By on October 1, 2009

(courtesy mlive.com)

Chrysler, the U.S.-funded, Italian-run, formerly bankrupt American automaker is leaking its product plans, ahead of their official unveiling in November. Automotive News [sub] confirms that Sergio Marchionne’s minions have decided to spin off Ram trucks into a separate brand, removing the company’s most profitable product from underneath the Dodge umbrella. For once, AN (or at least its mysterious person of interest) understands the full implications. “The separation of the Ram truck brand will allow Fiat to make Dodge more of a performance car brand, the person said. But the move could also make it easier for Chrysler to spin off its truck business down the road if a continuing slump forced Fiat or U.S. officials to consider such a step.” Did you see that? “U.S. officials.” Pay some attention to the Presidential Task Force behind that curtain! In any case, Chrysler and GM are heading into a perfect storm: continued market share erosion, new product constipation and chaos and, sopra tutti, cash burn.

Never mind that GM IPO FUD, or the back door billions shoveled GM and Chrysler’s way via subsidies, low-cost loans, union health care bailouts, the PBGC Delphi dance and tax breaks. Both automakers’ only real hope of long-term survival is the same as it’s been since last spring: your taxes. What are the odds that Uncle Sam will re-up? Of course, timing is. Everything.

Questions, questions, questions. Does either carmaker have enough cash in the kitty to make it past the mid-term elections without a fresh federal infusion? And if the Democrats get their asses kicked, will the new, fiscally conservative Republicans bailout Motown again (not forgetting that it was George W. Bush who started this whole debacle)?

For those of you who say the Obama’s army never really intended to rescue either automaker, that they were simply subsidizing the companies to facilitate a soft landing, I say bullshit. Washington’s big swinging dicks, led by private equity money men with a similar anatomical affliction, honestly thought they could “fix” Detroit. Any other reading of the situation would be deeply cynical, and you know how I feel about that.

In any case, it’s only a matter of time before Chrysler, and then GM, are parted out. Without a new new new round of bailouts, look for the Big Two to go down by the end of next year. Your take?

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55 Comments on “Ask the Best and Brightest: GM and Chrysler: Gone Tomorrow?...”


  • avatar
    NN

    Bold prediction, Robert…but I don’t think you’re off the mark. What do they have? Between now and the end of next year, Chrysler will have nothing to show more than it has now–the absolute worst car lineup in the North American market. And the recent Saturn debacle puts some writing on the wall…GM’s “spinoffs” (Saab, Saturn, Hummer, Opel) will not bring a single penny to the company. None of them are yet closed and paid in full. Yet GM still gave away their golden engineering goose (at least for CAFE-spec cars). They can survive, but more fat needs to be cut, most likely.

  • avatar

    So does this mean we get to go back to Death watch instead of Zombie Watch, or would they have to have been fully revived? I am so confused.

    Delay tactics are a large part of America and the world at this point, so nothing new here. That is all this ever was. It isn’t cynicism to say that the politicians understand that an unstable company selling an expensive product in a depressed and contracting market is going to need help to survive. They tried what they knew (throw money at it), it is failing.

    I can’t predict the future, but unless some radical change happens in the next 2 years, GM and Chrysler are toast.

  • avatar
    mach1

    Right on Robert! Predicting the timing is a little tricky but the outcome is most likely inevitable. It is tragic that these former powerhouse companies have fallen so far. GM brought it on themselves through arrogant self-serving management that failed to even recognize that the world was changing. Chrysler should have been allowed to fail in 1979. Propping them up kept overcapacity on line and weakened GM and Ford.

    I only hope that Ford doesn’t get dragged down with them. Ford is aggressively shrinking their supplier base to strong companies most likely to survive the meltdown.

  • avatar
    lahru

    I would love to sit here and type that GM and Chrysler have put together plans that show they know where they are headed and there will come a day where their survival is secure.

    What I do see is two disfunctional companies that without large doses of Gubmit cash they will not survive the recession.

  • avatar
    motownr

    How about setting odds on another backdoor infusion of capital to sort out the growing mess at GMAC? With Saturn going under, you’re now looking at 350 dealership loans going bad, and a large number of dealer GROUPS taking major financial hits.

    Chrysler Financial’s largest credit (now surely one of GMAC’s largest as well) reportedly belongs to one of the largest Saturn dealers in the country.

  • avatar
    chops

    Damn Robert, I’m gonna miss you…
    Do we have the stomach for another round of bailouts? If the economy does as Greensapn predicts, and wallows all of 2010, (I think he is right)the pressure will mount for DC action. I predict another round at the taxpayers expense.

  • avatar
    Mark MacInnis

    I agree, but nailing down the timing is harder. Certainly Chrysler will go down by the end of 2010. They got nothin’ and the only sounds emanating from their remaining dealerships will be crickets chirpin’ and howling wind.

    The elections of 2010 could become a referendum on the euthanasia of GM. A repub gain is their final death knell.

    Let ’em die.

  • avatar
    rnc

    will the new, fiscally conservative Republicans

    That’s one of the funniest things I’ve heard (and I vote republican about half the time).

  • avatar
    PickupMan

    +1 AWD-03

    This does sound almost like the start of another deathwatch series. Maybe Robert would be interested in

    moretruthaboutcars.com
    stilltruthaboutcars.com
    realtruthaboutcars.com

    all of which are available :-)

  • avatar
    rnc

    No more bailouts (that political capital was used, at a time when needed) Let’s look at what the bailouts really accomplished (w/o considering chrysler as thier bailout was just a political necessity):

    a) The pensions are fully funded, I’m willing to bet anything that most of the $50 billion went towards that.

    b) Debt was eliminated, but the cost structure wasn’t, the same thing that forced GM into bankruptcy is still there (UAW/US manufacturing) politically wasn’t possible to eliminate that.

    This leads to a second GM bankruptcy through private DIP (a very simple bk), all that’s left to eliminate is the cost structure (UAW). The pension will be eliminated, but since its fully funded, the PBGC will actually be overfunded (based on thier payout methods). There won’t be any debt holders (lots and lots of bondholders) to stand in the way other than the VEBA and the judge will decide that being half funded is still a great deal better than what they would usually get (and you can have some more stock). Majority of US manufacturing shut down, and coming out the other end you have a weakened “US” car company, but a very powerful “chinese” company that can come back over the next two generations (japanese/korean approach)

    And on the (+) side this will get Ford the concessions that they need in the US.

  • avatar
    TJ

    I aree and disagree with this assesment of Chrysler and GM. I think Chrysler is dead but GM will survive.

    Although I would hate for this to happen I feel that Chrysler is in intensive care in a coma and it’s body has failed to get the information that the brain is dead. Life support aside (bailouts) the best medical care around cannot save the dead brain.

    When Chrysler does die, it will be good news for GM. The ineviatable market adjustment should give GM some more market share at least in the profitable Truck/SUV segment and thus keep them going at least for the short term.

    The political side of this is harder to predict. When Bush started this mess he was a lame duck and I truly believe that he consulted with Obama and the Democrats about they wanted to do. Obama owed his sole to the unions so the government blank check was issued. I don’t think it was by chance that the government ownes a much larger share of GM then Chrysler.

    When Chrysler goes under Fiat will probally keep the dealer networks and Jeep leaving the rest to liquidation. RAM will be gone cutting out a major competitor to the truck/SUV segment and GM will jump at the chance to grab that share. Obama and the dumb-o-crats will have some sort of spin that this was good for America because of………….?

    Timne will tell……..

  • avatar
    JSF22

    Yes, they will be gone tomorrow; Chrysler because it is completely without compelling products, and GM because, no matter how good its latest entries, all studies say Gen X and Gen Y won’t be seen with a Chevy or Buick in the driveway. Demographics are ending GM the same way they are ending the Republican Party.

  • avatar
    mattstairs

    rnc

    That’s one of the funniest things I’ve heard (and I vote republican about half the time).

    I’ll second that. LOL!

    I wish the new GM and Fiatsler would be wildly successful and repay the taxpayers with interest, but I just don’t see it happening.

    That article yesterday about the move away from trucks is another nail in their coffins. The loaded up Silverados, Rams, and F-150’s were a substitute for luxury car cash cows for the Detroit 3, and now that segment has permanently shrunk.

    GM management is still pathetically flailing about. FIAT is saying what Cerberus said before them – Oh, holy crap, what did we get ourselves into?

    So now FIAT is cordoning off the “good stuff” (trucks, vans) from Dodge and calling it RAM. After making a halfhearted attempt to fix Chrysler and Dodge, they’ll say they tried and scrap them.

    They can intro a few Fiat cars, bring Alfa back, keep “RAM” and Jeep, and flush the rest.

  • avatar
    ClutchCarGo

    I think that you’re wrong about the BSDs in D.C. While they would love to be able to take credit for fixing Detroit, the bailouts, loans, etc have always been primarily about softening the crash landing of the US auto industry and preventing the wreckage from falling on the heads of both govt and private BSDs. As Chrysler is dismantled, tongues will be clucked and figures produced showing how bad it would have been had the crash happened in 2008 or 2009. And it will be true; had either of these zombies keeled over within the last year, the impact on consumer and investor confidence would certainly have pushed the economy over the edge.

  • avatar
    Buick61

    You’re still contributing to this site? And you’re still saying the same things you have always said?

    Not flaming, just stating.

    I think it’s way to early, and we have far too little information to make the assumptions and judgments made by this write-up.

  • avatar
    Tarditi

    Dodge sends its trucks to Jeep, Jeep spins off… profit.

    The reason Jeep stopped making the J-series truck (some of the best domestic trucks of their time) was because Chrysler (when they purchased Jeep from AMC) didn’t want competition with their dodge line… funny how the snake is always trying to eat its tail…

  • avatar
    psarhjinian

    For those of you who say the Obama’s army never really intended to rescue either automaker, that they were simply subsidizing the companies to facilitate a soft landing, I say bullshit. Washington’s big swinging dicks, led by private equity money men with a similar anatomical affliction, honestly thought they could “fix” Detroit. Any other reading of the situation would be deeply cynical, and you know how I feel about that.

    I do have to disagree with you on this point. While I’m sure government has no lack of hubris, that same hubris is exceeded only by fear of responsibility. The only true mission was to float two large employers (and keystones of other employers) of middle-class workers through the recession. After that, government wants no part of this particular hot potato. If they did, they would be taking a significantly more activist role (think Renault, circa 1980) in the running of the company.

    Big swinging dicks want no part of a low-margin, lame-duck industry like this one, and Washington is playing the same role that Cerberus wanted to, but ran out money for: float them as long as their’s PR value while you piece out the profitable bits. The difference is that government has a little more stomach for loss than the meth-addicted chicken-littles in Wall St.

    Chrysler is now, mostly, FIAT’s problem and exists purely to keep them from being gobbled up by someone else: what happens there doesn’t matter. GM will likely end up in the hands of another Cerberus and subsequently parcelled out like a carcass in a slaughterhouse: they’re too far gone and the latest rumblings show no likelihood of real change.

  • avatar
    Gary Numan

    Robert, we are soooo going to miss you!

    Yes, Chrysler is toast. Bet on it. Jeep and “Ram” will be spun off. Maybe Ford snags Jeep and maybe Hyundai/Kia snag “Ram”. Maybe.

    Gov’t Motors is toast too but a later death and with more taxpayers monies vaporized (reminder, 53% in the USA pay federal income tax). Corvette and Chevy get sold but not sure to whom. Chery or Tata buys Buick and keeps it in China. Cadillac becomes the standard coffin of the world. GMC goes away.

    I will never forget when I worked a brief time for GM around the recession of 91 and attended my first zone sales mtg for a certain brand that is now declared dead. The division zone manager reviewed the month end carline sales, then reviewed the “competition” which was Ford, Chrysler and of course the sister GM divisions! Not one mention of Honda, Nissan or Toyota.

    That first meeting said it all…..

  • avatar
    Conslaw

    It would be great if Chrysler could pick up the Saturn Aura now that the Penske deal is dead. Chrysler REALLY needs a family sedan. The Aura really doesn’t have any fatal weakness. It was just part of the wrong brand at the wrong time.

  • avatar
    Pch101

    Fiat did this deal largely for the distribution channel. They will attempt to buy time by giving facelifts to the old-line domestic product while they ready their home market vehicles for US consumption.

    Unless the economy drags on long enough that it pulls down the entire Fiat organization, Chrysler will still survive. It might be a lot smaller than it was, but it will still be there. The question will be a matter of how much Fiat is wiling to commit its own resources to make it work.

    Without seeing GM’s current burn, it’s tough to estimate their situation. But we do know that this three-channel strategy is more costly than a two-channel strategy would have been, so the burn is higher than it needs to be.

    GM’s revenue plan is hard to discern, and it’s hard to feel good about it. I don’t see a great plan for them making money. Buick is going to be a resource drain in North America, and having it makes things that much worse.

  • avatar
    NickR

    Conslaw…not a bad idea about the Aura, but I can’t see GM sharing a model that is basically the same as it’s Malibu.

    I can see Chrysler going t-u and having Ram (and maybe Jeep) purchased by someone else.

    Let’s face it, the cash-for-clunker hangover is going to be of freshman-year proportions and I don’t see Chrysler having the legs to make it through.

    It pains me as a life-long Moparite but just please die a somewhat dignified death before it becomes anymore sordid.

  • avatar
    tedward

    “government has a little more stomach for loss than the meth-addicted chicken-littles in Wall St.”

    government has a little more stomach for loss than the coke-addicted chicken-littles in Wall St.

    fixed that for you. Those cold calls everyone gets from annoying brokers? Fueled by mountains of coke bought by irresponsibly day trading their least attentive client’s portfolios.

    rnc a big +1

    exactly what constitutes a “new republican”? As far as I can see nothing has changed with respect to the party’s viewpoint, members or tactics. They haven’t even done a very good job of re-imaging now that they no longer have to be responsible for anything, and that is the easiest trick in politics. The push to “reform” tort proceedings or labor? The same old game of only pushing changes that harm your opponent’s donation base (not so different from Dem’s focusing in on health care, but at least that addresses a real life or death issue). Hope springs eternal I guess.

  • avatar
    mtr2car1

    Agreed with Pch101 – Fiat was looking for a cheap distribution channel, use the best dealers to sell a few Fiats and Aflas and if they sell a Chrysler or 2, even better.

    The product realities seem to have put a wrinkle in that plan.

    Jeep gets sold to Hyundai and Ram goes to Nissan and Sergio walks away with some extra cash after putting nothing into the deal.

    Fiat/Alfa were never going to be anything but a small, small bit player anyway.

    As for GM, same end, it just takes longer.

  • avatar
    Gardiner Westbound

    The Detroit-3, like rats clinging to a sinking ship, are all chasing the diminishing clutch of diehard domestic car purchasers in a race to the bottom. GM will survive if Chrysler goes down and frees up market share, albeit temporarily. Ford’s will live if it outlasts the other two.

  • avatar
    tpandw

    First, to echo what a couple of others have said, we’re REALLY going to miss RF. Second, to the point of the piece–as most others have also said both GM and Chrysler are doomed, although the end will probably come in different ways. When I read last night that the Saturn/Penske deal was off, while that wasn’t surprising, I thought that’s a very bad omen for GM. The NYT article about truck sales is another. I simply don’t see how they can last, although I’d be willing to bet that there will be some obfuscating in Washington to put the best face on things. That’s not a partisan comment, BTW–both parties would and will do it.

  • avatar
    VanillaDude

    Time has ran out. This economic crisis will not end quickly. Americans gave Washington this year to give us hope and change, and it’s now too late to see those deadlines met. The negative mood we began to see from taxpayers this passing summer will increase into next year, unless something dramatic happens – which is unlikely.

    They will be in no mood for another bailout. Like a relative in a coma since June, American taxpayers have prepared themselves for the moment they pull the plug on GM and Chrysler. These two patients have had billion dollar medical treatments no one can afford from the Washington doctors, and it still look grim.

    The auto market will not dramatically increase in the coming years. This recession has curbed credit available to spend-thrift consumers willing to stay in debt for a new set of wheels. Fiscally responsible consumers who used to spring for a new ride, are now looking at used cars and are now unwilling to pop for a new auto loan.

    The auto market has been oversaturated for twenty years. The US market was the world’s largest, and without protective tariff barriers and a fat lazy domestic auto industry, it was ripe for exploitation. So, Detroit’s two-cocktail lunches were eaten.

    If GM and Chrysler died in June, the remaining market share would assist Ford at a crucial time. As Washington intrudes into this market, it forces auto prices to bubble in both new and used auto markets. With every government dollar spent, the real costs or savings available to consumers is adulterated at their loss. We know this instinctively, even if liberals have forced themselves to forget it.

    Obama is trying to save voter bases by wasting our tax money. His bailouts and the plans that came out of GM and Chrysler help the UAW and breaks a long-term monetary tradition that those of us who are actually owners of these companies can lose our assets at a presidential whim. Obama damages the long-term business growth of the US by this action. His political moves rob those willing to invest their money into businesses. We cannot grow out of this recession without them.

    This will, in turn, damage the economy further.

    As GM and Chrysler dies, the auto suppliers for domestically assembled automobiles will also start failing. The layoffs and plant closing will further damage the US economy, including auto sales. The death of the US auto industry will result in political consequences for those in power today. Americans will vote out those who have spent the Trillions we do not have.

    There are a lot of pipers that need to be paid after nearly two decades of ridiculous debt borrowing and fiscal bubbles. We will not see any daylight until after we start seeing these markets returning to a balance. That may take a few years.

  • avatar

    Buick is the car, free of GM it would not only survive but prosper. people need to realize it’s the incompetents in the Ren Cen causing the problem, not the wonderful automobiles with their rich and storied past.

  • avatar
    Carlson Fan

    GM suppies all the motors for MerCruiser Marine and Volvo marine. They dominate the full size SUV market, for good reason, and are a major player in the full size truck market. These automotive markets will diminish as gas goes back up but will never disappear completely. At least not in Robert’s lifetime. Trust me GM will be around for a long time.

  • avatar
    stars9texashockey

    Pickup man–

    stilltruthaboutcarsagain.com

  • avatar
    sgirl5

    The government will fund the GM/Chrysler charity even beyond 2010. Yes I say “charity” because GM and Chrysler has no way of paying back the billions and they know it. So because government is willing to help non-viable car companies, this becomes a handout – a charity. I would predict the government will stop funding them when they have already spent $90 to $120 billion in GM/Chrysler. Currently they are burning more cash than incoming revenue and this will continue for years. So to stay in game they need the taxpayer to take the loss.

    Honestly with the bleek future of these companies I don’t know why people are still buying cars from them. Gosh don’t the buyers know that when the companies go down they will lose a lot of resale value. Gosh I don’t even know who would buy a $40k Volt when they can get a similar car with good fuel economy for half the price. And the situation with Chrysler, that company should have disolved last year!

  • avatar
    rnc

    They dominate the full size SUV market

    And Chrysler still dominates the large luxury minivan market….dominating a dead/dying market isn’t a necessarily a good thing (and if taken in context it’s about the same as Ford dominating the full sized RWD BOF car market, they do, but it isn’t going to save the company).

  • avatar
    Autojunkie

    You have to realize this also gives Fiat a distribution channel for their commercial trucks, which currently have no presence here.

    Why does everyone on here always have to think so negatively???

  • avatar
    fincar1

    “Why does everyone on here always have to think so negatively???”

    Yeah, c’mon, there’s gotta be a pony somewhere in all this horseshit.

  • avatar
    psarhjinian

    Americans gave Washington this year to give us hope and change, and it’s now too late to see those deadlines met.

    Now, let’s be honest, here. If Americans (or anyone, really) seriously expect a dramatic, on-a-dime turnaround from the greatest downturn in more than half a century then they’re living in a fantasy land. A year? Are you kidding? You’d have to elect Jesus Christ himself to pull that off.

    Unless they’re willing to junk social democracy+capitalism for Italian fascism, I don’t think you’ll get your magic year. And that won’t happen ever, considering how much Americans get their collective knickers in a twist about overt corporatism.

  • avatar
    Pch101

    You have to realize this also gives Fiat a distribution channel for their commercial trucks, which currently have no presence here.

    That’s not accurate. Iveco has been in the US for at least five years, with its own separate distribution deal. They don’t specifically need Chrysler in order to sell those vehicles.

  • avatar
    panzerfaust

    Tomorrow
    Tomorrow
    I love ya tomorrow
    Tomorrow
    You’re always a day away!

  • avatar
    Rod Panhard

    First off, the “logic” of the bailouts from Washington at that time was to save jobs, lest GM and Chrysler collapse and the whole country would go under. That was the conventional wisdom. Back to that in a second.

    Chrysler’s demise seems very obvious to me. We read this morning that Mr. Penske asked the world’s automakers to see if any of them could or would develop product quickly to sell at Saturn stores when GM’s done. The answer was apparently, “Not in the amount of time allowed.”

    So why do people think Fiat can? Chrysler’s product line is out of date now. In two or three years, it’ll be even more out of date. And now we’re reading that pickup truck sales are way down, and those were high margin units.

    Chrysler is a goner. Third time is the charm. Or is it that you go down three times before you drown? Or is it three strikes and you’re out. The Italian has walked out of the bathroom with only his dick in its hand. Somebody forgot to put the gun in the toilet tank, and the “gun” was competitive products.

    GM, however, is a different story. It’s much larger. In the public’s mind, it hasn’t been bailed out twice like Chrysler has. GM, from the public’s perspective, is still an American company. Let’s not let the facts get in the way as Fiat owns enough to “control” Chrysler and ask anybody on the street, they’ll say Chrysler is controlled by the Italians.

    In an odd way, Time is on GM’s side. The closer they can get to Election 2012, the better for them. The votes the Dems buy with another bailout will greatly offset the votes they lose.

    Think of it in this way. When we read about “How many jobs will be lost if GM goes under,” what we’re really reading is “How many votes will be bought when GM gets saved, again.”

    Conventional wisdom now says it’s a jobless recovery.

    And this is the only thing that will save GM, again. It won’t be the Chevy Volt. As someone in the B&B pointed out, GM has consistently struggled to consistently make great cars for decades. One overpriced electric car isn’t going to turn GM back into a profitable enterprise.

    And it’s a damn shame, too.

  • avatar
    Roundel

    I think many here sell Marchionne short on his abilities. He was to Fiat what Ghosn was to Renault/Nissan.
    Fiat Group is no Cereberus. They are a car company, Fiat did not come in for a strip and flip. That foolishness already failed under the three headed dog. It is unfortunate that this country is backwards when it comes to certification of sale in the US. These regulations need to be aligned with the rest of the world, and its a main reason why Chrysler could fail. New product needs to be on the ground now, and idiotic backwards regulations are stopping that.
    Even though people are shooting in the dark as to what the plans are, I think we would have to wait and see if there really is a train wreck before we can write it all off.

  • avatar
    Kyle Schellenberg

    It’s a test.

    If Ram can be successfully detached from Dodge while running under the Chrysler umbrella, then there’s no reason why Chrysler as a brand needs to exist. Alternatively, set up Chrysler solely as a luxury brand (tarnished as it may be) to compete with Cadillac and Lincoln and grow “everyday” models under Dodge. The escape plan would be to sell a single Chrysler luxury model while starting to hock Alfa Romeo as a luxury brand. If Alfa is a success then they can ditch Chrysler, if Alfa doesn’t take then they’ll just shift over to re-branding them as Chryslers.

    I don’t know what they’re talking about when they say making Dodge a “performance car brand”, that sounds like BS to me. Is anyone looking for a lineup of performance cars anymore? If separating Ram from Dodge means that each car no longer has to carry a honkin’ big truck grill on it, then that will be a positive change for Dodge.

    I bet Chrysler wishes GM had ditched “GMC” when they did their brand scalping.

  • avatar
    CamaroKid

    will the new, fiscally conservative Republicans

    We have been promising “new, fiscally conservative Republicans” since 1976. When will we get one? There are two kinds of Republicans… “Eggheads” and “Dittoheads” and neither have proven to be all that fiscally conservative.

  • avatar
    aakk123

    I have to disagree with most on this board. Besides the pot shots and continued bashing of specific companies here, there are major changes going on at the chrysler group that are not readily reported in the media. Not only has it started at the top executive level, but also right down to the managers on the shop floor. The WCM system is being implemented at each remaining Chrysler group facility. This system was highly successful in controlling costs at Fiat plants. I think right now Fiats objective with Chrysler is to get its operations running on the WCM system first. This will further allow it to control its costs outside of Bk. And yes quality is a huge part of WCM. They believe you cant control costs without quality improvments. NOt all of Fiats plants are fully implemented with WCM since Marccionie took over. IT takes about 2-4 yrs to get fully certified on WCM. Hence the full improvments have not been made on all Fiat products. The market is a dead duck. No use rushing out new and costly product lines in a dead market with little hope of a return as the industry average is down about 25%. Better to use this time to implement new and cost effective ways of doing business.

  • avatar
    ChristyGarwood

    Ok, aakk123, I’ll chime in and defend new GM, since I am an employee…

    GM has shed tens of thousands of salary and hourly jobs the past four years. It accelerated its 4-year down-sizing plan from 2008 into one 12 month period ending today. It will have closed numerous manufacturing plants by July 2010. Dealers have closed and more will close by July 2010. Debt is off the books. (Thank you to US and Canadian tax payers.) People driving new LaCrosses, Malibus, Terrains, Camaros, Equinoxes are loving ’em. Word will spread and so will sales. Ditto on the Cruze, but that won’t happen until later next year.

    And yes, GM will sell trucks because people still need to do work with trucks. And GM will sell Cadillacs and Corvettes profitably.

    GM also has rising sales in China…some, but not all yuan can flow into dollars.

    GM is now a lean, mean fighting machine for the next 18 months minimum.

    RF, stay in touch and next year let’s see who is right about GM. If I am right, I will buy a round of top shelf drinks since I’ll still be working, but you have to come to MI to collect.

  • avatar
    Hippo

    The irony is that both GM and Chrysler had one or two vehicles that one might have purchased if one had to, without government intervention.

    Ford has none.

    So now one could not purchase a domestic vehicle under any circumstance on principle.

    Maybe Jeep gets picked up by an efficient European or Japanese company that can update the Wrangler design and manufacture it somewhere up to modern quality standards.

  • avatar
    FreedMike

    Not to put too fine a point on it, but the best way to ensure these companies ARE gone tomorrow is to continually trash them. Is that the point, or is to get these companies off the dole eventually?

    I’ll go out on a limb and say GM WILL survive, simply based on political reality and the amount of new product it has coming out.

  • avatar
    lahru

    It is all about perception.

    People buy based upon values and they are based upon what is happening now. Some guy in Omaha leaves his house having made the decision that they need a new car. They have watched the news and maybe he has done a little research online, reviewing Consumer Reports ratings of vehicles that fit their needs and so out they go.

    They visit most likely the dealership closest to where they live and drive the model that meets their needs and leave and go on to the next area dealer that has something that most likely has caught the wife’s eye on the tv or an ad in Good House Keeping and keep going until they tire of the whole thing and go home.

    The next day they discuss what they have experienced and they most likely have differing opinions on what to buy. So,here they are, deciding what to buy and at some point they get to the question I am sure most buyers get to and.

    Some guy at work who follows the car business told me to be careful because these car companies are all having problems because with the way the economy is they you might end up with a car that the company that built it and is responsible for warranty, parts and service might not be here for the duration of the warranty period.

    So now they question their #1 choice based upon a whole set of different values than when they started looking for a new car.

    What company is going to be here ten years from now.

    So out they go the following week and with the thought of who’s going to fail on their mind they look at cars that they consider viable based upon what they have heard or read or looked at online who they believe will be here down the road and choose the make and model based upon a whole new set of values from when they started. Except the one opinion they had when they left the house the first day. What mets our needs.

    So this whole process expands their shopping to brands that they never would have considered and they might or not buy a Mazda or a Hyundai but they will go and look at them.

    And I see an increase in those that leave the house with the intent of buying and yet when it comes to reaching in their pocket for the cash think long and wisely about pulling it out.

  • avatar
    NoChryslers

    I have owned two Chrysler products; a Plymouth Sundance and a Neon Sport. Don’t be dumb like me…don’t buy a Chrysler EVER!!!!

  • avatar
    porschespeed

    @ChristyGarwood,

    Denial is not a river in Egypt, it’s replaces oxygen in the atmosphere of the tubes.

    Your post reinforces what many have known since somewhere in the early 70’s. GM’s completely dysfunctional corporate culture is not capable of correction without dismantlement.

    It’s bleakly apparent that we’ll be injecting even more money into GM, long before 18 months from now.

    God love ya for toeing the party line, hope it works out for you.

  • avatar
    ExtraO

    When talking about “Peak Oil” it isn’t that important to know what year it will supposedly happen, it’s enough to know the quarter century that it will likely happen.

    Something similar is true for GM & Chrysler; knowing which decade they go tits-up is close enough (we are talkin’ about government work, after all…). Son on that basis, I would say that RF is correct on this one.

  • avatar
    ExtraO

    When talking about “Peak Oil” it isn’t that important to know what year it will supposedly happen, it’s enough to know the quarter century that it will likely happen.

    Something similar is true for GM & Chrysler; knowing which decade they go tits-up flat out dead is close enough (we are talkin’ about government work, after all…). So on that basis, I would say that RF is correct on this one. By the time the third decade of the new millennium starts I expect them to both be rapidly fading memories and nothing more. And there’ll likely be a number of other ex-mfrs. in the same state.

  • avatar
    sutski

    Yup fraid so.

    There were over 40 new and “near” production electric cars at Frankfurt show….If you ain’t got one within 6-12 months of production, you are gonna miss the boat as these little independent companies get online.

    Just north of the border…

    http://evworld.com/currents.cfm?jid=26

    Small will be the new big in the car manufacturing world of the 2010’s !!

  • avatar
    FleetofWheel

    Three aggressive things Ford could do to take advantage of their stronger position.

    1) Run ads reminding car buyers of Chrysler’s precarious situation and inability to supports its products. Ads that depict Chrysler as a sub-quality brand. Too edgy you say?, this is a battle for survival.

    2) Introduce a CJ/Wrangler type of vehicle to strike at Jeep’s core product.

    3) Work to win contracts for military vehicles. Ford is the natural go-to to become the domestic maker of US military vehicle amidst a faltering GM. Sure, the GM boosters on the car czar team might resist this but eventually they’ll see the constituent benefit of having a mostly American car company, that is not a basket case, handling truck procurement contracts for the military.

  • avatar
    colin42

    Some of the brands from each company will survive but I’m not sure that either company will.

    Perhaps if Robert is looking for a job he could go and work of Chrysler or GM (at the top of course) and (try to) fix the problems from the inside!

  • avatar
    George B

    Chrysler probably can’t survive. Almost no new cars to introduce in the next few years and they’re not profitable with their current products and cost structure. I predict that their few competitive truck products get sold to a more competent manufacturer that has avoided UAW infection and Chrysler fades away.

    GM is a sad case. They do have new cars and trucks that are better than the vehicles they replace. They had one shot at changing their cost structure under chapter 11 and I think they blew it. New GM management appears to be just as clueless as Old GM management. They still have too many brands and too much legacy cost. Their various brands and products are so interconnected that it’s very difficult to sell off parts of GM to raise cash. Unfortunately they will probably need to borrow more money soon just to continue operating.

  • avatar
    Geotpf

    TJ :
    October 1st, 2009 at 10:21 am

    I aree and disagree with this assesment of Chrysler and GM. I think Chrysler is dead but GM will survive.

    I agree with this, with a slight modification: Chrysler must die if GM is to survive. If Chrysler goes away, enough of that demand will migrate to GM to keep it is business. Obama should have picked favorites and helped GM and killed Chrysler.

    In any case, I disagree with his assessment of what Obama wants to do. I’m sure Fargo is a Republican and automatically sees the worst in Obama; as a Democrat, I see the best. Obama realized that having both GM and Chrysler go out of business in the middle of a recession would be a disaster for the country at large. I seriously doubt a second go around of funds will be available, especially for Chrysler. We will just have to wait and see.

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