Since the beginning of Detroit’s slide into federal dependency, TTAC’s Best and Brightest have applied their razor-sharp wit to this sad, sad situation. But the bailout boondoggle beggars belief—overwhelming any attempt to subdue it with sardonic humor. To wit: the TTAC meme called American Leyland. On a scale from absurd to certifiable, the marriage of the two ailing American automakers comes pre-wrapped in a straitjacket. Earlier today, I suggested it was too stupid a concept to fade from federal consideration. And the more I think about it, the more it seems inevitable.
Bob Corker spent a part of this day having a chin wag with Reuters. The Senator from Tennessee told the news agency “there’s little hope that Chrysler can remain a stand-alone company.” The outspoken bailout critic advised “those advocating consolidation [which would be, uh, him] should realize that a tie-up might involve foreign ownership.” In other words, the guy on the “no way Jose” end of the bailout “debate” wants his colleagues to realize that a Chrysler-Fiat merger is OK.
I repeat, a republican is calling for the feds to approve Chrysler’s “plan” (I’m running out of quotation marks) to surrender Chrysler—an automaker that’s already into Uncle Sam for $9b—to a foreign owner. Fiat, no less.
The fact that Fiat has sworn on the grave of its sainted mother that it will not give Chrysler a plug nickel seems to have escaped Senator Corker’s attention. Or has it? Are we at the point where the feds are crying “will someone rid me of this troublesome automaker?” Sure. Absolutely. Will it be Fiat? Nope. Never.
Did anyone notice that Fiat reported a 69.8 per cent drop in its 2008 fourth-quarter profits? You can attribute that corporate cratering to the global economic meltdown all day long, but there’s a reason Fiat has pledged zero dollars to this matrimonio del fantasia, and it isn’t because they’re saving money they don’t have for a rainy day that’s already here.
The Fiat deal’s real “value” (found a pair in the back): it paves the way for the end of Chrysler as an independent automaker. Psychologically, it makes the break. In fact, Chrysler’s imminent demise and subsumption is like the old punch line “we’ve already established what you are; we’re just haggling over price.”
The thinking is clear enough. If we don’t want to hand over Chrysler to the Italians, then we gotta PICK SOMEONE. I know! what about . . . GM! You know, the other automaker suckling on the federal teat. We could put all our automotive troubles in our old kit bag, bend over and smile, smile, smile.
Don’t get caught up in the branding insanity or logistical nightmare this nutso plus plus proposal would engender. We’re WAY beyond that kind of fact-based rational analysis. It’s a good idea simply because it’s an idea; the unthinkable (a ChyrCo dissolution) is, of course, unthinkable.
Even more frighteningly, GM is actually good at this. Adding Chrysler’s Jeep, Dodge and house brands to GM’s “core portfolio” present no more challenges than The General faced when it brought Saturn, Saab and HUMMER into la famiglia.
Three brands go, three brands come. No biggie. The vehicles produced by this new “American Leyland” (I’m almost out) would be no better or worse than they are now. Who would buy the fruits of this unholy alliance? No one of course. Well, no one as in no person. The feds’ll have ’em. The money’s already lined-up (thank you America!).
Search “vehicle” on this United States Mayors’ “Ready to Go” bailout wish list. Tucson, AZ: 30 cars ($1.3m); Freeport, NY: 20 electric cars ($1m); Burlington, VT: 8 cars and 4 staff for “CarShare” program ($450k); Oakland, CA: 30 cop cars ($1.74m); West Hartford, CT: “vehicle replacement” ($400k); Hialeah, FL: “Vehicle purchase” ($2m); Pembroke Pines, FL: “vehicles for personnel” ($600k). And on and on and one to the tune of billions of dollars.
What are the odds that the feds will stipulate that bailout bucks allocated for government vehicles must be spent on products from taxpayer-supported automakers? Sorry. Automaker? It’s a dead certainty.
Obviously, government fleet purchases are still not enough to sustain this gigantic, theoretical American Leyland. The new company would continue to shed share and burn bailout bucks. But that’s not the point.
The bottom line is that the bottom line is no longer the bottom line. Chrysler and GM no longer have to make a profit selling cars. They need only please their new paymasters: politicians. And your duly elected representatives will buy anything American Leyland makes. Or nothing, as the case may be.
By combining Chrysler and GM into American Leyland, politicians will refashion the automakers in their own image. American Leyland will be slow, insensitive to the market and deeply, hopelessly unprofitable. In other words, it’ll be business as usual. Only you’ll have to pay for it, whether you like it or not. To quote Tommy DeVito, what do you mean funny, funny how?
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Thanks!
American Leylaaaaaaaaaaaand, you’re so good to me.
American’ Leylaaaaaaaaaaaaaand, won’t you come back to meeeeeee? /song
I don’t believe it. Well, the Chrysler GM merger that is. The government knows how stupid that is. I mean it would be better to bail them out individually…which is what will happen. Almost as bad, but not quite so.
My guess is that we’ll see another bailout for both, only to see them come back in 6 months time. At that point, I hope that there won’t be another bailout. But even then, the American taxpayer can kiss his $39 billion goodbye.
The only entity more inept than Chrysler and GM is the government.
Given that Fiat is pretty much Italian Leyland, you’ve got a choice between International Leyland and American Leyland.
Ouch
I was thinking today, I know that this will all end when the economy picks back up. When they got the first bailout, it was only because they were afraid that GM and Chrysler going down would only worsen the depression by laying all those people off work. So I am starting to think that as soon as the economy picks back up, Obama will just go ahead and give GM and Chrysler the finger, saying “We have helped you enough, now just sort it out amongst yourselves.”
We are beyond the International Leyland phase. International Lieland? International Layland? International Iceland?
I cannot wait for American Leyland to form.
Honestly, I don’t understand why everybody who hears about this possible merger doesn’t immediately discount the idea simply because they remember what happened to the british car industry.
At least this time we can be certian KGB agents have not infiltrated the union in an attempt to damage the USA’s industral capacity.
There are endless articles about the possible death of one or other auto manufacturer here. I’d like to see something on the RV manufacturers which have already been killed by high gas prices and the credit squeeze. I am trying to buy a 3 or 4 year old used Class A RV whose creator is still in business. Pretty hard. You try it!
To invert the standard Simpsons meme:
“I, for one, wholly reject our new American Leyland overlords. I’ll be damned if I willingly give them any money for their products, so long as I’m forced to fund their day-to-day (or, more accurately, hand-to-mouth) operations with my taxes.”
OOPS,
Read the latest from Bloomberg Business News. Last Updated: February 20, 2009 00:01 EST
Seems the unthinkable is still being thought. According to Bloomberg, Chrysler’s submission to the Auto Taskforce still lists a merger with GM as the best option in its “Survival Plan”.
http://www.bloomberg.com/apps/news?pid=20601087&sid=azVbsO2WEdIc&refer=home
So if you were GM what would you insist on in return for taking over Chrysler?
I’m thinking the deal has to go beyond simple cash to something more substantial, like the US government enacting meaningful health and pension reform so GM’s obligations in those areas automatically shrink to irrelevance. By meaningful, I mean Canadian-style universal health insurance and a European-style income related pension. This would sit on top of Social Security and provides a pension more closely related to workplace incomes for better off UAW-type workers.
At the end of the day the problem with a bankruptcy for either GM or Chrysler are their health and pension obligations. Even Republicans would cringe at presiding over the withdrawal of health and pension benefits from such a large body of ordinary workers. I cannot see Democrats even tolerating the thought.
So do you just try to keep pouring money into the new GM&C (a.k.a. American Leyland)? Or do you make the hole in the bottom of their boat smaller by socializing a larger share of health and pension costs for all employers?
It seems that every industry- Automotive, Mortgage, Housing- is or is going to be “helped” by government. While I agree that loans to US automakers is debatable, the stimulus package is not good. I don’t want to go political but I am starting to doubt Obama even more. And he’s been in office a month. God help us.
Down the road UAW workers will just be considered government employees, they can’t be fired either it seems.
Bridge2far :
February 20th, 2009 at 7:41 am
It seems that every industry- Automotive, Mortgage, Housing- is or is going to be “helped” by government. While I agree that loans to US automakers is debatable, the stimulus package is not good. I don’t want to go political but I am starting to doubt Obama even more. And he’s been in office a month. God help us.
Some of us warned about The One last summer, everyone pooh poohed the socialism warning, we all were treated to newscasts about how the sun would come out the day he took office.
I don’t think the majority of he voters support spending 800 Large the way he is. It’s not a legislative victory it’s a bank heist.
Isn’t American Leyland the mega-robot formed by multiple dysfunctional Transformers in the upcoming Michael Bay popcorn movie?
bob, i’ve been quick enough to point out to you when you’re wrong. so, it only seems fair to point out that you are so right. it’s just too stupid an idea for the government not to do it. the name of the game is saving jobs now. damn the inevitable and cost to our grandchildren.
btw, i still maintain (as i have throughout the deathwatch series) that ford will somehow survive this tsunami.
postjosh: btw, i still maintain (as i have throughout the deathwatch series) that ford will somehow survive this tsunami.
And if Ford does survive, it will present a new problem for a government-supported GM/Chrysler.
There has been an underlying current to the debate over a government bailout – namely, GM and Chrysler are getting beat up by those nasty foreigners.
But what if Ford’s new product offerings really do catch the public’s fancy, and the company starts stealing sales from GM/Chrysler? When sales are being stolen from GM/Chrysler by another member of the “home team,” it makes government support all the more problematic.
Will the government find itself in the position of favoring one America company (the one that has received many taxpayer dollars, and is still flailing about) over the other American company (the one that borrowed money from the private sector, and turned itself around)?
Garbage + Garbage ≠ Gold. So soon enough we’ll have ChryCo products with those side mounted GM square badges too?
Somebody quick… get some “American Leyland” T-shirts made up. Just need to tweak the original logo a touch… http://angloamericanservices.com/images/leylandl.gif
I don’t know anything about RV makers. What’s the scoop on that? Name the names, please.
GEEBER-Yes, the “Ford” (sorry RF, needed them) question.
What if they go out and prove that GM and Chrysler and the government have really just been a bunch of incompetent boobs?
I mean prove it to those who haven’t figured it out already. ;^D
Mullaly better have someone to watch his back.
Possibly us. Most of the public is against the bailouts (all of them). I could really see a backlash from consumers against the Welfare 1.6’s offerings if this gets ugly(er).
Not saying it will happen, but I have heard a few co-workers and members of TTAC’s B&B say they won’t buy from GM or Cryco for this reason.
Just a thought.
Bunter
BTW-I’m not advocating this action, it’s mearly an observation/theoretical point of view.
I’d be willing to actually consider buying a Ford as long as it was manufactured at least 55% in the United States, instead of a Hyundai Sonata.
Not sure Mrs. will even want to consider it, though – and it’s “her turn” to get her new car to replace the Sonata once the lease is up in June.
But no way in h e double sticks will a GM or Chrysler product ever again take a permanent presence in our garage. I already “paid at the office” (via involuntary servitude via extortion with menaces aka tax deductions) so don’t want to give them any more money. Besides, they make crap.
How’s that for crystal clear, Bunter?
menno-Lovely and sparkleing.
I have been wondering if there enough out there with this view of Living Dead 1.6 to swing the sales stats downward.
If the sales were to dry up even more severely at GimMe and CryCo-and the “must buy USA (re-defined in their minds as Debtroit)” crowd goes heavier to Ford (and Ford’s improve reliability should help), amybe even the Gov’t would realize they aren’t worth the time.
So…is it our “patriotic duty” to not buy vehicles from Bailout Motors companies?
Pondering, how about a debate forum on that RF?
Bunter
Neb said:
At least this time we can be certian KGB agents have not infiltrated the union in an attempt to damage the USA’s industral capacity.
LOL, just blame it on the Chinese then. Isn’t that very popular. Or, is the US actually becoming the next China? I mean, the tapped phone calls, the secret prisons, the state-owned car makers, the state-owned banks, the state media …