“Due to the continued lack of consumer credit for the American car buyer and the resulting dramatic impact it has had on overall industry sales in the United States, Chrysler LLC announced that it will make significant adjustments to the production schedules of its manufacturing operations. In doing so, the Company will keep production and dealer inventory aligned with U.S. market demand. In response, the Company confirmed that all Chrysler manufacturing operations will be idled at the end of the shift Friday, Dec. 19, and impacted employees will not return to work any sooner than Monday, Jan. 19, 2009. [emphasis added]
Chrysler dealers confirmed to the Company at a recent meeting at its headquarters, that they have many willing buyers for Chrysler, Jeep® and Dodge vehicles but are unable to close the deals, due to lack of financing. The dealers have stated that they have lost an estimated 20 to 25 percent of their volume because of this credit situation.
The Company will continue to monitor the production schedules of its manufacturing operations moving forward.”
There is no lack of credit for qualified consumers (i.e. the kind of consumers that should get loans in a normal economy). Sorry big-3, but no more moving metal with sub-prime, money losing loans; we have returned to reality.
Thank you, big-3, for contributing to the financial crisis with your loose lending practices. Your financially irresponsible company, like your financially irresponsible customers, can now find the way to the bankruptcy court.
Ahh, the 4 words I’ve been waiting for my whole life. Too bad it’s temporary.
Jan 19 is a little aggressive. They think buyers will have bought Chrysler’s existing inventory of cars by then?
Good luck with that Mr. Nardelli. I’m sure you’ll take the paycut your line workers will take during the holiday season. After all, that’s what a leader would do.
Now you will really see the suppliers wig out…no deliveries=no sales=no payment equals….Some Chrysler dependent suppliers will declare C11 most swiftly.
The end has begun.
This is a suitable companion piece to your last blog item about Chrysler: https://www.thetruthaboutcars.com/breaking-chrysler-kills-floorplanning-loans-as-dealers-run-on-bank/
Since they can’t stuff the channels, they need to start managing their inventory. Since customers don’t want the inventory, they have only option left, which is to stop building inventory.
Chrysler has so much stuff that it can’t sell that there is really little point in building much more of it. But if they don’t have anything to sell, they can’t make any money. This can’t have a happy ending.
While reading about ChryCo.’s shutdown, I get a mental image of John Snow (Cerberus) telling the dealer’s (on conference call) “I have altered the deal. Pray I don’t alter it any further.”
How many people work at Chrysler?
Oh, about half.
I bough so far all my cars (since 30 years) cash.
Why?
If I cannot afford a car, I dont buy one.
In case I have no money for a car I certainly can not afford getting a car based on (finally even higher costs) leasing, loan or credit.
It seems that the current problem in the USA is more a business culture problem (living a life based on credit, loans, credit-cards) versus a ideology that asks to save first and then go shopping. The problem the US has is that it is perfectly normal there for folks who can hardly afford a larger tent to get a loan for a house with 3 guest-rooms with attached golf course. This was the core of the economic trouble. And if that culture is not ending, the whole system will come crashing down – wait till February 2009 when the first credit card companies will go tits up…
I just saw this story on Alpar, and they make it seem like there is no credit for buying a car… Oh boo hoo! No, it requires credit to buy a car so the rest of us don’t end up paying for defaults.
In October I bought a car and financed it with no problems! Not only did my credit union want my business, but also the dealer tried to out bid my credit union on the rate.
jkross22 :
Thanks to their UAW contract, the workers will either be paid or they receive unemployment benefits courtesy of their State government.
Stu Sidoti :
You’re right – the big Ponsi scheme that is the OEM, supplier, finance arm, dealer pyramid is about to come crashing down.
The question is if Chrysler is big enough to take GM and Ford with it.
no_slushbox
What brand of Crack are you smoking?
First of all, the Big 3 do not use predatory subprime lending to sell vehicles. Any subprime lending they do, is no more/or no less subprime than any lending done by The Japanese companies to move their cars on this market.
I bought my girlfriend a brand new Accord loaded and she has EXCELLENT credit (over 750 for eeach of the 3 Transunion, experian,etc) Fical scores and even HONDA told her they weren’t certain the deal would go through since this was the first major purchase on her credit.
Honda in NYC has been moving most of their cars with subprime loans. Now those same cars are getting major reposessions.
Why? CAUSE PEOPLE ARE LOSING THEIR JOBS
The Credit Crisis has been misrepresented. Its not that people are simply defaulting on their loans…its that they can’t afford to pay their loans which were predatory in the first place – and now their backs are against the wall and they are losing jobs.
You thank them for contributing to the crisis?
THE BIG 3 ISN’T WALL STREET with their 50 BILLION DOLLAR PONZI SCHEME. The Big 3 ISN’T CONGRESS with their CORRUPTION and deregulation
GUESS WHAT. The Toyota Republicans, idiot shoe Bush and these retards in office have done their best to pull the rug from under the American worker and this is the result of it.
I’M PRO BAILOUT FOR EVERY REASON YOU ARE AGAINST IT.
The stupidity of people in this country amazes me. How do you even stand up straight?
I wonder how this will affect John Campi’s offer to suppliers that Chrysler would provide “refunds” to suppliers if Chrysler did not maintain its production-schedule. (His offer was to refund the savings that suppliers could realize with an effective production forecast).
http://wardsautoworld.com/ar/auto_campi_refund_chrysler/
“This city has been prolific in putting names to everything they do,” he says. “I’d rather not name it. I’d rather just execute. This is something that should be a way of life in the supplier relationship.”
The overriding principle of the system requires Chrysler and its suppliers to take 25% of the cost structure out of the supply chain. Campi considers that 25% to be waste caused by Chrysler because of instability in the auto maker’s production schedule, late engineering changes and other bad habits that ripple through the supply chain.
“I know the kind of costs suppliers sustain when I don’t give them sufficient lead time, and they have to expedite or change their schedule or readjust and do a lot of what I call the non-value added, the rework, if you will,” Campi says. “There’s a huge amount of cost we drive. My wiggle in a schedule is a whiplash through the supply chain.”
Oh wait … Campi isn’t working for Chrysler any more. Oh well.
I doubt that it will be business as usual after this.
Robert Frankfurter:
Thank God the US has financially responsible people like you, someone has to pay for these bailouts.
It seems that the current problem in the USA is more a business culture problem (living a life based on credit, loans, credit-cards) versus a ideology that asks to save first and then go shopping.
While that comment may sound like a bold stroke for moral superiority outside of America, the reality is just a wee bit different from what you attempt to portray.
Cars are expensive. Most car purchases are financed, and they have been for many decades. Americans do not have the company fleet car culture that exists in Europe, so you don’t find many Americans getting BMWs and Mondeos to drive thanks to a middle management job.
With higher credit standards and a weaker economy, there will be fewer car sales. The lousy car makers will suffer more than the better ones, but they are all suffering.
Despite comments to the contrary on this thread, there is a credit crunch. Even borrowers with good credit have to pay higher prices than they used to and have less access to credit than they did before. The lower quality borrowers have far fewer options or can’t borrow at all.
Everyone in the finance world knows this, and nobody who knows the business is in denial of the credit crunch. It’s not a matter of ideology, it’s just what it is.
Add “cars” to the list of other things we don’t make in the USA anymore, along with buggy whips, floppy disks, muskets and dirigibles.
The Grim Reaper has arrived at Chrysler, time to cue up Blue Oyster Cult…..
When you notice that GM has almost 200 days worth of inventory sitting around… it will only be a few hours before GM announces the same thing.
I’m not sure this will be “temporary” for Chrysler.
Flashpoint:
“First of all, the Big 3 do not use predatory subprime lending to sell vehicles.”
Yeah, maybe they do not now, but they have for the last twenty years (see toxicroach below).
And what kind of absolute shit is this:
“I bought my girlfriend a brand new Accord loaded and she has EXCELLENT credit (over 750 for eeach of the 3 Transunion, experian,etc) Fical scores and even HONDA told her they weren’t certain the deal would go through since this was the first major purchase on her credit.”
1) What the hell are you doing buying a HONDA? You want taxpayers to bailout the big-3 but you don’t even have the decency to buy a big-3 car? How the fuck can you “stand up straight”, whatever that means?
2) If you really bought the car then your girlfriend’s credit should not have mattered. Possibly you used your girlfriend’s credit to buy a car because yours sucks? Classy.
By the way, back in 1997, with excellent credit, I needed a co-signor to buy my first used car; that was pretty standard before the big-3 got rid of underwriting standards.
Finally, in response to “[w]hat brand of Crack are you smoking?” I am not familiar with the different brands of crack on the market. If you have a question about the different brands of crack please direct it to one of the estimated 20 to 25 percent of potential Chrysler customers that couldn’t get a car loan.
They ain’t comin’ back…
I have good news and bad news. The good news is Chrysler has been given a reprieve. The bad news is that Chrysler is going to continue making cars. – Johnny Carson, commenting on the 1980 Chrysler bailout
Anybody want in on the pool for IF, not when, but IF, they ever start building cars again?
Sadly, and I really do mean that, they may not be back.
Perhaps they can condense Challenger and Viper manufacturing into a saleable unit. Throw in the old Prowler tooling as a bonus. The rest? As they say, meh…
I guess somebody might want Jeep. (It’s a Jeep thing, and after driving several off-road, I really DON’T understand. Why the hell would you want one instead of a G-wagen, or a Stehyr or a Mog, or… But I digress.)
They will not be starting up again.
Bush should not give any TARP money to these boys, none.
Flashpoint: You are SO wrong its not even funny.
I’m a bankruptcy lawyer, and 95% of the subprime loans I see are for domestics. They are the masters of handing out 400/mo loans on Cobalts and selling 40k trucks to people making 30000 a year. Hell, they even were doing 80 month loans!
Personally I have NEVER seen a new foreign car loan that was as ludicrously improbable as many of the domestic loans I’ve seen.
People making 40,000 getting 0% financing with payments of 1200 a month on two Chryslers! A 40000 (yes 40000) loan on a new Ford Focus!
And don’t even get me started on how a 40,000 2008 Ford F-150 will depreciate by $15 grand in 6 months.
The loan practices of the domestics was way way more lax and opportunistic than those of foreign car companies. Predatory lending isn’t a word I like, but a lot of this stuff is coming close.
-650 Chrysler never makes a car again, +340 they do.
To me the issue isn’t ‘when’ Chrysler restarts production or even ‘if’ they restart, but rather ‘what’ production they restart.
I think they could sell 200K units annually of the minivans, the Ram, the Jeeps and the LY large cars. Beyond that, there simply isn’t demand for a Chrysler product.
It may well be that the Compass, Caliber, Sebring/Avenger, Durango, Aspen, Commander, Dakota, and Nitro simply aren’t around to make the 2009 TTAC Ten Worst list.
I’m OK with that.
@ morbo: That Vader analogy is friggin hilarious..LMAO
@Flashpoint: “Toyota Republicans”?? What’s up with your “Honda Girlfried”? lol – which union are you a member of?
I guess somebody might want Jeep. (It’s a Jeep thing, and after driving several off-road, I really DON’T understand. Why the hell would you want one instead of a G-wagen, or a Stehyr or a Mog, or… But I digress.)
Mostly due to price. The US version of the G-wagen costs $101K+. The US-spec Land Cruiser costs $65K+. Even the most blinged-out HEMI Commander Overland costs “just” $46K.
I can’t believe no one has commented on the dealer statement that they “have many willing buyers.” That gave me a really good laugh.
A few things:
First, thanks RF for your forbearance in passing along the facts while skipping numerous opportunities for sarcasm and prophecies of doom.
Second, as the NYT correctly observes, 2 week shutdowns have been SOP this time of year for Detroit lately. By that token, Chryco is only ceasing production for an additional 2 weeks. All this “they ain’t comin’ back” talk is overblown.
Lastly, toxicroach, while I’m not in the bankruptcy business, I can say that the first time I ever heard the phrase “upside down,” it was used by a big city Honda salesman as he described his typical customer in the early 90s. Sure, it’s anecdotal evidence, but so is yours.
Let’s all take a few deep breaths and remember that yes, it’s an industry and economy-wide dilemma we’re facing.
“The Grim Reaper has arrived at Chrysler, time to cue up Blue Oyster Cult…”With Nardelli on cowbell…
As a fan of vintage Mopars, I still quietly root for their survival. However, that hope has been getting very dim lately and I think that this could really be the end. Yes, a two week shutdown is SOP, but it is another two weeks coupled with the phrase ‘no sooner than’. Add this to several other recent news stories and what I see at Chrysler dealers firsthand…
I’d classify my evidence as semi-anecdotal. My data set is certainly incomplete and wouldn’t stand up to statistical analysis. On the other hand I’ve seen hundreds of sub-prime candidates in the past year, and foreign cars, especially foreign cars made this century, are rare enough that I can remember them clearly (2002 Elantra, 2002 Sportage, 2006 Mazda 626, 2008 Kia Optima) I see a whole hell of a lot of sub prime car loans, and like I said, very rarely foreign. It’s not just the one or two stories I wrote about; if its a dubious loan on a new car, its most likely a domestic. Distant, is-this-the-same-race second to Kia.
I’d be very comfortable about making a comfortable profit if you gave me a dollar every time I filed bankruptcy on a new domestic car loan and I gave you 10 bucks for every new foreign car loan I file on (excepting Kia).
Check out Crain’s Detroit Business article – “Court changes assignment rules to accommodate
potential Big 3 bankruptcy”
Here is the link…
http://www.crainsdetroit.com/article/20081217/FREE/812179985
Pch101 :
December 17th, 2008 at 5:44 pm
While that comment may sound like a bold stroke for moral superiority outside of America, the reality is just a wee bit different from what you attempt to portray.
I still stand by my argument.
Its not a matter of moral superiority … well it is – what it is.
If you know a little bit what’s going on on the upper deck, you are certainly aware that Europe (having had historically a far stiffer credit culture then the US) under enormous pressure on European banks by the USA government (who did finally shrewdly not go along with Geneva II they lobbied for massively for others to comply at once with) to impose on top of already rigid conditions further extreme harsh regulations on credits. Named Geneva II
In short:
Only customers who basically do not need a lending (because they own and hand over on securities surpassing multiple the requested loan) get a loan – and a expensive one.
In the US until recently – Geneva II they lobbied for others did not apply – every beggar could get a loan for a huge house. Now due that millions cannot pay their dues the ceiling is coming down.
Basically – in Europe was always and is a culture that not every bump can out of nothing apply for a credit to get a 747.
Or a bailout.
Nevertheless, it is common outside the US that folks who are interested in getting a car having if not the whole sum but a good part of the cost of the car in their pocket ready. That has nothing to do with company allowances of fleet cars to middle managers – not more so common as before, actually a rarity nowadays. That also only due to the poisonous “structured finance products” the US has spread as venom over the globe. Suffocating commerce world wide.
For that now your chicken is coming in everybody’s home to roost.
Take it like a man and take your very personal VIP uppercut here :
The Great Unraveling by THOMAS L. FRIEDMAN Published: December 16, 2008
Cars cost too much. The product is priced artificially high, which means higher than the market can bear.
The fact that people can’t get credit underscores that they can’t afford it, and so cannot pretend to afford it.
Oil is going down, airfares are, everything but food is; paychecks are (layoffs, wage freezes, benefit suspensions)and so on.
Cars are one thing that have not seen real discounts in three years. Trucks, which have had greater margins, are seeing discounts.
But there is some point under which by seemingly coincidence carmakers won’t go. And so their overpriced products sit.
So if the prices don’t drop to a point where people are willing and able to buy, then they will not sell and the company goes broke. The market has spoken.
This should be filed under the Chrysler Suicide Watch, Farago. Just sayin’…
Mercedes’ Alabama plant will close from the end of December until the middle of January.
I wonder if you folks would be so glib and jokey if it was your job that was going away. Yeah, I know, you’re all smart enough not to work in the auto industry or at least not for the domestics, and it’s the autoworkers’ fault anyways.
Such compassion.
toxicroach,
How can you be filing bankruptcies on people who bought domestic cars? I thought that nobody (or at least nobody that counts, you know, people with good credit) buys American cars anymore.
That also only due to the poisonous “structured finance products” the US has spread as venom over the globe. Suffocating commerce world wide.
Yes, it’s the fault of evil America. They forced those European banks to buy derivatives. The New York offices of foreign institutions didn’t trade in them as well.
First time I saw actual flamer operating on this site with whole back and forth cycles. Where is moderator?
Yes this is an actual death rattle. We are all standing bedside late evening on a workday and its happening now.
@ toxicroach
I don’t think you have to justify yourself, you only have to point to GMAC’s disastrous loan book to see the effect of their lending practices.
What percent of their salary and benefits do Chrysler employees get while their plants are idled, as opposed to those working for the idled Mercedes plant?
Anyone know this info?
There is nothing wrong with borrowing money, as long as you pay it back. People who think they’re morally superior because they only pay cash for cars drive crappy cars. Good luck with that.
I call BS on Chrysler’s statement that they have lots of willing buyers who can’t get credit. The truth is that very few people want to buy Chrysler products. Qualified buyers can still get financing.
The real evil of car financing is negative amortization. That’s why there are $40K loans for $20K cars. It is probably fair to say that the Big 2.8 were more willing to make those loans than the import manufacturers, but they have no other choice given the depreciation of Detroit product.
My prediction is that we’re all going to be keeping our cars a lot longer than we used to.
Ronnie Schreiber :
December 17th, 2008 at 7:54 pm
They did not force to buy – they did not have to- they simply offered the nicely polished poisonous apple like the snake to Adam & Eve, who never saw a apple before
Besides – if you know a bit how the truly global acting international finance structure works your statement is simply ridiculous.
You try to exchange corpse and murder or muddle them. But wait – the next one is at the door. As soon as the next Ponzi sheme is becoming public (imminent & dwarfing Bernard Madoff’s one by a factor of three) come back and tell me Rubin is Finn and Europe is responsible for the crater.
I do not want to flame and stop the ball here
@Ronnie Schrieber,
I don’t hear people here scapegoating the autoworkers and assigning all blame to them. I hear commenters angry at the incompetence at the top and the contempt at the site of union greed that created an unsupportable structure for these companies.
And yes, the autoworkers/UAW are partly to blame for this. JOBS bank is to blame, earning wages well above market rate is to blame, idling plants while paying workers the lion’s share of their salary is to blame.
I still feel badly for the workers, but please don’t confuse compassion with responsibility.
My complements to Chrysler LLC for the bold move of idling plants for four weeks. It’s this stepping out of line of conventional thinking they will need to be doing a lot of to stay alive.
The whole assembly process moves in a rhythm that has a sweet spot. Go below it and the costs per vehicle go up measurably. Even Lee refused to stop lines that were producing cars only to park them in every nook and cranny. He slowed things way down but did not want the hit for the shutdown/startup costs.
Once you absorb the stop/start costs, 6-8 weeks is little different than the announced 4 weeks. Those weeks of non-production? Chrysler is clipping coupons for units already built. Tens of millions of dollars arrive in the mailbox each day for the existing units for which no additional dollars will be spent.
Now if they would just call it a “labor lockout” to re-negotiate the labor contract, we’d have some way-cool thinking going on at Chrysler!
Life is indeed good at Chrysler!
I think the only question is whether the three headed dog files C11 on Chrysler before they have to shell out a January payroll. (You wouldn’t want to do it before Christmas).
Chrysler dealers confirmed to the Company at a recent meeting at its headquarters, that they have many willing buyers for Chrysler, Jeep® and Dodge vehicles but are unable to close the deals, due to lack of financing.
Ferrari, Lamborghini and Porsche all agree that that they too have many willing buyers (many even are teenagers!) that lack adequate financing to close the deal. They would like bailouts to weather this tough time also.
I mean, what kind of a country do we live in where I’m denied a new 911 GT3 just because I can’t afford it???!!!
@ ronin:
Not so. Mass market cars can be sold for ~$1500-$2000 over cost by Toyota and Honda. Ford, GM and Chrysler still sell their cars for a loss.
@ Stu Sidoti:
“Now you will really see the suppliers wig out…no deliveries=no sales=no payment equals….Some Chrysler dependent suppliers will declare C11 most swiftly.
The end has begun.”
True enough, the end is under way, but this isn’t going to have an immediate effect on the supply chain. Chrysler already wasn’t paying their suppliers, hence the COD’s they are requiring. Now at least they don’t have to build more parts they aren’t going to get paid for. Of course, once the deadline passes for when they should have received payment for the parts they are now no longer getting orders for, all hell will break loose.
December 1963. President Kennedy had just been assassinated and the nation was still in shock, which is why executives chose their moment to close down the unprofitable old, way oversized plant with some of the worst productivity of any union workers in the US. Studebaker – once one of the top 75 companies in the US – announced that as of Dec. 23rd, South Bend Main would close and with it, all US auto production. In order to not get sued by the 1500 or so dealers, they announced a simplified line-up which would be sourced from the small Hamilton, Ontario plant. By April 1966, production ended in Canada, closing out 114 years of manufacturing vehicles (obviously, horse drawn from 1952 to 1904). Studebaker had even survived Ch. 11 in 1933.
Now, Chrysler. Here’s what went down: the management at Cerberus have refused to spend any money, money’s gone, six weeks prior to Dec. 23rd the company handed out lay-off notices to 100% of the employees, if I understand right; this means that any time after that, they can close it all down and stay “legal”. The reason I think they pulled the plug in this particular way, is because this way, it gives their dealers some small chance of off-loading new old stock vehicles over the next 6 or 8 months.
I’m going to predict that Chrysler STAYS shuttered entirely and when the vehicles are gone, if they haven’t sold it, they’ll Ch. 7 it.
The end is sooner than later.
I nominate “Ponzi scheme” as the most overused phrase of 2008.
Robert Frankfurter,
It takes two to tango. For every “predatory lender” there’s an irresponsible borrower. And, if I recall correctly, Adam & Eve (more accurately Adahm v’Chava) were punished for their sins as well.
“I nominate “Ponzi scheme” as the most overused phrase of 2008.”
Nah – it’s “Bailout!”
ronin:
Cars cost too much. The product is priced artificially high, which means higher than the market can bear.
Perhaps new vehicles. But for the savvy used car buyer, there has NEVER been a better time to buy. And I don’t think the market has bottomed yet.
Used trucks are particularly a steal – just get a good mechanic to look them over.
As an aside, anyone know VW’s supply of Routans?
The only people to make out like bandits in all of this is the Orphan Car Club of America. Talk about burgeoning membership.
While I realize that not everyone can have immaculate credit, I find it kind of funny if an automaker’s ability to stay above water requires that people with bad credit be able to buy their cars. That would be a dumb position to get into in the first place, wouldn’t it?
How much do you want to bet that none of those factories every reopen for business under Cerberus ownership?
“With Nardelli on cowbell…”
Better yet, hang the bell from Nardelli’s neck so that bystanders will be warned when he is coming ’round the bend.
As an aside, anyone know VW’s supply of Routans?
Initially they were badge engineering them at the Fenton (STL) plant. There were truckloads of them on the lot a while ago, but that was before Unibrow started hawking the Routan Boom. And before they moved all the minivan production to the Great White North.
I’ll be passing by there tomorrow, I’ll see what signs are in the lot and how many babies you can have vehicles for.
Balls! It’s like a snow day that lasts all month! And probably the rest of your life!
flashpoint: “I bought my girlfriend a brand new Accord loaded…”
Whoa! What a guy! I once gave a girlfriend a nice watch; never anything like a car.
flashpoint: ” and she has EXCELLENT credit (over 750 for eeach of the 3 Transunion, experian,etc) Fical scores and even HONDA told her they weren’t certain the deal would go through since this was the first major purchase on her credit.”
W=a-a-a-a-i-t a minute… “on her credit?” I thought YOU bought her a car? Where does “on her credit” enter into the picture?
You have a funny way of buying cars for people.
Quote guyincognito : “True enough, the end is under way, but this isn’t going to have an immediate effect on the supply chain. Chrysler already wasn’t paying their suppliers, hence the COD’s they are requiring. Now at least they don’t have to build more parts they aren’t going to get paid for. Of course, once the deadline passes for when they should have received payment for the parts they are now no longer getting orders for, all hell will break loose.”
Chrysler is still ‘about’ 10% of the US Market. Losing them would be about the same as if all US Hyundai sales went away-that would be very painful, especially in such a slim-margin business as Tier one, two and three suppliers-especially IF you had been sending Chrysler parts that you owed money on and there was NO money coming your way-only I.O.U.s that may now only mean doodly-squat.
Imagine if you had to borrow money for a mortgage on an apartment building you owned and for the last 6 months or so, 10% of your residents were not paying you any rent…Bet your ass that would have an Immediate Effect upon your financial well-being…Some suppliers have not been paid by Chrysler for 3-6 months with each supplier having their own level of being screwed over but the effect will be and ALREADY is immediate-All Hell is already breaking loose…my guess is that Cerberus has already accepted a C11 deal and knows they will be able to stall payments by renegotiating the contracts in court so why pay now?
Oh yeah, one more thing…All over Michigan suppliers that have Chrysler divisions, groups or dedicated Chrysler plants are and will be laying off massive percentages of their ‘Chrysler’ staff. I know of one R&D group that laid-off 88% of their Chrysler-dedicated staff…No immediate effect? Tell that to the thousands of blue AND white collar workers being let go this week and next. It is immediate and it’s right here and right now.
The end has begun.
As far as I know they stopped building cars many years ago, if they ever did build cars.
The real news would be if they stopped building S.H.I.T. vehicles that no one wants to buy.
Don’t insult the cars in the World by comparing them to Chrysler vehicles. Next time you call McDonalds a FOOD producer and Miller a BEER brewery. Those all are attempts at best.
My personal guess is that this is the end of Chrysler and they will just never hire the UAW back and sell off some assets (Jeep etc.) and Cerberus cashs in before they declare ch. 7
So, all the Jobs BANK employees then get money for not working except that they then don’t even need to show up anymore? At least it will save gas and the environment and AAA will be less busy not having to fix all the cars on their way to work anymore (assuming that Chrysler employees drove Chrysler).
I suppose now the UAW workers officially follow their managers’ example by doing absolutely nothing.
Ronnie Schreiber :
December 17th, 2008 at 10:12 pm
Robert Frankfurter,
It takes two to tango. For every “predatory lender” there’s an irresponsible borrower. And, if I recall correctly, Adam & Eve (more accurately Adahm v’Chava) were punished for their sins as well.
When I remember well their sins where only to bite the unknown apple the snake handed. The whole affair did not change anything fundamental for the snake. She (Bernard Madoff is already fee walking in NY on bail) got away. History repeats again – you try like the snake to exchange corpse with killer. Same like the story in the bible. Crooks will finally get away with as always = honest folks will pay for their “sin” by losing their income for taking (after a lot on talking-in pressure from media & banks) lottery tickets from the crooks.
AnalogKid:
“There is nothing wrong with borrowing money, as long as you pay it back. People who think they’re morally superior because they only pay cash for cars drive crappy cars. Good luck with that.”
Got anything to back up cash = crappy cars?
I pay cash and buy when I NEED one. Hopefully
when I need one I will get what I WANT on the car I NEED.
Wants and needs are not the same thing. You want a $40K car but can only afford a $20K car. The 20K car is crap? Amazing.
I don’t believe I’ve ever had a crappy car other than a 77 Saab. Biggest POS on the face of the earth. Loved the way it drove, when it ran.
The last 3 cars I’ve owned went a cummulative distance of over 600,000 miles with the current one still going strong.
I would say I’ve had pretty good luck paying cash for my crappy cars.
If you need to take a loan to get a car, limit yourself to what you need, not want.
People like Mr. Frankfurter and me are not good for the economy (at least how the current game is played).
dejalma :
December 18th, 2008 at 8:13 am
I sign your post. Regarding the bbullshit:
“…they only pay cash for cars drive crappy cars. Good luck with that.”
Probably in your class that may certainly fit
I drive currently a Mercedes and a Mazda – both of them I have paid cash for
and took full possession of them. So I do not have to discuss with any lender – I hate them
I could not be happier.
Last time I checked thats the way capitalism works
Communism in contrary is based on subsidies, oppression, bailouts and buying folks will with their own money – not with us boys!
I wonder if you folks would be so glib and jokey if it was your job that was going away.
My job isn’t exactly 100% secure, what’s your point? If my employer goes tango uniform because of bad management do you think I’ll be defending them? Heck no. If you’re so worried about the poor Chrysler employee why don’t you go out and buy a new Sebring today. Yeah, that’s what I though.
The credit crunch is God’s way of confirming that only older folks with lots of cash would even consider a Chrysler. They should discontinue the entire lineup and bring back the Cordoba.
don1967 :
December 18th, 2008 at 9:40 am
“The credit crunch is God’s way of confirming…”
Please lave GOD out of this and dont use him as an excuse. He has far more important things to care for then men made troubles. The credit crunch is 100% the result of unabridged greed, backdoor government intervention in private business and resulting inferior management – besides the many high-flying crocks who have benefitted heftily. Mark the name Robert Rubin – just in case you may have thought that the Bernie Madoff ponzi scheme is the ultimate low…
Chrysler should go afap the way of the Edsel and off the back of the us taxpayer.
The hole it leaves behind is replaced by itself easily
craiggbear
“Nah – it’s ‘Bailout!’”
“Bailout” deserves a lifetime achievement award. “Ponzi scheme” is one of those phrases almost no one had ever heard of or used until the second half of this year and now everyone is using it everywhere to sound relevant. It is the “gravitas” of 2008.
Robert Frankfurter: They did not force to buy – they did not have to- they simply offered the nicely polished poisonous apple like the snake to Adam & Eve, who never saw a apple before.
Which means that they are just as guilty.
Sorry , but the “Devil – or Robert Rubin – made me do it” excuse won’t fly.
The real problem here is that Europeans like to think that they are smarter and less greedy than Americans, and this whole episode shows that they aren’t.
Robert Frankfurter: Basically – in Europe was always and is a culture that not every bump can out of nothing apply for a credit to get a 747.
Or a bailout.
Are you saying that Europe has been less likely to bail out failing companies?
I seem to remember that Great Britain shoveled plenty of money to British Leyland before realizing that the company was still doomed.
The French government took ownership stakes in Renault to keep it afloat. And France has made desperate attempts to prop up its computer industry.
Those three are just the tip of the iceberg.
Robert Frankfurter: When I remember well their sins where only to bite the unknown apple the snake handed.
No, their sin was disobeying God’s commandment not to eat the fruit from the Tree of Knowledge.
Robert Frankfurter: The whole affair did not change anything fundamental for the snake.
In Genesis, God specifically curses the snake for his part in the downfall of mankind.
Robert Frankfurter: She (Bernard Madoff is already fee walking in NY on bail) got away.
Do you understand how bail works? Mr. Madoff was eligible for bail because the judge determined that he would not likely flee to avoid a trial. He is not “free,” because if he leaves, he – or the party that put up the bail – forfeits the money, and the government will still search for him, and, when it finds him, bring him back for trial.
He will still be tried in charges. He may be free to walk around – and given the cost of keeping someone in prison, that makes sense – but he has not avoided any of the charges.
If you know a little bit what’s going on on the upper deck, you are certainly aware that Europe (having had historically a far stiffer credit culture then the US) under enormous pressure on European banks by the USA government (who did finally shrewdly not go along with Geneva II they lobbied for massively for others to comply at once with) to impose on top of already rigid conditions further extreme harsh regulations on credits.
I’m afraid that you’re a victim of the European popular press, which has gone to great lengths to avoid taking any responsibility for the economic trials and tribulations being faced within the EU.
They take the same amount of responsibility for their mistakes as Detroit has for theirs — in other words, none — and miss the boat on the facts.
There is a lot of data to show that industrial countries around the world have gone into hock or have otherwise put themselves into harm’s way, but here are just two examples –
-Ranked by per capita external debt, the US is 14th. With the exception of Hong Kong, every country with per capita debt loads higher than the US is located in western Europe. The most indebted country, Ireland, has ten times more debt per capita than the US. Europeans are obviously not strangers to being deep in debt.
-Ranked by public debt as a percentage of GDP, the US ranks 26th. Japan, Singapore, Greece, Belgium, Norway, Hungary, Germany, Canada, France and Portugal all exceed the US level. It isn’t just a US or third world issue.
Rather than bristle with national pride, look at the facts, instead. Europe is facing many of the same issues that the US is suffering. You also had inflated mortgage markets and increasing uses of consumer credit, despite whatever agreements that you may have negotiated.
Let’s remember, a lot of countries managed to sign Kyoto without following that, either. It’s easy to sign something, quite another to comply with it.
Geeber I thought France nationalized Renault as punishment for collaborating with the Germans in WW2
Robert Frankfurter,
By “God” I meant nature; no offense was intended.
If you read between the lines of my post, you will see that I applaud the credit crunch as nature’s way of putting Chrysler out of its misery. I agree that overborrowing, overspending and Chrysler are all man-made problems. A credit freeze is the “natural” response to all of them.
Reading between the lines, I think the Bushies at the White House are putting off their “bailout package” as long as possible, hoping Cerberus will euthanize Chrysler, so they don’t have to….the Managed Bankruptcy talk out of Washington today is really suitable only for GM…Ford isn’t that sick yet, and Chryslerberus is too sick….
The betting here is that Chrysler will never again make another car.
OK, so far all of the pool participants are on the side of ‘down for the count’.
Still trying to scare up some true believers to counterbalance, guess I’ll have to head over to allpar.
Meantime, please send me your money. Don’t worry, I’ll put it in escrow with this guy I know in NY. He’s got a stellar record (NEVER lost money!), the SEC and 4 of the big 5 accounting firms have sniffed his butt several times. They say it smells like roses.
OK, so far all of the pool participants are on the side of ‘down for the count’.
I believe that you’ll see Chrysler products again soon enough. But the trucks will have Nissan badges attached to them, or otherwise have something to do with our friends in France and Japan, while the minivans might have a bit of kinship with their compatriots at VW.
I’m not sure about the cars, though. If they can put together the funds, I could see Fiat and/or Mitsubishi and/or a new player in Asia taking a look, if the price is right.
To close the discussion I call “The Atlantic” as knowledgeable source in to clarify in stunningly simple terms who is doing what, why and how and where the different players stand.
In his first interview since the world financial crisis, Gao Xiqing, the man who oversees $200 billion of China’s $2 trillion in dollar holdings, explains why he’s betting against the dollar, praises American pragmatism, and wonders about enormous Wall Street paychecks. And he has a friendly piece of advice:
Be Nice to the Countries That Lend You Money
Its never to late to learn – from somebody real in power
(de facto much more powerful over the true value of the US currency then the US treasury)