POTUS speaks on Chrysler

[Richard]

News conference at 1109 CST by POTUS reporting lifeline tossed to Chrysler - a "real fix that will make Chrysler more competetive" - Chrysler and Fiat partnership confirmed.

Richard's $.02

[The Reaper]

The UAW is getting majority ownership in Chrysler (and likely GM).

The Dim econuts want Detroit to make tiny, gas-sipping (if not electric plug in), clown cars. These cars are not practical for most Americans (nor are high-speed or light rail), and only sell when gas is high, like it was last summer. Check the days of supply of the Prius, Insight, etc. right now. Lots are full of them. But the Dims will want to reward their liberal eco constituents, regardless.

There is little, if any profit in small cars. The margins are thin, which is why the Japanese makers started building trucks, SUVs, and vans.

Detroit is still way behind the quality of the Japanese brand cars, even with the U.S.-made Japanese cars. I will never buy another U.S. made car because of the poor quality and dealer/company indifference when I did own American cars.

So Congress is going to mandate that Detroit make unpopular, poorly built cars that will not sell, and they will not let them fail because of the UAW ownership.

This will require regular, massive infusions of cash from the US taxpayer to bail them out.

Better that MOPAR should rest in peace, IMHO.

TR

[2charlie]

cap·i·tal·ism
NOUN:
An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.

We certainly are not seeing capitalism or a free market at work today. It really worries me. I agree mopar should rest in peace along with GM unless they become profitable. They have made bad decisions for too long and allowed the unions to hold them hostage. They don't deserve my tax dollars.

-2charlie

[swpa19]

Better that MOPAR should rest in peace, IMHO.

The thoughts of re-organization under Chapter 11 should have been done a few billion dollars ago. Maybe this way they (the auto mfg) can get rid of the 1300 or so members of the "job bank". It must be nice to set around all day watching TV, drinking coffee for $31.85 an hour plus benefits.

There is little, if any profit in small cars.

There is also little chance of survival in some of them also.

Back during the first go rounds of small cars, many Omnis, Horizons, and Geo Metros came through my shop. They like the Chevette had a low surviveability rate, and even at low impact speeds, the cars were usually totalled. In many cases the drivers were also.

[Utah Bob]

I have a bad feeling about this.
Bad.

[alright4u]

Well, the Gov is now in the banking and insurance business, and; now they are in the car business.

[csquare]

Originally Posted by alright4u

Well, the Gov is now in the banking and insurance business, and; now they are in the car business.

So now it will be one stop shopping. Go on the Government web site and get your car, loan and insurance in one key stroke from BHO's new and used car sales. And they'll finance E1-E3s.....

[swpa19]

So now it will be one stop shopping. Go on the Government web site and get your car

YUP, just dial BR-549

[Razor]

Originally Posted by The Reaper

So Congress is going to mandate that Detroit make unpopular, poorly built cars that will not sell, and they will not let them fail because of the UAW ownership.

The Trabant lives!

[Richard]

YUP, just dial BR-549

Junior sent me.

Well, the Gov is now in the banking and insurance business, and; now they are in the car business.

Would you buy a used anything from this crew? I think not.

Richard's $.02

[Sigaba]

Originally Posted by Richard

Would you buy a used anything from this crew? I think not.

Maybe a teleprompter. The president seems to know his teleprompters.

His copy of Hackneyed Political Shibboleths might make for entertaining reading in the water closet.

How about an autographed galley of the president's forthcoming memoir I Just Can't Get Over How Great I Am: How I Saved You From Yourself In One Hundred Days Without Even Trying.

[Richard]

How about an autographed galley of the president's forthcoming memoir I Just Can't Get Over How Great I Am: How I Saved You From Yourself In One Hundred Days Without Even Trying.

Here's a sneak peek at the book jacket proof for that one.

Richard's $.02

[alright4u]

PT Barnum is rolling over in his grave. He never imagined so many suckers could be born in a minute.

[Richard]

Guess a pig in hot-pink foreign lipstick looks like real change among some of those feeding at the government's trough.

Richard's $.02

Chrysler Partners Have Many Goals
David Sanger, NYT, 30 Apr 2009

Before Chrysler can start building cars that more Americans want to buy, it will have to overcome considerable challenges.

The biggest may be persuading its three principal new owners — the retiree benefit fund for the labor union that President Obama himself has identified as a contributor to the company’s decline; a government that insists it will keep its hands off day-to-day decisions; and a foreign car company, Fiat — to innovate in ways the carmaker has resisted for three decades.

There is reason for skepticism. For all the optimism expressed by the administration about a downsized, leaner Chrysler, the structure of the new Chrysler sets the stage for a conflict between current workers and retirees.

Chrysler’s workers, of course, are desperate to preserve their job security, their wages and their generous health care benefits, built up over years of negotiations. But it is Chrysler’s retirees who will hold a seat on the new company’s board, representing the interests of a dwindling — and expensive — retirement health plan.

“There’s a potential conflict there, absolutely,” one of Mr. Obama’s aides conceded Thursday.

The innovative element of the new company is supposed to come from Fiat, the Italian automaker that managed a remarkable turnaround in the last five years. Fiat turns out fuel-efficient engines and sporty, economical small cars — exactly the image of the future American car industry that Mr. Obama talks about in glowing terms.

But when Chrysler was controlled by Daimler-Benz, one of Europe’s most successful luxury carmakers, everyone hailed the potential of great crossborder synergies. They simply never materialized.

Members of the team that negotiated the deal insisted on Thursday that they had explored all those risks as they revamped Chrysler and faced down a group of recalcitrant lenders who, on Wednesday night, balked at taking a deal that would give them about 28 cents for every dollar they had lent the company over the years.

The United Automobile Workers will not be managing the company the way unions tried, and failed, to manage United Airlines, they said. Moreover, Fiat is not Daimler — it is geared toward small, midmarket cars, not fine driving machines with wood-burl dashboards, they added.

Mr. Obama is trying to portray the government’s role as more venture capitalist than manager.

“I’m not an auto engineer,” the president declared Wednesday evening during the news conference marking his 100th day in office. “But I know that if the Japanese can design an affordable, well-designed hybrid, then doggone it, the American people should be able to do the same.”

In fact, in Chrysler’s case, he is relying on Italian technology — Fiat technology — to do what Chrysler has been unable to do itself. And while the White House doesn’t want to advertise that fact as Chrysler embarks on its latest last chance, the plan is for Chrysler to ultimately be a subsidiary of Fiat, in a turnabout of fortune like those in the early days of the auto industry, when giants were consumed by faster-moving competitors.

The plan announced Thursday creates incentives for Fiat to obtain a majority share of its troubled American partner, step by step. Fiat’s stake is supposed to rise in 5 percent increments, if it satisfies each of three milestones: It must expand Chrysler’s market beyond North America by putting Chrysler’s popular Jeeps on car lots in places like Brazil and Italy; it must begin to produce high-performance engines in old Chrysler factories; and it must produce a car that can get 40 miles to the gallon.

The entire venture will be overseen by a new board, including four directors appointed by the president — some of whom, it appears, have already been approached about the job.

Mr. Obama insists that beyond appointing those directors — mostly “experienced C.E.O.’s,” one administration official said — Washington will keep its hands off. But he cautioned that “every dime of new taxpayer money will be repaid before Fiat can take a majority ownership stake.”

That “new money” amounts to about $8 billion in loans, including the cash to pay off Chrysler’s lenders. The federal government has already extended about $4 billion to keep the company afloat in recent months.

The plan faces another potential hitch: that 40-mile-a-gallon car, according to administration officials, probably will not be for sale in the United States until 2012. If the Secret Service can be persuaded, Mr. Obama could tool around in it as he campaigns for re-election.

That means the government, the unions and Fiat must find a way to keep Chrysler afloat for two and a half years, in the worst car market in memory and with offerings that Mr. Obama himself described Thursday at the White House as “less popular, less reliable and less fuel-efficient than foreign competitors’.” Presumably, they will keep that ringing endorsement out of the company’s advertisements.

At General Motors, the events about to unfold are even more complex. While the United States government will hold only about 7 percent of Chrysler’s shares, it will very likely end up with 55 percent of G.M., once the world’s largest carmaker.

And while Mr. Obama says he neither wants to dictate car models nor run the companies, their success or failure will be viewed, rightly or wrongly, as his success or failure as the auto executive he says he never wanted to be.

http://www.nytimes.com/2009/05/01/bu...er=rss&emc=rss