It’s always interesting to see how multiple media outlets interpret stories carried communally. In this case, here’s the beef: Standard & Poor’s ratings agency cut Chrysler’s senior secured first-lien term loan (due 2013) to CC from CCC; and lowered its issue-level ratings on GM’s $4.5B senior secured revolving credit facility to CCC-. (That’s nine grades below investment quality.) Automotive News [sub] waits all the way to the second paragraph before offering Motown apologists a heart to hang on to. “The rating downgrades put extra pressure on the two iconic U.S. carmakers, whose already declining fortunes have worsened during the ongoing global economic downturn.” The Wall Street Journal [almost] gets to the meat of the matter straight off . . .
“The ratings firm warned that large parts of Chrysler likely would be broken up and sold off if it files for bankruptcy protection.” In other words, expect Chapter 7 liquidation on May first. Reuters UK minces no words. “If Chrysler goes into bankruptcy, I would expect it to go into liquidation — that its assets would be sold in whole or in part,” [Standard & Poor’s recovery analyst Greg] Maddock said. “Instead of being reorganized, there would be no carmaker after bankruptcy.”
And then, from another source . . .
The action by the New York credit rating service comes as talks intensify between President Barack Obama’s auto task force and Chrysler’s banks over how much of a discount, or haircut, the banks will accept in negotiations to restructure the troubled Auburn Hills-based automaker.
Chrysler must strike a deal with its creditors, the UAW, dealers and proposed partner Fiat by the end of April or face bankruptcy.
Guess who? The Detroit News. TTAC’s take: Chrysler takes a dirt nap, showing everyone that The Presidential Task Force on Autos (PTFOA) is rough and tough. GM gets a politically sensitive PTFOA-designed C11 and emerges . . . to syphon some mo’.
The Dodge and Chrysler brands would be great names for the Chinese to buy. The current customers are used to buying crap.
CC, CCC, CCC- ??? Next they’ll be displaying stock quotations using Roman numerals! Anyway, thanks to the Wikipedia for its decoding…
http://en.wikipedia.org/wiki/Investment_grade
CCC = “Extremely speculative”
CCC- = “In default with little prospect for recovery”
CC doesn’t appear in the Wikipedia’s chart.
Why am I not surprised this information came out on a Friday afternoon?
suckle, cant stand that word, can you use something else……
how bout syphon.
The fact we’re still relying on the rating agencies (the very same ones who let those mortgage-backed securities go wild like college girls on Spring Break) is laughable. Ccc-ut the ccc-rap and let’s get to the next ccc-hapter of this story: bankruptcy.
russification
Done.
That thing got a Hemi in it (referring to the photo of what looks like a Chrysler/Jeep product in the water)??
What I don’t quite understand is this: How can these two companies (GM and Chrysler LLC) file for bankruptcy when their new pony cars were supposed to save them?
Somethings not right…and it’s all the fault of the American public.
And specifically, GM has not one…but TWO savior products: GMT900 AND the new Camaro. Jesus, people, you’re all a bunch of fuddy-duddies…you’re not supposed to behave this way! Stop it already!
And specifically, GM has not one…but TWO savior products: GMT900 AND the new Camaro. Jesus, people, you’re all a bunch of fuddy-duddies…you’re not supposed to behave this way! Stop it already!
They have a third as well. Not only will it save GM, but humanity itself! It is called the Bolt or Dolt or Jolt or something like that.
Oh, no! Without “suckle”, “Federal Teat” is dead meat…
BTW, I expect somebody will propose the ‘good GM’ be called “The New GM”, but I would propose FTM, “Federal Teat Motors…
The Dodge and Chrysler brands would be great names for the Chinese to buy. The current customers are used to buying crap.
Chrysler scores higher JD Powers numbers than ANY Japanese company other than Toyota and Honda, also beating Benz and killing VW (as most everyone does) so maybe the Chinese should grab one of those brands.
Just more proof that JDP probably can’t normalize its data to take out the differences between expectations and reality of domestic and foreign nameplate buyers.
Should be interesting to see if Obama actually lets Chrysler go down. I can’t imagine a deal with Fiat that makes sense.
If Fiat wanted to sell it’s cars in the US, they could just call each Chrysler / Dodge dealer and be ready to switch them to Fiat dealers about 10 minutes after the bankruptcy papers are filed.
Obama today talked about a glimmer of hope for the economy. If he really believes that the economy will turn around in 6-12 months he should just keep giving cash to both GM and Chrysler.
Ignore the talk, watch the actions.
Another thought….
Assuming the recession keeps going at this clip with 600K jobs lost every month for the foreseeable future, there will come a point when foreign brands are not welcome.
Wall Street’s panic is about done.. If Main Street panics I would NOT want to be selling anything that doesn’t have it’s HQ in Detroit.
If I were Chinese and thinking about buying an American brand, I would have that scenario on my risk analysis….
Friday, yes…but Good Friday? NBD…Chrysler doesn’t trade – it’s a privately held corp and no one has bought a single piece of the old paper in months except as a 1 cent, 100% short…
Funny – 10 years ago a good friend and true stock market maven told me you can always buy GM – if it goes south the rest of the economy is already gone…I ignored him, bought chrysler 3 weeks before the Daimler Buyout was announced and sold then…I may be the only stock trader who ever made money on chrysler in a normal trade…HA!
They had a chance with Iacocca – blew it…had a chance with Daimler – Daimler dropped the ball when they realized the morass they’d walked into – blew it.
When I was in the biz nobody expected Chrysler to make it to 1980 and, I suspect, the only reason they did survive this long was the AMC buyout (or fire sale).
They deserve what they got and GM doesn’t deserve to survive either…but something will take over probably under a new name and it may or may not be in the car business.
Just MHO
LXbuilder: are you referring to that 90-day ownership poll they do? who cares what people think of a car after 90 days. The expensive maintenance doesn’t appear then. And after 90 days it is more subjective anyway. Or is the 90-day-ownership polling important because that is when Chrysler vehicles hit the 50% depreciation mark?
Whoever buys a Chrysler doesn’t have high expectations to begin with (assuming they looked at the car before signing). So the consumer satisfactions stays high as long as the car starts and doesn’t catch on fire?
Reuters UK
Yea, those British guys know all about the automotive industry.
Awww, that was a great pic, with drama and heartbreak and befuddlement! But you passed up the chance to add a witty caption!
If one has to go down, it’s definitely Chrysler. They have no small car and no midsize car worth considering, and none in the pipeline.
GM, theoretically, would survive based on existing and upcoming product alone, as long as they could pare off the nonperforming brands (Saturn, and I’m sorry, Pontiac) and reorganize their retirement benefit disaster.
Here’s what I really dread, though: bankruptcy will drive demand for GM products down even further, leading the company down the path to be broken up or bought. And the only buyers are foreign. Remember the last time a foreign company bought a Detroit car company?
Obama today talked about a glimmer of hope for the economy
If you trust him, you are going to be shocked by what is going to happen in the USA the next years. Only one word: Argentina.
http://mises.org/story/3418
Chrysler…They had a chance with Iacocca
The chance was in fact provided by the Federal Teat: Chrysler should have been declared bankrupt in 1979, but Carter decided to loan them taxpayer´s money.
You should read the description of the 1979 Chrysler provided by Iacocca…
http://www.google.es/search?hl=es&q=%22Iacocca%3A+An+Autobiography%22&btnG=Buscar+con+Google&meta=&aq=f&oq=
…A company like that deserves to dissapear.
And just for the sake of impartiality, lets talk about another misery prolonger to the D3 from Washington D.C.: The 1981-1985 VER (“Voluntary” Export Restrictions) policy by Ronald Reagan.
http://www.google.es/search?hl=es&q=%22voluntary+export+restrictions%22+%22reagan%22+%22japanese+cars%22&btnG=Buscar+con+Google&meta=&aq=f&oq=
The “Voluntary” word into the VER acronym was -of course- a Reaganite Newspeak word for “Compulsory”.
LXbuilder :
April 10th, 2009 at 7:50 pm
Chrysler scores higher JD Powers numbers than ANY Japanese company other than Toyota and Honda, also beating Benz and killing VW (as most everyone does) so maybe the Chinese should grab one of those brands.
I don’t know what your smoking up there in Brampton, but I don’t see a wash of Chrysler products here……..Perhaps Consumer Reports?
JD Powers Top Rated Cars;
Subcompact Cars:
1) Scion xA
2) Suzuki Aerio
3) Chevrolet Aveo
Compact Cars:
1) Toyota Prius
2) Toyota Matrix
3) Pontiac Vibe
Midsize Cars:
1) Buick LaCrosse
2) Toyota Camry
3) Mercury Milan
Large Cars:
1) Mercury Grand Marquis
2) Buick Lucerne
3) Mercury Montego
Entry Premium Cars:
1) Lincoln Zephyr
2) Cadillac CTS
3) Infiniti G-Series
Midsize Premium Cars:
1) Acura RL/Lexus ES 330 (tie)
3) Infiniti M-Series
Compact Sporty Cars:
1) Mazda MX-5
2) Subaru Impreza
3) Pontiac Solstice
Midsize Sporty Cars:
1) Toyota Solara
2) Chevrolet Monte Carlo
3) Ford Mustang
Compact SUVs:
1) Honda Element
2) Honda CR-V
3) Mitsubishi Outlander
Midsize SUVs:
1) Toyota Highlander
2) Toyota 4Runner
3) Buick Rainier
Large SUVs:
1) Toyota Sequoia
2) Chevrolet Tahoe
3) Ford Expedition
Midsize Pickup:
1) Ford Ranger
2) Honda Ridgeline
3) Toyota Tacoma
Large Pickup:
1) Toyota Tundra
2) Ford F-150
3) GMC Sierra 1500
Vans:
1) Dodge Caravan/Grand Caravan
2) Ford Freestar
3) Toyota Sienna
regarding Chrysler-Fiat and C11? You don’t have to be a financial analyst to realize this it’s merger? Schmerger!
From the country that brought us the word “Machiavellian,” the Chrysler-Fiat deal is Fiat’s way of looking through Chrysler’s assets before they go belly-up, as in “dead” after feeding at the trough and dying of food poisoning.
So Fiat gets the first look, finds out what’s on Chrysler’s balance sheets that’s not “toxic assets” and then buys what they want at fire sale prices. Americans would rather sell to Italians than Chinese.
So now … we wait. Even if the Chrysler-Fiat deal goes through, and they get $6 billion to tied them over, there’s nothing in the product pipeline, EVER, that Americans would rather buy than American-made Toyotas and Hondas.
Sure, a handful of us would LOVE to buy a new Fiat 500, rather than a MINI. Another handful of us would LOVE to buy an Alfa-Romeo of some sort rather than an Acura or BMW, but that’s not enough to keep Chrysler afloat.
That kind of customer can’t even keep Saab afloat. And let’s be honest. “Saab” is Swedish for “Fiat.”
RNader, You would need to look a bit deeper and check the ranking by brand and not simply the individual segments.
I’m sure all the the anti- Chrysler winers have had a bad experiance, but I know the Chrysler products I’ve had have been fine. I did put a transmission in a 91 mini-van, but the van did go 350,000kms while I owned it. I’ve got a GT PT Cruiser with 70k and no troubles at all. Also a Pontiac Grand Prix with 390k and only brakes, tires …etc. Still has the orginal exhaust even,so this guy dosen’t buy the domestics are all shit B.S. sorry.
Oh and we’re not smoking anything up here in Brampton, healthy living all the way my friend …but thanks for asking.
Also JD Powers does NOT say this car is better than that car. It is a rating of customer satisfaction. The fact is every car guy knows there is no way that Buicks are that much better than other GM products, but if they satisfy their customer base are they not doing their job? Anyone that wouldn’t be happy with the product wouldn’t be caught dead in one anyhow. Just a thought.
kaleun :
April 10th, 2009 at 11:33 pm
LXbuilder: are you referring to that 90-day ownership poll they do? who cares what people think of a car after 90 days. The expensive maintenance doesn’t appear then. And after 90 days it is more subjective anyway. Or is the 90-day-ownership polling important because that is when Chrysler vehicles hit the 50% depreciation mark?
Whoever buys a Chrysler doesn’t have high expectations to begin with (assuming they looked at the car before signing). So the consumer satisfactions stays high as long as the car starts and doesn’t catch on fire?
Long term 3yr customer satisfaction. (06,07,08)
And some people buy Chrysler because they are loyal to domestic products. I think the people buying SRT8s have somewhat high expectations, and they will not be disappointed. Hey I know I’m biased …but there is no way I’d take a perfect running Toyota/Honda toaster over a 300c or Challenger, or a Tundra over a Ram. I’m alive and I want to feel that way! So suck up all those boring Japanese appliances, you can have em.
Also JD Powers does NOT say this car is better than that car. It is a rating of customer satisfaction. The fact is every car guy knows there is no way that Buicks are that much better than other GM products, but if they satisfy their customer base are they not doing their job?
Not true, it isn’t just that. The Vehicle Dependability Survey is a reliability study, and the Initial Quality Survey counts defects. It does not just measure feelings and good vibes, but also tally ups data about service issues. It assigns dependability scores ranging between two stars and five stars, so a five star car would be better than a two star car.
Chrysler’s JD Power results are a mixed bag. The 300’s and minivans did well in the last VDS, the Charger had the lowest score and the Sebring was average. At best, they should be viewed selectively.
I know the Chrysler products I’ve had have been fine. I did put a transmission in a 91 mini-van, but the van did go 350,000kms while I owned it. I’ve got a GT PT Cruiser with 70k and no troubles at all. Also a Pontiac Grand Prix with 390k and only brakes, tires …etc.
What you miss is that for every “my domestics rock the world” anecdote like yours, there are far more “mine was horrible and I’ll never look at Detroit again” anecdotes to contradict them.
You’ll notice that sales have been falling for decades now. That’s why. People vote with their dollars, and their voting somewhere else. We wouldn’t be talking about the implosion of these companies if the products were particularly good.
LXbuilder :
April 10th, 2009 at 7:50 pm
Chrysler scores higher JD Powers numbers than ANY Japanese company other than Toyota and Honda, also beating Benz and killing VW (as most everyone does) so maybe the Chinese should grab one of those brands.
Ok,,,, from Consumers Reports…..
“Chrysler, which tied with Suzuki for last place in our 2008 ranking, fared even worse this year. Overall reliability of Chrysler vehicles, which was average last year, dropped to below average this year. No Chrysler, Dodge, or Jeep vehicles are recommended.”
“Chrysler is at the bottom of the class, with a drop in its overall score and average reliability rating. Most models from the manufacturer have noisy, inefficient, unrefined powertrains; subpar interiors; and poor visibility. Chrysler is the only automaker with no models on our Recommended list. But the redesigned and much improved Dodge Ram pickup offers a glimmer of hope. Our tests show it now competes well with the best full-sized pickups.”
So what does the average consumer do? If Chrysler products were thousands of dollars cheaper than the rest, you could look at it as a “get what you pay for” situation. Or view it as a “throw-away”, much like I do with a cheap desktop PC. But when all is figured in, the final cost of a Chrysler car is at the top of the price range(I know cause I bought one). What do I do next time????? What should the average family buy??????
Kaleun,
I was with you until your “Or is the 90-day-ownership polling important because that is when Chrysler vehicles hit the 50% depreciation mark” sentence. Let’s be honest after 90days they are looking at more than 50%. After all, this is “Crisis” we are talking about! I cannot wait until May 1st, my birth month none the less. Finally we will see the plug pulled from this undeserving American Embarrassment. YES! Happy Birthday to ME!
@ Ryan
I can’t imagine Obama pulling the plug. Would impact too many voters. 2010 is right about the corner.
Last year my dad got contacted by JD Powers with a phone call follow up interview that took about 20 minutes.
He answered as completely and unbiased as he could muster – with one small problem….
My dad still thinks Buicks are Doctors Cars. Really. All his comments/observations reflected that 1960 based premise.
And that’s exactly the problem with JDP. It’s nothing more then opinion based polling that is twisted into a statistic.
lw,
Good point but I hope you are wrong…
JD Power cuts the data a lot of different ways. No matter which metric you used, Chrysler was one of the worst quality cars made. I’m saying this as a Charger owner that has had ZERO issues with the car. the sales data actually reflects that Charger is one of the brighter spots in their line up. But one or two successful cars will not make a profitable company. And while I’m on a rant… the dealers absolutely killed the challenger with that damn bonus money plan. The number of people that got pissed off and walked away from the dealer is happening exactly as it has many many times before. When will the dealers learn?