Wild Ass Rumor of the Day: Chrysler Files for Bankruptcy on July 9th

Robert Farago
by Robert Farago

The autopblogosphere is abuzz with Chrysler CEO Bob Nardelli's memo to his employees, ordering the entire company to take a two-week vacation on July 7. Nardelli said he was putting 19k white collar and 52,500 hourly workers on simultaneous furlough to "create better alignment and efficiency across organizational lines and boost productivity." Huh? While most analysts take Nardelli at his word, and a company-wide summer break is an industry norm, rumors are circulating that Chrysler is going to file for bankruptcy while its workforce is off-site. Chrysler's market share losses and cash conflagration has continued (if not escalated) unabated since Cerberus bought the ailing automaker from [what was then] DaimlerChrysler. Chrysler workers' summer "vacation" could well be permanent.

Robert Farago
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  • Menno Menno on Mar 14, 2008

    Yes, geeber, we did drive huge cars in the 1960s and 1970s, and these morphed into SUVs. Then November 1973 hit, and suddenly the world turned upside down. But, we forgot, and went back to our old ways. So 1979 was another helpful reminder. But once again, we Americans forgot. And went back to our old ways. Then 1990 hit. We moved to small or more efficient vehicles a little bit this time, but not as much as 1973 or 1979. And once again, we forgot. So I'm certainly not only blaming Detroit Inc for our current situation. Plenty of blame to go around. But then again, how much of this "forgetting" over these three crises was helped by marketing of larger high profit vehicles by Detroit Inc? Be honest. You know it was some factor in it. After all, Detroit Inc NEVER has learned how to build small cars and sell them for a profit. For that matter, have they ever learned how to build a decent small car? Corvair? Falcon? Pinto? Vega? Chevette? Gremlin? GM X-cars like Citation? How about Saturn? Hasn't made a penny for GM in its entire existance. I'd say, case closed.

  • Windswords Windswords on Mar 14, 2008

    d996, Credit should go to Christopher too. Geeber, Of course when I said fleet sales as you did I was talking specifically about rentals. Chrysler also has plenty of fleet sales to cabs, police departments, etc. (just saw a T&C taxi the other day). As for the Avenger and Sebring, since they are not (deservedly so) going to get a lot of retail sales it makes sense to sell them to rentals. Everyone says "well just develope another one!" yea, if was only that easy. The cost is around 2 billion over 4 years. Before Daimler got their claws in them, they copuld develope an all new car in 39 - 42 months. and I mean all-new car. Not what Toyondassan does - put new sheet metal and interior and keep the basic platform intact and call all new. don't believe me? Put two gens together of a Camcordima and pop the hood. The giveaway is the shock towers, among other things. Now of course they eventually come out with something all new. The new Accord and current gen Camry are definatley all new. But notice they are that well recieived? It's risky to change EVERYTHING every 4 years. So the Japanese are very conservative. Now back to what i was saying, before Daimler they could come out with something quicker than almost anyone else, now there back to where they were in the 80's/early 90's. It will take 5 years to replace the Avenger/Sebring. Sad.

  • Geeber Geeber on Mar 14, 2008

    menno, You are talking about two different things. When you say that Detroit never really made a profit on smaller cars, and therefore the domestic companies never had their heart in addressing that market segment - I agree with you. But that is very different from saying that Detroit manipulated people into buying SUVs that they didn't really want. That is what I can't accept. Detroit just isn't that smart... I was a kid in the 1970s, and I remember my parents distinctly refusing to trade their 1967 Oldsmobile Delmont 88 hardtop sedan on anything smaller than a 1976 Delta 88 Royale hardtop sedan. They just didn't want a smaller car, gas crisis or no gas crisis. They weren't even interested in a Cutlass Supreme. They didn't like the way it looked or drove. They didn't downsize until GM forced the issue by downsizing the full-size Oldsmobiles (and its other full-size cars). Probably the best entry from Detroit in the small car sweepstakes was the Ford Escort, which, by the late 1990s, had a very good reputation (Ford was smart enough to use Mazda platforms and expertise for the second-generation Escort). Ford then replaced it with the Focus, which was marred by quality glitches, although the basic car was quite good. By the time that Ford figured out how to put the Focus together properly, the car's reputation was seriously damaged and the bloom was off the rose. But the 1990s Escort was a very good small car, and once Ford had fixed the Focus's quality glitches, it was, too...until Ford let it become stale. windswords: From what I've read, Ford leads in the domestics in sales to corporate and government customers, and is far ahead of Chrysler in this regard. If I recall correctly, Ford has the lowest percentage of sales to rental car companies among the domestics, when those sales are broken out as a percentage of total fleet sales. I realize how hard it is for Chrysler to design a completely new car...but do they really have even 2-3 years to take the Toyota/Honda route and come up with a heavily revamped Sebring/Avenger? Today's market is brutal, and it's only going to get worse in the coming years.

  • Toxicroach Toxicroach on Mar 14, 2008

    Why do people actually believe that the big 3 are the beating heart of the countries economy? Maybe that was true once upon a time. But GM and co. have been shedding weight for ages. And most of the "foreign cars" are built in the States or Canada, so its not really like the US is losing manufacturing capacity or automotive jobs. The only people at risk here are UAW workers. Not America.

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