Editorial: Chrysler Suicide Watch 48: Die Another Day

Robert Farago
by Robert Farago

Barack Obama is set to address the nation tomorrow, announcing Chrysler’s death and rebirth. The president will frame the government’s intervention in familiar terms: hope and change. Only in the reverse order: change and hope. Obama will say that the federal government is helping Chrysler transform into a viable American automaker. This we (yes we) are doing because President Obama has hope for the future of the American automaker and, not-so-incidentally, American automaking. Chrysler, the United Auto Workers (UAW) and Fiat will now build the kind of economical, environmentally friendly vehicles America needs. Unfortunately, Obama’s “plan” is the exact opposite of what it pretends to be.

Chrysler Bailout III represents the protection and perpetuation of the status quo, not genuine change. How could anyone think otherwise, now that The Presidential Task Force on Automobiles (PTFOA) has engineered a deal that gives the United Auto Workers a majority stake in the reconstituted Chrysler? If there’s any one group in the auto industry that has resisted change, that’s opposed root and branch reform, it’s the UAW.

Since the union’s inception, they’ve labored under an ever-expanding set of terms and conditions, that’s now thicker than “Gone with the Wind” and “War and Peace” combined. As you might imagine, none of these endlessly negotiated strictures, mandates, grievance procedures, benefits, entitlements, etc., were designed to engender manufacturing flexibility. They were designed to protect workers from change.

The UAW’s onerous contracts have bolstered a stultified corporate culture that’s both unable and unwilling to foster innovation. You want to change the way I do my job? Take it up with the union. And good luck with that.

Sure, Chrysler’s management bears ultimate responsibility for allowing their union workers to [help] frustrate the company’s overall competitiveness. And no, the UAW didn’t decide what Chrysler cars, trucks, SUVs and minivans to build, how to build them, what parts to use or how to put them together. But no matter who’s to blame for Chrysler’s execrable products, the union is in the business of protecting the union—not finding ways to build better automobiles.

Not to put too fine a point on it, anyone who truly believes that increasing the UAW’s stake in Chrysler will transform union members from legendary foot-draggers to world class sprinters, passing the four-wheeled baton to a freshly energized (Italian?) management structure with speed and grace, is nuts. As in delusional.

Which is a perfect description of President Obama’s “plan” for Chrysler.

Not to coin a phrase, Obama and his PTFOA have failed to hope but verify. It’s one thing to imagine a reborn Chrysler making fuel-efficient Fiats that can sell at enough of a profit to keep UAW members employed and pay off the new company’s $10 billion (and counting) debt to taxpayers. It’s another to think it can actually be done.

Chrysler’s turnaround “plan” involves more variables than a five day weather forecast, from mastering manufacturing logistics in a company decimated by layoffs, to somehow overcoming consumer resistance to TWO damaged brands.

Perhaps that’s why private investors wouldn’t touch Chrysler with a ten-foot spreadsheet. And now, where financial angels fear to tread, the federal government rushes in. To save jobs. Union jobs.

As I’ve stated previously, the American public doesn’t know credit default swaps from Shinola (another company that went the way of the buggy whip). But they understand that new Chrysler is a union gig. Well, if they didn’t before, they will now, what with the UAW’s 55 percent share of the post C11 company. The question then becomes how much sympathy does the average American—rather than, say, the average Democratic operative—have for the “plight” of the unionized working man?

The answer: some. But not enough. Not enough to go out and buy a new new Chrysler product just because it wears the union label. Especially not now, at a time when the average new car buyer isn’t buying a new car. When they can’t afford to risk their hard-earned money on a vehicle that may or may not be reliable. From a dealer that may or may not be in business next year. And then there are the people who will not even consider buying a Chrysler product because of the bailout.

There’s your bottom line. At the end of the day, after the feds “invest” tens of billions of tax dollars in Cerberus and Daimler’s cast-off, the automaker will live or die based on whether or not American consumers will buy the company’s vehicles in sufficient quantity at a price that allows Chrysler to take in more than they spend. As our Best and Brightest will tell you, without genuine change in corporate culture, without a realistic plan, the odds of that happening are somewhere between none and none.

And so the president will eventually learn—as Chrysler’s previous owners have—that commercial realities can only be postponed not denied.

Robert Farago
Robert Farago

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  • Windswords Windswords on Apr 29, 2009

    seanx37: "The tens of billions to upgrade the ancient and obsolete factories?" Sean, While I agree with your sentiments, it's untrue that Chrysler has obsolete factories. Chrysler has some of the most modern manufacturing plants anywhere. FIAT knows this. That's one reason they want in.

  • The Luigiian The Luigiian on Apr 29, 2009
    Oooppss. Before anyone else gets too startled, I meant that Ford pick up the remnants that have any worth. Jeep, maybe some truck business, Cadillac. Volt, maybe some sites. Ford getting Jeep could legitimately be a good thing. This is the brand I thought of when you mentioned Ford absorbing Chrysler.
  • CoastieLenn No idea why, but nothing about a 4Runner excites me post-2004. To me, they're peak "try-hard", even above the Wrangler and Gladiator.
  • AZFelix A well earned anniversary.Can they also attend to the Mach-E?
  • Jalop1991 The intermediate shaft and right front driveshaft may not be fully engaged due to suspected improper assembly by the supplier. Over time, partial engagement can cause damage to the intermediate shaft splines. Damaged shaft splines may result in unintended vehicle movement while in Park if the parking brake is not engagedGee, my Chrysler van automatically engages the parking brake when we put it in Park. Do you mean to tell me that the idjits at Kia, and the idjit buyers, couldn't figure out wanting this in THEIR MOST EXPENSIVE VEHICLE????
  • Dukeisduke I've been waiting to see if they were going to do something special for the 60th Anniversary. I was four years old when the Mustang was introduced. I can remember that one of our neighbors bought a '65 coupe (they were all titled as '65 models, even the '64-1/2 cars), and it's the first one I can remember seeing. In the '90s I knew an older gentleman that owned a '64-1/2 model coupe with the 260 V8.
  • SCE to AUX "...the complete Mustang model lineup to peruse"Will the fake Mustang show up, too?
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