Comments on: Chrysler Update

By: Doug

Doug — Thu, 08 Oct 2009 16:11:53 +0000

The current administration wants to investigate the legality of the previous one’s interrogation techniques, maybe the next will want to look into this.

By: perlhaqr

perlhaqr — Thu, 08 Oct 2009 05:08:50 +0000

feeblemind: I don;t know how broad this sentiment is, but I’m generally a “mopar guy” and now, I’d never buy a Chrysler product again. Which sucks, because I think they do make the best light duty diesel trucks out there. Ah well, that’s what the used market is for.

By: K

Thu, 08 Oct 2009 00:25:51 +0000

re Fiat: The guy running Fiat believes that Fiat had to get big or die. They couldn’t remain a second-tier or third-tier company. So Fiat has made several alliances or purchases in the last few years that didn’t seem highly attractive to other car companies. Chrysler is one.

But they aren’t going to put a lot of cash. I think they wanted access to Chrysler’s dealer network and US distribution. In return Chrysler got access to a lot of Fiat technology. But that costs Fiat almost nothing whether Chrysler revives or fails.

I don’t fault Fiat’s plans about how to survive in the auto industry. Those are their choices and they have a right to make them.

OTOH Tim is right, Fiat overvalued what remained at poor Chrysler and seems stuck on stupid about what to do.

What will happen when another 200,000 auto related jobs vanish in Michigan is everyone’s problem. O will wish to inject more money into Chrysler. Politically I don’t think he will be able to. His repeated pattern is to still do what he wants but rename it and call it a new idea. It will be interesting.

I am dubious about a GM recovery too. But we won’t face that until after the 2010 elections.

By: Tim

Tim — Wed, 07 Oct 2009 22:56:32 +0000

And, what’s worse was the shotgun marriage between Fiat and Chrysler at the insistence of the president.

First, it’s an extremely poor fit between the two companies. While there is not a lot of product overlap; Fiat does not have the design and engineering discipline that will lead to long term success. (The only reason that Fiat had cash at all was because they started a merger with GM; and GM paid US$2b to walk away from the deai.)

Second, Fiat didn’t do due diligence. Chrysler’s product pipeline is *empty* — and this came as a surprise to Sergio Marchionne. Outside of the new pickup, and a minor freshening on a couple of their sedans; their closest new product is at least two years out, and Fiat is 12-18 months away from having any of their European market cars federalized for sale.

Last, Fiat’s product plans for Chrysler are absolutely asinine. In the last plans I saw, they planned on repositioning Chrysler as a high and luxury nameplate slotting *above* Lincoln and Cadillac; and Dodge as a ‘driver car’ (e.g. BMW). That’s going to take decades — if they can pull it off at all.

By: Allen

Allen — Wed, 07 Oct 2009 20:54:11 +0000

Not surprising to see this turning out to be the case. As much as Fiat tried to say they were into this deal, they didn’t seem willing to sink much into it.

Question — Is there anything going on legally right now in regards to some of the issues raised by this deal?

By: L Nettles

L Nettles — Wed, 07 Oct 2009 20:17:17 +0000

You know I had just about forgotten Chrysler even existed.

By: gmsc

gmsc — Wed, 07 Oct 2009 19:45:38 +0000

If unions keep getting preference over shareholders in companies (especially bankruptcies), the obvious rule will quickly become to avoid investing in unionized companies.

By: feeblemind

feeblemind — Wed, 07 Oct 2009 16:06:58 +0000

One wonders what will happen if Chrysler runs out of money in a year? An election year. One also wonders if there is a significant percentage of car buyers that sees through the injustice of the bankruptcy charade and as a result won’t buy GM/Chrysler at any price?