Editorial: Between the Lines – Throwing Chrysler to the Wolves

Justin Berkowitz
by Justin Berkowitz
editorial between the lines throwing chrysler to the wolves

The mainstream media suffers from “opinion inertia.’ Once the press corps adopts a certain angle on a story, its superglue city, facts be damned. To wit: TTAC’s been slamming Chrysler for horrendous product quality, bizarre model choices, asinine marketing and a bloated, piss-poor dealer network since… ever. Meanwhile, our colleagues have been playing the underdog American automaker meme. Post Cerberus purchase, they’ve been ignoring Chrysler’s failed products and telltale gaffes, such as CEO Bob Nardelli’s infamous “operationally bankrupt” admission. But now that rumors of a GM – Chrysler merger have surfaced, the media’s woken up. And the fangs are out.

Detroit News contributing author Alisa Priddle normally puts her keyboard to use for Car and Driver’s blog, where she’s more PR repeater than news reporter. In September, she parroted “Chrysler shows it has a slew of electric vehicles in the pipeline, including a Chevy Volt competitor, and they’re coming to a road near you soon.” Not only was this blatant press release regurgitation, it was also patently false. “They” weren’t going into production; a fact that Priddle acknowledges later in the article (only one, at best, would be produced).

And now, Priddle pens “Chrysler, GM deal confronts obstacles,” which would better be titled, “WTF are these asshats thinking?” “Statements that Cerberus bought Chrysler for the long haul are falling on deaf ears,” Priddle writes. “Especially with the financial tiff that has broken out between GMAC (which is 51 percent owned by Cerberus) and GM, which is now paying dealers an incentive for sales financed outside GMAC.” Well, someone’s ears are open, now.

Co-writer David Shepardson is also a recent convert to the growing “Chrysler’s up excrement creek” camp.

In an August 6, 2007 column called “Controversial CEO,” Shep responded to CEO Nardelli’s critics. “But Nardelli improved the company [Home Depot] by several measures. Sales jumped from $46 billion to $91 billion in 2006, while profits doubled to $5.8 billion.” Shep quoted the usual (anonymous) sources, happily reporting that “A person close to the situation said Cerberus was deeply impressed with his financial performance. ‘If we get anywhere near what he has accomplished previously, we’ll be delighted,’ the person said.”

Now Shep’s taken off his rose-colored glasses and begun chronicling the folly of the mix ‘n match “too big too fail” theme. “Among the hurdles to any deal is whether Congress would agree to provide financing to help a merger. Congressional aides said any kind of money would likely include strings.”

Detroit News columnist Daniel Howes is also showing his ability to eviscerate a hometown hero. His October 2007 column “As Toyota falls, Detroit Big 3 rise” gives way to today’s “GM hasn’t learned bigger isn’t better.” “Forget the back-channel spin from those with self-interested agendas rationalizing the boss’s current negotiating position. Would this mega-deal, another stunning blow to Michigan’s wobbly economy, make sense to Joe the Autoworker and others not drinking the Kool-Aid of the moment?

In yesterday’s post on the Wall Street Journal blog, Heidi N. Moore asked “What If the U.S. Auto Makers Don’t Survive?” That’s a sharp turn from her June 10, 2007 post on Chrysler’s rosy prospects: “The honeymoon at Chrysler clearly isn’t over: Chrysler CEO Robert Nardelli couldn’t be happier about Chrysler getting rid of Daimler and public shareholders in one fell swoop.”

Clearly, the press has “reassessed the Chrysler situation,” working their way towards acknowledging Former CEO of American Motors Corp and current professor at University of Michigan Gerald Meyers’ assertion that “there is no economic justification for the existence of the Chrysler Corp.”

And now that press is beginning to face that uncomfortable reality, they’re showing remarkable insensitivity towards their former champion, newfound object of ire.

The current media group-think is, simply put, Chrysler’s going away. Get used to it. Whether through a merger or a sell-off, tens of thousands of jobs, hundreds of suppliers, thousands of dealers and tens of thousands of customers will soon be S.O.L. Chrysler’s presumed recovery has become Chrysler’s presumed oblivion. But is that necessarily true?

Even before day one, TTAC warned that Cerberus bought Chrysler to strip and flip the company. But before Chrysler is laid waste, someone in the media should stop for a moment to consider an alternative. Assuming the U.S. government is going to bailout GM, perhaps they should start by practicing on Chrysler. Where’s the talk of a Chrysler “intervention?”

The fact that a Chapter 11 reorganization isn’t part of the mainstream media discussion about Chrysler’s fate shows that the wolf pack press shares the same ADD and lack of imagination as Chrysler’s protagonists. In that sense, just like voters and their politicians, a story gets the coverage it deserves. We here at TTAC will continue to think independently, even as Chrysler is dismembered by greed, arrogance and indifference, on all sides of the story.

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  • Geotpf Geotpf on Oct 23, 2008
    Pch101 : October 21st, 2008 at 1:51 pm Like people, corporations don’t live forever. (If you don’t believe me, look up the original components of the Dow and see how many of those companies are still in business today.) 11 of the original 12 Dow components are still in business today. From Wikipedia: Of those original twelve, only General Electric remains part of the index. The other eleven were:[2] American Cotton Oil Company, distant ancestor of Bestfoods, now part of Unilever American Sugar Company, now Domino Foods, Inc. American Tobacco Company, broken up in 1911 antitrust action Chicago Gas Company, bought by Peoples Gas Light in 1897 (now an operating subsidiary of Integrys Energy Group, Inc.) Distilling & Cattle Feeding Company, now Millennium Chemicals, a division of Lyondell Chemical Company Laclede Gas Light Company, still in operation as The Laclede Group, removed from the Dow Jones Industrial Average in 1899 National Lead Company, now NL Industries, removed from the Dow Jones Industrial Average in 1916 North American Company, (Edison) electric company broken up in the 1940s Tennessee Coal, Iron and Railroad Company in Birmingham, Alabama, bought by U.S. Steel in 1907 U.S. Leather Company, dissolved 1952 United States Rubber Company, changed its name to Uniroyal in 1961, merged private with B.F. Goodrich in 1986, bought by Michelin in 1990. So, your point fails. However, you will note that many of said Dow components are now small portions of bigger companies (although vice versa occurred in two cases where the government broke up the companies in anti-trust actions). I guess this means, if you take the analogy further, that it's more likely GM will buy Chrysler and the combined company will survive than anything else.

  • Pch101 Pch101 on Oct 23, 2008
    So, your point fails. Your link proves my point. The companies on the original Dow are unrecognizable today, and those who survived in some form have experienced numerous twists and turns, with varying fortunes and owners. In the last few decades, Chrysler has gone through substantial ownership and management changes, from self-contained public company to a subsidiary of the public Daimler to a wholly-owned LLC of the private Cerberus. This is fairly normal stuff, and in and of itself not a sign of failure. Businesses change, and expecting them to remain constant is a false yardstick by which to judge them. The Iacocca-era bailout made sense at the time and paid dividends to the US government and taxpayer. The fact that Daimler and Cerberus aren't very capable operators does not negate the benefits that came from that earlier rescue package.

  • Damon Thomas Adding to the POSITIVES... It's a pretty fun car to mod
  • GregLocock Two adjacent states in Australia have different attitudes to roadworthy inspections. In NSW they are annual. In Victoria they only occur at change of ownership. As you'd expect this leads to many people in Vic keeping their old car.So if the worrywarts are correct Victoria's roads would be full of beaten up cars and so have a high accident rate compared with NSW. Oh well, the stats don't agree.https://www.lhd.com.au/lhd-insights/australian-road-death-statistics/
  • Lorenzo In Massachusetts, they used to require an inspection every 6 months, checking your brake lights, turn signals, horn, and headlight alignment, for two bucks.Now I get an "inspection" every two years in California, and all they check is the smog. MAYBE they notice the tire tread, squeaky brakes, or steering when they drive it into the bay, but all they check is the smog equipment and tailpipe emissions.For all they would know, the headlights, horn, and turn signals might not work, and the car has a "speed wobble" at 45 mph. AFAIK, they don't even check EVs.
  • Not Tire shop mechanic tugging on my wheel after I complained of grinding noise didn’t catch that the ball joint was failing. Subsequently failed to prevent the catastrophic failure of the ball joint and separation of the steering knuckle from the car! I’ve never lived in a state that required annual inspection, but can’t say that having the requirement has any bearing on improving safety given my experience with mechanics…
  • Mike978 Wow 700 days even with the recent car shortages.