Chrysler has always held a special place in TTAC’s chronicling of Detroit’s decline, enjoying a bespoke “Suicide Watch” in contrast to our Ford and GM “Deathwatches.” In the first entry in that series Frank Williams wrote of a gutted firm, dependent on incentives and flagging truck sales, seemingly doomed to drag its foreign partner into bankruptcy. Four years and countless opportunities for death with (some) dignity later, Chrysler presents much the same picture. Sure, it’s been rinsed of debts and excess capacity in bankruptcy court, but the Pentastar’s brands are still fundamentally damaged from years of self-abuse and the firm is struggling (and failing) to improve on last year’s sales numbers, which were recorded en route to said bankruptcy. Inventory may be under control, but Frank’s four-year-old assessment of an investor warning by JP Morgan could have been written yesterday [with "DCX" replaced by "Fiat"]:

JP Morgan remains convinced that management patience towards Chrysler has “worn thin and increases the likelihood that DCX will reduce exposure to Chrysler.” It’s the investment community’s equivalent of yelling “jump!” to someone standing on a ledge.

In fact, analysts from London’s Bernstein Research wrote nearly the exact same line yesterday. Chrysler has officially shuffled back onto the ledge, and once again the analysts are shouting “Jump!”

The Bernstein report, portions of which are published without subscription at Tire Business, is actually remarkably optimistic about Chrysler’s financial performance in the first quarter of this year. According to the write-up by Crain News Service:

The report praised the CEO’s cost-cutting efforts: “Mr. Marchionne and team are reportedly ‘again and again’ finding fixed cost savings” in key areas. Those cost-cutting measures have helped the company come “surprisingly close to breakeven” in the first quarter, the report said.

But, as Detroit has proven again and again, you can’t simply cut your way to viability. Marchionne’s deep industry experience may make him a more effective, efficient cost-cutter than the Cerberus boys were, but the strategy hasn’t changed much: move what we have with incentives and hope consumers hang tough with the brand until new products arrive. And with that strategy, Chrysler’s losing sales faster than it can cut costs. Bernstein may be optimistic about Chrysler’s Q1 financial performance, but the automaker ends the quarter with only 234,215 sales, a five percent decline from Q1 2009, which at the time earned such adjectives as “Medusa-class ugly,” “Yikes,” and “Bloodbath.”

This sales decline is the fundamental problem. Chrysler is burning cash on advertising, spending $170 per projected sale this year, and yet nothing will move the needle. Whether this is because the ads themselves have sucked, the product sucks or because consumers have simply decided to tune out the name “Chrysler” is a matter for debate, but ultimately the answer is academic. The important fact is that Chrysler must sell 95,000 vehicles for each of the remaining nine months of this year. Chrysler has achieved that level of volume once in the last 14 months, despite consistently offering some of the highest incentives in the market. Losing share in a weak market is a good way of showing that your turnaround needs a turnaround.

With this in mind, it’s not surprising that Bernstein concludes:

We remain unconvinced Chrysler will survive in its current form despite Marchionne’s blood, sweat and tears… A slimming down of Chrysler to be just Ram, Jeep and a U.S. production base for Fiat looks a realistic exit strategy to us

Worst of all, Bernstein is not simply recommending that Chrysler jump: it’s recommending that Fiat stockholders push. Fiat is unveiling its own five-year plan next week, and the Bernstein report was written as guidance for antsy investors. The Fiat brand, buoyed in the European market by recent scrappage schemes, is eyeing a 15 percent European sales decline this year according to Automotive News [sub]. Pressure is mounting on the Italian conglomerate to spin-off its car and truck businesses entirely, and to apportion its $11.4b in bonds. According to analysts, these transactions are “very much tied to how things go at Chrysler, which is still in the preliminary stages of the restructuring.” Scaling back the Chrysler turnaround as Bernstein suggests is likely to be seen as a popular strategy option among Fiat’s anxious stakeholders.

And ultimately, there’s little incentive for Fiat to not push parts of Chrysler over the edge. Fiat’s current 20 percent of Chrysler Group has cost it precisely nothing so far, having bought in to the bailed-out automaker with only its existing technology. Meanwhile, years two, three, four and five of Chrysler’s financial turnaround plan require the firm at least break even this year if it is to avoid a cash infusion from Fiat. We called the financial plan “leveraged assumptions” because, though it includes contingencies for market downturns, it doesn’t begin to contemplate the kind of market share declines the firm is currently facing. If Chrysler misses its 95k unit sales goal for several more months, Fiat will have no choice but to reassess its entire Chrysler turnaround plan, predicated as it is on continuous improvement in sales, market share and revenue.

Chrysler will spend untold millions over the next twelve months launching 14 “new or refreshed” products, most of them falling into the latter category. These products represent Chrysler’s last chance to survive in its current form, and to get its turnaround back on track. Having committed to keeping the Chrysler brand on life support by upgrading such sales duds as the Sebring with dual-clutch transmissions and re-worked suspension, Marchionne won’t scale back Chrysler’s five-year plans until he sees the asphalt rising to meet him, and he realizes that he missed his targets. At this point, Fiat’s shareholders and directors are the only ones capable of heeding Bernstein’s advice, calling the turnaround plan out as the pipe dream it is, and giving Chrysler (if only the brand) a tiny push.

TTAC did not file a full Chrysler Zombie Watch from the launch of Chrysler’s five year business and product plan, but two major points dominated our coverage. The first was this graph that shows 2009 as a trough year for Chrysler sales, with 2010 heralding a major and sustained turnaround in Chrysler’s fortunes beginning next year. Underlying this rosy projection is the second main point of Chrysler’s turnaround, a product/branding strategy that we summarized as “refresh and market like hell.” But refreshes take time, which is something that Chrysler simply doesn’t have. While the automotive world waits for the crucial Fiat-fettled refreshed Chryslers (due to begin arriving at the end of 2010), the “market like hell” portion of the plan is hitting America’s airwaves first, in the form of new ads aimed at reviving “consideration” of Chrysler’s damaged brands. But now that we’ve seen the opening salvos in this $1.4b war on consumer apathy, it’s becoming clear that Chrysler’s journey (no pun intended) of a thousand miles is beginning with a stumble.

The very first of these ads debuted the evening after Chrysler’s seven-hour Powerpoint-fest, introducing the American consumer to the already-infamous tagline “my name is Ram and my tank is full.” For attendees of the seemingly interminable five-year plan presentation, the “my tank is full” line was a piece of inspired humor that generated gales of laughter in the line for the restroom. Within days it was clear that the humor worked even without the toilet-humor angle. Parodies flooded onto Youtube, poking fun at the ad’s meaningless recycling of every truck ad cliche.

This inauspicious start was made doubly so by the fact that the new Ram brand is one of Chrysler’s strongest. Indeed its spin-off has been justified by the fact that the Ram image had overwhelmed the entire Dodge brand. Moreover, unlike Chrysler’s other brands, Ram has/is a product that actually competes in the mass market.

And yet any mention of this product or its real attributes was left out of the Ram spot in favor of the kind of rhetorical flourishes that scream style over substance. “My Name Is Ram” is more internal propaganda for firing up the troops and dealers than anything that might motivate a consumer to consider buying a Ram pickup. With so many staggering challenges facing Chrysler’s brands, Ram marketing should have been the only easy layup. Instead it became a joke that Chrysler could ill afford.

In contrast, the Dodge brand has no recently-released products to highlight, and faces deep existential questions about what it stands for without its horn-headed logo and truck halo. Dodge CEO Ralph Gilles’s presentation at the five-year plan ceremony did nothing to shed light on what exactly Dodge is supposed to stand for, and neither has the brand’s first ad titled “Amplify.”

Autoextremist Peter DeLorenzo initially identified Dodge’s brand image as “being all things to all hip people,” and the Amplify spot confirms this weak brand focus. Needing to explain the positioning of its least-plummeting brand, Dodge’s first ad merely highlights a few attributes of the weak-selling Dodge Journey juxtaposed with images of young hip people “Amplifying” their existence with a staid mommy-mobile. Should any consumer feel moved by the ad to check out a Journey, the only thing they will find “amplified” is their sense of disappointment with the Journey’s weaknesses and the fact that the 25 mpg advertised is not attainable with the AWD option highlighted in the spot.

Though defining Dodge as a hip and youthful brand is a major unmet challenge, bringing perceptions of the Chrysler brand upmarket is by far the toughest hurdle for the Fiat-led Chrysler Group. Attendees of the five-year plan were treated to a video montage expressing the values of Chrysler’s upmarket aspirations that was far more convincing than the Dodge, Ram and Jeep brand presentations. A blend of traditional Chrysler values and European flair, the video worked on the emotional level, probably by failing to show any of Chrysler’s moribund products in favor of models and celebrities exiting mysterious scissor-doored supercars.

But the other indication of Chrysler’s luxury ambitions, fancy new model brochures printed on heavy stock, showed how deeply Chrysler’s fate balances on style over substance. The faux-leather carboard cover of these brochures brought back echoes of “Rich Corinthian Leather,” while the content merely reminded readers that when it comes to Chrysler products, there really is nothing new under the sun. For the next 12 months or so, Chrysler will work to raise expectations of its brand image while rewarding actual shoppers with the same old dead-in-the-water lineup, enhanced only by a few cynical “special editions” to debut early next year.

So perhaps it’s a good thing that Chrysler is not broadcasting Laurence Olivier’s video in advertisment form. After all, its traditional luxury appeals would only have hurt Chrysler’s credibility with shoppers. Instead, the opening shot in Chrysler’s image makeover is its Town & Country spot titled “Beaches,” featuring five female models driving a single child to the beach where a surf-dancing party breaks out. Combining the vacuity of “My Name Is Ram,” with vague lifestyle imagery of “Amplify,” the “Beaches” spot creates a wholly unbelievable scenario which speaks to nobody in the market for a minivan.

Similarly, the Jeep brand’s “Reality” and “It’s Only Hair” spots are so focused on increasing consideration among non-traditional buyers that they create impressions that only serve to confuse potential Jeep buyers. “Reality,” is an edgy statement against America’s voyeuristic consumerism, that ends with the confusingly adamant statement of vicarious living “i live. i ride. i am Jeep.” “It’s Only Hair” makes the same confused point (spending money on your image is stupid if it’s spent on your hair and not your Wrangler) with the added confusion of bringing salon-bopping young ladies into the rugged ouevre of Jeep marketing.

These ads are not merely the missteps of any automaker’s failing campaign, they are the only things standing between Chrysler’s unchecked sales slide and its projections of a turnaround of several hundred thousand units next year. And with a 2010 ad budget set at $1.4b, Chrysler knows it. Any attempt to turn brand perceptions around in the current market environment, especially without new products, is bound to be tough; in this sense, GM’s relatively deep portfolio of newer, more competitive products makes it look incredibly well-positioned by comparison. But Chrysler is already slip-sliding as it climbs its five-year mountain, putting several weak feet forward from the outset. If things don’t fundamentally improve in this respect, Chrysler will be facing a tiny market share, poor consideration and a huge credibility deficit by the time its new products finally arrive.

I can hear TTAC’s audience wincing at the headline. It should be “differently,” not “different.” Of course, if you imagine this executive exhortation spoken by an Italian mobster—a reasonable re-imagining given the fact that Chrysler is now controlled by Fiat—it still doesn’t work. In that case, it should be “We gotta do business different.” Preferably preceded by the word “Hey.” This ode to illiteracy appeared in a dealer document comparing Chrysler, Dodge and Jeep advertising’s effectiveness to that of Ford and Toyota. (Guess who scored higher?) So, did anyone notice the literary mistake? I’m serious. You can concentrate on what Chrysler plans to do different before it goes Tango Uniform, or you can wonder why these guys never, ever sweat the details.

Actually, it’s more about causation than a straight either/or choice. To survive, Chrysler has to learn how to sweat the details: to make interiors, engines and transmissions that don’t suck and fit them together in such a way as they don’t break, fail or fall apart. And then, gradually, inexorably, make them better, until they’re better than all their competition’s. As for branding, it’s no biggie. Jeeps go off road, Dodges go the distance and Chryslers have class. Off you go, boys. Don’t forget to pay me my $14,312,130,642 when you get the chance.

But noooooo.

“To save Chrysler Group LLC, Chief Executive Officer Sergio Marchionne has to create a mid-size sedan that can compete with the world’s best,” Bloomberg asserts. “It’s a three- to five-year job, and he may have two years to do it.”

You can forgive the ADD-afflicted media for its ongoing love affair with The Next Big Thing. But the days are gone when Chrysler could join its cross-town rivals in pinning its hopes for a turnaround on a single vehicle. Ford and GM have the cash needed to sustain the delusion that what they really really need is a hit vehicle—instead of say, a gradual return to respectability via improved version of the products they already have. Chrysler can’t even afford the vig.

Even if Chrysler were rolling in dough, what are the odds that the former bankrupt can create a box-fresh Camry killer in a truncated product development cycle? The automaker behind the Sebring and Avenger is going to build a brand new class-leading vehicle in the most competitive segment of the market in the most competitive market in the world? Led by the head of Fiat? It’s just as preposterous now as it was before Uncle Sam decided to save American jobs by handing Chrysler’s keys to the Italians.

And even if they did build it, who would buy it? It’s not like Ford, Honda, Hyundai, Nissan and Toyota owners are wondering when the hell Chrysler’s going to offer them something demonstrably better than what they’re already driving. How do you get satisfied consumers to buy a vehicle from a company widely known for creating crap cars, whose taxpayer-provided existence is, in and of itself, off-putting? You know; if they were buying. Which, in the main, they aren’t.

We shall not see. Meanwhile, all the rest.

Sometime in the next two weeks, Sr. Marchionne will present his product and marketing plans for Chrysler, Dodge, Jeep and Mopar (not to mention Fiat and Alfa) to the nine-member Chrysler board. Huh? While I’m a firm believer that intelligence gathering is a sign of intelligence, I’d kinda hoped that the head of the semi-nationalized automaker would have had a clear idea of what he was going to do with Chrysler before our elected representatives put him in charge of the aforementioned [nearasdammit] $15 billion “investment.” Forty-two days later, what do we know? Nothing.

Whatever Marchionne’s plan may be, Chrysler’s nine-member Board of Directors is bound to rubber stamp it. With each day’s delay, the pressure for doing something builds. With each day’s delay, the natural human tendency to consolidate power in the hands of a “man of action” grows. (Pretty good for a Canadian accountant eh?) I’m not saying Machionne is hiding behind a cult of personality. Oh wait, I am.

Whether it emanates from Marchionne’s minions or represents a mainstream meme, Chrysler’s press is increasingly focused on Sergio’s style. Bloomberg breathlessly reports the Divine Mr. M’s arsenal of cell phones, minimal sleep, and five days vacation per year. Well so what?

What we need from Chrysler is proof that they’re doing things differently, not a sneak peak into the seven highly effective work habits of sleep-deprived automotive executives. And while a[nother] new Chrysler sedan could be a showcase for New Chrysler’s capabilities, the only real proof that Chrysler has refashioned its corporate culture would be found on the showroom floor, in its existing products.

It’s not there. And it won’t be there. Even if Chrysler’s Best and Brightest hadn’t already headed for the hills (or away from the Hills), even if the company’s employees work full tilt, the company simply doesn’t have enough time to fix all the quality issues bedeviling its vehicles. And it certainly doesn’t have the ten years needed to correct a well-earned reputation for also-ran products.

Zombies are different from you and me. But they are not so different from each other. Whether its GM’s headless chicken product plans or Sergio’s [theoretically] carefully-crafted vision for Chrysler’s future, the undead are doomed. Anyone who thinks any different is deluded. “It has to work this time,” an unnamed Chrysler board member supposedly told Bloomies. “A patient can only be operated on so many times before he dies.” What if they’re already dead? Fuhgeddaboutit. If only we could.

The brilliant lawyer, author, and ex-blogger, Bill Patry (now senior copyright counsel at Google), wrote on his Patry Copyright Blog back in 2005 about the greatest Biblical scholar of all time, Rabbi Shlomo Yitzhak (whom everyone affectionately calls “Rashi“).

Bill wrote:

David A. Skeel Jr. is the S. Samuel Arsht Professor of Corporate Law at the University of Pennsylvania Law School and author of “Icarus in the Boardroom” (Oxford University Press, 2005) and “Debt’s Dominion: A History of Bankruptcy Law in America” (Princeton University Press, 2001). In an article in the free market American Enterprise Institute’s house organ,  The American, Skeel says that while the Obama administration avowedly patterns itself after FDR’s New Deal, the deal that the President’s task force on autos has cooked up for Chrysler would actually “make a true New Dealer turn over in his grave.”

Prof. Skeel points out that a major aspect of the New Deal was reform of bankruptcy laws that permitted sham sales called “equity receiverships” to bondholders and other creditors.

New Dealers hated the process, which they saw as opaque and designed to foist a deal crafted by the insiders on everyone else. Jerome Frank, a lawyer who later headed an important New Deal agency and became a federal judge, complained in 1933 that the judicial sale in these cases “was a mockery and a sham.” He said, “A sale at which there can be only one bidder, is a sale in name only.”

In 1938, thanks to the handiwork of another prominent New Dealer, future Supreme Court Justice and then-SEC Chairman William Douglas, Congress dramatically altered the bankruptcy laws, eliminating the former practice.

The Obama administration blueprint for Chrysler’s bankruptcy looks startlingly like the artificial sales that the New Dealers so abhorred. Unlike a traditional reorganization, in which the parties negotiate the terms of a restructuring that is then voted on by each class of creditors and shareholders, the administration plans to quickly sell Chrysler’s most important assets to a new entity “New Chrysler” whose stock will be owned by Chrysler’s employees and Fiat.

The senior lenders who objected to the government’s offer (which amounted to little more than 30 percent of their claims) will not have any vote on the sale. Their only option is the one they have pursued: objecting to the sale, and praying that bankruptcy judge Arthur Gonzalez takes a hard look at its terms even while the government is breathing down his neck and saying in a sense, he better approve or else.

The dissident bondholders made Judge Gonzalez’ job a little easier today when they folded after two of the remaining five holdouts withdrew from litigation. Still, Gonzalez has to approve the sale of whatever worthwhile remains among the dross of Chrysler.

What makes the Chrysler plan unique, and makes it similar to the receiverships of the New Dealers’ era, is that it is not really a sale at all. It is a pretend sale and its main purpose is to eliminate the pesky creditors who might otherwise interfere with the government’s plans. It also seems to flout bankruptcy’s priority rules by giving Chrysler’s employees (who are general creditors) a big stake in New Chrysler while forcing senior lenders to take a major haircut. The usual rule is that senior creditors must be paid in full before lower priority creditors are entitled to anything.

Skeel says that the judge can do two things to make sure the sale is appropriate. The first is to get an independent determination of the value of Chrysler. So far all the parties involved in valuing the assets have an interest in exaggerating or lowballing the company’s valuation. The second is to require a complete accounting of the deal so it’s absolutely transparent in terms of who is participating and who’s getting the shortest haircut.

Though much of the criticism of the Obama administration’s plans for Chrysler and GM has centered around government excesses, threats to the capital markets and the rule of law, it’s interesting that Prof. Skeel worries more for what it may portend in terms of bankruptcies in general.

The Chrysler sale looks like the latest of a series of government interventions that have run roughshod over ordinary legal rules, and it appears to be paving the way for a similar strategy in a General Motors bankruptcy. Much of what the government is doing allowing Chrysler to file for bankruptcy, promising to guarantee its warranty obligations is admirable. But the use of a sham sale of the sort the New Dealers thought they had forever eliminated will cause mischief in future bankruptcy cases.

Not only may the government go back to this well, but in the future private parties will conclude that sham sales are a legitimate tool in their own cases.

Saving Chrysler is just stupid. There isn’t one shred of pure economic logic—never mind basic business sense—to rescue this company from liquidation. Yet, here we are watching tax dollars garnered from real earners (individuals and corporations) tossed into a swirling morass circling the drain of history. It’s time to speak up against this misbegotten adventure. And, well, here I am.

My argument against saving Chrysler springs from one basic business premise: risk taken should be compensated by adequate reward. It should be intuitively obvious that all the capital invested into Chrysler since Daimler’s acquisition back in 1998 and Cerberus in 2007 has never earned an adequate return. So why should we think that the US Government will be smarter than a successful German automaker or a wealthy private equity firm? Does it really make sense to pour (past and future) $12 billion or more of taxpayer dollars into the same hole?

Let’s review. Daimler acquired Chrysler for $36 billion or so and spent billions more trying to make a go of it. Sure, Chrysler had some profitable years in the interim. But by the end, Daimler recognized that there would be no future and effectively walked away from the mess. The decision matrix in Stuttgart came down to this: there would never be a return on the investment in Chrysler. It was an experiment in globalization gone seriously awry.

Despite public announcements to enhance and restore an American icon (hey, Steve Feinberg, you don’t look so good in that American Flag outfit), Cerberus had no intentions of making Chrysler into a real company. Rather, it would be a strip and flip operation by reducing expenses, fobbing off vehicle development to others (Nissan, Mercedes, and anyone else) and make money from financing customers’ wheels. We know how well this business strategy worked. Cerberus lost $7 billion of someone’s money (we still don’t know whose). All gone forever.

And now the American taxpayer has become the next sucker in the game of Chrysler. What is the ante at the table so far? Some $6 billion and going higher. And for what? To continue the fallacy that Chrysler in the last two decades has been a great American icon? Even President Obama can’t polish that pig.

The lawyers in bankruptcy court have argued about absolute priority, lenders tainted by TARP funds, and diminution of value without a quick sale. But it’s really irrelevant. The fact remains that any dollars plowed into Chrysler will never provide an adequate return.

Let’s review the government’s plan with Chrysler . . . With a quick asset sale, a modified UAW labor agreement, Italian management today, small cars tomorrow, and perfecto! We’ll enter into an automotive utopia of profits and cash flow. Will someone please dial 911 to the White House and clue the Administration into reality please?

There are NO good assets of Chrysler cobbled together in any fashion that can be considered as a going concern. Recall that Chrysler has had little retail success in the past several years with its product line. Fleet sales likely made up at least 40% of all sales. Guess what? The New Chrysler will have the same product line. Does the President really believe that American consumers will now wake up and buy Chrysler products all of a sudden? If so, he’s sadly mistaken.

Some will argue that the New Chrysler has a competitive labor agreement. Yea, so what? Labor makes up less than 10% of the total cost of running a car company. And GM and Ford get the same deal—which matches mostly what all the transplants already have. No real advantage there.

But the coup de grâce rests with faith in the Italians to do a better job running this mess. C’mon now! Fiat is and always has been a second-tier automotive player in Europe. Its product reputation hasn’t brought it accolades. And why would Americans even consider small cars from Italy being superior to Ford’s new Fiesta (a raging best seller in Europe) or cars from Honda or Toyota already here? And small cars just don’t make the same profits. Go ask the Japanese for the truth on that one.

The bottom line should be clear. Putting money to work in Chrysler, even reconstituted as a new company, makes no sense. Pitting the same product line, same weak brands and future Italian-mobiles against strong competitors in the USA today just doesn’t compute. Not for the capital invested. In fact, no venture capitalist would do this deal. No private equity players show any willingness to take this on the come. And not one other automobile manufacturer wants to buy the rotting corpse of Chrysler. Only the American government—an entity already proven incapable of running its own shop successfully—has stepped up to the plate.

This will not end well.

For all the “Inside Baseball” we play around here, we never forget that this is a car website. And the immediate reason Chrysler has gone under is because its products have been consistently sub-par for several cycles now. With that in mind, we can dissect the financial details of Chrysler’s alliance with Fiat all we like, but if it doesn’t produce products that sell, it goes nowhere. Car and Driver‘s analysis of Chrysler’s plan (PDF) shows that Chrysler has nothing besides a tarted-up “new” 300C and EV vapor in its new-car pipeline. Which means Fiat’s going to have to step up, big style. But are Fiat’s products up to the challenge of overcoming Chrysler’s brand baggage? And will they translate into the US market success that Chrysler needs to pay off its taxpayer loans?

Our own Fiat review archives are stocked with one Panda 4×4 (“2011 Jeep A Segment”, per C&D), one Grande Punto (2011 “B Segment Hatch”),  and an Alfa 147 (ha ha, you wish) review, which ain’t bad. While we wait for our man on the continent to update us on the now-relevant Italian whips, we went looking for thoughts on Fiat product on the internet . . . and you’ll never guess what we found.

The first stop for anyone who wants to know about cars that aren’t sold in the US is Jeremy Clarkson at The Times. The man drives just about everything, and there’s no need for Google Translate! And who could ask for more than Clarkson on the Bravo aka Sebring/Avenger 2.0? “To buy this car you must decide that what you really want is something that’s not quite as good as a Golf,” pans Clarkson towards the end. And that’s about it. Crappy but loveable. To wit:

There’s a looseness to the controls that you may interpret as poor build quality or a slackness in the system, and I’d be the first to agree that the steering’s not that great and the handling isn’t especially noteworthy. However, somehow, it puts a smile on your face. Maybe it’s because it feels so very, very different to a taut and muscular Volkswagen.

He loves the styling, which definitely wins the coveted “better than a Sebring” award.

Inside, it’s pretty much the same as all the other cars in the world, except for one thing. I could never quite get comfortable. Italian cars always used to be designed for creatures that are only found under rocks in the sea, and while they’ve got better, they still refuse to accept that a human being’s legs are usually longer than his arms.

Oh dear. On second thought, maybe Clarkson isn’t the first place to go. Even Top Gear’s freebee mini “review” is more helpful.

But what do our underwater friends, the Italians, say about the cars that must win America’s heart to repay the tax bill? To answer this question we must turn to the funniest place on the internet, Google Translate. Unfortunately, Italian reviews tend to sport a distinctly chauvinist streak. Infomotori.com gushes:

What we are living today, is the arrival of another new “queen” for this Italian car constructor from Turin. The new Fiat Bravo has caught everybody’s attention for months, making all experts, dealers and competitors wonder about it. In a short time New Fiat Bravo has already become such a desirable car, like Fiat 500 did in the past. This is a very important result for Fiat, because it represents the concrete its re-birth: Fiat is now ready again to challenge international competitors.

In the Bravo, Infomotori “taste some brave maneuver,” and basically finds nothing lacking. Even a long-term test for Yahoo! Italy (also by Infomotori) suggests “Are you comfortable in five, with no particular Behavior and the line sportiveggiante not minimally affects the input board. A pleasant atmosphere, as we said, free of obvious flaws and drops coarse style.”

One reviewer for omniauto.it gets a little too excited about the diminutive 500, and how it “officially enshrines the awakening of ‘Fiat mother’ by a long agony, the approach to a new life.” He has to remind his readers:

“We must not forget that the 500 is also an industrial product, a car in the banal sense of the word: a machine. And as such, has to with the market and competition. The premise, as it often was for Fiat cars from the past, there are. Mechanics, in no uncertain terms derived from that of ‘Panda excellent, very good promising talents of efficiency and reliability, supported by the merits of the establishment of Tichy: The best of Fiat factories and capable of a quality which, if it is not Japanese, they pretty close.”

Reppublica.it is a little more even-handed. Though they call the 500 “Funny How A Kart,” they caution overeager fashionistas “we must never forget that – refinement of design or not – we are always at the wheel of a car segment A. Segment where the noise often reigns supreme in modern cockpits apparently.” But analysis inevitably swings back towards the nationalist pissing match with the Germans already in progress:

“The kilometers go by and the only possible explanation for this dynamic is that suspensions are beautiful duretta. We go in search of a pavé or uneven ground beautiful, but nothing: the 500 digests scomporsi without even the worst holes. The passenger is not getting those typical shocks to which many German cars have become accustomed. Sure, the seats are very padded their work, but also demonstrate an excellent compromise suspension calibration.”

A series of rather serious enthusiast tests from grandprixnews.myblog.it give a decent overall impression of several Fiat offerings. Grande Punto is knocked for lacking power and a less-than perfectly usable rear hatch. “The vision side driver is not the maximum, the uprights are quite large and the small windows do not help much,” we are told. “Rear access is easy, and opening the door is suitable for raising and lowering of the car without too many contortions.” The Panda review suggests the diesel engine (a theme in nearly every Fiat review) and praises the Panda’s “excellent maneuverability.”

But the Panda 100HP “wins the internet,” as the kids say. Between a killer evo review (“brilliant”) and a virtual driving experience that suggests it is invulnerable to high-speed crashes, the Panda 100HP seems to be the Fiat in which to “taste some brave manouever.” Too bad Chrysler has no apparent plans to bring it to America. So much for the internet, then.

]]> http://www.thetruthaboutcars.com/2009/05/editorial-chrysler-zombie-watch-bella-macchina/feed/ 22 http://www.thetruthaboutcars.com/2009/05/chrysler-zombie-watch-zombie-stripper/ http://www.thetruthaboutcars.com/2009/05/chrysler-zombie-watch-zombie-stripper/#comments Tue, 05 May 2009 12:48:14 +0000 Robert Farago http://www.thetruthaboutcars.com/?p=313627

Proponents of Chrysler's current reinvention often refer to the exercise as a "surgical" bankruptcy. OK, who's the surgeon? As far as I can tell, the people in charge of deciding how to cut-up Chrysler are Chrysler. "Physician heal thyself" is a nice sentiment, but it doesn't normally involve a scalpel. Second, speed. When a patient is bleeding to death, time is of the essence. Chrysler is hemorrhaging red ink. It's one thing to stop the bleeding (as Uncle Sam adds multi-billion dollar cash infusions). It's another to attempt to cure the patient with a knife. And after the health care recipient leaves the theater, well, who expects an amputee to run a marathon? In other words, the operation may be a success, but the patient will still die.]]>

Proponents of Chrysler’s current reinvention often refer to the exercise as a “surgical” bankruptcy. OK, who’s the surgeon? As far as I can tell, the people in charge of deciding how to cut-up Chrysler are Chrysler. “Physician heal thyself” is a nice sentiment, but it doesn’t normally involve a scalpel. Second, speed. When a patient is bleeding to death, time is of the essence. Chrysler is hemorrhaging red ink. It’s one thing to stop the bleeding (as Uncle Sam adds multi-billion dollar cash infusions). It’s another to attempt to cure the patient with a knife. And after the health care recipient leaves the theater, well, who expects an amputee to run a marathon? In other words, the operation may be a success, but the patient will still die.

The counterpoint: synergy. Or, to call it by its rightful name, “wishful thinking.” In the course of human history there must have been two huge companies working in a hideously complicated manufacturing enterprise who were able to integrate with each other and prove that the whole is greater than the sum of the parts. A partnership that delivered cost reductions though combined “back office” functions. More efficient and creative product development. Better sales and marketing. Streamlined management. A more productive workforce. It’s just that I can’t think of any.

[Renault - Nissan? The fact that this partnership works at all---and the jury's still out---is down to the fact that the two companies tend to stay out of their each other's way.]

It’s ironic that the American carmaker that forged a company-killing merger with a German automobile manufacturer almost eleven years ago to the day now wants US taxpayers, suppliers, creditors, workers, the media, etc. to accept the idea that Chrysler’s future is best served by merging with an Italian automobile manufacturer. To borrow an adjective from the non-TARPies court filing, that’s “incomprehensible.” Unless you try really hard to believe that someone isn’t stripping assets from someone else. To wit: The New York Times.

Fiat and Chrysler have much to offer each other. Chrysler desperately needs Fiat’s small cars and fuel-efficient engines to balance an aging lineup of S.U.V.’s.

For Fiat, Chrysler offers an instant dealership network for its return to the United States. They can also benefit from savings on the $46 billion worth of parts and materials they would buy as a combined entity.

The whole “ChryCo needs small cars” meme flies in the face of any realistic appraisal of commercial reality. Stateside, small cars a small part of a shrinking market; Chrysler needs small cars like a man dying of thirst desperately needs a shot glass of low-alcohol beer. Chrysler needs a mainstream model that generates enough profits to sustain their credibility the next time they call on the public purse. I mean, to repay their “loans.” Something like the Chrysler 300. Only a lot better.

The merger’s small car justification violates a pseudo-military maxim: go where they ain’t. Trying to sell small cars in a mature marketplace against highly-developed, well-entrenched competition is a Sisyphusian endeavor. GM’s failure to recapture its automotive mojo in its North American and European home markets—even while it succeeded outside of North America and Europe—proves the wisdom of the advice.

Besides, Chrysler already has small cars. Yes, they’re crap. But fixing ChryCo’s crap cars would be a lot less expensive and time consuming than hitting reset. Again. And that’s without adding Fiat’s cultural dissonance to the mix.

Clearly, there’s a political subtext to this supposed “desperation.” ChyrCo’s political overlords and their camp (not in the Batman TV series sense of the word) followers have a hard-on for American-built small cars/hybrids. To use an Obama-ism, they believe it’s “the right thing to do.” But even The Gray Lady understands that it’s probably not the most profitable thing to do; hence the SUV “balancing” remark.

As for the joint savings on parts, somebody somewhere’s smoking one. Three years after assuming control of Ford, CEO Alan Mulally still hasn’t fully realized his plan for parts worldwide parts commonality. Similarly, GM’s “world car” program has been a spectacular failure, delivering unto the world a seemingly endless stream of badge-engineered failures (e.g., Cadillac BLS), non-starters (e.g.,Pontiac G8) and nichemobiles (e.g., Chevrolet Camaro).

Just for S&G, figure Fiatsler will save ten percent on its $46 billion parts and materials tab. Split it two ways. That’s a $2.3 billion cost reduction. Which is not even half of Chrysler’s current cash burn. Or the United States government’s outstanding “loans” to the Auburn Hills zombie. This theoretical saving might pay for the bureaucracy needed to organize the two automakers’ parts integration. It might not. if history is any guide, any such attempt would end up costing money and delaying production.

So where’s the beef? Nowhere. The Chrysler – Fiat deal is one of those veggie burgers that only looks good—and then only to vegetarians. It sounds crazy, and it just won’t work.

]]> http://www.thetruthaboutcars.com/2009/05/chrysler-zombie-watch-zombie-stripper/feed/ 18 http://www.thetruthaboutcars.com/2009/05/chrysler-zombie-watch-2-politics-vs-the-rule-of-law/ http://www.thetruthaboutcars.com/2009/05/chrysler-zombie-watch-2-politics-vs-the-rule-of-law/#comments Fri, 01 May 2009 13:14:31 +0000 Robert Farago http://www.thetruthaboutcars.com/?p=313167

Announcing Chrysler's bankruptcy, President Obama vilified the "investment firms and hedge funds" who decided to "hold out for the prospect of an unjustified taxpayer funded bailout." No, not the existing unjustified taxpayer funded bailout. The new one. "Some demanded twice the return that we bludgeoned the other TARP-supported lenders into accepting." Obama didn't say that; but he would have if his daughter had made the same birthday wish as Max Reede. Anyway, it turns out the Presidential Task Force on Automobiles can't stand losing, they can't they can't they cant stand losing, they can't they can't they can't stand losing to hedge funds. "I don't stand with those who held out when everybody else is making sacrifices," Obama chided con multo vigore. As intended, Obama's remarks triggered a shit storm from both his supporters and the business community. ]]>

Announcing Chrysler’s bankruptcy, President Obama vilified the “investment firms and hedge funds” who decided to “hold out for the prospect of an unjustified taxpayer funded bailout.” No, not the existing unjustified taxpayer funded bailout. The new one. “Some demanded twice the return that we bludgeoned the other TARP-supported lenders into accepting.” Obama didn’t say that; but he would have if his daughter had made the same birthday wish as Max Reede. Anyway, it turns out the Presidential Task Force on Automobiles can’t stand losing, they can’t they can’t they cant stand losing, they can’t they can’t they can’t stand losing to hedge funds. “I don’t stand with those who held out when everybody else is making sacrifices,” Obama chided con multo vigore. As intended, Obama’s remarks triggered a shit storm from both his supporters and the business community.

“U.S. Tactics Spark Worries Over Lenders’ Rights” The Wall Street Journal reports/warns.

Banks, hedge funds and other investors that hold $6.9 billion in secured loans are being asked to release their contractual claims over Chrysler’s assets in exchange for a fraction of what they are owed. Many lenders see that as a raw deal, because in the bankruptcy code’s priority scheme, secured creditors are supposed to get paid before unsecured creditors such as employees.

Remember when Congressman Barney Frank confronted an expert on bankruptcy law during the second round of the so-called bailout hearings? [link help?] When the witness said it would be illegal for the feds to jump the queue to recover bailout bucks, Frank suggested that Congress could rewrite those pesky laws because, well, Congress wrote them (never mind the Constitution or common sense). Well, here we go . . .

Investors worry the government-led plan could rewrite the rulebook on corporate restructurings and the entitlements of creditors. They say that could make lending more expensive for corporations, while crimping lenders’ willingness to get involved with companies that have a connection to the government.

As of late Wednesday, about 20 of the 46 lenders were opposed to the government plan, according to a statement from a group of debtholders. If more than half the lenders oppose the reorganization, the Chrysler deal could be stuck in bankruptcy court for far longer than the government hopes.

Or not. After all, you have the President of the United States deciding with whom he does and doesn’t stand in a legal proceeding. Could the Prez use his political power to gazump secured debt holders? Yes he can! And that’s when this could get really, really ugly.

Of course, there are those who see beauty in the face of Gorgon (stoned as they are). How about Salon’s “A sob story from the vultures who forced Chrysler into bankruptcy.”

According to reporter Serena Ng, Gwin, the “principal” of the Group G Capital hedge fund, “is wrestling with the knowledge that the retirement plans of some 80,000 Americans may rest in his hands.” 

Spare us the sob story, [Chrysler investor] Geoffrey Gwin. You’re in this game to make money by speculating on the bonds of companies that are in big financial trouble. Now you’ve found yourself smack in the middle of a major political showdown between a pissed-off public and a Wall Street that hasn’t had this little credibility since 1929. Too bad for you. Good luck sweet-talking the judge.

The Washington Post is down with that “reasoning.”

What you need to know about these vultures is that their idea of fairness is throwing 100,000 people out of work and denying retirees their pensions and their health benefits just so they can liquidate the company and maybe squeeze an extra 15 cents on the dollar from their Chrysler debt.

As you might expect, The Huffington Post is just as huffy.

On the 101st day of his Presidency, Barack Obama finally slapped the hedge funds across the face like they deserved . . . The President’s message was this: when labor, management, and taxpayers of multiple nations have stepped up to bat, the American public will not be held hostage by hedge fund managers stalling for profits. That is the message. And it is a message Americans have been waiting patiently to hear.”

As over 70 percent of the public opposed providing additional bailout billions to Detroit, I thought they were patiently waiting to hear that the United States government was getting out of the car business. If so, in this they were disappointed.

As in any good zombie movie, Chrysler’s liquidation—the only “viable” or indeed probable outcome in this—depends on a hero who stands for truth, justice and yes, the American way. In other words, it’s all coming down to the judge Arthur J. Gonzalez.

And who chose Gonzalez? Art got the nod via a sealed envelope system known as “the wheel.” It is, literally, a wheel of fortune. You can’t make this shit up. Nor the confrontation to follow.

]]> http://www.thetruthaboutcars.com/2009/05/chrysler-zombie-watch-2-politics-vs-the-rule-of-law/feed/ 51