Chrysler Creditors: Can We Please Sue Daimler?
Automotive News [sub] reports that Chrysler’s unsecured creditors have requested permission to sue Daimler for gutting Chrysler’s “most valuable assets” during its sale of the company. The request alleges that “unidentified assets” were lost in Daimler’s 2007 sale of Chrysler to Cerberus Capital Management, for which creditors are seeking $3 billion in compensation. If granted, the damages would eclipse the $2 billion granted to secured debtors during Chrysler’s bankruptcy sale. “This is completely without merit and we intend to defend ourselves vigorously,” say Daimler spokespeople, and we can’t help but feel that they have a point. What mythical assets were present for Daimler to squirrel away by the time they sold to Cerberus? Did Daimler mismanage Chrysler? Sure. Did they loot assets? For that to happen, there would have to have been valuable assets in place to begin with. Best of luck with that, Chrysler creditors.
tced2, you're right about Lutz's book Guts. I just finished it and was shocked to see that he actually admitted how good the AMC guys were instead of "um, who again?" simply forgetting the entire chapter in the history of Chrysler (because of course, Chrysler bought AMC). He even truthfully mentions that the theoretical starting point for the LH cars was the Eagle Premier, which is also true. Another thing that Lutz mentions in the book is how leaders should act. Simply having a glib tongue is NOT NEARLY enough. But I can't possibly comment on Barack Obama's leadership eh? Someone will report me to the Stazi at the white house.
rnc: "Because as every other automaker went global (either through organic growth or mergers) chrysler would have become a niche maker selling mainstream (discount) products, that just doesn’t equate success." After the recovery from near death in the 80's Chrysler slowly built up it's foreign sales. By the 90's they were selling hundreds of thousands of units in Latin America, Europe and China. They developed left side of the road vehicles for Japan and Australia (Neon, Cherokee). They built a mini-van/Grand Cherokee plant in Graz, Austria. They designed the 300M as a "5 meter" car (with rear orange signal lights) so that it would be appropriate for European markets. Like it's US sales, Chrysler's export sales in the 90's were going in one direction: Up edgett: "And, ok, the minivan was a nice idea, but if post-1980 Chrysler had not existed, it’s likely that Lee would’ve come up with the idea for someone else." He did. For Ford. He and Steve Sperlich had the idea for what they called the "MiniMax", but Henry the Deuce hated it and fired Sperlich, who went to work for Chrysler. Chrysler - before Lee - didn't think it was a bad idea and were developing it when he got there. So yeah, they should get the credit because they recognized it was a worthy idea. "I have no doubt that Bush’s advisors told him that any loan to Chrysler was like throwing money into a bonfire hoping that some would waft away, and Obama certainly was given the same verdict." Chrysler has a better chance of surviving than GM does and it always did. Like someone said GM is cancer patient waiting to die, even though the government is still giving them chemo (cash). tced2: "And if you read the Lutz book “Guts”, he describes how the Chrysler development system was improved by the American Motors acquisition. American Motors had a very efficient product development system headed by Francois Castaing. This was one of the un-discussed assets Chrysler picked up when it bought American Motors. Everyone thinks the only asset was Jeep." The development process was based off a study of Honda and furthered by the experience of the engineers at AMC, who had to do more with less. And of course Dumbler FUBARe'd it. For that alone they ought to be sued, but about that $8-10 billion... galaxygreymx5: "The ‘93 Grand Cherokee was a massive improvement over the crotchety old model in almost every way. Superior off road skills with car-like driving dynamics. A strong seller immediately after launch with innovative four wheel drive and safety systems for the time." You forgot to mention MT truck of the year. And it was clearly a superior vehicle to the Ford Explorer. It even had a counterbalanced hood that didn't need a prop rod to hold it up (like the Ford). "The ‘95 “cloud cars” (Cirrus/Stratus) were in the same league as the Neon and Ram, a stylistic home-run that left mouths agape at first sight. Packaging efficiency like nothing else in the class. MT Car of the Year." My mouth was agape. And I bought one. Red '97 Stratus SE with Auto Stick. Loved it. Never gave me any problems. My wife’s grandmother, who bought TWO new Accords every few years when the redesign came out (for her and my mother-in-law) drove it and was impressed. Oh yeah, one of the buff mags compared it to Fords new Contour and they liked the Stratus better. "Comically short lead times on new models, stunning concepts that actually hit production while the market was still excited (Viper, Prowler, Neon, PT Cruiser), and simply class-leading performance in many areas all disappeared when the “merger of equals” hit the fan." I would like to add: 1996 Dodge Caravan - MT Car of the Year (Boy was Ford pissed! That's when they introduced the new "jellybean" Taurus. They thought they had the award in the bag.) 1996 Dodge Dakota MT Truck of the Year. 1999 Chrysler 300M, MT Car of the Year. I won't even bother with CD's Ten Best lists, they were all over that. - - It seems there's a certain amount of myopia when it comes to Chrysler, it's products, and it's (near) history. Or maybe it's just Sodium Silicate of the brain, the inability to process anything outside of the Asian or Euro imports or the GM/Ford mega-corp. I've seen the 1980 loan guarantees miss-labeled a direct government bailout via a transfer direct from the US treasury; a dismissal of products in the '80's and 90's that were genuinely ground breaking; a mental snort of the designs, sales, and SPECTACULAR profits made in the 90's like they were some sort of "stroke of luck" that was not earned by hard work (and I think the fact that Bob Lutz had so much to do with that is the heart of the problem, after all we can't give HIM any credit now can we?). Then the re-writing of history that Chrysler was terminal all along in the 90's (hey it was only a matter of time till they went out of business, no, really!) and that Dumbler did them a favor by buying them and giving them "good quality" German engineering. And just recently the hope and desire of some that Chrysler would just die so that GM might live (if GM is so great, why can't it make it no matter what happens to Chrysler?). We like to say this is the "truth" about cars and claim that we are the "best" and the "brightest". Perhaps we need to work on that a little more.
@ windswords Thank you for helping to get the truth out there. Daimler did nothing other than squeeze the fruit for all the juice they could get and then throw the rind away. A good example of this that many people don't understand are all the "preferred" German suppliers that were forced upon Chrysler...in many cases Chrysler's costs went up vs. the suppliers they had been using, but Daimler reaped the benefit of improved pricing from the volume increase. I submit as an example the awful 6-speed manual transmission from Daimler that replaced the excellent NVG 3550 transmission in the Wrangler at near triple the net cost to Chrysler. To add insult to injury, the 5-speed NVG gearbox had a better overdrive ratio!