Latest Chrysler News

[MoparDan]

Once again, commenting on the folks being quoted, not the ones quoting them. The whole GM comment of government interference made me shake my head. Try competing and keeping the stock high when they're liquidating you without the government handout. Its like a bum complaining that when you gave him a $100 dollar bill, you demanded he take time away from pan handling to pick up some trash.

I definitely agree with your analogy; don't come begging for money then turn around & say keep out of our business. Sounds pretty much like what a lot of the financials said where bonuses & other payouts were concerned.
And the beat goes on...

[ccbatson]

VEBA=Voluntary employee benefit association. IOW, the entity that holds the assets for the UAW dedicated to health benefits [[and, I suppose other benefits as well).

A tax sheltered account of the UAW...that is not organized labor's assets? Giving the stock to this entity is like putting money in someone's bank account...who is that someone in this case? The UAW.

[Lorax]

Once again, commenting on the folks being quoted, not the ones quoting them. The whole GM comment of government interference made me shake my head. Try competing and keeping the stock high when they're liquidating you without the government handout. Its like a bum complaining that when you gave him a $100 dollar bill, you demanded he take time away from pan handling to pick up some trash.

I also have a fear that the opposite will happen. The government now has a vested interest in a more profitable GM so I'm worried about what they'll allow GM to do in search of those higher profits.

What the government will do is make sure GM develops battery technology, make sure cars get 45 MPG, and insist on accountability, which, unfortunately is a double standard when compared to the lack of accountability given to Wall Street. Bush and Paulson saw to that last year.

[mjs]

I'm hoping that the way Congress dealt with GM and Chrysler was because they learned they screwed the pooch in their handling of the banking behemoths, but I'm figuring its really because GM and Chrysler bribe well, but not as well as the banks. Regardless, I don't see why errors handling the banking bailout should have been extended to other bailouts.

[ccbatson]

"Battery technology" is not new, exists, and isn't what liberals are trying to make it out to be.

Remember ethanol?? You know, flex fuel? Last year's perpetual motion machine? How is that working out?

[mjs]

Oh, yes ethanol. The fuel used by the Bush administration to kill California's zero emissions law. What are liberals making out battery cars to be? Something that people will want to buy like the EV1s GM refused to sell after the California law was killed? Why would you crush vehicles that have a buyers waiting list?

[ccbatson]

Not enough people wanted to buy the EV1 at the prices charged to sustain viability.

[ccbatson]

Oh...btw, that is a phenomenon called market forces in action. Liberals are likely unfamiliar with what they must think is this alien custom.

[mjs]

In the extremely limited market they sold them in, at the price they were charging, there was a waiting list. I could buy their claim if they opened the market and advertised and then the days of inventory even got near their typical days of inventory or if Toyota wasn't eating their lunch by doing everything GM said was impossible. The reason why I never applied for a big three job was that I like to solve problems and they just like to list reasons they can't be solved. Yeah, market forces say that when an oligopoly ends, the oligoplists need to innovate or die. It works!

[MoparDan]

Some more Chrysler news...
http://www.allpar.com/news/

LaSorda to advise Penske on Saturn bid

May 20th, 2009 by Bill Cawthon
Tom LaSorda, who retired at the end of April as Chrysler president and vice chairman, has a new job: he has joined Penske Automotive Group as an advisor as the auto retailer considers a bid for Saturn’s distribution network.
A spokesman for Penske confirmed an earlier Bloomberg News report that LaSorda had been brought on as a consultant and that America’s second-largest automobile dealer group was looking at the GM division. The Detroit News reports two area dealers, Joe Serra, past co-chairman of the North American International Auto Show and CEO of Serra Automotive, and David Fischer, chairman and CEO of Suburban Collection, a dealer group that includes the world’s largest Saturn dealership, are in discussions with Penske about joining forces in a bid for Saturn.
Penske Automotive Group also owns the exclusive distributorship for Smart Cars in the U.S. and Puerto Rico.

Chrysler’s official statement in response to new Obama standards

May 20th, 2009 by Bill Cawthon
Chrysler welcomes the President’s announcement of a framework for a single national approach for fuel economy and greenhouse gas standards. We thank the Administration for their leadership.
Today’s announcement begins an important process of harmonizing state and federal fuel economy programs. Chrysler has long been an advocate for a national approach to fuel economy as the most effective way to help the nation achieve energy security and environmental sustainability. With regulatory clarity and certainty, Chrysler and its alliance partner, Fiat, will now be able to concentrate their resources on developing a nationwide fleet of clean, fuel-efficient vehicles that will help support its revitalization and benefit American consumers.
These fuel-efficient vehicles will feature both improvements to conventional technology and technology that is entirely new. For example, Chrysler will soon introduce an all-new, high-volume V-6 engine that will deliver up to 8 percent improved fuel economy across the company’s current vehicle lineup. Chrysler’s alliance with Fiat will initially deliver consumers a world-class small engine and overall powertrain technology that will rapidly bring to market even more fuel-efficient, environmentally friendly small cars.
Chrysler’s entirely new technology will be found in vehicles developed by ENVI, an organization within Chrysler that is focused on electric vehicles as its primary clean-vehicle technology. Chrysler’s product plan includes the introduction of several production electric vehicle models by 2013.
We look forward to working with the Obama administration and others as this process moves forward toward an outcome that is economically and environmentally sustainable.

[Det_ard]

In the extremely limited market they sold them in, at the price they were charging, there was a waiting list. I could buy their claim if they opened the market and advertised and then the days of inventory even got near their typical days of inventory or if Toyota wasn't eating their lunch by doing everything GM said was impossible. The reason why I never applied for a big three job was that I like to solve problems and they just like to list reasons they can't be solved. Yeah, market forces say that when an oligopoly ends, the oligoplists need to innovate or die. It works!

So a company should keep selling a huge money-loser because there are people who'll take the product at the hugely subsidized price? GM lost a ton of money on every EV1. If they sold more they'd lose more. It had limited appeal, serious deficiencies and the proof that it was a dud of a product and of a concept in general is that in the years since the demise of the EV1 no major automaker has seriously pursued the EV market. It was an experiment that showed that EVs weren't commercially viable products.

[mjs]

I don't want to continue to hijack this thread on the Latest Chrysler News. Lets discuss it on the 35.5 mpg thread.

[MoparDan]

http://www.allpar.com/news/

Chemical man to head Chrysler Group

May 20th, 2009 by DaveAdmin
Chrysler LLC has announced that C. Robert Kidder, former Chairman of Borden Chemical and of Duracell International, will become Chairman of Chrysler Group LLC, the company to replace Chrysler. The name “Chrysler Group� was used by Daimler for the former Chrysler Corporation.
Kidder is currently on the board of directors for three companies - Morgan Stanley, Schering-Plough, and Microvi Biotech. He has also served with consulting firm McKinsey and Co., and is currently Chair and CEO of investment firm 3Stone Advisors LLC. He holds an M.S. degree in Industrial Economics from Iowa State University and a B.S. degree in Industrial Engineering from the University of Michigan and lives in Columbus, Ohio.


Chrysler Group LLC to get new Chairman

May 20th, 2009 by Bill Cawthon
C. Robert Kidder, former chairman of the board at Borden Chemical and Duracell International, will become Chairman of Chrysler Group LLC after it completes its reorganization and its alliance with Fiat SpA. He will succeed Bob Nardelli, who will take a advisory position with Cerberus Capital Management.
“We are most fortunate that Bob Kidder will lead the new company through its transformation,� said Nardelli. “My number one priority has been to preserve Chrysler and the livelihoods of thousands of people who depend on its success. With his broad expertise serving on numerous world-class boards and his accomplished business background, Bob will provide the leadership and strategic counsel that will help to create a strong global competitor moving forward.�

[MoparDan]

Wow! The guy gives a great opinion on his weblog!
http://www.allpar.com/weblogs/2009/0...e-dirty-dozen/

Keeping the hysteria down: the dirty dozen
May 22nd, 2009 by DaveAdmin
Let’s do some quick reality checks on the hysteria surrounding the automakers.
1) Chrysler warranties: the company is not going to be in bankruptcy forever. It seems reasonable to assume that the warranties will go back into full force as soon as Chrysler Group buys the main assets of Chrysler LLC. What’s more, when Chrysler said they might not be able to honor a widespread defect, I suspect that has a lot to do with their inability to buy parts or run their plants.
2) Nobody is “twisting� bankruptcy law here. Bankruptcies are always like this — a big morass where most people lose their shirts, but lawyers and executives tend to come out with millions. And, no, it is not unheard of for retirees to keep part of their pensions.
3) Obama is not forcing Chrysler or GM to slash its dealer count. They intended to do that before and made numerous public statements about it. It’s all in back issues of Automotive News.
4) Obama is not, as far as I know, behind every little action of GM and Chrysler, nor would he probably want to be. I’m pretty sure he knows that his knowledge of the industry is minimal. On the other hand, I think he knows he can’t trust auto executives, either. There needs to be a balance of oversight and independence, and I’m pretty sure Obama knows this and respects it. Decisions made by his team have so far been minimal, as far as outsiders can tell. The only cases where people are positive there has been Obama influence was cutting the Chrysler ad budget in half [[which seems to have been a sensible move, given that the ads are still running on a saturation schedule), asking for Rick Wagoner’s resignation [[by no means a bad move), and being a party in union and lender negotiations.
5) For all the flaws of Obama’s participation, the alternative was the Chapter 7 liquidation advocated by some politicians, or the unlikely long-term Chapter 11 proceedings advocated by other politicians. Nobody came forward with a better idea - one that would let the United States retain a key industry and a huge number of jobs.
6) Which is not to say that I approve of everything Obama or Judge Gonzalez has done.
7) The media seems to give a lot of credence to that law firm which has been harassing Obama through Chrysler. Their statements, though, are laughable as legal documents. While legal arguments tend to be rational and clear, White & Case meander around, throwing accusations at the White House and government, and making legal points almost as an aside. Looking at their filings, I have to wonder whether their primary goal is to serve their clients or see Barack Obama lose his next election. I also have to wonder about anyone, pension funds included, who would use White & Case after reading their past work.
8) Fiat will not, according to current plans, own a majority of Chrysler.
9) The UAW will not control Chrysler. People have been reporting this even though they know better. The UAW gets no voice. The VEBA, which is accepting less “cents on the dollar� for its debts than the secured vendors, will end up with 55% ownership but no control other than a single board member. That ownership is worth roughly $1 billion by my seat of the pants valuation, and is meant to substitute for over $10 billion. Do you still think the UAW is being put “above� the secured creditors, who got $2 billion plus some ownership in exchange for $7 billion in debts? And were you aware that many of those creditors appear to have purchased the debt at a substantial discount?
10) The Treasury plans to hand off Chrysler as soon as it can. By 2012, I would not expect the U.S. government to have any ownership.
Is this socialism? I frankly don’t care. My life is not ruled by intractable dogma or names. I like social security because it has made a vast difference in one of America’s great humiliations - poor, homeless war heros begging in the streets and dying of exposure in the winter. I have no problem with contributing my share, which is probably double what yours is, since I’m self-employed and pay both sides. I am perfectly happy to pay for medicare. [[I would prefer not to pay unemployment insurance, though, since I have only very rarely been eligible to collect it. Why do they collect unemployment from part-time and self employed people, anyway?)
The fact is, you can’t run a nation on dogma alone. If we had done so, we’d never have gotten started. We’d have split up before the Revolution because of the “all men are created equal� dogma. I don’t mean to countenance slavery here, but from the very start we’ve had a nation of compromise. We tried having an extreme states’-rights country, and it fell apart quickly. So we replaced it with a stronger Federal government. In World War II, to keep things together, the government took over whole industries and infringed on property rights in a way which, today, would be considered heretical to the free market which we have made our religion. But a totally free market doesn’t work; Adam Smith himself said as much. A free market ends up being consolidated into a set of monopolies or oligarchies, as we found out in the 19th and 20th centuries. So we started regulating it. Is that socialism? Does it matter?
There is a balance we have to walk, between government control and anarchy, between capitalism and socialism, between regulation and deregulation. It’s a balance corporations have been walking between centralization and decentralization, control and worker autonomy. If you go to either extreme, you suffer. Finding the right balance is far harder than picking an extreme view and sticking to it, but it’s the only way.
This leads me to –
11) I’m tired of people calling the Chrysler deal socialism. Many of these people also call Social Security socialism. Most don’t complain about the Federal highway system, which is as socialist as it gets. They don’t complain that the FCC lets them get sound on any radio they buy, without worrying about whether the Sony will pick up Z-FM or whether the Panasonic will get X-FM2, and whether either of them will cause their garage door to open or their pacemaker to stop. But you know, the FCC is a great example of government interfering with private industry. So is the FDA, demanding that the drugs we take for arthritis won’t cause strokes. Or demanding that baby formula is actually made with nutrients rather than water and soap. [[Does anyone remember the Nestle or Beech-Nut scandals? They didn’t use water and soap, but they showed that corporations can’t be trusted with babies.)
So, in short, I take it for granted that sometimes government will interfere with private industry. That’s a balance, and anyone who says this deal is wrong because the twain are meeting needs a history lesson. If this is bad, I need a pragmatic reason why it’s bad.
Now, since we need a dozen:
12) Chrysler will have vehicles to sell before the Fiats come in. What’s more, they ARE cars people want to buy. A lot of people, if not any snooty pundits. One of my neighbors got a Sebring Convertible, and now my other neighbor wants a Sebring sedan. There are still people interested in the PT despite Daimler’s 2006 cheapening. Lots of people are still lusting after the 2009 Ram, recently ranked above the Ford, Toyota, and GM pickups in not one but two comparisons. I could go on but I don’t need to, because I have one word for you: CHALLENGER.
13) [[Baker’s Dozen) Fiat is unlikely to ride Chrysler like Daimler did. Fiat’s approach seems to be far more decentralized; at worst I’d expect them to do to Chrysler what Chrysler did to SIMCA, which is to rationalize their product line a little, lend and borrow technology and vehicles, and lead them to success.
14) [[Bad Arithmetic Dozen) Some are calling for Chrysler to extend the length of time dealers will have to stop selling their cars. The reason they set the date they did, was because the next day, they’re likely to be out of bankruptcy. The more time the dealers get, the longer Chrysler has to stay in bankruptcy to avoid penalties.
Chrysler is poised for recovery, if it gets the chance. A lot of pundits and politicians, for various reasons, don’t want it to get that chance. Don’t be one of the people holding them back.

[ccbatson]

I heard a media report refer to this deal as "Fiat buying the valuable parts of Chrysler"...true? Meaning that Cerebrus did indeed do what they are designed to do and chop up and sell the assets of their temporary ward [[Chrysler)?

[MoparDan]

I heard a media report refer to this deal as "Fiat buying the valuable parts of Chrysler"...true? Meaning that Cerebrus did indeed do what they are designed to do and chop up and sell the assets of their temporary ward [[Chrysler)?

This is what I found on the AllPar site about Cerberus:
Though the Cerberus people portrayed themselves as patriots rescuing a great American automaker, Steve Feinberg did not invest his own money to rescue the company from bankruptcy, and tried to link up with numerous Chinese companies. They appear to have been willing to break up Chrysler despite statements that they were keeping the company whole. Tom LaSorda, in his court statements, wrote:

Chrysler sent letters to parties, primarily in China, whom we thought would be potentially interested in purchasing our assets. Over the next two months, several companies, including Beijing Automotive Industry Holding Co., Tempo International Group, Hawtai Automobiles, and Chery Automotive Co., expressed interest in purchasing specific vehicles, powertrains, intellectual property rights, distribution channels and automotive brands.

Rumors surrounding an attempted sale to GM, which would have been disastrous for employees at both companies but would have kept assets in the United States, were true; Bob Nardelli called Rick Wagoner in January 2009 to try to restart the merger. GM was not interested.

LaSorda said that Chrysler tried to form alliances with Nissan, GM, Volkswagen, Tata Motors, Magna, GAZ, Hyundai, Honda, and Toyota. The alliance with Toyota suggested by LaSorda and Jim Press would have had Toyota using Chrysler factories to build new products. Toyota quickly rejected the proposal, as did Honda. Both companies have built their factories on farmland rather than re-using industrial land.

Talks with Nissan started in 2007, as rumored. In 2008, Nissan and Chrysler exchanged term sheets, but Nissan could not get the needed financing. They tried again later in 2008, with executives from both companies, but were unable to nail down financing; in January 2009, Nissan was no longer interested.

Talks with Fiat apparently began in March 2008, and were more fruitful.

[jiminnm]

8) Fiat will not, according to current plans, own a majority of Chrysler.
9) The UAW will not control Chrysler. People have been reporting this even though they know better. The UAW gets no voice. The VEBA, which is accepting less “cents on the dollar� for its debts than the secured vendors, will end up with 55% ownership but no control other than a single board member. That ownership is worth roughly $1 billion by my seat of the pants valuation, and is meant to substitute for over $10 billion. Do you still think the UAW is being put “above� the secured creditors, who got $2 billion plus some ownership in exchange for $7 billion in debts? And were you aware that many of those creditors appear to have purchased the debt at a substantial discount?

Dan, these points are not necessarily so.

Fiat may well end up with a majority stake in Chrysler.
http://online.wsj.com/article/SB124218648848214101.html

It's true that the UAW will likely get one Board seat, but the VEBA will initially control the majority of stock and the UAW will control the VEBA. That gives the UAW plenty, if not most, of power typically associated with ownership. The UAW has indicated that it intends to sell much of the stock sooner rather than later, but my guess is that the value may be depressed for some time. So, who knows?

As for the distributions in bankruptcy, well established law places secured creditors at the front of the line for available funds [[regardless of what those creditors paid for their debt) or for the property that secures that debt. An unsecured creditor, like the UAW, in the another bankruptcy might get nothing at all. As I've stated before, without the availability of the funds obtained by the secured debt, Chrysler could not have functioned and would have had to file bankruptcy sometime in 2008 [[with a very different result than the current filing is likely to produce). When the current holders of that debt acquired it, the discounted price they paid was likely based on their assessment of the secured property's value and not the likelihood of ever being paid back by Chrysler.

[ccbatson]

Will not own a majority....but the largest share? And the only large stockholder in the business of making and selling automobiles...semantics....like "a merger of equals"

VEBA is a intermediary/holding company for UAW assets [[in particular the medical benefits of the UAW)...how is that not the same as the UAW owning that 55%?

[ccbatson]

Nope....designed and manufactured while their still was an American automaker behind the wheel.

Besides that...the major determinant for me is the features/performance/utility/value and cost. If the vehicle has an optimum mix, then I am interested.

[otter]

FWIW, the Cherokee was created by AMC, not Chrysler.

O.

[ccbatson]

The name was...this generation is the third [[or fourth) after the death of AMC.

[MoparDan]

A nugget of good news.

Chrysler Could Exit Bankruptcy by Next Week
http://www.cnbc.com/id/30948933/site...t%7C&par=yahoo

[otter]

Bats,

The current and previous-genertion Libertys are sold as Cherokees in most of the rest fo the world, but in the US, the Cherokee that was discontinued in the early 2000s or so was the same Cherokee that AMC/Jeep introduced in 1983. DCX did a refresh in the early 90s or so with a new fascia/lights/bumpers, wider tailgate opening and new interior, but this was just a mild facelift. The Cherokee really is a classic design. I brought it up b/c your use of the word 'still' suggested that you thought it was originally developed by Chrysler, before the Daimler takeover. The Cherokee came out in 1983 but Chrysler didn't buy AMC until 1987. OK, that is my anorak moment for today.

O.

[ccbatson]

Already old news as investors rebel against the terms of bankruptcy.

[MoparDan]

http://finance.yahoo.com/news/Chrysl...5384.html?.v=6

"The three funds bought Chrysler debt last year and hold a combined $42.5 million of the company's total $6.9 billion in secured debt."

Less than 1%; I doubt the judge is going to hold up progress over these guys.