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Can Chrysler Turn It Around in Bankruptcy?
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Comments
The local dealer where I am in the burbs disappeared in the middle of the night about a year ago. The cars actually sat there for a few months getting dustier and dustier before they got hauled away.
No matter what Chrysler has in the way of a turnaround plan, it isn't going to do them much good if all their dealers go out of business first. Seems like of all the domestics, Chrysler has historically been hardest on its dealer body.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I only say this because Chrysler is privately owned whereas GM & Ford have majority share holders. Just a prediction?
By making the allegations public, Cerberus appears to be conceding that its Chrysler investment hasn't gone well for the New York private equity firm."
Cerberus claims it was misled in deal for Chrysler. (Yahoo)
I don't think Daimler should be blamed for Cerberus' lack of success with Chrysler- anybody with a decent brain should have known that Daimler was looking to dump Chrysler for a reason, and that any buyer would need to put some serious TLC into the brand before it could become profitable again.
The hedge fund quick fixes don't apply to the automotive business, and this is a classic example.
2021 Kia Soul LX 6-speed stick
You can read Chrysler's plea to the Congress here. (pfd file)
At Insistence of Testy Lawmakers, GM and Chrysler Reconsider a Merger
I had suggested to my friends weeks ago that combining the big three into a really BIG one would make sense.That way they could stop competing with each other and make a much more efficient and streamlined corporation.There are many ways that this could work out,just as an example: One could build the luxury types, another the Suvs and such and another the hybrids.Funny just last week there was an article in Newsweek suggesting the same thing.Am I too smart for my own good ? (hee hee)
I don't see the Ford family going along with a 3 way merger since they'd have to give up lots of control, but they may increase their net worth by running to the sidelines.
I could see Nissan joining in on a tie-in some way too.
THAT wouldn't last long before it imploded.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Government aid won't save Chysler (Straightline)
I should add that my local Toyota dealer DOES provide free loaners, lattes, and Wi-Fi for service customers - including me, with my $12,000 Echo which I bought for $1800 less than the advertised price. And they don't seem to be too stressed out about it either. mwl may just need some stress management techniques, that's all.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
So whats your point?
In the letter, Mr. Gilman said more than $1.5 billion has been withdrawn from the CMA fund since July.
"Continued significant levels of withdrawals from CMA could potentially force us to temporarily suspend wholesale funding," he wrote. He asked dealers not to withdraw "beyond what's absolutely necessary."
Chrysler Warns Dealers About Loans to Fund Car Inventories (WSJ - may be a flaky link)
Any bets as to whether they ever reopen?
the article I read on this used an "if" in a rather ominous spot, I thought:
That means Chrysler will drop an additional two weeks of production if workers return on Jan. 19.
It also said this, more ominous stuff:
Nardelli told Congress the company would end 2008 with $2.5 billion cash on hand. He said the company will owe suppliers $8.0 billion in the first quarter alone.
........He said Chrysler burned through $1 billion a month in the third quarter.
So the cash burn rate even at little ol' Chrysler, half the size of GM and Ford, is roughly the same as those two giants of industry. I guess the question of IF Chrysler plants will reopen in late January will be answered by what the Prez finally decides about giving the domestics some of the financial bailout money. Certainly by the time Obama takes office it will be too late to save Chrysler if nothing has been done up until then. Of course, I am still wondering if Cerberus will drop some money into Chrysler once its back is REALLY against the wall.....
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
They may have to sell or hock some performing assets to raise the dough to fund Chrysler. They may decide to cut their losses instead.
Certainly, articles on the subject always play up the angle that Cerberus BY CHOICE will not plow any more money into the company.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Chrysler gets $4 billion on Dec. 29. That's it.
Unless more funding is forthcoming, Chrysler really has no other choice but to determine the best way to go away."
It May Not Be Bankruptcy, But Chrysler Deconstruction Inevitable (AutoObserver)
Cerberus to invest $2 billion in Chrysler
NEW YORK (AP) - Cerberus says it will invest the first $2 billion of Chrysler Financial profits back into the financing arm's parent automaker.
Cerberus Capital Management LLC says the funding will back up the $4 billion loan Chrysler is getting from the government as part of its rescue package for the domestic auto industry.
But Cerberus says Chrysler's labor costs must be cut to the level of its foreign competitors and its debt restructured.
If that doesn't happen, it says the automaker will not be able to return to long-term viability or be able to repay its government loan.
In order to make that happen, Cerberus says it will offer equity stakes in the automaker to its unions and creditors in exchange for concessions.
It seems the best option for Chrysler may be to simply sell the company for whatever they can get for it. They need major concessions by the UAW (which won't happen) and their creditors to re-negotiate....all by the end of March. :sick:
And then there were 2......
Days before the details of White House's half-hearted bailout became known, the CSM analysts spoke of the advantageous dynamics of the new "Detroit 2:" capacity utilization and flexibility will soar (thanks to, ahem, lots of shuttered Chrysler factories) as some two million or more units of vehicle-assembly capacity is removed from the manufacturing base of the now-Chryslerless domestic auto industry.
I have been thinking that for a while. Nobody is taking into account the huge beneficial effect it will have on the remaining automakers if the weakest one fails and leaves the market. Of course, that STILL won't bring Ford and GM totally out of the woods, as we have lost well over 2 million annual sales this year, but it sure is a start.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
It's been game over for Chrysler for a long time; Daimler basically raped Chrysler...
I could see VW bidding for the Caravans. Unless they decide to redo the Routan in-house after seeing how Chrysler has been building them.
GMAC, 51% owned by Cerberus, is now a bank holding company meaning that they can get TARP money to use for financing car loans and leases. That's going to help GM too. (BNET)
The Quest logs so little in sales, and its resale is far worse than most other Nissans, that it might simply be worth dumping anyways, though.... Nissan hasn't had much luck with minivans.
The Routan is a curious case; I don't see why VW would want to get into a market that is declining every single year due to 7/8 passenger crossovers becoming better and better. Why not just develop their own crossover, or engineer the next Touareg to seat 7?
I could see Nissan bringing over a version of the Renault Espace vans instead of chasing after the Caravan, but having the factory and tooling set up would be an advantage. And the Caravan brand is still worth something.
The Routan is curious. Lots of minivan fans like me were disappointed that VW didn't do the Microbus concept that they floated a few years back.
hmm, just thought of something. If Chrysler goes dark, maybe I could pick up a Grand Caravan for dirt cheap and take it to the VW dealer for service if a local mechanic got stuck on a problem. Might be worth taking a flyer on. Too bad they quit making the short wheel base one a while back.
Chrysler Faces Criticism for Full-Page 'Thank You' Ads (Fox)
Besides, people coming to Edmunds rely on those car ads to help narrow down their choices.
Pretty awesome design for a Volt competitor.....