Can Chrysler Turn It Around in Bankruptcy?

dtownfb · September 2008

Despite the disparaging remarks above concerning the readiness of Chinese cars to come to the U.S. market, I would say it will be two years or less before the first ones arrive, and Cerberus would do well to make agreements to make sales and manufacturing deals with them (and more with the Italians too) to use the existing plants and dealer network

Hate to disagree with you but I don't see anything that suggests the cars from China will be ready in a year or two. More importantly, I don't see Cerebus owning Chrysler for very long. LIke another poster mentioned, I don't think Cerebus understood what they were getting. The cupboard was bare after Daimler was done with them.

Nissan is an established company with two decent small cars, Versa and Sentra. Folks would be more receptive to buying a re-badged Nissan than a car form China.

nippononly · September 2008

...comes news that Chrysler is in talks with Lotus to mass-produce a car very similar to Tesla's ($100K) electric sports car, which is based on the Elise??!!

http://www.autonews.com/apps/pbcs.dll/article?AID=/20080923/ANA02/809239991/1186- /emailblast02&refsect=emailblast02

Frank Klegon, Chrysler executive vice president of product development, told Automotive News this morning that the sports car -- called the Dodge EV -- would go from 0 to 60 mph in under five seconds.

That automaker also is considering production of Chrysler Town & Country and Jeep Wrangler electric vehicles. The company wants to put one of the three electric vehicles on the market by the end of 2010.

Chrysler apparently figures 50% of all cars on the road will be electric by 2020. I say pshaw to that notion and the idea that Chrysler will beat GM to market with an electric car (and van, and Jeep), even as GM struggles to remain on target for late 2010 with the Volt, which has a smaller electric-only range.

Will Chrysler still be in business in 2010?

mickeyrom · September 2008

Right...just what we need ...a $100,000 Dodge. I'm afraid my favorite badge is about to go under for the third time.What possible excuse can they have for not producing a single legitimate high mileage economy car? :confuse:

fezo · September 2008

Daimler in talks to sell the rest of Chrysler. To Cerberus! What the heck are they thinking??!?

nippononly · September 2008

That they want to be rid of them for good?

fezo · September 2008

This makes sense if you are Daimler for exactly that reason. My question is what the heck is in this for Cerberus? I just can't believe they can keep Chrysler running until new product hits the pipeline. I'd love to be proven wrong. Especially if they build cars that somehow seem like Chryslers again. Been a long time.

hpmctorque · September 2008

Yeah, this has me very puzzled too. You'd think that if Cerberus wanted to invest additional money into Chrysler it would be used to ride out this difficult period, until new product can be introduced. It could also be invested in product, which is one area where Chrysler currently falls short.

The devil must surely be in the details on this one, because on the surface it defies logic.

andre1969 · September 2008

I heard that Cerberus is against the gov't bailout of the domestic automakers. Evidently, they have enough cash reserves to ride it out, where Ford and GM don't. At least, according to my roommate, who works for a company that's ultimately affiliated with them, somehow. He works for a restaurant named Smokey Bones, but somehow qualifies for employee pricing on any new Chrysler product.

stever · September 2008

Cerberus keeps saying Chrysler isn't up for sale, but getting completely divorced from Daimler could make the whole package a bit more attractive to some other company. Say, one that competes hard with them. VW perhaps?

dtownfb · September 2008

Interesting. I just heard a report that the House approved the $25 billion dollar "loan" to the Detroit automakers. I thought this bailout was critical for Chrysler to release their electric cars in 2010 as well.

lemko · September 2008

...somebody at work just bought a new black Chrysler Sebring. At least there's one person who likes 'em. One of my co-workers at my other job has a new Chrysler Aspen. They must be giving them away as nobody at that job makes enough to pay the MSRP on them.

dtownfb · September 2008

They are fine cars as long as you don't test drive any of their competitors.

stever · September 2008

"Chrysler LLC is expected to fire roughly 300 salaried employees as soon as Friday in a bid to meet a target of cutting 1,000 white-collar jobs by the end of September."

AP

More at the WSJ, including this quote:

"With a number of firings looming, morale at Chrysler is "lower than low," another employee said."

hpmctorque · September 2008

"With a number of firings looming, morale at Chrysler is 'lower than low,' another employee said."

Unfortunately this is almost always the case when many employees lose their jobs. It's a very difficult thing to avoid. Please excuse me for asking a rhetorical question, but would morale be better if the company didn't control expenses, thereby virtually ensuring bankruptcy and the loss of all jobs?

stever · September 2008

It is a good question. HP laid off a few hundred people here in Boise not long ago. They choose to do it on a Monday morning and people were told to come to work prepared to leave for good. Usually Fridays are the trigger day, but HP wanted to avoid a situation where people wound up home alone for the weekend with suicidal thoughts.

There was lots of counseling available (emotional and job) and generous parting gifts. Morale has suffered but probably not as bad as a Friday rout without much notice. And much better than the shock of closure out of the blue, like the sudden shutdown of the Bill Heard dealerships.

The long slow drag on Chrysler sales in this economic environment must be like a cloud over the whole organization.

hpmctorque · September 2008

Good points!

dclarke811 · September 2008

I am in the process of buying either a Town and Country or a Honda Oddyssey. If I can find a CDI number, this would put the Town and Country over the top for me. Can anyone help me find one? Please?
Thanks

iluvmysephia1 · October 2008

Chrysler has some new news to me. And it's news that goes a long way to answering what is going on with the subcompact Dodge Hornet. I just read in the September '08 Motor Trend magazine that Dodge and Nissan are working together on a small car that will be built on the Nissan Versa platform, that will be based on the Dodge Hornet design. And it will be released to us here in the U.S. in 2010 as a 2011 model.

Also, Dodge and Chery Motors of China are still working on a small car(rumoured to be the Chery A1)that will be exported to world markets in 2012. That part about that car being the Chery A1 was not in the Sept.'08 Motor Trend. I knew that from my car magazine and internet reading. Seems to me I have read different things about where the A1 will be built. It makes sense for it to be built in China by Chery Motors, however, this part of the story may have more information to come about the A1's build location.

Finally some information on the Dodge Hornet subcompact! I have continued to look for infomation on that little stinger for months and months and found nothing, until now in the Sept.'08 Motor Trend. It was near the front of the magazine where on this same page MT was discussing the new Chevy Cruze subcompact and the Ford Fiesta plans. Just to sort of give us all a domestic small car update.

hpmctorque · October 2008

BY TIM HIGGINS  FREE PRESS BUSINESS WRITER  October 3, 2008

"It's official: Chrysler plans to launch redesigned versions of the Dodge Charger and Chrysler 300 in 2010.

The Auburn Hills automaker's plan to launch redesigned versions of the full-size cars in 2010 was an open secret in Detroit, but it was something that Chrysler officials never talked about in public.

That is until this week when Chrysler CEO Bob Nardelli confirmed it.

'In the pipeline for 2010: A brand new 300, a brand new Charger ... a brand new Jeep, the pipeline is full, plus we have these smaller vehicles coming through partnerships and alliances," Nardelli said. "I think the product cadence at Chrysler is coming back strong.' "...

This article went on to say that these redesigned cars, which will debut in 2010, will probably be designated as 2011 year models. Makes sense.

mickeyrom · October 2008

I guess MOPAR will continue making cars that have no resemblance to what we need.I.e...economical vehicles.

hpmctorque · October 2008

"I guess MOPAR will continue making cars that have no resemblance to what we need.I.e...economical vehicles."

Well, I don't think that's really accurate, if they follow through with their announced product plans. In addition to the 300 and Charger, they'll field a small car based on the Nissan Versa plus at least one electric vehicle in 2010. They also plan to expand their hybrid offerings, to include the Dodge Ram and other larger vehicles, such as minivans, crossovers, and maybe the 300 and Charger too. Additionally, there may also be a smaller than Versa car in the line-up, sourced in China. Finally, the next Jeep Grand Cherokee will be on a car instead of a truck platform, to reduce weight and improve fuel economy.

The big IF is whether they'll actually be able to introduce all these new models and changes. I don't know the answer to that, but I'm convinced that the current management understands as well as anyone that much more fuel efficient vehicles are essential for Chrysler's survival.

Circling back to the 300 and the Charger, I think they'll sell if they're as aspirational as the current generation is AND they get better fuel economy. Those cars were well received, but as with other large cars, fuel consumption needs to be reduced.

Diesels are another option for the larger vehicles. Chrysler already offers some diesels, so I'm sure they're considering expanding their diesel offerings.

iluvmysephia1 · October 2008

need for smaller, more fuel-efficient vehicles. Seeing them come out is a bit of a question mark. And how good the cars are made, etc. Progress is being made, though, it looks like, in the small car field, by Chrysler. That is progress that is important to me.

dtownfb · October 2008

I agree iluv but I just don't know how Chrysler can make it. their car sales are the worst of the Big 3 and their current offerings are lackluster at best.

Of course, since Cerebus is a private equity firm, they don't have to release the financials. Not unless they have raised more cash, I don't see how they can make all of this happen.

stever · October 2008

Not much in the way of details, but Chrysler did tell its dealers a couple of weeks ago that it lost $400 million through August. They lost $1.6 billion in '07, so maybe that's an ok number. They also said they had $11 billion in cash (Chrysler, not Cerberus).

Reuters

fezo · October 2008

G.M. and Chrysler Explore Merger.

Can't even start to wrap my brain around that one.

dtownfb · October 2008

Cerebus owns 51% of GMAC and GM is looking to get rid of the rest of GMAC. Eventhough GMAC is a mess right now, it's in better shape than Chrysler. I think Cerebus is better at mortgages and loans than they are building cars.

I know GM wants to unload the rest of GMAC but not sure why they want Chrysler. Chrysler has no competitive mainstream cars. I guess they could sell the Jeep line and keep the minivans. Of course they do mention that the talks are on hold because of the unstable stock market.

jchan2 · October 2008

What I said a few months ago:
Chrysler is a train-wreck. A disaster. A mess.

Since the majority of dealers are combined anyways, why not close a brand? or 2? Sell Jeep, keep either Dodge or Chrysler, and shut down the other; they're essentially carbon copies of each other anyways.

Of course, there's the obvious. Dump dealerships, overlapping models, etc.

If none of their new product is supposed to come out until 2010, my question is: can they ride out the storm that is 2008 and 2009?

myershift · October 2008

I personally feel that Chrysler's best interior execution ever came with the Pacifica. Even MotorTrend stated that it approached that of Volkswagen/Audi in perceived quality of interior materials, and I would agree with that.

The upper dash pad is very soft touch with a matte finish and surrounding materials are attractive and mostly pleasant to the touch as well.

However, LX cars (300, Magnum, Charger, Challenger) aside, Chrysler's interior finishes, materials, and styling inside and out took a dramatic plunge over the far more attractive and aerodynamic "cab-forward" cars that Honda seems to have modelled the new Civics after.

Chrysler's recent descent into stylistic abortion is most likely what has led to their current woes. As we have seen, great styling and innovation if not actual quality and reliability made Chrysler the most profitable mass market automaker in the world in the 1990's.

Then Robert Eaton and Jurgen Schrempp masterminded the takeover of Chrysler by Daimler-Benz and it basically went down hill from there.
The hardest hit products in their lineup seem to be the compacts and midsizers. Chrysler went from the sleek and fun to drive Neon to the heavy, bulky, and unpleasant looking Caliber. Even the new Caliber SRT-4 is slower than the previous Neon SRT-4 despite the additional, what, 55 horsepower and also lacks a limited slip differential. Worse looking are the new Sebring and Avenger. Compared to the previous two generations of cars Stratus/Cirrus/Breeze and Stratus/Cirrus, the new midsize models look more Korean like what Hyundais used to (especially the Sebring) than what Hyundais do now.

I feel it's a sad day to realize that my favourite player on the home team is now turning out less attractive AND generally inferior cars to a Korean outfit that even just ten years ago was the laughing stock of the industry. I hate to say it, but Chrysler could now really learn a thing or two from Hyundai/Kia about vastly and swiftly improved perceived and actual quality.

I myself no longer own a Chrysler product (previously a 1993 Chrysler LeBaron Cabriolet and later on a 1996 Plymouth Breeze) due to mainly the styling. Had the Neon been available to me in a new and improved form back in January 2008, I would have purchased one of those instead of my 2008 Volkswagen Golf (Rabbit). I had never experienced something horrible enough in one of my Chrysler Corportation products to warrant not ever wanting one again. Coupled with their unique style at the time and generally fun to drive nature, I was won over. For instance, the Chrysler 300M (which was to be the new Eagle Vision don't you know) could go head to head with any comparable car around the globe with no apologies. [Visit link title for a road test of the 300M where it placed second only to an Acura TL and link title for more information if one is skeptical.]

So, overall, what Chrysler needs to do first and foremost is dramatically improve the styling of its products to be similar in greatness to the of the cab-forward era and improve quality, reliability, and NVH. My Breeze was quite the noise maker!
Chrysler also needs to dump unnecessary models such as the Dodge Nitro, Jeep Compass (what an abomination to the brand it is!) and produce a new compact sedan at least for the U.S. market because hatchbacks aren't big sellers here and a new compact Chrysler sedan with good styling would go a long way to helping them out.

Chrysler; what you need most are style AND substance.

-S. Myers

jchan2 · October 2008

That the Pacifica was and still is a very classy car (if equipped correctly) and that the interior is actually pretty decent, especially in light of the Sebring, Avenger, Caliber, Compass, etc.
The Pacifica was an excellent concept, design, and execution, only there should have been a 7 passenger model at the beginning (and there still isn't) and the car was priced to fail. (I remember pricing out 2004-2005 Pacificas and seeing some of them reach up into the upper $30K range, even low $40s). The Pacifica also would have benefited by having the 4.0L at the beginning of production instead of halfway through...

I saw Pacificas advertised in the local paper starting at around $16K... A pretty decent car for the price...

The Pacifica was an almost-premium car priced like a premium car under a brand nobody regarded as premium. A classic example of how price can sometimes kill a well-conceived product before it even hits the marketplace...

mickeyrom · October 2008

I hate sounding stupid,but exactly what is "cab-forward" ? :confuse:

hpmctorque · October 2008

"I hate sounding stupid,but..."

You ask a logical question. Here's my understanding of "cab forward": It's a term, although not necessarily a concept applied by Chrysler Corp. to the design of its all-new '93 Chrysler Concord, Eagle Vision, and Dodge Intrepid front wheel drive large cars. In contrast to a relatively long hood and short rear deck design, or a normal length hood and rear deck, the cab forward design attempted to maximize passenger space, especially, and also trunk space, by featuring a relatively short hood and a steeply sloping windshield. I believe another feature of this design was to make track wider, relative to the width of the car. Chrysler's cab forward '93 cars were notably larger and, arguably sleeker than previous ground breaking FWD designs, such as the first and second generation ('87-'91 and '92-'95) Ford Taurus/Mercury Sable

I think the use of the cab forward term had as much to do with marketing as with configuration, because one could argue that the Honda Accords and Civics of the mid-late '80s and early '90s featured similar design language, but Honda didn't employ the cab forward term to their styling.

For all the many quality issues that plagued the domestic models of the '80s and '90s, many featured innovative styling (eg. GM's '85 large bodies, Ford's '83 T-bird and '87 Taurus, and Chrysler's Cab Forward and '95 "Cloud Cars" [Chrysler Cirrus and Dodge Stratus]).

stever · October 2008

There's a pic of a car at this post that's the opposite of "cab forward."

boomchek, "Mystery car pix...." #18463, 27 Sep 2008 12:54 pm

hpmctorque · October 2008

I would add that I believe that "cab forward" was an attempt by Chrysler to transform itself from a manufacturer of stodgy K-cars and K-derivatives to a styling leader. After all, it had tried this three times before; in the '30s with the Airflow, in '55 with its "Forward Look" cars, and in '57, with its dramatically new fin-themed cars. Remember, the '93 cab forward, and '95 cloud cars and Neon were conceived when Lee Iacocca and Bob Lutz managed the company, and these guys were not averse to risk.

Ahh, if only the quality and reliability of Chrysler's cab forward cars was as good as the styling...

nippononly · October 2008

Chrysler is laying off 25% of its salaried workforce by the end of the year? That's not far off. Maybe pretty soon the whole company will just disappear - POOF!

On the bright side, I guess they have all the bidders they want in the sale of the Viper program.

krecker · October 2008

My Jeep Liberty just had a major engine problem. This does not appear to be isolated to only Jeeps engines. My Jeep had 82K miles. Dealership stated valve seat came loose putting a hole in the piston. This has been reported in ALLDATA reports recently yet the word is not getting out to the general public. A reliable friend of mine said carbon built up can't cause the resulting damage and there is a major manufacture flaw in the material they used. The resulting hole in the piston is a defect in the metal. There appears to be a trend here and the manufacturer is not saying anthing including a recall notice. Has anybody else had any Jeep engiines vakve replaced or major engine repairs. We only discovered this by demanding to see and take photos of the resulting problems and it was evident it was a manufacturer defect.

skw0123 · October 2008

I think Chrysler would be liquidated *tomorrow* if Cerberus Capital could find buyers for the pieces. Selling the company or any large part of it is out of the question; there are no interested buyers, and no investment capital even if there were.

Finding partners or trying to figure out how to run the company more cost effectively would be logical steps if this were 2006, but it is too late now.

My hunch is that we'll know a lot more by the North American International Auto Show.

mickeyrom · October 2008

Do you think that Chrysler will go the way of Studebaker,AMC and Hudson? So what do you think would happen to that lifetime power train warranty that recent purchasers were promised? :confuse:

andre1969 · October 2008

In my opinion, the only thing that "Cab Forward" really gave you was a huge dashboard and huge rear package shelf, and sharply sloping windows that would make both impossible to clean. It might have made the cars look sleek and futuristic, but I don't think it really did anything for interior room. That was the wheelbase, pure and simple.

I was always impressed with the amount of legroom that the Neon had in it. However, the first-gen model was on a 104" wheelbase, and 105" for the second. Just for comparison, some midsized cars were in range of that. The Chevy Celebrity was 104.9". The "small" Ford LTD/Mercury Grand Marquis was 105.6". And Mopar's own Dodge Dynasty/Chrysler New Yorker was only 104.3". The older Dodge 600/Chrysler E-class/New Yorker/Plymouth Caravelle, also a fairly roomy car, was only 103.3"! I think the first Ford Taurus was around 106".

Similarly, the Dodge Stratus/Chrysler Sebring/et al sedans were decently roomy. I think their wheelbase was around 108". My old 1980 Malibu, with a 108.1" wheelbase, was about as roomy inside, and it was a coupe. The sedan was a bit roomier.

My 2000 Intrepid's wheelbase is 113". That car replaced a 1989 Gran Fury I had, a box on wheels if ever there was one. The Gran Fury dated back to the 1976 Volare, wasn't exactly the ultimate in space efficiency (decent for 1976, but NOT 1989!), and rode a 112.7" wheelbase, yet I swear it was roomier inside than the Intrepid. Maybe a little tighter in the back, but it more than made up for it up front! The only thing I really hated about that Gran Fury was the steering wheel location. Too close to my chest. And it had an airbag, so I'd hate to think of some little old 5'2" lady driving one and getting into an accident!

It's kinda funny how Chrysler has a knack for making cars that look nice and futuristic but fall apart, or are somewhat conservative and stodgy but last forever. Too bad they couldn't strike a balance somewhere!

lemko · October 2008

1957 Forward Look Styling + 1949-54 Briggs Body Quality = Perfection

carolinabob · October 2008

If GM takes over Chrysler, would it be likely that within five years, Chrysler disappears in favor of Buick, Dodge disappears in favor of Pontiac and Chevy/GMC trucks?

dtownfb · October 2008

Your guess is as good as anyone else's. Some are talking a merger of products; some are predicting eliminating all of Chrysler except Jeep and the minivans; and recent talks discuss more of a slow death like you are alluding to. I think all is on the table and depends on if the government hands them over $10B. You'll probably hear more in the next few days as Cerebus seems eager to get this done before the election.

I can't see the government supporting this merger if it means eliminating 40,000 jobs which some analysts are predicting. That makes absolutely no sense to use tax dollars to support job elimination. Let the companies go bankrupt and then help the workers with that $10B.

nippononly · October 2008

Chrysler will pull plug on hybrid Aspen, Durango

Chrysler LLC will stop producing its first two hybrid-electric vehicles slightly more than two months after they started arriving in dealerships.

This summer, Chrysler introduced the Chrysler Aspen and Dodge Durango Hemi hybrid SUVs to great fanfare. Production began in August. But the two were doomed to a short lifespan from the beginning. They are made at Chrysler's Newark, Del., plant, originally scheduled to close at the end of 2009.

But slow full-sized SUV sales pushed Chrysler to move the closing up a year. The company announced last week it will close Newark at the end of this year. Chrysler has no plans to produce the hybrid SUVs elsewhere, said spokesman Todd Goyer.

They talk about producing a hybrid Dodge Ram in 2010, and promise that "more hybrids are coming", but it's all just spitting in the wind. There isn't a chance the current management team will still be running this company in two years, and there's a fair chance Dodge won't be around at all...

http://www.autoweek.com/apps/pbcs.dll/article?AID=/20081029/FREE/810299993/1528/- newsletter01

stever · November 2008

Chrysler and Hyundai?

hpmctorque · November 2008

"Hyundai denies interest in Chrysler's assets

By MarketWatch
Last update: 10:31 a.m. EST Nov. 8, 2008Comments: 7
SEOUL (MarketWatch)

Hyundai denied on Saturday a wire service report that it has been in talks with Cerberus Capital Management LP about buying Jeep or other assets from Chrysler LLC.

A Hyundai Motor spokeswoman said the carmaker isn't considering acquiring Chrysler's Jeep brand and other assets because it is focusing on completing its overseas plant construction. 'We have little room for acquisition of an overseas company such as Chrysler,' said the spokeswoman.

Citing people with knowledge of the discussions, Reuters reported Friday that Cerberus is looking to renew talks with other potential bidders like Renault SA (and Nissan Motor Co."

stever · November 2008

Hyundai denies interest in Chrysler's assets

Must be a done deal eh? :shades:

I'm not going to be too shocked to see a headline like "Apple and Chrysler?"

Toss in Ford's Sync tie-up with Microsoft and all that will be left to do is for Google to buy GM.

fintail · November 2008

I think Enterprise, Budget etc should buy Chrysler, and then they can make their own cars to their own specs - they must be the primary customers anyway.

jchan2 · November 2008

I'm kind of tempted to pick one of these rare creatures up just as a collector's item.

I'm loving how these Hybrids are being advertised right now when they won't be available shortly. What a waste of cash!

dtownfb · November 2008

Interesting.... Better than the government support the big 3.

fintail · November 2008

25 years...

stever · November 2008

25th anniversary of the Chrysler minivan? Sweet.

A friend is visiting and is driving a rental Grand Caravan. Nice rig - has more bells and whistles on it than the one I rented a couple of months ago.

Can Chrysler Turn It Around in Bankruptcy?

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