tagged w/ Chrysler
-
Unthinkability is upon us. Or is it unthinkableness?
Advertisement
No matter, as "W" might say, it's reallymarkable, the stuff that's goin' on today, especially in Detroit.
And hold onto your helmets, dear readers, stranger days are coming.
Chrysler LLC will almost certainly disappear in the next few months, assimilated into General Motors Corp. or Renault-Nissan in a deal blessed, if not partially funded, by the U.S. government. Unless, that is, Chrysler is first peddled to an outfit from China, India, Italy or Russia.
GM, the world's largest company for most of the last century, could implode at any moment from the mounting pressures of being all things to all people, providing cars for every purse and purpose, plus generous pensions and pay and health benefits to support generations of workers and spouses and kids and retirees.
Rick Wagoner, GM's resilient CEO, who has survived previous predictions of his imminent demise, may bow out soon, no matter what becomes of the GM-Chrysler talks. His smarts and likability have kept him on top so far, but GM has underperformed for so long that somebody must ultimately pay the price -- and the loyal Wagoner has been reluctant to cut loose other top-level executives for not producing results.
Do I know this stuff is going to happen?
No, of course not, any more than I know exactly what buildings will be demolished the next time a tornado rips through town. But I'm pretty sure a cyclone is whipping through Detroit's automobile industry now and that we'll hardly recognize the landscape when it's gone.
Here's one small example of the unthinkable happening in these stressful times.
Don Leclair, Ford Motor Co.'s chief financial officer and widely respected whiz at crunching numbers, suddenly "retired" this month. The Oct. 10 announcement received only modest attention because reports of GM-Chrysler merger talks surfaced the same day.
Leclair retired at age 56; his replacement Lewis Booth is 59.
People well-wired to Ford's Glass House headquarters tell me Leclair's 32-year Ford career was cut short because some powerful people inside Ford didn't like working with him.
Ford's board of directors approved his early exit, I'm told, after weighing the internal conflicts against Leclair's considerable pluses. He was the CFO who led Ford's prescient move in 2006 to round up $23.4 billion in credit that provided a cash cushion for the more-difficult days that followed. Leclair was also said to be highly regarded by Ford director John Thornton and former Ford board member Robert Rubin, well-connected Wall Street titans who made key phone calls to help obtain the loans.
It's unthinkable, one might surmise, that Ford would dispatch a respected CFO, the guy most intimately familiar with its complex finances, during the worst financial crisis since the Great Depression, because of some friction with colleagues. But strange things happen in high-stress times.
How desperate are these days in the auto industry?
One CEO put it this way to me the other day:
Think of the car business today as being a singles bar, one hour before closing.
No one wants to go home alone and everyone is buying everyone else a drink and trying to get friendly.
There will be winners and losers. Some will get lucky.
Some will be left behind.Unthinkability is upon us. Or is it unthinkableness?
Advertisement
No matter, as... more
-
-
General Motors has had talks with smaller rival Chrysler LLC about a merger that would combine the No. 1 and No. 3 American automakers at a time when both are struggling to cut costs and shore up cash, according to a source briefed on the matter.
Separately, Ford Motor Co, plans to sell shares from its $1.4-billion stake in Japan's Mazda Motor Co, a second source said.
Barron's reported that GM was preparing to approach the U.S. Federal Reserve about borrowing money from the central bank's discount window because of the logjam in credit markets that has shut it out of other borrowing.General Motors has had talks with smaller rival Chrysler LLC about a merger that would... more
-
-
"The Dow was trading at a hair above 200 points, the Soviets had just declared themselves a nuclear power and the US population was half of today's level. Much has changed since 1950, but the share price of the world's largest car company, General Motors, is back to where it was in those heady days of American industrial supremacy and there is rampant speculation it is heading to zero, with Ford - which yesterday announced the departure of its chief financial officer - not far behind.
The collapse in domestic auto sales to the lowest level since 1992 and a poor outlook make it likely that Detroit's big three, rounded out by privately held Chrysler, will burn through much of their cash by late next year. Bets on their debt in financial markets give low odds to their creditors getting all their money back over the next five years. CMA Datavision puts the probability of default for Ford and GM at 90 and 97 per cent respectively.
But the rumours of the US auto industry's death may be exaggerated. Even under a nasty sales scenario, voluntary bankruptcy filing makes little sense. It would do nothing to boost demand and, after concessions on wages and healthcare by unions last year, would not result in much better labour terms. Bankruptcy would help shed unsecured debt, but this is not the US auto industry's big problem. It is that their cost structures are still too big for their shrunken domestic market share, currently about 44 per cent, down from a virtual monopoly 35 years ago.
The easy credit that put more cars on American roads than licensed drivers is history. After decades of management miscues, though, executives in Detroit have made big adjustments in order to sell better cars to a smaller slice of a shrinking market. The credit crisis is gaining speed, but it is far from certain to catch up with an industry that now has the pedal to the metal.""The Dow was trading at a hair above 200 points, the Soviets had just declared... more
-
-
SDLN
-
added this
-
3 years ago
- |
-
General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.
The talks between G.M. and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were “50-50” as of Friday and would most likely still take weeks to work out.
A merger would be a historic event, with two of the most iconic names in American industry coming together to survive in an increasingly difficult environment. Both have roots dating back decades in Detroit and, with Ford, long dominated the auto industry — until Japanese and other foreign car makers began making inroads into the American market.
The auto industry is being pummeled from all sides — by high gas prices that have soured consumers on profitable S.U.V.’s, by a softening economy that has scared shoppers away from showrooms, and by tight credit that is making it difficult for willing buyers to obtain loans. Both G.M. and Chrysler have been struggling with product lineups that are out of sync with consumer demand for smaller, more fuel-efficient cars.General Motors is in preliminary talks about a possible merger with Chrysler, a deal... more
-
-
Can this save Chrysler?
-
-
Frobot
-
added this
-
3 years ago
- |
-
Government has throughout U.S. history stepped in, there are some lessons
The stock market plummets, investors pull out money and loans dry up, triggering global financial turmoil. Enter the government, buying up bad mortgages and other problem assets.
This scenario from the 1930s sounds eerily current, in part because the Bush administration is taking pages from the playbooks Herbert Hoover and Franklin D. Roosevelt used to unfreeze credit and keep Americans from losing their homes three-quarters of a century ago.
From the Great Depression to the Chrysler bailout in 1979 to the savings and loan crisis that cost taxpayers $125 billion in the 1990s, the current administration has many government interventions from which to learn. If the history of previous bailouts holds any single lesson, however, it's that the outcomes are unpredictable and the problems will take years to work out.
Government has throughout U.S. history stepped in, there are some lessons
The stock... more
-
-
The BIG 3 are an American embarrassment. We as citizens should boycott these companies until they devote themselves FULLY to creating smart, efficient, sustainable products that speak to the innovation, ingenuity and creative power of the United States.
No more excuses. Innovate or DIE!The BIG 3 are an American embarrassment. We as citizens should boycott these companies... more
-
-
Chrysler has announced plans to cut its production of minivans in the US as rising fuel costs have pushed consumers to switch to smaller vehicles.
One plant in St Louis will close and another will go from two shifts to one, affecting 2,400 jobs.
Rivals Ford and General Motors have also announced plans to make fewer larger vehicles.
Sales of Chrysler vehicles in the US were down 25% in May. Earlier this month, Ford said it expected to make a loss this year and revealed plans to cut the production of trucks and large SUVs in favor of more fuel efficient models.
Higher running costs have caused sales of minivans, trucks and sports utility vehicles to fall significantly.Chrysler has announced plans to cut its production of minivans in the US as rising... more
-
-
Talk about unsafe, some long-term wear on the gear shift assembly could cause them to shift out of park without the key in the ignition.
Good call Chrysler!Talk about unsafe, some long-term wear on the gear shift assembly could cause them to... more
-
-
"Chrysler LLC said Thursday it plans to cut up to 12,000 jobs, or up to 15 percent of its workforce, as part of an effort to slash costs and match slowing demand for some vehicles." Didn't another car company do something like this to the midwest back in the day?"Chrysler LLC said Thursday it plans to cut up to 12,000 jobs, or up to 15... more
-
-
Take a peek into the life of Ralph Gilles Jr., visionary Vice President of Jeep & Truck Design at the Chrysler Group, and designer of the Chrysler 300.Take a peek into the life of Ralph Gilles Jr., visionary Vice President of Jeep &... more
-
