By on December 2, 2008

TTAC reader Steve Leiter took up our challenge and headed over to the Maryland Port Authority for Chrysler’s bailout begging party. He files this report… “Sorry, no pictures, ran out the door so fast, cell phone was selected specifically such that it does NOT have a camera in it.

The podium’s surrounded by a gray RAM pickup, olive Patriot, red Charger, white Caliber, Sand 300C, red convertible Sebring, Bbue Liberty, and silver Journey. About 90 folks, equally split between ACT employees, suits, and press corps people. 12 of the employees had neon yellow flak-jackets– must be the Stevedores. WJZ-TV, CNN-Political, etc. cameras.

AMPORT Parametrics is the largest US port for handling autos. The Big 3 export 300k/yr. from Baltimore. Chrysler accounts for 40 percent of that traffic, some 200k Chrysler vehicles in 2007. Who knew? Workers charge 7 hours per car. ACT has 400 employees, about 200 charge to Chrysler when adding RR, maritime, and Stevedore workers.

Jim Press, VP and Chairman Chryco LLC since 9/07– in charge of sales, international sales, marketing global strategy, and parts– steps up to the microphone.

Jimbo wants to learn from the (little?) people. He’s on a whistle stop tour to DC (no prizes for guessing what he wants when he gets there). Mr. Press presses his case: the U.S. economy needs value-added jobs– someone has to pay for the standard of living. Furthermore, America needs to preserve it’s manufacturing core. Around four percent of U.S. GDP is heavy industry; autos are the only heavy industry, don’t screw it up.

The U.S. auto industry– and by that he means Chrysler, Ford and GM– is under attack, from three different directions [look how two fronts worked out for Hitler]. It faces globalization (competing wage-structures due to pensions); product (quality, fuel economy) and “internal Issues.” To wit: Jimbo says ChryCo was working through their cunning plan, reducing their pesky cost-structure, when the fuel prices hit. Yes, they were waylaid by $200/bbl., followed by $4 gas. Funny, I don’t remember $200/bbl oil…

Anyway, the Industry’s contracting, from 16M/yr. to 10.2 M/yr. So Chrysler needs a 1.5 year bridge loan. But don’t blame us, we’re babies: “We’re only a one-year-old company.” So much for heritage, I guess.

More blame shifting: “This has been an interesting year,” Press admits. Pinched credit hit three ways: customers, dealers and operating costs. (Jim loves the number three.) From (his) international experience, he can see what Chrysler has to do differently to make it. More threesomes. Improve quality – which is up because warranty pay-outs are down by 29 percent. Export. And be expert in the industry.

This is your problem, guys. Beyond the port, MD has around 100 ChryCo dealers, with an average of 53 associates apiece. What’s an associate? Need to open our eyes (i.e. open Uncle Sam’s wallet) and preserve what’s been built (same). Skipping shameless politicking from politicians to JP’s Q&A…

Our plan is working, Mr. Press assures a less than skeptical audience. We are acting in a fundamentally responsible manner. We are being transparent, and accountable. We’re only one year old. (What’s up with that?) We are on this tour to ‘collect information;” we don’t want the loan to become a political logjam. We just need time (2010 – 2011) to finish resurrection and be competitive.

What would happen if Chrysler declared Bankruptcy ?

1)  Very difficult to come out of; image of a quality product would be damaged; product is 2nd in magnitude only to house.

2)  BRK would damage supplier base, big-3 connected outcome due to common suppliers.

JP will not attend the Thurs-Fri session downtown DC. Jim will be “scraping the hide” of local parts suppliers to try to build basis of support, in some room not open to the press. Stuart Schorr (Sr. Mgr. Communications) had ‘no comment’ on the mode of transportation for the Management Team to get to DC on Thursday+Friday session.”

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11 Comments on “Bailout Watch 225: Report from the ChryCo Cryfest...”

  • avatar
    Edward Niedermeyer

    Thanks for taking the time to blog this, Steve. Anyone else think that $200/bb quote is worthy of a Lutzie nomination?

  • avatar
    montgomery burns

    The “we’re an new company” really is “don’t blame us for this mess, it was the other guys”. A favorite tactic in corporate America.

    One thing that puzzles me about BK though. Do people really not care if an airline goes through BK, as has been mentioned a few times? After all you are putting your life on the line there versus having a problem getting (unlikely) a power steering pump for your minivan.

  • avatar

    @Edward Niedermeyer :
    Anyone else think that $200/bb quote is worthy of a Lutzie nomination?

    That’s got to get him in the running, but I can’t see Bob giving up his title that easy.

  • avatar

    Funny how a one-year-old company made my 18 year old Dakota…..


  • avatar

    @montgomery burns:

    The difference between an airline that went BK and a car company that went BK is that when you get off the airplane and get your (hopefully non-lost) suitcase, you’re done with the transaction. Airplanes rarely crash.

    If you buy a car and the company goes BK, where are you going to get parts? Sure, there will be some in the pipeline still, but what happens in a few years when the radiator goes? Cars break down all the time. A minivan or a generic sedan isn’t the same as a classic Mustang/T-Bird/Vette that has specialty shops making parts for them.

  • avatar

    I’ve been flying bankrupt airlines for a couple of years now. I’m OK with that because of the regulation and knowledge that they are legitimately restructuring (so they can’t afford to kill off the future customer base). With the airlines I see their plan.

    As opposed to the D2.8, which I think we all agree won’t survive as is. I think the CEOs all have the ch11 thing backwards – if they would go on and do it and show me a viable plan I might consider buying from them. Since they have spent so much time lately telling the nation how not viable they are why would anyone buy now?

  • avatar

    autos are the only heavy industry

    Please. Stop spewing BS, Jim.

  • avatar

    “autos are the only heavy industry”

    Right. So, that roll of steel that I saw at the AMERICAN factory near Montgomery Alabama (Hyundai) which said “US Steel” on the side; that was my imagination, right, Jim? You know, the plant built by the company that DaimlerChrysler used to own 10% of; Hyundai. That company, which DaimlerChrysler pissed off so badly that Hyundai demanded that they buy back their 10%. At about the same time that DumblerCry-slur yanked the rug from under their “partner” Mitsubishi.

    Kizmet (paybacks) are a bi-atch, ain’t they, Jim?

  • avatar

    What about Boeing? Isn’t that considered heavy industry?

    Freightliner trucks? Paccar?

    Anyone else have any answers? Bueller?

  • avatar

    The D 2.8 love to quote about losing heavy industry when they themselves are guilty of outsourcing how much? Wasn’t Chrysler about to ship all their parts manufacturing overseas to India or China if they couldn’t get costs down locally?

  • avatar

    Yep it was. Amazing how much denial of reality they have. It’s no wonder corporate America is in the condition it is in if a majority of it’s leaders are like this.

    We’re in a race to the bottom. The whole folks have to earn enough to buy your products thing. Ship jobs to some foreign land and all that is left is a service industry where a handful of people make a good living while too many make $8 an hour. How about balancing the tables a little. Eliminating some greed. Make the line from the top level pay to the entry level pay a little flatter. I’m all for making lots of money with minimum gov’t interference but it’s beginning to look a little like the 3rd world countries where we have an elite wealthy class and a working class making small money and very little in between.

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