"Chrysler Financial is Losing $5,000 on Every Truck It Takes Back"
Thanks to The Economist, we now have a name for ChryCo's pain. (OK, a number, but literary needs must.) In an article entitled "Detroit's race against time," the UK pub recaps the domestic automakers' litany of woes: truck-heavy line-ups, falling sales, killer depreciation and quasi-criminal stupidity [paraphrasing]. The Economist feels the cash burn. But they also understand the importance of Detroit's general cluelessness. "But if the speed with which the Detroit firms are burning cash is the biggest immediate cause for concern, the deeper question is whether they are using what remains to make their businesses viable in the long term." Ford's plans get a tentative thumbs-up, Chrysler gets a question mark and GM gets a shot to the solar plexus. "GM’s global design chief, Ed Welburn, acknowledges that its next generation of small cars will be designed in places like South Korea and Europe where they 'really know how to do small cars'. But unlike Mr Mulally, Mr Wagoner has not said what will be arriving and when. Indeed, at times he seems weighed down by the sheer complexity of managing such a bloated product portfolio." Poor bastard. [thanks to Point Given for the link]
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There is a new book coming out. I have read reviews and watched an interview of the author on Charlie Rose. The title is: "The 10 Commandments of Business Failure" by Keough. Please make sure you read that title correctly. Keough is describing the commandments that should be followed if you want to destroy your business. It appears that Chrysler and GM management have followed several of the commandments: isolation, fear of change, infallibility, love your bureacracy, fear the future, and send mixed messages. The book has examples from many businesses and sounds like a fun read. Hopefully the author will issue this book with just 2.8 stories.
There is an even bigger loser than Chrysler finance on chrysler trucks. It is their retail customers, and I can assure you if you take an additional $5.000 hit plus the normally expected depreciation on your three year old truck you will not be back for more. The only winners are the commercial users and individuals who will buy one and keep it until it dies. This seems to be The only way out of a truck right now, but not good for the sales of new ones. Which by the way Dodge is introducing as we speak the newest dodge pickup (ram tough) (Elephant thirsty). Actually a mile or two better than the $5000 loser models it replaces and now in line with Ford and GM trucks. A huge plus for dodge, we are not the world's worst mpg truck anymore.
Wagoner doesn't have to worry, he's got his ass covered with another job lined up just incase GM dumps him, and it's a position he's entirely qualified for.....as captain of the Exxon Valdez. Hmmmm.....how could GM make more money to pull itself out of the hole it's in ?.....bakesale ?....yardsale ?.....lemonade stand out in front of Ren Center ?. I've got it, a dunking booth with Wagoner as guest of honor !. I'm sure they could make a few million from that just from UAW members alone.