Thread: And the burn starts- adios Chrysler

Sad thing!

I live in Southern Germany, a region heavily affected by the automobile industry (Mercedes and Porsche have their HQs just a few miles away). In know many people that work either at the companies itself or at suppliers.
For all the workers, I hope the market can regroup in some way.

Ah, by the way, my family owns Fords since I can think. They were very reliable, but these were those European Models produced here.
Don't know much about the technique and stuff from models produced in the US.

Well, Ford said no to the current Detroit bailout. I must say that they've risen a notch in my book. Let's see if it's just a show or if they really mean business.

Ummm. didn't Toyota just halt construction on a huge prius plant here that was almost finished? because they don't know where the car market is headed?

They're going to finish the building, they just aren't going to be installing the machines. This is mainly because their stock is just sitting at the ports with nowhere to go. Also, the plant wasn't going to be actually producing until late 2010. They're still producing elsewhere, whereas Chrysler has shut down all production for a month.

Originally Posted by Quick

Ummm. didn't Toyota just halt construction on a huge prius plant here that was almost finished? because they don't know where the car market is headed?

(haha, I'm replying to my own post... )

Seems to me that a lot of people are the car companies being entirely responsible for their own problems now. True they may not have planned for the current crisis and they may not have been trimming down effeciency wise when it didn't look as if they would have to, but you could make the same argument for all the people losing their houses right? I think pretty much everything in the economy gambles on other parts. I think it would be tough to say "We should be preparing for the remote possibility of a lending crisis the likes of which we've never seen before".

It's not surprising that the auto industry was hit first and the hardest. So far. For the average American, buying a car is the second largest purchase they will make in their lives after their house. Lots of people don't own a house so it is the largest purchase they make in their lives. Loads of people are currently losing their houses. Not so surprising no one is buying cars right? And it's not just the American cars. See above.

Not saying I agree with the below but there is always more than one side. This is a letter to the editor from a Ford dealer in the Pittsburgh area.

Editor:

As I watch the coverage of the fate of the U.S. auto industry, one alarming and frustrating fact hits me right between the eyes. The fate of our nation's economic survival is in the hands of some congressmen who are completely out of touch and act without knowledge of an industry that affects almost every person in our nation. The same lack of knowledge is shared with many journalists whom are irresponsible when influencing the opinion of
millions of viewers.

Sen. Richard Shelby of Alabama has doomed the industry, calling it a dinosaur. No Mr. Shelby, you are the dinosaur, with ideas stuck in the '70s, '80s and '90s. You and the uninformed journalist and senators that hold onto myths that are not relevant in today's world.

When you say that the Big Three build vehicles nobody wants to buy, you must have overlooked that GM outsold Toyota by about 1.2 million vehicles in the U.S. and Ford outsold Honda by 850,000 and Nissan by 1.2 million in the U.S. GM was the world's No. 1 automaker beating Toyota by 3,000 units.

When you claim inferior quality comes from the Big Three, did you realize that Chevy makes the Malibu and Ford makes the Fusion that were both rated over the Camry and Accord by J.D. Power independent survey on initial quality? Did you bother to read the Consumer Report that rated Ford on par with good Japanese automakers.

Did you realize Big Three's gas guzzlers include the 33 mpg Malibu that beats the Accord. And for '09 Ford introduces the Hybrid Fusion whose 39 mpg is the best midsize, beating the Camry Hybrid. Ford's Focus beats the Corolla and Chevy's Cobalt beats the Civic.

When you ask how many times are we going to bail them out you must be referring to 1980. The only Big Three bailout was Chrysler, who paid back $1 billion, plus interest. GM and Ford have never received government aid.

When you criticize the Big Three for building so many pickups, surely you've noticed the attempts Toyota and Nissan have made spending billions to try to get a piece of that pie. Perhaps it bothers you that for 31 straight years Ford's F-Series has been the best selling vehicle. Ford and GM have dominated this market and when you see the new '09 F-150 you'll agree this won't change soon.

Did you realize that both GM and Ford offer more hybrid models than Nissan or Honda. Between 2005 and 2007, Ford alone has invested more than $22 billion in research and development of technologies such as Eco Boost, flex fuel, clean diesel, hybrids, plug in hybrids and hydrogen cars.

It's 2008 and the quality of the vehicles coming out of Detroit are once again the best in the world.
Perhaps Sen. Shelby isn't really that blind. Maybe he realizes the quality shift to American. Maybe it's the fact that his state of Alabama has given so much to land factories from Honda, Hyundai and Mercedes Benz that he is more concerned about their continued growth than he is about the people of our country. Sen. Shelby's disdain for "government subsidies" is very hypocritical. In the early '90s he was the driving force behind a $253 million incentive package to Mercedes. Plus, Alabama agreed to purchase 2,500 vehicles from Mercedes. While the bridge loan the Big Three is requesting will be paid back, Alabama's $180,000-plus per job was pure incentive. Sen. Shelby, not only are you out of touch, you are a self-serving hypocrite, who is prepared to ruin our nation because of lack of knowledge and lack of due diligence in making your opinions and decisions.

After 9/11, the Detroit Three and Harley Davidson gave $40 million-plus emergency vehicles to the recovery efforts. What was given to the 9/11 relief effort by the Asian and European Auto Manufactures? $0 Nada. Zip!



We live in a world of free trade, world economy and we have not been able to produce products as cost efficiently. While the governments of other auto producing nations subsidize their automakers, our government may be ready to force its demise. While our automakers have paid union wages, benefits and legacy debt, our Asian competitors employ cheap labor. We are at an extreme disadvantage in production cost. Although many UAW concessions begin in 2010, many lawmakers think it's not enough.

Some point the blame to corporate management. I would like to speak of Ford Motor Co. The company has streamlined by reducing our workforce by 51,000 since 2005, closing 17 plants and cutting expenses. Product and future product is excellent and the company is focused on one Ford. This is a company poised for success. Ford product quality and corporate management have improved light years since the nightmare of Jacques Nasser. Thank you Alan Mulally and the best auto company management team in the business.

The financial collapse caused by the secondary mortgage fiasco and the greed of Wall Street has led to a $700 billion bailout of the industry that created the problem. AIG spent nearly $1 million on three company excursions to lavish resorts and hunting destinations. Paulson is saying no to $250 billion foreclosure relief and the whole thing is a mess. So when the Big Three ask for 4 percent of that of the $700 billion, $25 billion to save the country's largest industry, there is obviously oppositions. But does it make sense to reward the culprits of the problem with $700 billion unconditionally, and ignore the victims?

As a Ford dealer, I feel our portion of the $25 billion will never be touched and is not necessary. Ford currently has $29 billion of liquidity. However, the effect of a bankruptcy by GM will hurt the suppliers we all do business with. A Chapter 11 bankruptcy by any manufacture would cost retirees their health care and retirements. Chances are GM would recover from Chapter 11 with a better business plan with much less expense. So who foots the bill if GM or all three go Chapter 11? All that extra health care, unemployment, loss of tax base and some forgiven debt goes back to the taxpayer, us. With no chance of repayment, this would be much worse than a loan with the intent of repayment.

So while it is debatable whether a loan or Chapter 11 is better for the Big Three, a $25 billion loan is
definitely better for the taxpayers and the economy of our country.

So I'll end where I began on the quality of the products of Detroit. Before you, Mr. or Ms. Journalist continue to misinform the American public and turn them against one of the great industries that helped build this nation, I must ask you one question. Before you, Mr. or Madam Congressman vote to end health care and retirement benefits for 1 million retirees, eliminate 2.5 million of our nation's jobs, lose the technology that will lead us in the future and create an economic disaster including hundreds of billions of tax dollars lost, I ask this question not in the rhetorical sense. I ask it in the sincere, literal way. Can you tell me, have you driven aFord lately?

Jim Jackson
Elkins

I think both the mortgage problem and this auto industry problem can be summed up by two words: bad business. There were a lot of people getting houses and mortgages they couldn't afford. The car industry may have started getting better in the last couple years, but prices have also dramatically risen.

I find it funny that the guy references a Focus vs a Corolla and a Cobalt vs a Civic. I would hardly think they are on the same playing field. I've driven both new Cobalts and Civics, and there's a big difference between the two. The Civic has much more room, as well as sounds and feels like a quality vehicle. Cobalts are nice, but the space inside is smaller, and it feels and sounds like a cheaply made entry level vehicle. I've not driven a Focus or Corolla, but I know the Corolla is bigger.


I wish I could write a letter back to this guy

Anyway, more interesting news. Canada is helping bail out GM and Chrysler. Naturally GM is getting more money. Bloomberg.com: Worldwide

Originally Posted by Quick Orange

Dare I say it, we could have been on a German level. Instead, let's have sloppy tolerances and lax quality control. The American way...

But at least you have cupholders and soggy suspension

But I think the problem is that the Big 3 assumed they would never get any real competition. So they assumed that people wouldn't have a choice, and even if they did, hey would choose 'American', as if 'American' had any real value by itself.

History has shown enough times that protectionism and nationalism always lead to failure when it comes to economy.

I dont really understand why the big 3 get so much crap. I have a 13 year old Ford Escort that runs great, I get 32 hwy and 27 city. I maintain it myself and do as much of the work as possible. The reason so many cars get crappy milage is because everyone wants all the bells and wistles in the car which add weight and kill milage. I am utterly amazed at how many people at my school dont even know how to change their oil. It is sad that things like this are not taught in school anymore(they werent when I was in school, I learned on my own and from my dad).

chrysler isn't shutting down for a month, they are just extending their 2-week holiday shut down that happens every year for an extra 2 weeks to attempt to save some money.

Originally Posted by Bruno

But at least you have cupholders and soggy suspension

But I think the problem is that the Big 3 assumed they would never get any real competition. So they assumed that people wouldn't have a choice, and even if they did, hey would choose 'American', as if 'American' had any real value by itself.

History has shown enough times that protectionism and nationalism always lead to failure when it comes to economy.

Being American does have value in itself, but only to a point. Assuming everything was equal in a domestic and foreign car, I'd pick the domestic (even though it was probably built in Canada anyway). I agree about protectionism. As much as it hurts sometimes to not tariff the hell out of imports, it's the best way to go.

Akady, the reason they get so much crap is two-fold. First, they could be doing better. Japanese companies can build a higher quality car, ship it halfway around the world, sell it cheaper, and give a better warranty. The Big 3 have an automatic proximity advantage, but we don't see them using it. Instead, they jack their prices way up then give "incentives". No one should be able to take $5,000 "off" the price of something. That kind of profit margin is ridiculous.

Two, your car is not in the average. The year 2000 Grand Marquis for instance was a great car- for a couple years. After that, most of them suffered cracked intake manifolds, broken window motors, and a whole host of problems that shouldn't be experienced until a car is at least 10 years old. Similar problems run rampant through many cars from all of the companies. Chrysler's woes should be familiar to everyone. Just watch their ad campaigns from 10 years ago until now.

Ford was just doing plain bad. Luckily for them, their image wasn't drained like Chrysler's, so they could still salvage themselves. There for a while though, they were on the verge of sinking because of their bad quality, high prices, and terrible dealers. They had to sell some of their marques that were dragging them down, and now they're in a better place.

GM...jeeze, I don't know where to start. Far overpriced vehicles for one. Many people are familiar with their factory woes. Quality is ok, but just not great for the price. Their Cobalt starts out at $15,500. It's a nice car, but it's a throwaway, just like a Kia Rio. VW's Jetta is only $1,500 more, doesn't feel like a rolling tin can, and is better in every way.

The Big 3 can do it. I've seen some great products roll off their lines, so it's not a question of ability. It's just a question of will they restructure so that they're more competitive. They're at a great point right now, both from an economic standpoint and a PR standpoint, to come back and kick some ass. I guess we'll see if they do.