Bailout Watch 364: Chrysler Is Insane

bailout watch 364 chrysler is insane

Bailout fatigue? Not me. Every day I wake up wondering what new absurdity I’ll encounter in my quest to tell the truth about cars and those who make them. And just when I think it can’t get any more ridiculous—a Chrysler Fiat tie up, “strategic reviews” of dead brands, a back room bailout for an ex-Treasury Secretary’s new boss, viability plans spun out of thin air, product plans cut from the same cloth—it does. Here’s today’s hit of alternate reality: Chrysler wants—no, demands—that its suppliers cut their prices. WTF? Remind me again. Chrysler’s suppliers are making how much profit these days? I’m thinking… none. And how many cars can Chrysler build if its suppliers—make that one key supplier—can’t deliver parts? I’m thinking… none. Not that anyone’s buying Chrysler products, but blood from a stone?

And yet, there it is [via Automotive News]: “Chrysler LLC’s purchasing chief is demanding a new round of price cuts from suppliers as the automaker faces a Feb. 17 deadline to justify its federal bailout money. Scott Garberding has ordered price cuts from all suppliers effective April 1. Those would be in addition to annual price decreases required contractually of suppliers, according to a Jan. 26 Chrysler letter obtained by Automotive News.”

So Chrysler’s going to sacrifice its suppliers to get tax money to pay its suppliers to build cars no one’s buying. Fabulous! Literally.

“In his letter, Garberding offered suppliers a carrot in the form of a 90 percent share of any cost-reduction ideas they initiate. But such efforts require a long-term process of testing and evaluation.

The supplier executive said Chrysler’s mass layoffs have stripped much of the staff needed to run that program.”

You can’t make this shit up.

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2 of 42 comments
  • 50merc 50merc on Jan 29, 2009

    Chrysler's policy: the components will continue to get shoddier until overall vehicle quality improves.

  • Dougfixit Dougfixit on Jan 29, 2009

    The big 3 have been beating up on us suppliers for years. I would bring up the point time and time again that they are saving a few pennies now, but paying out big bucks later in warranty and customer dissatisfaction. The supplier I worked for does business with all the big 3 and some of the transplants, yet despite their diversification, they are deathly afraid of losing business. To which I would say "Zero money is better than negative money." Anyway I am now unemployed.

  • Ltcmgm78 I must laugh because this is an expansion of the old question of why car manufacturers don't build less expensive cars. There's no money in it! As long as virtue signalers have the long green to buy the pricier EVs, there won't be any affordable ones until most of the demand for the expensive ones are met. Economics, you know. New technologies always progress this way. The future Chevy Vega on the Ultium platform is a long way off.
  • Daniel J Also, the additional 20K is spread out over a loan, which could end up closer to 24K.
  • Wolfwagen When will GM and Dodge/Ram come out with a BOF 2 door sport utility? Im not one that jumps on the first year new vehicle bandwagon, but for a new Ramcharger, I'd sleep out in front of a dealership for days to be first in line for preordering (or infront of my computer for hours)
  • Wolfwagen Is it me or does the front end look like a smaller silverado?
  • MQHokie Who decided moving all headlight control to the touchscreen was a good idea? I assume this means no manual high beam control anymore, so you're at the mercy of the automatic system that gets fooled by street lights, porch lights, sign reflections etc. Not to mention a good software bug or a light sensor failure might render the lights inoperable. With all the restrictions the NHTSA has placed on USA headlight design over the years, it amazes me that this is even legal.