, planned as an alliance with Fiat S.p.A., the new company will have to finish assembling the many vehicles, engines and parts now partially built in Chrysler factories, Ewasyshyn said.
That and readying for the new models will delay 2010 launches. Those typically take place shortly after a July shutdown to change tooling for the new vehicles.
Ewasyshyn said the smooth launch of 2011 models also is jeopardized.
Some suppliers are balking at sending the tooling and parts that need to be validated now in order to build the 2011 models. He was testifying in support of the bankruptcy court allowing Chrysler to pay suppliers for the nearly $1.71 billion that Chrysler owes them for parts already shipped."
No matter what is said, and I am sorry to say it, but Chrysler is not relevant in the automotive world. Other than trucks, who drives a Chrysler product and what are they? Unless Chrysler fixes the obvious - make themselves relevant in the marketplace why save them. If Fiat takes over Chrysler, they should just take their brick an mortar and rename the compan Fiat and sell Fiats here.
reality2: Chrysler is not the only American auto maker that has not been relevant in the automotive world. Certianly GM and Ford are included in that catagory as well. The rest of the world has been forced by their lack natural resourses for fuel and high cost of fuel, to drive smaller more economic vehicles. The United States has only in the last half or this decade paid for fuel what other countries have been paying for a very long time. The reality of Hemi engines and vehicles that reach 0 to 60 in less than 5 seconds as being a right of a person who can afford to buy these vehicles and the fuel needed to run these boats may be soon ended.
Chrysler was managed by Daimler who had one motive, build the vehicles as cheap as possible and charge as much as the public will pay. Under Daimler such vehicles as the Jeep Compass for example were created as cheaply as safety would permit. Even with cheap materials and poor fuel mileage Daimler really expected the American buying public to flock to the dealers. Daimler scraped every dime they could get out of Chrysler and then dumped it. Chrysler has a majority of low fuel mileage vehicles.
For instance the Dodge Neon got an honest 30 + mpg. The vehicle Daimler replaced it with the Caliber is bulky, over weight, and quality of materials and fit and finish are one of the lowest in the automotive industry. The Caliber gets no more than 27 + or - mpg. Daimler went backwards in every area.
What is confusing is how a 2007 Chrysler Pacifica Touring AWD with the new 4. L engine and 6 speed auto can get 24 to 26 mpg and a Jeep Compass only 22 mpg. Daimler did produce a top quality safe vehicle in the Pacifica. But why didn't Daimler carry this quality over into other Chrysler vehicles?
I hace owned 17 Chrysler made vehicles (Plymouth, Dodge, and Chrysler) for a good long time. I have had good luck and I have been pleased except for a Jeep Liberty diesel and the Jeep Compass.
Does Chrysler stand a chance? I hope so. Will Fiat be the means to keep Chrysler alive? I have some real doubts, Fiat has made some real unhappy owners in the past with low quality vehicles imported to the US some decades ago. Unless the quality and needs of the public are top on the list Chrysler may well go into history as AMC and Studabaker did. I surely hope not.
Chrysler offers up to $6,000 in incentives on some cars
If consumers can overcome the connotations that ride shotgun with buying a new car from an automaker in bankruptcy, there are some deals to be had on Chrysler vehicles.
The company said Wednesday that it will offer up to $6,000 in incentives on some of its new cars in May in the wake of a 48 percent sales drop in April. The incentives run through June 1.
Starting Wednesday, buyers can get $4,000 in consumer cash on most 2009 models, $1,000 owner loyalty for current Chrysler owners on most ’08 and ’09 models and another $1,000 in credit-union bonus cash for those who finance through certain credit unions.
I ave bought 17 Chrysler made vehicles. Until Daimler raped the company with cheap materials and very poor quality and pushed the volume to be produced no matter what the vehicle looked like, the Chrysler brands were pretty much equal to other brands. Unless Chrysler changes so drasticly they don't stand a chance.
Hi Farout, To push sales of the "Smart", Daimler recently paid for a TV commercial where you see two black sheep lying in a field and busy eating grass. The comment said: Only those of you who behave/are like Chinese sheep with thick wool cannot be interested by the SMART car. I've seen stupid things, like the Chrysler - Jeep commercials we were served for many years in the EU, but now is time to send "the nice young men in their clean white coats" to take Daimler away During the past 40 years, Chrysler lived several lives in the EU; people bought Chrysler because they have always kept a good reputation, service and quality was present. Daimler will not be assimilated to quality by those who have "emancipated their reason".
Here is Daimler's advertisement for the Smart car: http://www.youtube.com/watch?v=yvYGdZ5pHxQ The narrator says 'those who chew gum to look intelligent like cowboys...' I wonder why they are allowed to say such things because there are many North-Americans who live here and I'm one of them. In the form of language and context this is said, only NA cowboys are targeted and presented as being ridiculous :sick:
"Chrysler is moving through bankruptcy more smoothly than some expected. A top Chrysler executive says a healthier version of the company could come through court as early as next month.
Chrysler Vice Chairman Jim Press says a new Chrysler company could emerge from bankruptcy very soon.
"It appears that we may be running ahead of schedule," he says. "The current plan is nine weeks, but I'm hopeful that that's going to be many weeks earlier."
"Analysts are saying the approval could pull Chrysler out of bankruptcy in a matter of days, and the Wall Street Journal said on Monday that the company could get out of Chapter 11 as soon as today."
So remind us all once again: Fiat gets 20% of the "new Chrysler" without spending one red cent? While all the suppliers, labor unions, and pretty much anybody not in Italy gets screwed at taxpayer expense?
Which part did I get wrong?
In his written opinion, Judge Gonzalez said the only alternative to approving the sale was the "immediate liquidation" of the company and that he was concerned about saving the value of Chrysler as a continuing operation.
"Indeed, because of the overriding concern of the U.S. and Canadian governments to protect the public interest, the terms of the Fiat Transaction present an opportunity that the marketplace alone could not offer, and that certainly exceeds the liquidation value," Gonzalez wrote in a 47-page opinion.
I heartily disagree. As of late today the lenders that got the shaft in this decision are appealing the decision, which will keep the assembly lines idle while the appeal is resolved. More power to them.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
You got nothing wrong, but not spending one red cent is not the same as not contributing value. Millions of marriages have taken place where one partner didn't contribute money or property, but contributed something of value. Money is only one way to contribute value.
Few would doubt that Chrysler's survival will depend on fresh new products, which is exactly what Fiat will provide. Fiat will bring new designs, technology, know how and distribution to this partnership, plus scale to supplement Chrysler's.
Heh, that's a bit of a scary analogy considering how many marriages end in divorce.
Karl's take:
"Look at the breakdown. Fiat gets to direct Chrysler's product plan for the foreseeable future. Fiat gets instant access to Chrysler's U.S. dealer network. Fiat even gets to fund the experiment using several billion dollars in U.S. taxpayer money. And what is Marchionne contributing? Small car/engine technology that he already has? My goodness! Such philanthropy!
And here's the kicker: If the experiment goes awry for any number of reasons (U.S. car market continues to tank, unexpected cost/labor issues arise, nobody wants a Chrysler-badged Fiat, etc.) what will Marchionne do? I'll tell you he'll do -- walk away. Think of this, what's the downside for Fiat and Marchinoone? Worst-case scenario, it blows up in his face and he flys back to Turin -- with no money spent and his home market probably glad to be free of what many see as a no-win proposition?
Better still, if it works Marchionne becomes the hero who catapaulted Fiat from second-class automaker to first-tier "player" in the industry."
What you say is all true. Sure, it has the potential of being an awesome deal for Fiat, but at the same time Marchionne offered Chrysler the best deal it was able to get. Without the Fiat deal Chrysler would be dead. With the Fiat deal, Chrysler has an opportunity to recover. One party stands to win more than the other, but it could still be a win-win.
Corporations don't "get married". They are businesses with a dollar value, and they get bought and sold.
Problem is, Chrysler with all its debts and problems had a zero or negative value, which is why it should have been liquidated. It certainly was not in the public interest of the U.S. or Canada to preserve it, as the judge stated in his decision.
But as far as Fiat, Karl from Edmunds stated it best. I will leave it at that. We have spent billions of taxpayer dollars to HAND Chrysler to the Italians, and when the new Chrysler fails, we will have BURNED billions of taxpayer dollars, while Fiat walks away scot-free.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
If Fiat does make it work, we (the taxpayers) get our money back and then some.
We don't have to worry about adding the UAW retirees to the government pension. We don't have to worry about another 100,000 people unemployed (Chrysler workers, UAW and dealerships).
i was dead against giving Chrysler anything. I don't mind being wrong if it helps the greater good. Decision to support them was made back in December, 2008. No use crying about something we can't change. let's just hope it works.
If the issue is whether the federal government should have bailed out Chrysler and/or GM, I'm in complete agreement with you. It was not a wise use of taxpayers' money. It's a real long shot that all the money will ever be repaid. These bailouts were primarily President Obama's pay back for the support he got from the UAW. Most of the jobs will be lost anyhow.
I believe GM and Chrysler should have filed Chapter 11 like any other company. Although I'd like to be proven wrong, if these companies should survive and thrive, it would set a bad precedent, because it would make it easier to justify the next bailout.
On the other hand it keeps a lot of people off the unemployment and food stamp rolls and if the new Chrysler and new GM survive a few years, all the tax monies collected from those paychecks will likely offset the billions paid out (whether the loan money is repaid or not). There's probably already been a significant savings in human misery from the bailouts, and that misery index has a real financial cost to the economy.
It's true that the Bush Administration, in consultation with the incoming Obama Administration, kicked the can down the road, by giving the first loans in the last few days of its term in office. Then President Obama greatly expanded the assistance program. That's my recollection. I predict that we haven't seen the end of the loans.
In my view, both presidents made politically expedient decisions, rather than good business decisions. While these bailouts are well intentioned, they're extremely expensive. They're very unlikely to be wise investments, in my opinion. I should add that although I've never worked in the automotive industry, I have emotional attachment to Chrysler and GM, and have generally had good experience with their products. I hate seeing them go down, but I consider my opinion on the bailouts a rational one.
Chrysler to restart plants by end of June BY GREG GARDNER • FREE PRESS BUSINESS WRITER • June 2, 2009
"Chrysler will resume production at most of its assembly plants by the last week of June, less than 60 days after it filed for Chapter 11 bankruptcy protection, its top sales executive said today.
'A majority of the plants will come bank up in the last week of June,' said Steven Landry, executive vice president of North American sales and marketing.
Even some of the eight plants that aren’t included in the sale to Fiat, such as Sterling Heights Assembly and Detroit Axle, will resume production. Chief Financial Officer Ron Kolka said the new company has contracts with the old company to purchase the necessary parts and vehicles from plants owned by the old company.
Chrysler’s sales fell 47% in May from a year earlier, but inventories have fallen to low levels for such models as the Jeep Wrangler and the Town & Country minivan.
Earlier today U.S. Bankruptcy Judge Arthur Gonzalez ruled that an appeal of his approval of Chrysler’s sale will go directly to the Second Circuit Court of Appeals in New York. The move came in response to a request by attorneys from Jones Day, the law firm representing Chrysler in its bankruptcy case. Attorneys for the Indiana pension funds wanted to appeal to U.S. District Judge Thomas Griesa.
Chrysler’s lawyers also have asked Gonzalez to compress the period between his May 31 approval of the sale and the formal closing from 10 to three days. Fiat can abandon the deal if it isn’t completed by June 15.
The Indiana pensioners contend accelerating the closing violates their right to an appeal.
'The (bankruptcy) court must provide the Second Circuit with sufficient time to decide whether it will accept the appeal and order an expedited briefing,” said Glenn Kurtz, an attorney for the pension funds. “This cannot be accomplished with only the two or three days proposed by (Chrysler).'
The Indiana pension funds purchased $42 million in secured loans to Chrysler. Those loans are part of a bundle of $6.9 billion in loans that the U.S. Treasury has offered to settle for 29 cents on the dollar, or $2 billion in cash. The pension funds want to be repaid in full, but all the other secured lenders have agreed to accept Treasury’s offer."
Sounds like one set of bondholders are trying to tank the whole thing and go to liquidation. Their appeal isn't based on dollar value right now...they're keeping that in reserve. Right now they're appealing making the closing 3 days instead of 10 days...
I see what they're doing: They want the closing to take an entire 10 days, so they can file the dollar-value appeal on day 9.999999 and take the process past June 15th. Then Fiat abandons the deal and the process goes into Ch7, and then they can collect more cash.
Sneaky. I understand them wanting to protect their account-holders investments, but bonds aren't guarantee instruments. And they're toilet paper outside of a liquidation right now: no sane investor would even pay 5 cents on the dollar for them.
...on a recent Chrysler commercial. At the end of the commercial was a lineup of Chrysler vehicles and one unfamiliar car was labeled "200-C Electric." Did I hallucinate this?
No, you didn't hallucinate. If the company makes it, they are preparing a shortened version of the 300 to replace the Sebring, to be called the 200, and they do plan an electric version.
All pie in the sky at this point though.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Chrysler, to its credit, has been a leader in the US auto industry for many years in terms of product conceptualization and styling. Think as far back as the 'Ks, the minivan, the retro RAM truck, the whole 'cab forward' thing, the reinvention of the American 'musclecar' (300/Charger) etc etc Developing products that the American consumer might want to buy has NOT been Chrysler's problem, historically. Developing and manufacturing QUALITY products however is something else again. Something has always seemed to get 'lost' in the translation and Chrysler is wallowing in a grave it dug for itself. Fiat, OTH, has been a miserable failure in this country once, and now assumes 'inheriting' an established distribution chain is going to magically going to move the American consumer away from our behemoths and into those buzz bombs that they couldn't sell here 30 and 40 years ago. :confuse: Don't think the American consumer will be fooled by a rebadged Fiat and nor do I think that Chrysler has anywhere near enough time to clean up its image - and products. Just hope that the American taxpayer doesn't waste too much money in some feeble attempt at salvation.
There's probably already been a significant savings in human misery from the bailouts, and that misery index has a real financial cost to the economy.
What about all the misery the "Chrysler Ownership Experience" brings to all of its products owners? I would argue that the misery caused by being a Chrysler vehicle owner FAR exceeds the misery experienced by workers who clearly underperformed by every measure standard in every measureable category. Is there anything Chrysler did well or was good at? The answer to that in my view, is a big FAT NO.
They have caused years and years and decades and decades of inflated misery, so the misery index in my view will remain much higher as long as Chrysler is still in business in some manner. Chrysler disappearing would save countless innocent unknowning Americans from misery.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
but bonds aren't guarantee instruments. And they're toilet paper outside of a liquidation right now: no sane investor would even pay 5 cents on the dollar for them.
Its just a last minute attempt to strong arm a few more bucks. Personally, I doubt the government will see an early repayment like during the Iacocca years. In fact, I expect Uncle (meaning us) will lose our shirts on this one! There is too much else to pick from out there.
Not all Chrysler owners are miserable. I own a 2006 Dodge Caravan and just bought a 2007 PT Cruiser convertible. I have owned 2 other Caravans, a Lebaron and a Laser; never felt miserable owning any of them.
There's a woman here at work who bought one of the early PT Cruisers, liked it so much she bought another, now she and her husband have a pair of Cruisers in the driveway. She had an Intrepid before it that she said was a "pile of junk", but she is very happy with the Cruisers, and miffed that the American public and government didn't do more to support Chrysler.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
She had an Intrepid before it that she said was a "pile of junk", but she is very happy with the Cruisers, and miffed that the American public and government didn't do more to support Chrysler.
What else does she want the government to do??!!?? They went against the public and gave this company another chance.
Apparently she wants the American public to buy Chryslers. But if she wants that, maybe she should get Chrysler to make Intrepids that aren't piles of junk, as she put it.
That bit is scary...here you have someone who knows that the company makes junk, and admits to it...she likes ONE model that they make. And so, in order for her to enjoy that one single model, Americans should either buy junk or subsidize the company.
Why doesn't she buy 100 Chrysler vehicles herself and give them away to her neighbors ala Oprah style giveaway if she feels so strongly about keeping Chrysler alive?
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
That's just another version of NIMBY. Of course dealers should be closed. Just not the ones that contributed to their campaigns...should be some "other" dealers, somewhere else, that contributed to someone else's campaign. :shades:
Indeed, the Indiana funds explicitly compared the Chrysler case with Youngstown Sheet and Tube v. Sawyer, the 1952 decision in which the Supreme Court rejected President Harry S. Truman’s assertion that he had the constitutional authority to seize steel mills during the Korean War.
They're on shaky ground here. This wasn't a forced corporate seizure: Chrysler went to the government and basically ASKED to be seized, voluntarily. This next part is also interesting:
They have also objected on constitutional grounds, saying that the Obama administration was not allowed to give bailout money meant for financial institutions to Chrysler.
Uhh, guys, that would be the Bush Administration as well. Unless it's OK if one party does it, just not the other? Then again, they COULD file more paper with that one...sounds like they've saved up enough ammo to delay the thing for 6 days so long as they fire one shot at a time.
I realize those Indiana pensions get much more money in liquidation, but I'd really hate to be known as the parties that took down Chrysler because they wanted more money. They're going to take a REAL bad PR hit.
There's 6 days left before Fiat can walk away. Considering Saturn's dealerships just went for between $100 and $200 million, Fiat has to be thinking about it now...is dealing with a UAW-owned Chrysler worth it when they could maybe pick up Saab's operation for $150 million?
Personally, I'd like to see a UAW-run Chrysler for a whole lot of reasons (I like employee-owned companies in general, I want to see if the UAW can build cars when left to their own devices, UAW gets more a management-side view, etc), so I do hope things don't get derailed.
Comments
In the end, I don't see GM making it either. If I were GM, after watching Chrysler negotiate with their bond holders, I would be very afraid. GM has about 8 times more debt than Chrysler.
Not to mention the economic benefits generated from 600,000 retirees drawing checks on their UAW pensions.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
The longer they are in bankruptcy, the easier it will be for Fiat to walk away from this deal.
Some secured lenders object to quick sale of Chrysler
May 4, 2009 - 10:12 am ET
UPDATED: 5/4/09 10:58 a.m. ET
NEW YORK -- A minority group of Chrysler LLC secured lenders has objected in bankruptcy court to the quick sale of Chrysler to a new corporate entity led by Fiat S.p.A.
The group of about 40 banks and hedge funds holds about $3 billion of the $6.9 billion in secured loans that Chrysler has with the banks.
....Chrysler's new corporate entity, led by Fiat and its proposed 20 percent stake, would be considered the lead bidder for Chrysler's assets in a bankruptcy court auction.
The automaker asked U.S. Bankruptcy Judge Arthur Gonzalez to set a hearing as soon as May 21 to approve a $2 billion sale of most of its assets out of bankruptcy that would clear the way for a merger with Fiat, according to documents filed with the court.
The court has set a May 15 deadline for competing bids, according to Bloomberg News.
http://www.autonews.com/article/20090504/ANA02/905049986/1128
(registration link)
Just further evidence that this whole 30-60 day timeline is pure fantasy. The debtholders are going to be fighting over this one for a loooong time.....
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
It's a difficult timeline but strange things happen in bankruptcy court.
And they said that the 30 day deadline to put a deal together with Fiat was fantasy too, so ....
The judge did Enron and WorldCom and even better, did a few years with the IRS. Sorting out Chrysler may be a cakewalk after the IRS years. :shades: (WSJ - Chrysler Bankruptcy Judge Handled Enron, WorldCom)
The new sales program is expected to rely heavily on giving dealers cash incentives, which means that customers will see big price reductions at the dealership, said Jessica Caldwell, an industry analyst with the automotive Website Edmunds.com."
"Not everyone sees bankruptcy as a disaster for Chrysler sales. Some customers are optimistic, focusing more on the possibility of a Fiat deal and on the fact that Chrysler isn't going out of business, said Scott Painter, chief executive of Zag.com, an automotive buying service provider, and Truecar.com, an auto pricing Website.
Interest in Chrysler, Dodge and Jeep products has actually gone up, he said."
New Chrysler auto incentives coming (CNN)
By DAVID BARKHOLZ
"A picture of The Chrysler Town & Country minivan--and all 2010 models will be delayed because of the automaker's Chapter 11 filing. ChryslerChrysler LLC will be late getting its 2010 vehicles to market because of the automaker's Chapter 11 bankruptcy filing, Chrysler manufacturing chief Frank Ewasyshyn testified today.
The current shutdown of plants and stresses on suppliers also threaten to delay the 2011 models next year, Ewasyshyn said.
The changeover to 2010 models is delayed while Chrysler tries to emerge from bankruptcy within the next 30 to 60 days, he said.
Once Chrysler returns to production, planned as an alliance with Fiat S.p.A., the new company will have to finish assembling the many vehicles, engines and parts now partially built in Chrysler factories, Ewasyshyn said.
That and readying for the new models will delay 2010 launches. Those typically take place shortly after a July shutdown to change tooling for the new vehicles.
Ewasyshyn said the smooth launch of 2011 models also is jeopardized.
Some suppliers are balking at sending the tooling and parts that need to be validated now in order to build the 2011 models. He was testifying in support of the bankruptcy court allowing Chrysler to pay suppliers for the nearly $1.71 billion that Chrysler owes them for parts already shipped."
Chrysler was managed by Daimler who had one motive, build the vehicles as cheap as possible and charge as much as the public will pay. Under Daimler such vehicles as the Jeep Compass for example were created as cheaply as safety would permit. Even with cheap materials and poor fuel mileage Daimler really expected the American buying public to flock to the dealers. Daimler scraped every dime they could get out of Chrysler and then dumped it. Chrysler has a majority of low fuel mileage vehicles.
For instance the Dodge Neon got an honest 30 + mpg. The vehicle Daimler replaced it with the Caliber is bulky, over weight, and quality of materials and fit and finish are one of the lowest in the automotive industry. The Caliber gets no more than 27 + or - mpg. Daimler went backwards in every area.
What is confusing is how a 2007 Chrysler Pacifica Touring AWD with the new 4. L engine and 6 speed auto can get 24 to 26 mpg and a Jeep Compass only 22 mpg.
Daimler did produce a top quality safe vehicle in the Pacifica. But why didn't Daimler carry this quality over into other Chrysler vehicles?
I hace owned 17 Chrysler made vehicles (Plymouth, Dodge, and Chrysler) for a good long time. I have had good luck and I have been pleased except for a Jeep Liberty diesel and the Jeep Compass.
Does Chrysler stand a chance? I hope so. Will Fiat be the means to keep Chrysler alive? I have some real doubts, Fiat has made some real unhappy owners in the past with low quality vehicles imported to the US some decades ago. Unless the quality and needs of the public are top on the list Chrysler may well go into history as AMC and Studabaker did. I surely hope not.
farout
If consumers can overcome the connotations that ride shotgun with buying a new car from an automaker in bankruptcy, there are some deals to be had on Chrysler vehicles.
The company said Wednesday that it will offer up to $6,000 in incentives on some of its new cars in May in the wake of a 48 percent sales drop in April. The incentives run through June 1.
Starting Wednesday, buyers can get $4,000 in consumer cash on most 2009 models, $1,000 owner loyalty for current Chrysler owners on most ’08 and ’09 models and another $1,000 in credit-union bonus cash for those who finance through certain credit unions.
http://www.autoweek.com/article/20090506/CARNEWS/905069973
If you still want that Hemi, now's the time to buy! Once Marchionne is the CEO, who KNOWS what will be going on! :-P
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
farout
To push sales of the "Smart", Daimler recently paid for a TV commercial where you see two black sheep lying in a field and busy eating grass. The comment said: Only those of you who behave/are like Chinese sheep with thick wool cannot be interested by the SMART car. I've seen stupid things, like the Chrysler - Jeep commercials we were served for many years in the EU, but now is time to send "the nice young men in their clean white coats" to take Daimler away
During the past 40 years, Chrysler lived several lives in the EU; people bought Chrysler because they have always kept a good reputation, service and quality was present.
Daimler will not be assimilated to quality by those who have "emancipated their reason".
Here is Daimler's advertisement for the Smart car:
http://www.youtube.com/watch?v=yvYGdZ5pHxQ
The narrator says 'those who chew gum to look intelligent like cowboys...' I wonder why they are allowed to say such things because there are many North-Americans who live here and I'm one of them. In the form of language and context this is said, only NA cowboys are targeted and presented as being ridiculous :sick:
Chrysler Vice Chairman Jim Press says a new Chrysler company could emerge from bankruptcy very soon.
"It appears that we may be running ahead of schedule," he says. "The current plan is nine weeks, but I'm hopeful that that's going to be many weeks earlier."
Bankruptcy Proceedings Moving Quickly For Chrysler (NPR)
Chrysler Gets OK for Sale to Fiat (Inside Line)
linAnother Historic Event: Chrysler Begins Emerging From Bankruptcy (AutoObserver)
Which part did I get wrong?
In his written opinion, Judge Gonzalez said the only alternative to approving the sale was the "immediate liquidation" of the company and that he was concerned about saving the value of Chrysler as a continuing operation.
"Indeed, because of the overriding concern of the U.S. and Canadian governments to protect the public interest, the terms of the Fiat Transaction present an opportunity that the marketplace alone could not offer, and that certainly exceeds the liquidation value," Gonzalez wrote in a 47-page opinion.
http://www.autonews.com/article/20090601/ANA02/906019996/1057
(registration link)
I heartily disagree. As of late today the lenders that got the shaft in this decision are appealing the decision, which will keep the assembly lines idle while the appeal is resolved. More power to them.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Few would doubt that Chrysler's survival will depend on fresh new products, which is exactly what Fiat will provide. Fiat will bring new designs, technology, know how and distribution to this partnership, plus scale to supplement Chrysler's.
Heh, that's a bit of a scary analogy considering how many marriages end in divorce.
Karl's take:
"Look at the breakdown. Fiat gets to direct Chrysler's product plan for the foreseeable future. Fiat gets instant access to Chrysler's U.S. dealer network. Fiat even gets to fund the experiment using several billion dollars in U.S. taxpayer money. And what is Marchionne contributing? Small car/engine technology that he already has? My goodness! Such philanthropy!
And here's the kicker: If the experiment goes awry for any number of reasons (U.S. car market continues to tank, unexpected cost/labor issues arise, nobody wants a Chrysler-badged Fiat, etc.) what will Marchionne do? I'll tell you he'll do -- walk away. Think of this, what's the downside for Fiat and Marchinoone? Worst-case scenario, it blows up in his face and he flys back to Turin -- with no money spent and his home market probably glad to be free of what many see as a no-win proposition?
Better still, if it works Marchionne becomes the hero who catapaulted Fiat from second-class automaker to first-tier "player" in the industry."
Talk Back Tuesday: Fiat-Chrysler -- an automotive experiement we all get to pay for
Problem is, Chrysler with all its debts and problems had a zero or negative value, which is why it should have been liquidated. It certainly was not in the public interest of the U.S. or Canada to preserve it, as the judge stated in his decision.
But as far as Fiat, Karl from Edmunds stated it best. I will leave it at that. We have spent billions of taxpayer dollars to HAND Chrysler to the Italians, and when the new Chrysler fails, we will have BURNED billions of taxpayer dollars, while Fiat walks away scot-free.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
We don't have to worry about adding the UAW retirees to the government pension. We don't have to worry about another 100,000 people unemployed (Chrysler workers, UAW and dealerships).
i was dead against giving Chrysler anything. I don't mind being wrong if it helps the greater good. Decision to support them was made back in December, 2008. No use crying about something we can't change. let's just hope it works.
I believe GM and Chrysler should have filed Chapter 11 like any other company. Although I'd like to be proven wrong, if these companies should survive and thrive, it would set a bad precedent, because it would make it easier to justify the next bailout.
Umm...WHO executive-ordered the bailout program again?
In my view, both presidents made politically expedient decisions, rather than good business decisions. While these bailouts are well intentioned, they're extremely
expensive. They're very unlikely to be wise investments, in my opinion. I should add that although I've never worked in the automotive industry, I have emotional attachment to Chrysler and GM, and have generally had good experience with their products. I hate seeing them go down, but I consider my opinion on the bailouts a rational one.
BY GREG GARDNER • FREE PRESS BUSINESS WRITER • June 2, 2009
"Chrysler will resume production at most of its assembly plants by the last week of June, less than 60 days after it filed for Chapter 11 bankruptcy protection, its top sales executive said today.
'A majority of the plants will come bank up in the last week of June,' said Steven Landry, executive vice president of North American sales and marketing.
Even some of the eight plants that aren’t included in the sale to Fiat, such as Sterling Heights Assembly and Detroit Axle, will resume production. Chief Financial Officer Ron Kolka said the new company has contracts with the old company to purchase the necessary parts and vehicles from plants owned by the old company.
Chrysler’s sales fell 47% in May from a year earlier, but inventories have fallen to low levels for such models as the Jeep Wrangler and the Town & Country minivan.
Earlier today U.S. Bankruptcy Judge Arthur Gonzalez ruled that an appeal of his approval of Chrysler’s sale will go directly to the Second Circuit Court of Appeals in New York. The move came in response to a request by attorneys from Jones Day, the law firm representing Chrysler in its bankruptcy case. Attorneys for the Indiana pension funds wanted to appeal to U.S. District Judge Thomas Griesa.
Chrysler’s lawyers also have asked Gonzalez to compress the period between his May 31 approval of the sale and the formal closing from 10 to three days. Fiat can abandon the deal if it isn’t completed by June 15.
The Indiana pensioners contend accelerating the closing violates their right to an appeal.
'The (bankruptcy) court must provide the Second Circuit with sufficient time to decide whether it will accept the appeal and order an expedited briefing,” said Glenn Kurtz, an attorney for the pension funds. “This cannot be accomplished with only the two or three days proposed by (Chrysler).'
The Indiana pension funds purchased $42 million in secured loans to Chrysler. Those loans are part of a bundle of $6.9 billion in loans that the U.S. Treasury has offered to settle for 29 cents on the dollar, or $2 billion in cash. The pension funds want to be repaid in full, but all the other secured lenders have agreed to accept Treasury’s offer."
I see what they're doing: They want the closing to take an entire 10 days, so they can file the dollar-value appeal on day 9.999999 and take the process past June 15th. Then Fiat abandons the deal and the process goes into Ch7, and then they can collect more cash.
Sneaky. I understand them wanting to protect their account-holders investments, but bonds aren't guarantee instruments. And they're toilet paper outside of a liquidation right now: no sane investor would even pay 5 cents on the dollar for them.
All pie in the sky at this point though.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Fiat, OTH, has been a miserable failure in this country once, and now assumes 'inheriting' an established distribution chain is going to magically going to move the American consumer away from our behemoths and into those buzz bombs that they couldn't sell here 30 and 40 years ago. :confuse:
Don't think the American consumer will be fooled by a rebadged Fiat and nor do I think that Chrysler has anywhere near enough time to clean up its image - and products. Just hope that the American taxpayer doesn't waste too much money in some feeble attempt at salvation.
What about all the misery the "Chrysler Ownership Experience" brings to all of its products owners? I would argue that the misery caused by being a Chrysler vehicle owner FAR exceeds the misery experienced by workers who clearly underperformed by every measure standard in every measureable category. Is there anything Chrysler did well or was good at? The answer to that in my view, is a big FAT NO.
They have caused years and years and decades and decades of inflated misery, so the misery index in my view will remain much higher as long as Chrysler is still in business in some manner. Chrysler disappearing would save countless innocent unknowning Americans from misery.
Its just a last minute attempt to strong arm a few more bucks. Personally, I doubt the government will see an early repayment like during the Iacocca years. In fact, I expect Uncle (meaning us) will lose our shirts on this one! There is too much else to pick from out there.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
What else does she want the government to do??!!?? They went against the public and gave this company another chance.
That bit is scary...here you have someone who knows that the company makes junk, and admits to it...she likes ONE model that they make. And so, in order for her to enjoy that one single model, Americans should either buy junk or subsidize the company.
Umm, :P because you all wanted Chrysler to go BK in first place?? What, you thought cars would just be sourced from China overnight?
But, does Fiat want Chrysler and its US dealer network bad enough to walk away from this thing?
Indeed, the Indiana funds explicitly compared the Chrysler case with Youngstown Sheet and Tube v. Sawyer, the 1952 decision in which the Supreme Court rejected President Harry S. Truman’s assertion that he had the constitutional authority to seize steel mills during the Korean War.
They're on shaky ground here. This wasn't a forced corporate seizure: Chrysler went to the government and basically ASKED to be seized, voluntarily. This next part is also interesting:
They have also objected on constitutional grounds, saying that the Obama administration was not allowed to give bailout money meant for financial institutions to Chrysler.
Uhh, guys, that would be the Bush Administration as well. Unless it's OK if one party does it, just not the other? Then again, they COULD file more paper with that one...sounds like they've saved up enough ammo to delay the thing for 6 days so long as they fire one shot at a time.
I realize those Indiana pensions get much more money in liquidation, but I'd really hate to be known as the parties that took down Chrysler because they wanted more money. They're going to take a REAL bad PR hit.
There's 6 days left before Fiat can walk away. Considering Saturn's dealerships just went for between $100 and $200 million, Fiat has to be thinking about it now...is dealing with a UAW-owned Chrysler worth it when they could maybe pick up Saab's operation for $150 million?
Personally, I'd like to see a UAW-run Chrysler for a whole lot of reasons (I like employee-owned companies in general, I want to see if the UAW can build cars when left to their own devices, UAW gets more a management-side view, etc), so I do hope things don't get derailed.