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I would have a 6 martini lunch and then come back and work on the re-structuring plan. :shades:
GM: Merger Talks Have Not Restarted With Chrysler
Not quite the same when you part out the whole company, but it does make some sense here.
I don't know how you'd handle the dealers though.
Once enough dealers close up shop on their own accord, it should be relatively inexpensive to take Chrysler apart, sell the Ram to Nissan, minivans/Jeep/300 to Ford, and fold the rest.
No automaker will be looking to expand right now given the tough market; it'll take a while for automakers to be in the game to purchase another one, and that'll give Chrysler enough time to get dealers to fold.
I'm not sure how much longer Chrysler will be in business anyway. The reports are if they do not get major concessions from the UAW as far as wages and from their creditors, they will not be able to repay the "loan". I guess Cerebus is willing to give up its equity stake in Chrysler to the unions and creditors.
of course it doesn't solve their major problem which is no one is buying new cars right now so making a profit in this market will be difficult. And Chrysler has nothing in the pipeline past 2010 so their long term viability is in question.
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)
Talking to a friend at Chrysler. He is ahead of a financial group. Everyone in the group was bought out. Price Waterhouse people brought in. Some of them the same ex Chrysler employees. These are not contract positions but it takes employees off the books.
No doubt Cerberus is preparing to get rid of it. We may see more buyouts of hourly and salaried with the $4 billion and then a sale of the assets to the highest bidder. They have a huge brand new headquarters building but I doubt anyone would buy it at anywhere what it would normally go for. Just too big for any company around here. Also a proving grounds which Toyota may pick up.
That leaves the minivan plant, some plants that build Jeeps and the Ram truck plants. Ford takes the Jeep plants and the minivan plant. Nissan takes the Ram truck plants. Only issue for Nissan is the UAW workers so they all get fired before they take it over from Chrysler.
The rest of the plants get parted out and the property sold.
That's OK. Detroit is good at burning oil...
I talked to someone who is in Chrysler and they felt this would be a good thing, like Fedx that is owned bt the employees.
There is never a dull moment as our country seems to be facing the most challenging financial times in our history.
farout
If the UAW ends up with a majority stake, this is their chance to prove that they actually know what they're doing. And if they can't do it....let's face it, no big loss. :shades: it's just Chrysler.
Cerberus has made to offer to give the UAW the complete Chrysler LLC. Along with this gift comes the full responsiblity that Chrysler LLC has debt and all. The UAW has not said yes or no, and all the creditors and suppliers must agree to it.
The Auto News Editor told me Cerberus wants to rid it's self of Chrysler LLC. Cerberus has tried to sell Chrysler LLC> but no one has the money or cantake on more than they already have. The editor said this is real bad news for all the auto industry.
Ford seems to want to avoid the intangelments that has been required for the bail out money. Personally I doubt any huge company could draw up a plan that is required for the bail out money in 90 days.
My personal opinion is as a country we are headed for a major down tern in our economy and employment that may be a depression, this present administration waited to long to see the hand writting on the wall. I can't see how we can stop not only the USA from sinking into a depression say nothing about the rest of the world. I hope I am wrong.
farout
I think Bloomberg originally reported it.
Oh, here's the Allpar link. I don't know if the Automotive News link there works or not since I'm not registered there.
Craig Fitzgerald, analyst for Plante & Moran, in Southfield, said Chrysler's best hope for the future lies with finding a partner or partners "that will cause some of their brands and products to be moved over to competitors."
Cerberus's move to give up its equity stake could help the restructuring, said Kimberly Rodriguez, also with Grant Thornton.
"It's really a pre-packaged bankruptcy without the pre-pack where equity is no longer in control," she said. "It's a cooperative way of handing over your position in a company to help it see another day. It's an industry-supportive move by Cerberus, which is more beneficial to the other OEMs."
Will the UAW bite? So will Ford then bite?
GM might bite if it could...Jeep could be a good Hummer replacement, and the Ram is a step up from Silverado. But they'd also have no interest in the minivan platform, since they have the Acadia/Traverse, which fills the same niche. So unless Nissan buys Ram and VW buys the minivans (both possible, they're each selling them now), the UAW is probably going to end up with the whole package.
Nissan could go for the Rams- the Titan isn't the hottest of sellers and being able to buy something like the '09 Ram that could be an off-the-shelf replacement for the Titan would be nice.
I could even see Nissan picking up the minivan franchise with the Quest essentially worthess; they could take the bones of the 'vans and improve on them.
Only problem for Nissan is the UAW- maybe they would just buy the designs and build them in Canton, MS.
I have yet to figure out where Jeep could go... A foreign automaker (Renault, Alfa, Fiat) could buy Saab or Volvo and get the US dealer network they want without the pesky UAW... Plus Jeep's exponentially larger dealer network compared with Volvo/Saab makes it less attractive as any foreign automaker would have to have enough product to sustain all those dealers...
Nissan already has a truck design completed that Chrysler was going to build for them. Just change over the line and go. Issue is that I doubt that Nissan could sell an entire plant capacity (240, 000 units) of Nissan trucks even with the Ram trucks gone.
It is hard to drum up sympathy for a group of people that have a paid work pool that will pay laid off workers for up to four years. Or so I have heard. The average tax payer has got to be wondering what hit them when Banks have been using the bailout money to buy other failing banks and now GM and Chrysler get billions from the same tax payers. If indeed we the tax payer ends up buying into another bailout and the auto manufacturers end up receiving that money it will be hard to justify paying a laid off worker for that many years.
If the two companies merge and they receive tax payer money the UAW will have to bargain with the tax payers representative, the government. Not that I have any faith that the government can do a better job of running a company I think they can bargain a better deal against the UAW. A strike against the government isn't as effective.
I don't know the answer but if the Imports can make quality cars in the south with what they pay their employees you have to wonder why the domestics can't? Just day dreaming here.
http://blogs.thecarconnection.com/blogs/marty_blog/chrysler/cerberus-to-uaw-take- -our-company-please/
If they can give it away they can sell it away for some minimal amount. Cerberus wants to dump Chrysler anyway they can. There sure is nothing left to it. Talked to an ex employee there and hardly anyone she knew is there any longer. They have cut all kinds of models and are only building some vehicles now. Basically a manufacturing company ready to pass on the plants and minimal staffing to supply parts and keep them running.
I talked with the Web Editir of Automotive News and he emailed me a copy of the
article about Cerberus and the giving away of Chrysler LLC. There is more to it than you think.
"Cerberus also announced that it's Chrysler Finincial unit would offer $ 2 billion to backstop the federal loan, which Chrysler must repay at the end of the first quarter. Cerberus acquired 80.1 percent of Chrysler from Daimler AG for $ 7.4 billion in 2007."
Please note that the $ 2 billion is due before the federal money has to be paid back should Chrysler fail to make the required changes. The loan of $ 2. billion is a protection that Cerberus wont lose it's inital investament, and it stops the federal givernmenr from forcing Chrysler into bankrupcy if Chrysler faild, then Cerberus gets a chance in fixing or selling Chrysler. Cerberus is "allocates capital on behalf of it's investors" so Cerberus does not want to run a vehicle company.
I think you Chrysler is in transition and had dropped some vehicles that were not profitable for Chrysler. I own a Chrysler Pacifica Touring AWD which was dropped. Our PAC is a 2007 and we are very pleased and the quality od materials is excellent as well the fit and finish. The 4. L engine and the 6 speed automatic was the first for Chrysler and the engine and trans. are a great combination.
What other vehicles come with a lifetime warranty on the powertrain? Even the extenede warranties are lifetime as well. Ther just is no other warranty that even come close to that. I think you are making judgements that are lacking facts to back your statements up. If you don't like Chrysler products than don't buy them. I personally don't like GM and Ford. But I am not going to bad mouth them, especially when I don't own either. farout
Here are two guys.
http://www.linkedin.com/in/garettpatria
http://www.linkedin.com/pub/8/804/790
notice they have recently left Chrysler with excellent credentials.
GM has 10 year warranty on powertrains and is transferable.
My sister in law also worked there and no one is left that she used to work with. Yes there are enough people there to keep the plants operating but it sure seems like not much else is going on. heck they even got rid of their PR head and stuck PR under HR!!
Keep in mind that 30mpg is not that big of a deal anymore. The base model of every mid size (read full size in Europe) car sold here gets that much or better. I agree that the demand for gas guzzlers has dropped significantly and that is a good thing, At the same time to say that every sub 30mpg vehicle will vanish is a sweeping generalization that is inaccurate.
Name one 30mpg plus car that can seat 7 and tow 8000 lbs? Didn't think so. A car company that is as large as GM needs vehicles that address every need. Besides if you had read my post carefully you would notice that my line-up overall is more fuel efficeint than the one they currently have.
I am convinced that we have reached the point of maxium efficiency with the ICE. That even the best scenario-a common rail DI diesel backed with an electric motor might be able to achieve 65-75mpg in a compact car (I am not counting the Chevy Volt, because in reality the Volt is basically an electric car). The problem is one of weight and cost. You can in theory make full size vehicles a lot lighter while still maintaining safety, but the costs of replacing standard steel and aluminum body work with F1 type carbon fiber construction would be enormous and would make such vehicles well beyond the reach of an average person.
What I meant by my comment was that the Astra is already developed, already paid for and it isn't likely to be dropped over here if GM survives, so it is effectively a free model over there - all they have to do is stick it on a boat. I thought it was actually selling better there than some of it's competitors - given GM doesn't have much else in that segment. And it isn't sub 30 mpg here - the claimed combined (urban/extra-urban) figures for the Astra here are 42.8 (1.6 petrol);36.7 (1.8); 56.5 (1.7CDTi). (that's UK gallons)
As for why Americans prefer bigger cars, well there is some pyschology you have have to understand. Conduct the following experiment. Walk up someone you do not know from your side of the pond and observe how close he or she lets you come before moving away from you. Then do the same to an American stranger. You find on average the American will more likely move away from you sooner. The reason for this is that Americans have a very strong sense of personal space and space ownership. This is why a higher percentage of Americans live in detached houses, own their own cars and have more suburban development.
There will always be a number of Americans who will not be comfortable in a car that forces you into close proximity with the other occupants. The trick is going to be to make bigger cars more fuel efficient. The forth coming Ford Fusion hybrid, again a "large" car by your standards is supposed to get 40mpg.
I understand where you are coming from, but I am not sure the Astra is GM's miracle compact. The Honda Civic gets better MPG and has more power and a bigger interior. If GM fields a car it must be the undisputed winner in almost every comparisson test, R&T, CR, Car and Driver etc. to win buyers back.
If they can't sell the Astra competitively in the US against VW's Golf, with your huge network of dealers, but they can in Europe, maybe the question is whether GM's management could find its a** with a map - or perhaps they were too busy polishing the corporate jet...
In a word, it's price. It's too expensive compared with the competition. The pricing suggests that GM is more concerned with margins than volume with the Astra, in large part because the value of the euro vs. the dollar doesn't permit GM to make a profit on this car at lower prices.
Price isn't the only reason the Astra isn't selling well in the U.S., but I believe it's the primary reason. Another important reason is a very small marketing budget.
Reason #3 may be that the future of the Saturn Division is up in the air.
I don't doubt that the Astra is a good car, but is it better than, say, a VW Golf/Rabbit or Honda Civic, just to mention two competing models?
I like what GM planned to do with Saturn (Opel designs) but GM starved Saturn for so long that they destroyed the brand. To save all the research dollars, GM should move the products scheduled for Saturn to Pontiac. But I just read the current Motor Trend and it appears that Buick may be the recipient of the Opel 's designs which leaves Saturns future in question. Well, not really. I think we all know how this story ends, it's a matter of when and how.
I have a feeling that by the end of this month, we should know more about GM's fate. The fat lady is already warming up on Chrysler.
I still think that if GM wants Pontiac to survive and improve it is going to have to go its own way in design and engineering. In the plan I laid out in an ealier post, Pontiac would be an all rear wheel drive, performance oriented niche seller much like Toyota's Scion.
Again Saturn no longer has a clear mission and is now a waste of research and marketing dollars.
Which car is that? I'm confused on Saturn's offerings. The L-series cars weren't based on the Malibu. They were based on the Opel Vectra B and manufactured at a GM plant in Wilmington, Delaware.
2014 Malibu 2LT, 2015 Cruze 2LT,
Good thing about the Saturn is that while the Malibu makes its living off supprting the rental market, the midsize Saturns do relatively little fleet sales.
Currently, the Saturn product portfolio is as strong as it's ever been. I will admit, however, that there have been some missed opportunities in the past 5-10 years.
1) L-series. I own a 2003 L300 (with the V6) and chose it over an Accord or Camry because of the value it represented to me. Yes, it is quasi-European (which I'm reminded of every time I spend $400 to have the brake rotors replaced), but, with the 16" wheels and tires, it handles quite nicely. I've got 77K on mine at the moment and while it's had its fair share of issues (aforementioned brakes, plus two replaced BCM's) it's never left me stranded.
2) VUE. I've had two - an '05 and an '08. The '05 was the first year that GM offered the Honda sourced 3.5L V6 and the 5-speed automatic. My wife loved that car - up until the day it simply stopped running. Towed to the dealer, who couldn't find anything wrong. Picked it up from the service side of the dealership and immediately traded it in on a redesigned '08 - which is orders of magnitude better in every respect.
3) ION. My step-daughter drives an '06, and while it's no head turner in terms of looks, it is a competent little car that does what we ask of it. We took it from Denver to St. George, UT last Memorial Day weekend and loaded up with 3 teenaged girls and all their stuff, it averaged over 30MPG through the Rockies.
One thing that used to make Saturn different was the use of the polymer panels. Both the ION and L-series have them, and it cannot be underestimated how good they look when clean. I used to drive to downtown Denver and park in public parking, so I don't know how many door dings I've avoided. Same with the ION at the college campus my daughter lives on.
The other aspect of owning Saturn is the service experience, both before and after the sale. When we bought my L-series in November 2002, my wife was absolutely blown away by how easy it was (before that, we drove Fords almost exclusively). In the 6 years that I've owned Saturns, I cannot remember one bad service experience - the dealers that I've worked with have gone above and beyond the call of duty on more than one occasion to accommodate us.
The Astra, while a fine little car, suffers from a couple of issues that have doomed it here in the states. The first, already noted above, is that the exchange rate has made it quite pricey compared to the competition. Hard to justify $20K for a compact that really has no pedigree here in the US. The second is that it was hastily converted to the US market and doesn't come equipped with an AUX jack or XM radio (as almost every other GM car, truck and SUV has). Little things, to be sure, but the little things often push a consumer to a different brand.
I'm hoping (for obvious reasons) that GM keeps the Saturn brand alive, but I will admit that I'm not too optimistic about it. I've heard that the franchise agreements GM wrote with the dealers are different and give GM more control, allowing GM to close the brand without the same amount of overhead that plagued GM when they discontinued Oldsmobile.
Time will tell.
My one car that got dumped while the loan was still going was an 80 VW Rabbit.
Your L300 only managed to produce 180Hp from 3.0 Litres. The same model year Accord had a 3.0 Litre that put out another 60hp (240) and thanks to its 5 speed autobox compared to the L300's 4 speed probably got better gas mileage to boot. The L300 was too narrow for the American market and its shape was about as anoynomous is it gets. The L300 was an "ok" car but not a class leader. Truth is if you looked at all the expenses involved, repairs, gas and resale value, you would have saved money on the Accord in the long run.
The Aura is much better than the L300 but still misses the mark. It has yet to win a comparison test. The Chevy Malibu which better utlizes the same platform set has had much better reviews.
The Ion consistantly rated at the bottom of the class. It does not come close to the Civic or Mazda 3 in terms of refinement, standard features, drivability or gas mileage. The Colbalt sold at the Chevy store is again based on the same platform and is a much better car. Read some reviews of both.
The Vue and the Astra is the only unique products Saturn offers, as crossovers go the Vue is not bad but "not bad" does not cut it anymore. There is no breakthrough here. Nothing that wows the buyer looking for a crossover. For about the same money you can get an Equinox which seats 6.
The fact is that Saturn has never turned a profit and has failed in its misson to be an affective "import" fighter. It was one of Roger Smith's really bad business decisions to spend money on creating a new import fighting brand when he could have just had the funds spent to improve the exisiting ones.
As for the pricing stategy, that too is a double-edged sword. I had a friend who was interested in one of the Lambda crossovers. He checked out the Outlook and then looked at the identical GMC Arcadia down the road. The Arcadia stickered higher, but because the GMC dealer was willing to negotiate he managed to get it for a lower price.
I have never really understood brand loyalty in cars, each and everytime I buy a car, I do extensive reading and research, then thoroughly test drive the top five vehicles in the class I am looking at and pick a winner based on the car's performance, features and comfort . If all Americans bought cars this way every weak brand would be gone and we would always have top notch cars to choose from and frankly the big three would not have had the problems they are having now.