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“If you look at it on a pure-business basis, we are clearly more viable (than GM),” Chrysler CFO Ron Kolka tells Bloomberg.
37 Comments on “Quote Of The Day: More Than Less Than Zero Edition...”
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He could be right. Chrysler seems to be a step ahead of GM. The have the sports car, looks like they will have electric vehicle first, plus they have cars that people really want, Minivans and Jeeps.
He IS right – GM will be dead at least two hours before Chrysler.
He’s making a distinction without a diference.
That’s like saying Rosie O’Donnell is hotter than Barbara Bush.
As much as people here hate Chrysler, he does have a point. Chrysler’s fortunes could be turned around with two good models, a Sebring replacement and a real small car to replace the Caliber. Chrysler used to have the fastest product development cycle of the Big 3 and their idea of giving labor a place on the board was brilliant and went a long ways towards building a team rather than the normal adversarial attitude. Plus Chrysler has a much lower debt load than the other guys.
Get something going in the spirit of the original Neon and Cirrus programs and Chrysler could come back from the dead again.
Quality issues are another thing, but hey, if everyone listens to JD Power surveys that might not be a problem anymore!
This hinges on the will of management though, and that’s where progress might be halted. I don’t get the feeling that Cerberus wants to do anything more than hold a lot of jobs hostage so they can scam some government dollars to enrich who-the-hell-knows.
And last Tuesday’s garbage is clearly more edible than last Monday’s garbage.
He is absolutely right; if you could treat cars as a commodity. What Mr. Kolka does not understand is that the car buying public can tell a difference between a GM, Chrysler and Toyota vehicle.
Sure and the Rams or the Chiefs are more viable than the Lions.
midelectric, I have to admit Chrysler only has to fix a “few” problems.
They’re DEAD LAST on Consumer Reports reliability, so they need to figure out what Honda, Toyota, Lexus and Hyundai do right and what they do wrong.
They’re DEAD LAST on ‘score points’ on Consumer Reports car tests, so they need to figure out how to make better cars than, um, everyone else.
The interiors are Playskool-tastic, so they need to do something else other than that.
They already knew that their last 4 cylinder engine effort couldn’t keep head gaskets so they went 1/3’s with Hyundai and Mitsubishi on building new 4 cylinder engines (designed mostly by Hyundai). Trouble is, the Hyundai version is now already like 2 generations along and they haven’t improved their version. They’ve got to get with the program on their 4 cylinders.
They’ve just threatened (extortion with menaces) the Canadian government and said unless the government coughs up money, they’ll pull their factories from Canada. Think the Canadian public – who actually look favorably on Chrysler products – will take this news sitting down? Sure, Canada’s market is “only” 1/8th the size of the US. Would Chrysler p*ss off Arnold Schwabledinger and all Californians, though? I don’t think so dot com. California’s car market is about the size of Canada’s. Plus, Canada is actually NOT in nearly the recession that the US is.
Their rear wheel drive architecture is a) built in a Canadian plant b) will cost a fortune to move to Mexico c) relies upon technology from a minor partner d) is not all that fuel efficient
Their mid-sized Sebring/Avenger is an EPIC FAIL; that’s what happens, I guess, when your owner (Daimler) pulls the rug out from under a “partner” (Mitsubishi) in the middle of co-engineering a car for Chrysler.
The compact cars are not selling well, and are pretty poorly engineered.
Finally, the company, owned by a wealthy bunch of New Yawker types (who haven’t put penny one into the company) went hat in hand for taxpayer monies to prop up a dead dinosaur, and the backlash in the market is telling.
Seems to me like General Motors is the new Studebaker and Chrysler is the new Kaiser.
Epic failures, both.
“If you look at it on a pure-business basis, we are clearly more viable (than GM),” Chrysler CFO Ron Kolka tells Bloomberg.
Well, yes. In a way. They’re a smaller company, and they’d require less “oxygen” to keep going than GM does. If GM fails, they’re also more likely to be able to survive in the remaining space than GM would were they to fail.
Plus, they do have independent, private financial backing. Pity Cerberus won’t cough up the money.
It’s doubly a pity that they have one of the worst lineups in the developed automotive world. The Ram and the minivans are probably their only class-competitive products. Everything else uniformly stinks. Daimler wrecked their product development and Cerberus has shown no interest in fixing it.
I’d feel a whole lot more amenable to Chrysler had Cerberus shown any inclination to improve them. They haven’t. Heck, they’ve done worse: their “plans” were little more than to strip, gut and hock parts Chrysler; plan that were made evident in their failure. The only reason they weren’t able to succeed in turning Chrysler into the automotive equivalent of Wal-mart is that the economy sank them first.
And what exactly is a “pure business basis?” Are dealers included in this business? Suppliers? Employees? He might as well say, “more of our customers prefer Chrysler cars to GMs.” Well yes, I guess they do. The problem is that there aren’t enough of them as a percentage of the overall car-buying public.
Look, I know it’s the job of every company’s execs to spin things as positively as possible to help keep their companies alive, but for this guy to be comparing the viability of Chrysler to GM is stretching just a bit too far. I’d much rather hear this guy – the CFO for chrissakes – talk about the financial viability of Chrysler. When might they start paying me back for the money I’ve loaned them? What possible reason would I have for loaning them any more?
I don’t have a dog in this race, but having sampled the offerings of GM and Chrysler over the past year I’d say that GM has a distinct product advantage over Chrysler. They’re also bigger and have more overhead but if you just look at their current portfolio they have more cars that are competitive in their markets. Engineering-wise, they’re at least a generation ahead. Even with our money propping them up, Chrysler has a huge deficit to overcome on the product side for their business to become viable.
So my response to this guy while I’m paying his salary: STFU and GBTW.
All the data I’ve seen indicates Chrysler is in far worse shape then GM.
Add up how much money they bragged they had in the bank and extrapolate the amount they lost. They literally have to be out of all cash at this point. Their product development cycle is toast, without much to show. They’re talking about electric cars that nobody seems to know about. There are very few secrets inside the auto companies, mostly because so much has to be farmed out to suppliers… who talk to their suppliers and that person knows somebody at the competition. They’ve announced a “new” Charger and 300, which at best appear to be reskins. They have cut so deep, even their internet info contains stupid mistakes, much less worrying about designs. Their entire company, receivables, leases, buildings, even the car loans have been sold. No future income, not much in product, out of money, they are in a really tough place. GM isn’t a whole lot better, but they may be fixable. Being a privately held entity, chrysler does not have to release “accurate” press statements. They could say they have 1 trillion in the bank and it wouldn’t matter, there are no public shareholders to hold them accountable.
@Midelectric: You describe a Chrysler that has not existed in at least 5, maybe 10 years.
He’s sort of right only by virtue of their size. Being so small, one right move can send them back up, but the flip side is that one more bad move can bury them. As far as having a decent lineup, cars people want, etc., I think he’s hitting that bong a little too hard. They have nothing to offer in the most important segments. The Sebring/Avenger and Caliber are complete jokes. At least GM has the Cruze coming, and the Malibu is truly class competitive. Then there’s the truck line, the Lambda SUVs, CTS, SRX, Equinox, the list goes on. GM would be in great shape if they could drop some brands and dealers (CH11? HELLO?) and produce an appropriate amount of cars for the market. They’re too big and need to scale back a bit. As far as total viability though, how can he be so sure that they’re better off? They’re still in line for a welfare check.
“If you look at it on a pure-business basis, we are clearly more viable (than GM),”
Sounds like we will survive and make it to shore because the sharks are brushing up against MR GM. Except your both treading water 50 miles out to sea and 5 feet apart as the sharks nibble at GM’s toes. Your both dead, quit wasting our resources.
Well, there is that saying about not having to be faster than the bear, just faster than the guy next to you.
Still, GM — properly managed — could be a viable automaker. Even after all the cuts, they are still capable of making world class product, like the CTS, Camaro, Malibu, ‘Vette, and Enclave.
Chrysler just doesn’t appear to have the ability to engineer top flght product anymore. And its not like Fiat can do it for them — they compete in completely different product spaces.
Detroit is hoping to eke through this year and then get back in the black once the recession is over and sales return to 16M/annum.
The problem with that logic is that I don’t see buyers coming back for Sebrings and Compasses. They’ll want Accords and CR-Vs, which Honda has conveniently been stockpiling.
He’s completely wrong. The business he’s in is making cars. The customers care about the product. Chrysler’s cars aren’t as good as GM’s. Neither are the trucks.
It’s Baghdad Bob redux. He’s a shill, just like the rest of the tools at Cerberus/Chrysler.
A shame neither Obama nor Bush had the intestinal fortitude to let Chrysler fail.
cars are sold on rational facts and irrational love affairs. It is interesting that chrysler has an entire lineup of vehicles that are neither to buyers. You have a tough time selling chryslers with buy one get one free. They build the quintessinal cars and trucks that nobody asked for. They build them poorly, market them with giant fire sales, have suspended r&d on new models and could not make a profit if their life depended on it. This is all happening in a World that needs to cut capacity to build vehicles in half for everyone to survive. You can’t cut chrysler in half as there is no half worth keeping. So the biggest donation they can make is to exit stage left.
As an accountant, he doesn’t know what the f**k he’s talking about. Their quality is horrible. Have you ever owned a Chrysler? Transmission failures, engine sensor failures. You name it. The fisher-price plastics. The only thing they have worthwhile is Jeep, Minivans, and Viper. They want to sell Viper. They partner with Fiat. Fiat is the Chrysler of Europe.
They can generate profits, until everyone finds out their cars are shit.
The only reason that they might be better off than GM is because they are not as big as GM. As already stated several times, in the technology and desirability department they trail GM and every other car manufacturer that sells cars in the US by a long shot. I seriously doubt that they can even see Toyota’s tail lights or sniff Honda’s exhaust.
“Well, there is that saying about not having to be faster than the bear, just faster than the guy next to you.
Still, GM — properly managed — could be a viable automaker. Even after all the cuts, they are still capable of making world class product, like the CTS, Camaro, Malibu, ‘Vette, and Enclave.
Chrysler just doesn’t appear to have the ability to engineer top flght product anymore. And its not like Fiat can do it for them — they compete in completely different product spaces.
Detroit is hoping to eke through this year and then get back in the black once the recession is over and sales return to 16M/annum.
The problem with that logic is that I don’t see buyers coming back for Sebrings and Compasses. They’ll want Accords and CR-Vs, which Honda has conveniently been stockpiling.”
Sales aren’t returning to 16M/annum any time in the next decade. In fact, one of those BloggingStocks reports posted around here the other day states (correctly) that GM’s “future viability” plan depends on there being more cars sold 3 years from now than there were in 2007. On that call, “pipe dream” seems like an understatement.
@Robert.Walter
@Midelectric: You describe a Chrysler that has not existed in at least 5, maybe 10 years.
True, and that’s a damn shame. Is there any of that Chrysler left? Probably not.
All you need to do is compare the Sebring to the Malibu.
Nardelli will probably go down in the automotive hall of shame.
From the Bloomberg story (my comments in parentheses)
Kolka said he isn’t rooting for GM to fail or to be denied further aid. His concern is that a political decision could be made on the basis that GM is too big to fail and closely held Chrysler isn’t. Cerberus holds an 80.1 percent stake; Daimler AG, maker of Mercedes-Benz luxury vehicles, owns the rest.
(This is why he is saying this, fear of the same thing that Ken Elias and others here have been proposing – sacrifice Chrysler to “save” GM (it won’t))
Chrysler’s plan to return to profitability assumes the U.S. market will have 10.1 million light-vehicle sales this year compared with 10.5 million that GM predicts. After that, GM expects a much stronger U.S. market, growing to 14.3 million in 2011 while Chrysler’s forecast is for 11.1 million cars and light trucks.
(This shows me that not only is Chrylser smaller and cheaper to rescue but they also are more grounded in reality than GM’s mgt)
Accounting firm Grant Thornton LLP estimated last week that auto sales would be 12 million to 14 million in the U.S. beginning next year.
(If this becomes true then Chrysler can most definately be profitable again. GM?)
Even if sales fell to 9.1 million in the U.S. this year, from 13.2 million in 2008, Chrysler would have $8.1 billion in cash at year-end, Kolka said.
(At this point, I’d say this is where Kolka hit the bong pipe. I just don’t see how they can preserve cash at 9.1 million sales)
Chrysler doesn’t have any viable vehicles outside minivans and pick-ups.
GM does.
Compare the Sebring sedan to the 2010 Fusion or Malibu. Sorry, they’re just not in the same league anymore.
It really blows that Diamler screwed them over, but they did and there’s little to be done.
What he said is partially true. All Chrysler needs is a few good products. GM needs a lot more work and has obviously passed the point to where they are unable to be saved.
@Lumbergh21: Thought since CVCC, Honda’s exhaust was oderless anyway.
I sell about 25 million dollars of product to CLLC per year, and am wondering how to get my EDT expense and investmet back before CLLC takes the big dirt nap. Fortunately, I don’t have to worry about releasing my development personnel, as I’ve had them assigned to non-CLLC projects since CLLC encased its product development activity inside a glacier.
Chrysler is the titanic the day after it hit the iceberg. If a company cannot even engineer a passenger car then they are not viable.
Nardelli makes Roger Smith look like Henry Ford.
Everything stinks………
When I look at the entire Chrysler product line (including Chrysler, Jeep, and Dodge) I see a lot of products that I think are well positioned in their class.
I’d be happy to drive a 300C, Crossfire, Town & Country / Grand Caravan, Pacifica, Viper, Ram, Wrangler, Liberty, or Grand Cherokee.
I see Chrysler as a company with two problems right now.
First, despite having many good products, they have a few absolute turds that they should be ashamed of (Sebring, Avenger, *cough*)
Second, they don’t have a small car – which is what they need in today’s market. The Caliber isn’t what buyers are looking for.
When I look at GM I see a hugely mismanaged enterprise with products and brands that don’t make any sense. With Chrysler, I see some well executed products, just a current product lineup that needs some adjustment.
I don’t see either durability or quality design in Chrysler products. Hyundai passed them by easily. Even Mitsubishis are better. You could, and should, look at Mazdas and Volkswagens and Fords before you look at Chryslers.
Chrysler used to be a scrappy company, but the current ownership will sink it. In some respects, Chrysler deserves to outlast GM, but I will not put money on it.
Mtypex,
You must not have seen the latest JD Power survey. VW and Mazda scored lower (as in way) than Chrysler and Dodge and maybe even Jeep. Ford I will give you. These were for 3 year old vehicles which means cars from the Daimler era. Internal measurements of reliability (warranty claims) are down on the new models. Now they have a warranty that doesn’t quit so they just can’t stonewall their customers till it runs out.
Now as Zammy said Chrysler has a number of vehicles that are competitive although I think none are class leading. GM has some outstanding vehicles now I agree. But this argument (which is a tired one) is NOT about who has the best vehicles – it’s about who is more viable and cheaper to rescue. It has NEVER been GM. If you like GM more than Chrysler and want to root for them it’s ok. But don’t say based on the business case that it should be GM and not Chrysler. Again I want to see both make it. This should not be a game of Lifeboat. This should be about a healthy US auto industry, even if that means GM is reduced to Chevy and Caddy and Chrysler gets it small to medium sized cars from FIAT.
The Chrysler Fiat merger is going to be the biggest bomb the industry has yet seen. Does Chrysler ever learn from history? Instead of dying by the German sword the Italians with provide the final stab wound.
Who the hell in the US is going to buy a Fiat 500. Things will get even uglier when the 500 fails US crash tests.
There is a reason Fiats are no longer sold in the US. They are not suitable for the US market. If they were, Fiats would still be here.
Here is to the biggest bomb ever – booommmmmmm!!!
Everyone here knows this simply will not work. Heck, it may not even go through.
One point:
Without Chrysler, who will challenge Suzuki for worst built vehicles?
Didn’t JD Powers state Chrysler was “good” again.
Well, JohnK, it seems that in Europe and the UK, Suzuki cars are considered quite reliable – if in the lower priced band alongside Skoda and Kia, etc.
But then again, the Euros and Brits accept Mercedes Benz ‘quality’ while paying out the orafice for it, too…. and largely eschew the much higher quality Toyotas and Hondas, for Euro trash cars…
I think Suzuki’s big downfall of late was that the more popular, conventional looking cars were all from GMDaewoo in South Korea, and GMDaewoo’s biggest seller in this country happens to be badged as the Chevrolet Aveo. ’nuff said? (Though I actually bought a Daewoo once and it actually was a better car than a Dodge Neon I’d had just prior… but that’s another story for another time).
Euro Suzukis are actually real Suzukis as well, not GMDaewoo. Plus, Suzuki has now stopped selling any new GMDaewoo sourced cars as of the 2009 model year.
akear,
I read a lot auto websites and blogs and there are a lot of folks saying they can’t wait to get their hands on a FIAT 500, especially the Abarth. Some of them are excited about having another choice beside the MINI. There’s no way to tell until the vehicle makes it here if it will sell well or not. And your forgetting that FIAT makes a whole slew of vehicles larger than the 500 and Alfa’s as well (another brand that folks are saying they can’t wait to get their hands on).
John_K,
Chrysler is not that bad at all (not great either). And it’s “who will challenge Volkswagon for worst built vehicles?”, not Suzuki. In Suzuki’s defense I will say that a lot of their US vehicles are rebadeged Korean Daewoo’s. Suzuki’s own vehicles are rather good.
People also said they couldn’t wait until they could drive the Saturn Astra. Apparently, those Astra fans never showed up at Saturn dealerships.
Maybe, Chrysler could peddle off 30,000 500s a year if they are lucky.
Remember, the 500 already cannot be sold in Canada due to some safety regulations.
The 500 is simply the wrong car, at the wrong time.
A mint-condition used NEON would probably appeal more to Americans than the 500.