"Hogwash, Absolutely Not Being Considered at All. Absolutely No Relevance. I Don't Even Want to Entertain Those Questions"
Doth Chrysler President and Vice Chairman Tom LaSorda protest a possible C11 filing too much? You be the judge. Meanwhile, step forward JPMorgan auto analyst Himanshu Patel. And man did that dude set the Wall Street cat amongst the Detroit pigeons this week, most notably flagging GM's "not impossible" bankruptcy. Now that the dust has settled (i.e. GM's stock found a level below the basement) the AP is highlighting Patel's assertion that Chrysler is in worse shape than GM, or Ford. "Patel estimated the automaker will burn through $4 billion this year and could be forced to file for bankruptcy protection or sell off parts of its business in the second half of 2009 if industry conditions don't improve. Patel said it's difficult to predict the most likely outcome for Chrysler, but he said South Korean or Chinese automakers covet Chrysler's U.S. distribution network. A bankruptcy filing could be a hit to Cerberus, which invested $6.1 billion in Chrysler as part of its acquisition and also backed a $500 million line of credit that Chrysler tapped last month." [FYI: The steelworkers union was no big fan's of Patel's.]
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Just checked out the crash test of the Brilliance and a Chinese SUV. Wow, those vehicles had no control of the crash energy, though the dummy did it's part to absorb energy. Didn't they do any testing prior to making this thing? Maybe I have been to hard on the NHTSA...
If they do not have any bankruptcy lawyers on their payroll or retained, they will not file chapter 11. Chapter 7 is a different story...
How did Toyota sign up most of their dealer network? When Studebaker folded in March 1966, Toyota signed up hundreds of the (best) dealers. Several of the oldest Toyota dealerships in the US today were originally Studebaker dealers. Daimler-Benz did the same thing in 1956 when Packard folded. At least 10 CA Packard dealers were signed up. Several of these dealerships today are still operated by the same family. One former Packard, now Mercedes-Benz dealership dates back to 1937.
If I were the AP reporter taking this story, my question would be something along the lines of: how the hell do you know? They're a private company; they don't report their numbers. So how the hell does he come up with his predictions and estimates? Cerberus may be in it for the strip and flip, but as TTAC keeps pointing out, the lineup sucks, there are too many dealerships, and there are many other problems to work out. I'd bet that Cerberus is at least going to stick it out through these tough times, get some new models out there with some nice plastics, maybe get some of the mid-90's Chrysler design mojo back, and THEN flip it. Not before (definitely not now).