Chrysler-Fiat Becoming Reality...

[AZRedhawk44]

http://www.breitbart.com/article.php?id=D97SV5E80&show_article=1

So now that "Swine Flu" is distracting everyone from the economy, our lefty Government can go ahead and squash our industry on page B6 instead of A1 top.

Chrysler bankruptcy = good... but a merge with Fiat has me really worried.  Hopefully the new Chrysler comes out with none of the onerous UAW liabilities that it carried before.

Obama's blathering about unpopular vehicle designs has me a bit confused... the Ram truck is incredibly popular.  The weenie little alumi-cars made by Dodge certainly weren't popular.  People don't go to a Dodge/Chrysler/Jeep dealership for a bubblesedan.  They go for a truck, SUV or Jeep.

Those vehicles may not suit Chicago or San Francisco, but they do just fine in AZ, TX or IA.

[Brad Johnson]

but they do just fine in AZ, TX or IA.

You forget those states are in flyover country.  They don't count.

Brad

[taurusowner]

I see more Dodge Chargers on the road than any other car I can remember.  Maybe it's just cause they are so distinctive looking, and I want one myself.  But I see tons of them everywhere.  My local PD even switched to Chargers last year.

[Standing Wolf]

You forget those states are in flyover country.  They don't count.

Sad to say, Brad has nailed it.

[Dannyboy]

... but a merge with Fiat has me really worried. 

Why?

[AZRedhawk44]

Why?

Everything from Western Europe reeks of Socialism.

If Chrysler escapes the UAW debt only to embrace fresh Socialist policies embraced by the likes of Fiat (and I don't know anything about their corporate policies or Italian HR or Labor Law), then they haven't escaped anything.

Western Europe is only viable right now due to the vibrancy of Eastern Europe and the bloodsucking aspect of the EU.  Poland and the Czech Republic in particular are strong manufacturing economies with trade surpluses, last I checked.  I don't want any Western European manufacturing concern to have an effect upon the American economy.

[French G.]

Reminds me of the old joke, how do you pronounce Daimler-Chrysler? The Chrysler is silent.

[Iain]

Everything from Western Europe reeks of Socialism.

If Chrysler escapes the UAW debt only to embrace fresh Socialist policies embraced by the likes of Fiat (and I don't know anything about their corporate policies or Italian HR or Labor Law)

Good work.

[dm1333]

Chrysler needs a guy like Sergio Marchionne to shake things up.

MILAN (AP) -- Sergio Marchionne's first days as Fiat CEO were marked by fear at the company's headquarters, as some top managers saw their careers abruptly end in a 20-minute chat.

The new chief executive quickly determined whether each manager had the skills to help transform tradition-bound, family-run Fiat -- namely "speed, simplicity and self-confidence."

"Many did not make the cut," Marchionne recalled later.

Marchionne then dismantled Fiat's old hierarchy in favor of what he calls a "flat management structure" -- fewer managers for quicker decisions. He has already said similar changes also are needed at Chrysler, the limping U.S. automaker that he may soon be running.

http://finance.yahoo.com/news/Fiats-Marchionne-willing-to-apf-15093470.html?.v=1

Maybe we can get him to straighten out Wall Street if he has any success with Chrysler.

MILAN — Italian automaker Fiat, which is seeking an alliance with troubled U.S. Chrysler, on Thursday reported a 14.7% increase in March sales in Europe amid an overall 9% drop in European car sales.
Fiat was the only European automaker to see sales grow, to 131,315 vehicles last month, increasing its market share to 9.2% from 7.4% in March 2008.

http://www.usatoday.com/money/autos/2009-04-16-fiat-sales_N.htm?csp=23&RM_Exclude=aol

[drewtam]

Those vehicles may not suit Chicago or San Francisco, but they do just fine in AZ, TX or IA.

This a rather silly stereotype that should have been debunked a long time ago. A person will find more trucks in cities than they will in the rural areas. How else did the automakers sell so many. In my experience, rural areas drive fewer trucks, I mostly see worn out chevy luminas.

I know my brother would drive his chevy big block 454, 3500 truck in downtown Chicago. He said the sound it made in Lower Wacker drive was awesome (it had modified exhaust).

[RadioFreeSeaLab]

Maybe we'll finally get some of those sweet 50+ mpg diesels they've have in Europe for years.  I'd really enjoy a Honda Civic-sized car with a small turbo diesel in it.

[dm1333]

Those vehicles may not suit Chicago or San Francisco, but they do just fine in AZ, TX or IA.

This article is from May of last year, when sales were not as bad as they are now.

Toyota Motor said its car sales rose 12 percent, largely on the strength of the subcompact Yaris, whose sales rose 46 percent, and the hybrid Prius, whose sales were up 54 percent. Toyota's truck and SUV sales dropped 8 percent.


"We continue to see that fuel efficiency will remain one of the top priorities for purchasing consumers," said Bob Carter, general manager of Toyota's U.S. division.

Chrysler said sales fell 23 percent, with car sales down 19 percent and truck and SUV sales down 25 percent. The Jeep Commander SUV saw sales plummet 49 percent. Steven Landry, Chrysler's executive vice president of North American sales, said that decline was partly caused by a 33 percent drop in low-profit fleet sales. Ford and GM cut fleet sales as well.

Pickup sales have been falling for months because of the slowdown in housing construction The trend away from SUVs began several years ago as baby boomers aged and roomy but more fuel-efficient crossover vehicles gave consumers more choice. But automakers said gas prices are accelerating the trend.

http://www.washingtonpost.com/wp-dyn/content/article/2008/05/01/AR2008050103773.html

[RadioFreeSeaLab]

Too bad the Commander was a flop.  I rented one in Colorado for a few days.  It was really nice to drive, except for the crappy rental car V6 that was in it.  With the V8 option, it would've been sweet.

[dm1333]

I've driven one too and it is a pretty decent vehicle but why do they need the Commander and the Grand Cherokee?  My 09 Patriot is proof enough for me that Jeep and Chrysler can build a good vehicle.  I know a few engineers who retired from automakers and none of them had anything good to say about Daimler-Chrysler management.  One thing is certain, the 09 Patriot interior is MUCH improved over earlier years.

[RadioFreeSeaLab]

Why do they need the Patriot and the Compass? 

[dm1333]

They don't.  Sales numbers for the Compass have proven that.

[RocketMan]

Fiat made a foray into the American market back in the '70s.  They later pulled out.  Their vehicles didn't sell well.  Hmmm...

[drewtam]

Maybe we'll finally get some of those sweet 50+ mpg diesels they've have in Europe for years.  I'd really enjoy a Honda Civic-sized car with a small turbo diesel in it.

That is unlikely to happen. The EPA tries to hold gasoline and diesel to similar emissions regulations. In this scenario, it reduces the fuel efficiency advantages of the diesel. Combined with the high diesel cost and high engine premium cost; the American market is a tough nut to crack for automotive diesels.

Diesels in Europe succeed because they cheat. They are not held to the same emissions standards, and the fuel tax structure encourages diesel fuel.

[Gewehr98]

I'd like another Fiat Spyder 2000, please.   

[Kwelz]

Chrysler hasn't made a good car in years.  They deserve to fail.
Any why is the president doing Press conferences about individual companies. 

[Nick1911]

Fiat made a foray into the American market back in the '70s.  They later pulled out.  Their vehicles didn't sell well.  Hmmm...

As an interesting side note, my parents bought a slightly used Fiat way back when - before I was around.  Apparently it broke down before the car made it home.

That's not to say that that scenario couldn't happen with any brand of car (it sure could, every maker puts out a lemon now and then) - but it only takes one incident to sour a family and their friends from a new brand for a long, long time.

[HankB]

Fiat made a foray into the American market back in the '70s.  They later pulled out.  Their vehicles didn't sell well.  Hmmm...

Too many who bought them realized there was some truth to the rumor that Fiat stood for Fix It Again, Tony. (I even saw one of the talking heads on FNC mention that.) I remember a guy in some of my classes in college who had a Fiat, and he said just about everything on the car - even the windshield wiper motor and the window cranks - broke while he owned that car.

When I was very young, my folks bought a Chrysler. Terrible car - if you got caught in the rain, it was better than even money it would stall.

Years later, when shopping for an SUV for myself, I checked out the Dodge Ramcharger. Not one I test drove had a properly working 4WD system. (Balky linkage.)

About the same time a buddy bought a Dodge Dart. Brand new. Funny thing is, one side said Dodge Dart, the other side said Plymouth Valiant. Hmmm . . .

I looked at a Jeep, too, several years after Chrysler acquired the brand from AMC. While test driving it - I pushed a button and accidentally punched it right through the console. 

More recently, I've had a Dodge Avenger a couple of times as a rental vehicle, and wasn't impressed. (Did nothing particularly well, did nothing particularly bad. Generic car.)

I do like the styling of some Chryslers, but under the skin, their mainstream vehicles fail to impress. So I'm really not surprised at Chrysler's troubles.

[RoadKingLarry]

The chrysler products I've owned have been good vehicles. '83 pickup bought new, only problem I had was the nylon distributer gear sheared itself one night when I tried to start it with temps at 20+ below 0. the '97 pickup now has 240,000+  is still reliable and runs and drives good. The '92 Cherokee has almost 240,000 with only (mostly) minor issues.

As far as union baggage didn't the UAW get a 55% share of the company?

[Scout26]

Ummm, from what I've read the UAW Health and/or Pension Fund will own ~55% of Chrysler.  Fiat only has a ~20% stake.



http://www.bloomberg.com/apps/news?pid=20601087&sid=al89RU9gWof8

April 28 (Bloomberg) -- The United Auto Workers union’s retiree health-care fund will own 55 percent of Chrysler LLC in exchange for cutting in half the automaker’s $10.6 billion cash obligation to the trust, people familiar with the matter said.

Under the terms of the contract, the trust would get representation on the company’s board of directors, said two people briefed on the deal, who asked not to be named because the matter is private.

The tentative agreement was approved unanimously by UAW leaders yesterday and will be sent to union locals for ratification, one of the people said. Chrysler, operating with $4 billion in U.S. loans, faces an April 30 deadline to restructure its costs or risk losing government support.

“With employees effectively sharing the risks, this could play to the advantage of the ailing company,” said Howard Wheeldon, a senior strategist at BGC Partners LP in London. The UAW role, if confirmed, may be the only “feasible way of moving forward,” he added.

The U.S. Treasury, which still is negotiating on Chrysler’s behalf with the company’s secured lenders, has little room to give the banks more equity. Fiat SpA would get 20 percent of the company to start, with the ability to increase ownership to 35 percent by hitting performance goals. The Treasury would keep 10 percent.

Shawn Morgan, a spokeswoman for Auburn Hills, Michigan- based Chrysler, declined to comment on the tentative agreement “as it still needs to be ratified,” she said in an e-mail.

‘Weak’ Chrysler Products

The Fiat connection may not be the best approach for saving Chrysler, though employee ownership through the union may help, BGC’s Wheeldon said.

“The weakness remains Chrysler’s product base and how quickly this can be adapted with or without Fiat’s ‘help,’” the analyst said.

Instead of contributing $8.8 billion to a retiree health- care trust, Chrysler will give the union trust shares of the company and a promissory note for $4.59 billion that will be paid in installments with 9 percent interest until 2023, one of the people said. This reduces the up-front cash Chrysler would have had to pay under its 2007 contract agreement with the Detroit-based union.

The union’s equity in Chrysler is valued at $4.2 billion. If it can sell the shares for more, the Treasury would get the difference, one of the people said.

Workers also agreed to changes in work classifications, including the number of types of skilled trades. The contract also has a provision that all new hires for the company in the factories will make $14 to $16 an hour, up to 25 percent of the total Chrysler-UAW workforce. This increased from 20 percent in an earlier contract.

Separately yesterday, General Motors Corp. said it will be at least half owned by the U.S. government under a plan to slash its debt and cut dealer ranks nearly in half.

To contact the reporter on this story: John Lippert in Chicago at jlippert@bloomberg.net

[go_bang]

Watching the Obama Administration bumble through these finance and auto industry bailouts has me thinking that he took a whole chapter out of GW's playbook.  Do whatever you want, make it look like a good idea, damn the legalities, and let the courts sort it all out later.  By the time the courts catch up he'll be halfway through his second term if he gets one.