Followers of the Motown meltdown may have detected a strong whiff of mafioso about the whole enterprise. Did I say enterprise? That sounds a bit too industrious, even though the automakers have been working hard to turn $7 million worth of your hard-earned taxes into about $35 billion in additional bailout bucks. On the other hand, we have the term “criminal enterprise.” As in you pay me my money or I’m gonna hurt you. If you still don’t pay, I’m gonna NSFWing kill you. (Organized crime may be organized but it’s not terribly clever.) To wit [via Automotive News]:
Chrysler LLC said today it may close its plants in Canada unless it gets sufficient labor concessions as well as government aid and resolution of a tax dispute.
In case you were thinking the recent CAW agreement with GM shows the way out of that particular part of ChyrCo’s Mexican standoff (also a NAFTA member!), Co-Prez “Tommy Gun” LaSorda’s got news for you, after the jump.
“Failure to satisfactorily resolve these three factors — the labor costs, government assistance and, of course, the transfer tax — will place our Canadian manufacturing operations at a significant disadvantage relative to our manufacturing operations in North America and may very well impair our ability to continue to produce in Canada,” Chrysler President Tom LaSorda said.
LaSorda also said the Canadian Auto Workers agreement reached with General Motors over the weekend would not eliminate even half the labor cost gap with the Japanese plants operating in Canada.
“The current agreement with GM is unacceptable and we have to break their legs,” LaSorda said.
Just kidding, pattern. He said pattern. I wonder how his union leader father feels about all this. Tommy. Listen to me, Tommy. Our enemies may change, but the famiglia remains the same. Capisco?
Anyway, LaSorda also demanded $2.3B in Canadian tribute—sorry, “loans”—to stop Don Feinberg (go figure) from pulling the plug on ChryCo Canada.
Will someone whack this company already?
When I lived in the UK, “private” clamping companies could be hired to “service” parking areas and clamp your vehicle legally.
They tried it in Scotland, and canny Scots knew the (different) laws and had the REAL law down on the clampers.
“Extortion with menaces” was the charge and it stuck.
There wasn’t any clamping by non-governmental agencies in Scotland after that (of course, I’ve moved away 17 years ago so it could be different from now).
But every time I see stuff like this (and stuff pulled by the “government” against their own people) I think
“extortion with menaces”
@ RF
This has more Piranha Brothers about it than mafioso.
Farago…. what kinda name is that anyway?
PeteMoran:
We laugh, but only to keep from crying. Thousands of jobs are gone. Entire communities are and will be devastated. A once great American business has been sucked dry by greedy, incompetent managers. Taxpayers are being played for suckers, at the exact moment when those resources are most needed by the less advantaged.
This is a tragedy that defies even Monty Pythonesque satire.
This hits close to home. I am Canadian living in Ontario, and my company is also going under and does not deserve a bailout (I will likely be unemployed in a month).
They should tell Chrysler to take a hike. Foreclose on the Billion in Taxes that they owe and grab the factories and see if Ford, Toyota or Honda want to make use of them.
Chrysler is going down, taxpayer money shouldn’t fund them.
The Detroit three are not the governments children. They don’t deserve equal treatment. It is time to pick some winners and let the weak losers die.
Under no reasonable scenario is Chrysler one of those winners. They are privately owned, they are the smallest with the least interesting product, thus they are not “too big to fail”…
Let them die. Or at least Canada should take a pass on this Chrysler “Offer”. The USA can then determine the ultimate fate of Chrysler.
I am still trying to figure out how Chrysler was the #1 automaker in sales in Canada for February. I know of a whopping one person that even looks at them when shopping for a car, and that was for a Magnum because he wanted a wagon.
F*ck you, Chrysler. Let Cerberus pay for you, not Canadian taxpayers. You don’t even have any worthy products other then Viper and Challenger. Since you wont to sell Viper, no one will be sorry to see you to go bankrupt.
And I agree with Bytor, since nobody helps small businesses with bailouts why should ChryCo get one?
Lasorda’s Dad was the head of the Windsor union.
And Lasorda got a nice 19 million paycheck last year. Nice for a guy that ran the company into the ground.
Maybe if they didn’t pay dummies 19 million a year they wouldn’t be going broke.
Anyways they have terrible product and it is a total waste to give them money. The “loan” is not going to be repayed.
http://business.theglobeandmail.com/servlet/story/RTGAM.20090311.wchryslerCanada0311/BNStory/Business/home
This is sooooo Canadian.
The Canadian Gov’t will desperately try to prop up the losers – while healthy companies suffer accordingly.
I agree, they should move immediately on the tax debt – while there is still a company to go after and then offer up the remaining factories to someone who still knows how to build cars.
The only problem with this plan is that the factories apparently come fully equipped with the CAW.
“Bye bye, don’t let the door hit your ass on the way out”
or
“If I let you die, that may cause me problems in the future, but at least I’ll still be around to have them…unlike you, CryCo”
Bytor, perhaps the Province of Ontario and Ottawa governments would like to try their hands at doing a UK (British Leyland)/France (Renault) and nationalizing Chrysler-Canada. Of course, they could not use the Chrysler name. Let’s just pick an old Canada automaker name out of the past.
With apologies (but no money) to Ford, how about “Monarch”?
Problem is, there aren’t any engine plants in the fold and if nationalized, do you think Chrysler LLC would sell engines to a nationalized Monarch Motors Ltd? I don’t think so dot com…
Without engines, “whadayagonnado?”
OK just to think outside the box: they have the Windsor minivan factory and the Bramalea rear wheel drive car factory (inherited from AMC).
The province contracts with Magna to help run it (on contract) and contracts with (let’s pick someone) Hyundai USA to send V6 engines and transaxles from Montgomery Alabama for the minivans (3.3’s, 5 cog automatics), retains the contract with Volkswagen to supply minivans, and contracts with Hyundai to buy a version of the Genesis 3.8 V6’s and transmissions for the rear drive cars. (South Korea). Magna would also be contractually bound for engineering and styling, which would mean “new jobs” (well, a few, anyway).
Taking over all Chrysler Canada dealer franchises is a given, but several problems arise. Chrysler LLC could “sue” in US courts. So would “Monarch” then be sold alongside US imports in Canada, at the same dealers? Maybe.
Then, with no access to smaller cars, the minivan and big car line-up is not exactly what is wanted. Being owned by the Province and Ottawa governments makes it politically “difficult” to import Chinese or South Korean small cars and surely, Chrysler would say “no way” to supplying cars.
Possible solution: convince (read: arm-twist) Toyota into supplying “some” badge-engineered Avensis sedans sent CKD from the UK for “assembly” at Windsor. Of course, there would be a 12-18 month delay…. so in the meanwhile, simply re-badge some Corollas built in Canada.
Next: what about selling cars in the states?
Possible solution: buy up DaewooUSA, a still functioning but bankrupted dealer organization; suddenly, there are a couple hundred dealers, at least; a parts supply organization and a small California HQ.
Trouble is, of course, that Chrysler also produces minivans in St. Louis.
Next: what about shared suppliers? Chrysler could simply “demand” that suppliers cease sending “their” engineered parts to “Monarch.”
Finally, what about model names? Let’s use some interesting names from the RAF (V-series bombers) one of which has a very popular history as a Chrysler product sold in Canada.
The compact car could be the “Valiant”, the minivan could be the “Valkyre” and the large car could be the “Vulcan”. (Obviously, get “Spock” to do the TV ads on CBC)
Would it work? Probably not, really.
Would it be a hocky-stick across the face to Chrysler LLC and Cerberus?
It sure would be a good THWACK and deserving.
Glad I’m not a Cannuck taxpayer (says me with tongue in cheek, as my idiots in charge just spent 1.5 trillion frickin’ dollars borrowed from the Chinese)
I’m sure the Canadian and Ontario governments are wishing they had more Toyota and Honda plants and less Chrysler/GM plants…anyway.
Interesting idea, menno. If anyone can produce anything close to car in Canada independently, it’s Magna.
Oh wait! I’ve a brilliant idea! Let’s buy kits from FIAT and assemble efficient city cars in Windsor while watching Chrysler being liquidated accross the border…wouldn’t that be a twist of fate.
@Menno,
Like you, I’ve enjoyed our banter. I like your idea of buying Toyota Avensis from the UK and shipping to Canada (Hey, anything to boost our exports is good by me!). But there’s 2 glaring flaws in your plan.
1: You say that Chrysler should arm twist Toyota into supplying cars to Canada. How are Chrysler going to “arm twist” Toyota? Chrysler are so weak, they couldn’t twist the coolant cap off a Sebring!
2: If Canada were to follow your plan, they’d be up in front of the WTO before you could say “copyright infringement”. In the UK we have our own version of the KKK, it’s called the British Nationalist Party (BNP). And one of their manifesto promises is to nationalise all factories in the UK and make them British and export British goods. Trouble is, (as with all extremist policies) it won’t work. The moment the BNP try that, Toyota, Honda, Nissan, Vauxhall, Ford, Sony, Proctor and Gamble, Sara Lee, etc will sue the UK government for hijacking their patented goods. Pretty much like China is doing with fake goods. The difference is that companies want to stay in China, nobody’s knocking on our door! That’s the funny thing about governments and business. When they want to get things moving….they can.
Quite right, Katie; typo on my part. I should have said “Ottawa” could arm-twist Toyota.
Hey, isn’t not without precidence. That’s what governments do. Abuse power! Ha.
You’re probably right about the WTO.
Where was the WTO back when the Brit ratepayers got raped with British Leyland from the early 1970’s on, and the French taxpayers got boheca’d back from the 1950’s on, eh?
Robert,
What you see as strong-arming I see more as a Mexican standoff. Chrysler is #1 in sales in Canada. What would happen to those sales if they closed all their Canadian plants? Right down the toilet eh!!
For that matter, where are the WTO right NOW to protect we American and Canadian and German and British taxpayers from having to prop up failed companies?
OK, now what was it I was just saying about governments and abuse of power?
http://www.latimes.com/news/nationworld/nation/la-na-texas-profiling11-2009mar11,0,507135.story
“Will no one rid me of this troublesome priest?” ~ King Henry
“Where was the WTO back when the Brit ratepayers got raped with British Leyland from the early 1970’s on, and the French taxpayers got boheca’d back from the 1950’s on, eh?”
It didn’t exist.
Bytor wrote: Foreclose on the Billion in Taxes that they owe and grab the factories and see if Ford, Toyota or Honda want to make use of them.
You know that what’s left of Chrysler is just a house of cards and not a very stable one at that. If Chrysler really does owe a billion in taxes, then by all means seize whatever property Chrysler holds in Ontario.
Either Chrysler will crash like a deck of cards and declare bankruptcy – or – your province will get its tax money.
As far as I know Cerberus is still profitable and is not willing to pony up even a couple of billion dollars to keep Chrysler going. Why should the taxpayers provide the needed funds – if Cerberus isn’t willing to step up to the plate?
Canadian talk radio callers are seething about LaSorda’s extortion attempt. The flash point is Cerberus looking for $1-billion tax arrears forgiveness. Individual taxpayers would be in the slammer for a fraction of that amount. Nor is their sympathy for the CAW. Unflattering comparisons are being made to the rapacious local teacher unions. Regardless, there is resignation our spineless governments will give them the money.
The auto sales never really tanked in Canada! Even the D3 companies have reasonably high sales.
It puzzles me as why our Canadian government is trying to save an industry that’s not in any distress. Yeah, D3’s US counterparts are in deep shxt, but that’s not Canada’s problem and Canada is simply too small to tackle that foreign problem.
Why not, after the liquidation of Chrysler and GM, inject a loan to a Canadian company such as Bombardier and let it run the auto plants. And then there will be the true Canadian auto industry. Not some foreign transplants.
@hazard: Interesting idea, menno. If anyone can produce anything close to car in Canada independently, it’s Magna.
That was true, but not since about 2005 when they sent most of their production work to China, and design work to India. They’ve lost a lot of the design room, and shop floor grunt talent that would be needed to “git ‘er dun”.
Most of the lost are too bitter to go back, and the young folks straight out of school are too high on theory, and too short on practice (no disrespect intended).
@John Horner – I was being fascetious. I know WTO didn’t exist at that time.
Put another way – why don’t the politicians ever seem to have the best interests of their constituents in mind?
I know, that’s the unanswerable question, right alongside “how long is a piece of string?”
January 09 sales in Canada:
GM 14,147 (08: 26,509)
Chrysler 11,170 (08: 16,836)
Ford 10,901 (08: 12,708)
Toyota 10,269 (08: 10,559)
Honda 7,559 (08: 12,022)
Hyundai 4,607 (08: 3,874)
Nissan 4,259 (08: 5,074)
Mazda 4,150 (08: 4,732)
While Chrysler has been outselling Ford in Canada, GM is still on top even though it suffered an almost 50% drop over the previous January’s sales. What really makes the difference for these three is the truck sales. For GM the car vs truck sales in January were 5034 vs. 9113 whereas for both Ford and Chrysler, truck and car sales show a much greater difference. Ford: cars vs. trucks 2264 vs.8876; Chrysler: cars vs. trucks 2294 vs. 8876. Taking just cars alone, Toyota, Honda, Hyundai, Mazda, & Nissan each sell more cars than either Chrysler or Ford in Canada.
Big 3 Cars 9,592 (08: 20,462)
Big 3 Trucks 26,626 (08: 35,591)
Import cars 26,161 (08: 31,261)
Import trucks 14,481 (08: 15,517)
The government should press its tax claim, refuse to bail out Chrysler, and take possession of the assets. The CAW workers will be out of a job in any event sooner or later so if the government wants to avoid a political backlash, why not divide the bailout money among the actual workers to give them a chance to retrain, move, shift to other work, or retire? It’s better to help them than pour money into the pockets of Cerberus or the incompetents who run Chrysler and who are responsible for the product mess.
February #’s are
Chrysler 11,923
Ford 11,854
GM 11,381
http://www.auto123.com/en/news/car-news/february-2009-sales-in-canada-hyundai-scores-gm-plunges?artid=104269
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20090303/auto_sales_090303/20090303?hub=Canada