Is Chrysler a lost cause?

Discussion in 'Economy' started by Neubarth, Jan 7, 2009.

  1. Neubarth
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    Neubarth At the Ballpark July 30th

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    Is Chrysler a lost cause?

    Even after bailout loan and perhaps more help on the way, Chrysler could be facing death knell

    Tom Krisher and Ken Thomas, Associated Press Writers

    DETROIT (AP) -- Even by the standards of battered automakers, Chrysler is in dire shape. Its sales in December were down a stunning 53 percent, far worse than Ford or General Motors, and analysts say it probably won't survive the year as an independent company -- despite $4 billion in government loans and the possibility of more.

    Things were so bad last year that a single Toyota model, the Camry/Solara midsize car, outsold the entire fleet of Chrysler LLC's passenger cars.

    "Basically they're done," said Aaron Bragman, an auto analyst with the consulting company IHS Global Insight in Troy, Mich. "There is no real possibility of turning this thing around as an independent company in my opinion."

    Chrysler will not comment on speculation about its future, spokeswoman Shawn Morgan said Wednesday.

    "We are completely focused on our plans to ensure the future viability of our company," she said.

    U.S. sales of Chrysler, Dodge and Jeep brand vehicles fell 30 percent last year, the worst decline of any major automaker. It lost more market share than any of its peers, down to 11 percent. Analysts say most of Chrysler's products, especially its cars, don't look, feel or drive as well as the competition's.

    Chrysler plans to introduce an electric car in 2010, but until then, there are few promising models to boost sales. Many analysts predict that by 2010, Chrysler will be acquired by another automaker or sold in pieces by its majority owner, New York private equity firm Cerberus Capital Management.

    Chrysler's chief financial officer has said the company needs $7 billion every 45 days to pay parts suppliers, and analysts question whether the company's meager sales are generating enough cash to make those payments.

    Analysts also say an acquisition by General Motors Corp. is still possible. The two companies discussed it late last year before GM backed away to focus on its own cash issues.

    Nissan Motor Co. could be interested in buying Chrysler's truck business. Chrysler is already signed up to make pickup trucks for the Japanese company.

    Jonathan Macey, a Yale University law professor who has been critical of U.S. automakers' management, said Chrysler's sales numbers are "further evidence of an unviable entity."

    When automakers went to Washington late last year, their aim was to get enough money to become viable again. They wound up with only enough help from the Bush administration to get them through March, when President-elect Barack Obama will be in office and might provide more aid.

    Macey said giving the carmakers any money is burning cash.

    "I'm a big fan of not throwing good money after bad," he said. "The idea that you would enter into a financing relationship like this without any parameters is more evidence of the complete insanity of all this."

    Is Chrysler a lost cause? - Yahoo! Finance
     
  2. Neubarth
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    Neubarth At the Ballpark July 30th

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    The entire bailout of the Auto Industry is a lost cause.
     
  3. Zoomie1980
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    Zoomie1980 Senior Member

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    Yes, Chrysler is done. Put a fork in 'em.

    Their popular Jeep line, however, will just be sold and maintained.
     
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  4. BaronVonBigmeat
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    BaronVonBigmeat Senior Member

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    Chrysler has a long history as a hodgepodge of smaller car companies that got bought out by bigger ones. This is nothing new. And frankly after two bailouts already, third time's the charm.
     
  5. auditor0007
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    auditor0007 Gold Member

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    The bailout of Chrysler doesn't make much sense. However, keeping Ford and GM alive is another story.
     
  6. auditor0007
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    auditor0007 Gold Member

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    Jeep will likely be sold off; the rest will be liquidated. There really is no point for another company to buy Chrysler out. They have nothing to offer. GM already has a couple of divisions that should probably be closed so they can consolidate and concentrate on putting out a better product. Quality over Quantity is how Toyota, Honda, and even Nissan have been so successful.
     
  7. michiganFats
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    michiganFats BANNED

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    I don't believe Chrysler is a lost cause. Chrysler may not directly employ anywhere near as many people as they used to ,at least in my region, but what a lot of people don't know is that Chrysler's affiliates and suppliers are still located here in the U.S. Many people I know are still pulling pretty good paychecks because of Chrysler, if not directly from them. GM and Ford, on the other hand, couldn't wait to abandon Detroit and did so at the first opportunity. I have bought Ford for 25 years,I never will again, nor will I buy GM. I would consider buying Chrysler however. GM and Ford moved significant portions of their supply chains out of the country. In essence, they fired their own customer base, and now they wonder why no one is coming into the showrooms anymore.
     
  8. Zoomie1980
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    Zoomie1980 Senior Member

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    Looks like Pontiac and Saturn are going..... The should punt GMC but for some reason, won't.
     
  9. Paulie
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    Paulie Platinum Member

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    Never understood the point of GMC.
     
  10. Toro
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    Toro Diamond Member

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    Yes, Chrysler especially.
     

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