Bailout Watch 364: Chrysler Is Insane

Robert Farago
by Robert Farago

Bailout fatigue? Not me. Every day I wake up wondering what new absurdity I’ll encounter in my quest to tell the truth about cars and those who make them. And just when I think it can’t get any more ridiculous—a Chrysler Fiat tie up, “strategic reviews” of dead brands, a back room bailout for an ex-Treasury Secretary’s new boss, viability plans spun out of thin air, product plans cut from the same cloth—it does. Here’s today’s hit of alternate reality: Chrysler wants—no, demands—that its suppliers cut their prices. WTF? Remind me again. Chrysler’s suppliers are making how much profit these days? I’m thinking… none. And how many cars can Chrysler build if its suppliers—make that one key supplier—can’t deliver parts? I’m thinking… none. Not that anyone’s buying Chrysler products, but blood from a stone? Aintgonnahappen.org.

And yet, there it is [via Automotive News]: “Chrysler LLC’s purchasing chief is demanding a new round of price cuts from suppliers as the automaker faces a Feb. 17 deadline to justify its federal bailout money. Scott Garberding has ordered price cuts from all suppliers effective April 1. Those would be in addition to annual price decreases required contractually of suppliers, according to a Jan. 26 Chrysler letter obtained by Automotive News.”

So Chrysler’s going to sacrifice its suppliers to get tax money to pay its suppliers to build cars no one’s buying. Fabulous! Literally.

“In his letter, Garberding offered suppliers a carrot in the form of a 90 percent share of any cost-reduction ideas they initiate. But such efforts require a long-term process of testing and evaluation.

The supplier executive said Chrysler’s mass layoffs have stripped much of the staff needed to run that program.”

You can’t make this shit up.

Robert Farago
Robert Farago

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  • 50merc 50merc on Jan 29, 2009

    Chrysler's policy: the components will continue to get shoddier until overall vehicle quality improves.

  • Dougfixit Dougfixit on Jan 29, 2009

    The big 3 have been beating up on us suppliers for years. I would bring up the point time and time again that they are saving a few pennies now, but paying out big bucks later in warranty and customer dissatisfaction. The supplier I worked for does business with all the big 3 and some of the transplants, yet despite their diversification, they are deathly afraid of losing business. To which I would say "Zero money is better than negative money." Anyway I am now unemployed.

  • Jeff I doubt most people care. Care more about their vehicles but after being a loyal gm customer for almost 50 years and having family members all the way back to my grandparents I no longer care. The last gm vehicle I owned was 2 years ago. To me gm can go into the dustbin of history.
  • Cprescott I'm surprised they didn't move to China. That is who bankrolled their bankruptcy bailout plan.
  • Analoggrotto You ask as if I should care. Well I don't. Any more questions?
  • Analoggrotto What the heck are those people doing in front of that house? Just staring at this stupid pos truck?
  • Jeff Good review but the XLT although not a luxury interior is still a nice place to be. The seats are comfortable and there is plenty of headroom. The main downside is the limited availability resulting in dealer markups above MSRP. I have a 2022 hybrid Maverick XLT for over 2 years and it has more than met my expectations. I believe for many who do not need a truck most of the time but want one the Maverick will meet most of their needs.
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