The Truth About Cars » Comment of the Day The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 24 Jul 2014 17:47:59 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Comment of the Day Chrysler Workers Smoke Pot, Drink Beer At Lunch And Don’t Give A Freckle About Quality Sun, 14 Nov 2010 08:47:42 +0000

Some say, TTAC has an anti-Detroit, pro-import slant. We won’t comment on that, you mommy-fraternizing liars. All we can say is: If you harbor these notions, don’t move to Oklahoma. Oklahoma’s largest newspaper, the Oklahoman, dishes out more anti-Detroit snark in a single serving than even a Farago could have cooked-up in his TTAC lifetime. How about calling the former owners of Chrysler unqualified “idiots?” And not the former owners you think of now. Wait, there is worse.

The Oklahoman runs a Dear Abby style investment column, where readers can come to a Malcolm Berko for advice. An F.M., hailing from Troy, Mich, did so. (Why someone from Troy would turn to Oklahoma City’s hometown paper for investment advice is beyond me, but I digress.) F.M. didn’t agree with Berko’s prior opinion that buying GM stock amounts to throwing money away. He (or she) wanted to know whether Chrysler would be a good investment, should it ever go public.

Boy, did F.M. receive an earful of investment advice!

“Dear F.M.: No matter how much perfume you splash on a pig, a pig will always be a pig. The Chrysler culture could never function under Daimler’s superb management, could never emulate Daimler’s skilled work force and could never produce a Daimler-quality product. That’s not how the American automobile industry comports itself.”

“And 10 years later in predictable disgust, Daimler sold 80 percent of Chrysler to Cerberus Capital Management in 2007. And the Cerberus idiots hired Robert “Nasty” Nardelli, who couldn’t make it at GE or Home Depot, to run the company.”

What, no requisite jab at the “merger of equals?” No accusation that vestal & virtuous Chrysler had been raped by Teutonic terrorists who then pillaged her dowry and made off with the cash? Nope. No double quotes around “superb management” either. Now what about an investment into a possible Chrysler share? Over to you, Malcolm:

“One must be mad as a hatter to consider owning a single share of this issue (same for the General Motors issue when it comes public again) because good old new Chrysler won’t have changed enough from good old, old Chrysler.”

“Good old new Chrysler will have the same good old, old workers who still smoke pot and drink beer at lunch and don’t give a freckle about quality. Good old new Chrysler will still be held hostage to the United Auto Workers’ self-serving workplace rules and financial shenanigans. And good old new Chrysler will still be managed by the same corrupt culture of fools who drove the good, old, old Chrysler into bankruptcy.”

“The only profits in this IPO will be made by the Wall Street lawyers, CPAs, advisers and brokerage firms who take this public. And considering our high unemployment numbers and lower consumer incomes, I doubt that Chrysler can sell enough vehicles to produce a profit.”

The deathwatch series continues. In Oklahoma.

P.S.: Turns out this is not an Oklahoman phenomenon. Berko is syndicated all over the place. We need to get more aggressive. Or else the supposedly staid MSM will win the snark war.

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Who’s Unhappy About Higher Wages, Stronger Currency in China? The Japanese. For Starters Tue, 22 Jun 2010 10:19:52 +0000

It stands to reason that Japanese car makers would rejoice over rising wages in competing China and over an appreciating Chinese currency. Rising wages make production there more expensive, a rising Yuan makes exports more expensive. Both should give the Japanese more breathing room. That reasoning is falling by the wayside. The Nikkei [sub] reports that these developments pose ”serious threats to Toyota’s profitability in China, strategic challenges that other Japanese companies must also deal with.” Just goes to show that you need to be careful what you wish for. And wait who else should worry.

As chronicled here, Honda and Toyota had to stop the lines because they were left partless by strikes at some of their parts makers.

Over the weekend, the world joined a chorus of “ding-dong, the peg is dead” , after – in a lead-up to the G20 summit – China announced it would be a bit more lenient with their Yuan/Dollar valuation. Today, the USD/CNY official mid-rate stands at 6.7980 vs 6.8275 yesterday, a breathtaking 0.5 percent “bounce.”

So why would that bother the Japanese? Says the Nikkei: “The price of new cars in China is similar to that of Japan. This translates to fat profit margins in China — now the world’s largest auto market — thanks to lower production costs. But rising wages are likely to reduce those margins, warned a Toyota executive.”

That’s just the beginning. Many parts used in worldwide production are made in China. Rising wages and a stronger Chinese currency make those parts more expensive abroad. This is not just a Japanese concern.  What’s more, a stronger Yuan makes it cheaper for Chinese companies to import the latest manufacturing machinery from abroad, strengthening their competitive posture in the long run. Students of economic history will remember Germany and Japan.

Foreign automakers with joint ventures in China have short term reasons to be worried.  Exports amount to one third of China’s GDP. A stronger currency and higher wages make Chinese exports less competitive in international markets. A more frigid business climate will most certainly result in a cooling-off of China’s red-hot auto market.

“The booming sales that continued until March have gone,” said a Toyota dealer to the Nikkei. “Sales growth could slow further if falls in exports choke economic growth.”

If you think that’s a great problem for Toyota to have, think again:  Guess who’s also unhappy about higher wages and a stronger currency in China? General Motors. GM sells more cars in China than in the U.S. The Europeans can take a more sanguine posture: The Euro had dropped so much in value against major currencies that they can shrug off wage increases and an 0.5 percent rise in the Yuan. Volkswagen will “significantly exceed” last year’s results, mostly because of China. One country’s depression is the other country’s euphoria.

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