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The sale of Chrysler’s assets to Fiat is complete, reports the New York Times. Paperwork (and the transfer of $6.6 billion in Treasury money) was completed at about 9 a.m. Eastern, after news came yesterday that the Supreme Court would not hear the Indiana pension fund challenge. News reports refer to the speed of the Chrysler bankruptcy as “an important victory” for the Obama auto industry restructuring effort. Perhaps to avoid talking about the substance of the bankruptcy. Either way, she’s a done deal. Chrysler is dead, long live Chrysler!
35 Comments on “Bailout Watch 557: Fiat “Buys” Chrysler...”
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Awesome. To whom do I make out my $1 cheque for a Sebring?
So, I’m completely lost with this whole thing. The UAW owns half of this mess and Fiat owns how much? And how much of it do we (taxpayers) own? Anyone?
Ha! Sucker.
The government says, like a cheap mechanic who just got done nicking some brake lines, “They’ll be back”.
“Under the plan, the carmaker would emerge from bankruptcy with a union retiree trust owning 55 percent, Fiat owning a 20 percent share that could eventually grow to 35 percent, and the United States and Canadian governments holding minority stakes.”
The US and Canada share 25% of the ownership.
BTW, that $6.6B wire transfer from the US Treasury into New New Chrysler this AM is equivalent to equivalent to about two weeks of spending in Iraq. Which doesn’t make it right, but does point out how massive the cost of the Iraq war of choice is.
So the U.S. government paid Fiat $6.6 billion to take Chrysler off “our” hands?
I know Fiat makes some good cars these days, but I’m pretty sure most of America just thinks of Fiat as a maker of rather unreliable cars that couldn’t compete here in the 80s. And I don’t many people think much better of Chrysler. As much as I would love to get a new 500 stateside, I just don’t see this working out for them.
OK, so they created this monster – now what? They have to limp along for at least 18 months with a decimated reputation and no new product. Do they open all their factories tomorrow and start cranking out Caravans and Avengers? Who’s in charge? Fiat?
Everyone seems so proud of the quick bankruptcy process, but I’m actually more concerned that the clock will start ticking again and they didn’t give themselves time to actually DO or FIX anything! I predict they’ll burn through the gov’t cash by December.
and I’ll say it again: Sign me up for a Panda.
I’m sure Cerberus executives are sighing collectively in relief, and high-fiving each other. Because Cerberus owns the Chrysler HQ, engineering center, etc. in Auburn Hills Michigan and LEASES it back to Fiatsco.
So, did the gummint take my advice and name the new enterprise “EF Motors” (for “EPIC FAIL”)?
No? I didn’t think so.
Why doesn’t Obama get the troops out of Iraq like he said he was going to?
Because that’s where the oil is.
Now to the point –
There was a joke that went around during the Mercedes/Chrysler merger:
Heaven is Chrysler styling with Mercedes engineering.
Hell is Chrysler engineering with Mercedes styling.
What’s the equivalent Fiat/Chrysler joke?
As much as I would like some affordable Italian metal here I don’t see how this is going to work. THe money they have been given is only enough to keep the doors open while they don’t sell cars for a year, maybe less. Even without the debts they are still burning through money like it was flash paper.
RF I have a few question that might help this discussion. What has Chrysler’s US market share been over the last 3-4 months? What was their cash burn over the same period?
Is it possible that this bankruptcy could lower their running costs enough to break even with the pathetic sales they have now?!?!?
I don’t think they did enough cutting of production and plants for that to happen, I guess we will see when we see which ones start back up in the coming weeks.
@menno: Because Cerberus owns the Chrysler HQ, engineering center, etc. in Auburn Hills Michigan and LEASES it back to Fiatsco.
I fear this will end badly.
Lokkii: Heaven is Chrysler styling with Mercedes engineering.
Hell is Chrysler engineering with Mercedes styling.
What’s the equivalent Fiat/Chrysler joke?
The current Sebring/Avenger…made in Italy.
Or the Fiat 500…reengineered for “American tastes” by Chrysler.
My question is-will there be any CryCo dealers left in 18 mo to put FIATs in?
Politicaly it is going to be tougher to sell the continueing bailout of a “furrin\'” company.
Bunter
So when does Fiatsler Deathwatch begin? When do we get to find out if Chrysler products were sold at fire sale prices to goose May sales reports? When does the first American-made Fiat badge-engineered into a Dodge roll off the assembly line? What plans does Fiat have for remaining dealers until said day happens?
What’s the burn rate of cash now at Fiat’s American-taxpayer funded division?
Honestly, I’m no fan of the UAW, but if you view the world through their lens for a moment, they really got taken up the dirt road on this deal. If I was Gettelfinger, I’d poo-bag the White House.
Why doesn’t Obama get the troops out of Iraq like he said he was going to?
Because that’s where the oil is.
And under Alaska, and just off the California coast, and under Utah, just to name a few…
Jim Press gets to be in charge this time. Oddly, there are now managers for each of the 3 brands.
The headline is misleading. Fiat may now control the remains of Chrysler, but they paid nothing for it. The headline should read: “Fiat given control of Chysler’s zombie”, and a sub-head should read: “Marchionne: Thanks, Suckers”.
RobertSchwartz: Indeed. Scare quotes added.
@Robert Schwartz:
You beat me to the punch. “Sale” typically indicates an exchange of currency for goods or services. Fiat received the goods (although it’s a stretch to refer to Chrysler as goods) but paid not one lira, pound, rupee, dollar, kroner, ruble or shekel for it.
That’s not a sale… that’s a hand-me-down, like an old sweater with a hole in it. Or in this case, a bucket with a hole in it.
We don’t need troops anywhere else in the world, for oil reserves at all.
We don’t need to drill any more offshore, onshore, in Alaska.
We can use 1940’s technology and produce at least enough gasoline, heating oil and diesel fuel for our own needs and employ Americans, using American raw materials.
We could have (should have?) done this as soon as American oil output peaked in the early 1970’s, but we didn’t.
We could have (should have) done this in 1973 when the Arabs tried to grab our national gonads and twist by turning off the oil in order to see if we would “allow” them to do another 3rd reich and destroy the Jews in Israel, but we didn’t.
Same thing in 1979. And 1990. And 2007.
What is this “magical” technology?
Turning coal into liquid fuels.
SASOL (South African Synthetic Oil Limited) has been producing 50% of South Africa’s liquid fuel needs for decades, using American licensed technology, invented by the Nazis after the Brits and Americans kicked the Nazis out of North Africa, from which Germany got its oil for their war efforts against us. America took this technology as war reparations (entirely legal) after winning World War II with the allies.
Other methods of entirely being oil-import free within a matter of months to years, include building factories to turn offal, sewage and garbage into light synthetic oil; a process invented in the United States within the last 10-15 years and until recently, working successfully in a major Missouri plant operation.
http://www.changingworldtech.com
Still further, we can convert the ethanol facilities into Butanol producing plants; plant sugar beets instead of corn; and replace ethanol in our fuels with Butanol, which is a drop-in substitute for gasoline.
http://www.butanol.com
That is, if we had real leadership in Washington and the halls of commerce, we could.
Follow the money, as to why we don’t.
Pertaining to Fiat being “given” Chrysler; sheesh! When I was a teenager and someone would “give” any of us an old car, it was polite, customary and normal to palm a dollar bill into their hand “for the title”. It’s for the dignity of the person receiving the freebie, making the transaction nominally a purchase and not gift, as much as anything.
When Chrysler was in trouble in 1979 and sold Chrysler-Europe (once known as Simca-France and Rootes Group of the UK) to Peugeot, Peugeot slipped the Chrysler Corporation $1.
This doesn’t get interesting until Chrysler needs more cash in a couple months.
Fiat now owns about as much as Daimler did AFTER they sold it to Cerberus.
One cash infusion from the UAW would bankrupt the union, so my guess is that Obama will allow Citibank to loan billions in exchange for diluting Chrysler “shares”.
In the end another $10-15B will go down the hole and Fiat will shut Chrysler down and use the dealer network for Fiats.
Business leaders are starting to make decisions now based on the assumption that the economy will stay at this level or get worse.
Lokkii: What’s the equivalent Fiat/Chrysler joke?
Chrysler reliability and Fiat styling?
“Obama-wan’s failure is complete.”
Heaven is Chrysler styling with Mercedes engineering.
Hell is Chrysler engineering with Mercedes styling.
What’s the equivalent Fiat/Chrysler joke?
How about seventh circle?
BTW, that $6.6B wire transfer from the US Treasury into New New Chrysler this AM is equivalent to equivalent to about two weeks of spending in Iraq.
I’m not sure where you are getting your figures, but according to the Pentagon, we’ll spend $87 billion on the Iraq war in 2009, including current and previous appropriations. That means you’re off by a factor of two, with the war costing $3.34 billion for a two week period.
Frankly I think the money is better spent than most of the “stimulus” package and much of the budget.
In any case, we’re there, we can’t just pick up and leave, and complaining about the cost of “wars of choice” that we are already committed to doesn’t accomplish a thing other than feeding your ego and aiding your partisan agenda by painting Republicans as bad guys.
Souce LA Times, April 11, 2009
FIAT…..Fine Italian American Transportation
menno,
Global Resource Corp, has a microwave based technology that lets them recover natural gas and petrochemicals from recycled plastics, tires, scrap auto fluff, oil shale, tar sands, drilling fluid and residue oil that can’t be refined.
It’s a pretty elegant invention. They crack off the hydrocarbons they want with specific microwave frequencies, and the process is done in a vacuum so recovery of the hydrocarbons is easy and there is no environmental release.
http://www.globalresourcecorp.com/
They had a successful demonstration of their first commercial scale prototype last month, using scrap tires as the feed stock. The tires were turned into diesel fuel, methane, pentane, butane, propane, other combustible gases, and carbon ash.
Other methods of entirely being oil-import free within a matter of months to years, include building factories to turn offal, sewage and garbage into light synthetic oil;
I know conservatives are bad with numbers, among all things, but really I thought they could compare two numbers properly.
Look up how much oil we use. Look up how much this process can be expected to produce. Prove me wrong, show that you can tell which number is much bigger.
It’s a good thing this kind of idiocy is no longer running our energy policy.
It’s a good thing this kind of idiocy is no longer running our energy policy.
Ah yes, when you have no facts, just resort to name calling… cause that makes you look smart!
Is it too much to expect a Maserati badged as a Chrysler? A Fourporte.
DearS, hush your mouth, lest somebody brings back memories of the TC.
Ah yes, when you have no facts, just resort to name calling… cause that makes you look smart!
Really? So if I can show two numbers, and explain how to compare them, you’ll admit to it yourself?
There’s no big scientific secret to supplementing current oil consumption. The technologies are numerous (renewable and not), and likely a combination of them will be applicable in the future.
Sorry, but there is no magical technology that will save us all any more than the 100mpg carburetor.
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I’m not sure where you are getting your figures, but according to the Pentagon, we’ll spend $87 billion on the Iraq war in 2009, including current and previous appropriations. That means you’re off by a factor of two, with the war costing $3.34 billion for a two week period.
Frankly I think the money is better spent than most of the “stimulus” package and much of the budget.
War costs more than the soldiers and guns. Funny thing is Joseph Stiglitz estimated the total cost for iraq at like 2bil back in the day. All the warmongers bashed him for being crazy. The lesson is that you should listen to people who have a history of correctness rather than those who are always wrong and deceive you. This lesson has been taught a lot recently, even on this site, but some people must be slow learners.
I doubt you’ll be able find any stimulus spending more wasteful. War usually clock in at somewhere well below bridges to nowhere in terms of overall productivity.
The kind of people who usually claim the “budget” is wasteful are either those ignorant of what’s in it, or those who lie about it. Generally they point to one or two exceptional items, and try to trick morons into thinking the rest is the same thing. They also tend to ignore the fact that about half of it is war related, so I guess this statement is ironically half-true in a way:
“Frankly I think the money is better spent than most of the “stimulus” package and much of the budget.” It’s not “better” spent, but much of the same thing.
Although I can’t remember the source, I’m pretty sure I read something that indicated Cerberus gave up ownership of the Tech Center as part of the “deal”, reverting it back to “Chrysler Real Estate Holdings” or whatever it’s officially called.