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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM , Earnings/Financials Mitt Romney, former Massachusetts governor, former entrant in the marathon to win the White House, and current automotive industry expert (who knew?) had a few things to say in the New York Times today on the potential auto industry bailout. The opening paragraph says it all: "IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won't go overnight, but its demise will be virtually guaranteed." Romney is not rooting for the end of the biz, but he believes that bankruptcy is the only way to save it because it will force a reset, and that will be the only way for the Detroit 3 to rectify entrenched structural problems. These include UAW contracts -- "a new direction for the UAW," executive perks -- "sanity in salary and perks," getting rid of old blood -- "management...
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Filed under: Government/Legal , Chrysler, LLC. , Earnings/Financials Chrysler still makes cars? Apparently so, and CEO Bob Nardelli was on Capitol Hill yesterday with his colleagues from Ford and General Motors, warning that the Pentastar is in serious danger of exhausting its reserves by early 2009. Chrysler's share of the $25 billion in aid the automakers are asking for stands at $7 billion, though at the current rate, that money wouldn't last long, possibly about one fiscal quarter. Senators are concerned that the automakers will turn into a monetary black hole, but the Detroit CEOs are trying to plead the case that securing some federal help will make it easier to emerge out the other side of this downturn. Nardelli did pledge to accept a $1 per year salary if it would help sway those with the purse strings. It would have been nice if he'd made that pledge to help his company and workforce, instead of it just being a token gesture to help him pick the pocket of the American...
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Filed under: Car Buying , Trends , Crossovers/CUVs , Hatchbacks , Chrysler, LLC. Here's an interesting way to clear some unwanted inventory: offer a crazy-sounding deal on two new cars, like buy one car and get the second for just $1. That's the pitch at a suburban Chicago Chrysler dealership that promises a 2008 Chrysler PT Cruiser demo car for just $1 if you happen to purchase one of their five remaining 2008 Chrysler Pacificas. That's practically a 2-for-1 deal and would give buyers two options for family hauling duty. The lame-duck Pacificas in stock range in price from $37,000 to $40,000 and can carry six passengers and their stuff in floaty luxury. The PT, on the other hand, offers a more frugal option for up to five passengers. Dealer Frank Mancari started the deal on Saturday at his Oak Lawn dealership to increase showroom traffic. Once all of the vehicles are sold, however, that's it. We bet more than one person will walk in and tell the dealer he can keep his PT...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM , Earnings/Financials So here's a breakdown of what's going on in Congress concerning federal aid for U.S. automakers. A Senate bill expected to be voted on this Thursday would expedite funds for Ford, GM and Chrysler so that they could actually get the cash they need within 22 days after the bill becomes law -- should the bill become law. The $25 billion loan, paid back at an initial rate of 5-percent, would come out of the $700 billion bailout fund for financial institutions. The Senate's stipulations would be that the government receives "stock warrants or senior debt instruments to the government," similar to actions taken with banks that accessed the $700 billion. As well, top executives get no big payouts and stockholders get no dividends. The rumblings on the track indicate that unless the folks in favor can change a lot of minds before Thursday, the Senate bill has little hope of passing. That makes...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM , Earnings/Financials "Thick and fast." That's the phrase that describes the opinions, pleas, advice, denunciations, and WTF? going on around the U.S. auto industry right now. Enter Congress, which is trying to figure out how to give Detroit automakers the $25 billion they were promised a few months ago. Congressmen are sounding off almost daily on what kinds of stipulations they want to attach to the loan/bailout/whatever you want to call it -- and that's just the ones who would vote for it at all. Next up is Senator Bill Nelson, a Florida democrat, who wants U.S. automakers to achieve a fleet average of 50 mpg by 2020. Right now, the CAFE target is 35 mpg by 2020 -- a goal agreed upon only after a huge amount of jockeying in and out of Congress. Nelson asked, "Why should we be pouring taxpayer money into an automobile industry that has continued to resist higher miles per gallon, which has led us in part...
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Filed under: Plants/Manufacturing , Chrysler, LLC. One door closes, another one opens. Just as Chrysler is working to extricate itself from its deal with Getrag , the Pentastar people are about to announce a deal with ZF Friedrichshafen AG. Chrysler is erecting a plant in Marysville, Michigan that will build axles and employ 900 workers, but word is that the deal will involve ZF signing a long-term commitment to operate the plant. As far back as September, the UAW said that Chrysler and ZF were getting together. The Detroit News reported on the talks at the time , but they were described as a "non-binding discussion" and "a possibility." The Marysville factory, planned to open in 2010, would replace the Detroit Axle plant that currently employs 1,430 workers. Letting ZF run the Marysville location would allow Chrysler to put more focus on getting its survival in order. The announcement will be made at 9 AM EST tomorrow. [Source: Automotive News , sub req'd] Chrysler...
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Filed under: Plants/Manufacturing , Chrysler, LLC. The roundabout that was the Chrysler, LLC-Getrag partnership recently came to an end with Chrysler pulling out the deal, citing untenable financing terms. Now Getrag Transmission Manufacturing, the U.S. company that was going to build the dual-clutch transmissions for Chrysler, has filed for Chapter 11. Getrag has done so in order to streamline its handling of claims and creditors. Of course, it's not over: Getrag is suing Chrysler for pulling out, Chrysler is suing Getrag for not getting the $300 million financing that Getrag was supposed to bring to the table. Other than the lawsuits and bad blood, all that's left are the partial remains of the factory that was to build the transmissions, and Chrysler's need to find a source of dual-clutch transmissions. Just another monument to the turmoil the auto industry is currently mired in. [Source: Automotive News , sub req'd] Getrag's U.S. transmission plant files for CH11...
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Filed under: Economy , China , Plants/Manufacturing , Hatchbacks , Chrysler, LLC. , Chery It may be time to stop holding your breath. The planned deal between Chrysler LLC and the Chery Automobile Company to bring a Chrysler-badged Chery to our shores seems to be completely over... no, really this time . While there was nothing inherently wrong with the concept of importing the small fuel-efficient cars to North America (even if there were near insurmountable obstacles to overcome in the area of safety and emission standards), both companies have been crushed by the economy. According to a former Chery executive, "I wouldn't place much hope on it... both companies have their own problems to deal with, and both have run out of money." As neither company ever offered a public timetable for the arrival of the cars after the initial announcement early last year, the news is unlikely to come as a surprise. [Source: Automotive News - Sub. Req.] Chrysler's deal with Chery on...
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Filed under: Government/Legal , Videos , Chrysler, LLC. Now that the domestic industry is in dire need of cash, the American taxpayer is being bombarded with facts and figures purporting to show just how vital the industry is for the health of the overall economy. Hundreds of thousands of jobs at the automakers, millions more from suppliers and dealers -- the numbers seem to change each time, but they're always substantial. Problem is, it seems only GM and Ford ever get quoted, so Chrysler went ahead and whipped up its own little video. Hit the jump to view Chrysler's 2:42 docudrama filled with still more numbers touting the industry's importance. For example, active Ford, GM, and Chrysler employees make $22 billion per year in salaries, and the three companies pay $21 billion in retirement and health care costs. Chrysler also states that the amount of people whose wages depend on autos either directly or indirectly are equal to the population of South Carolina. [Source: YouTube...
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Filed under: Hirings/Firings/Layoffs , Chrysler, LLC. , Earnings/Financials Executive bonuses are a hot-button issue in these difficult economic times, and for good reason. As companies in every industry teeter on the brink of bankruptcy, paying out millions in bonuses to execs is a breach of trust to those white- and blue-collar workers in the cheap seats who are being asked to sacrifice benefits, retirement security and even their jobs to keep a company solvent. The Detroit Free Press recently discovered that Chrysler LLC has an executive bonus plan in place that will cost the automaker about $30 million at the same time it's asking Congress for federal aid money to keep the lights on. Chrysler's executive vice president for human resources, Nancy Rae, who herself is on the receiving end of $1.6 million in bonus money, tells the Freep these bonuses were designed to keep executives in place after the automaker was sold by Daimler to private equity firm Cerberus. She goes on to...
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Filed under: Etc. , Government/Legal , Chrysler, LLC. , Ford , GM , UAW/Unions When Congress wants to hand out money, it apparently wants to include everybody. Barney Frank, Chairman of the House Financial Services Committee, is likely to propose a measure that lets automakers tap into the $700 billion vein of rescue dollars that's ostensibly intended for financial institutions, yet is being hungrily eyed by everyone. CEOs from Ford, General Motors, and Chrysler will make the trek to Washington, DC, as will UAW chief Ron Gettelfinger. All will be pleading their collective case for an estimated $100 billion-plus vitamin pill. Many, not the least of whom is Treasury Secretary Henry Paulson, think that automakers should not be allowed to snag some of the cash that's intended for financial institutions. Things look bleak for all three of the brands, but can Congress be moved to offer up some money and prolong the jobs of so many Americans? Even if the automakers get the $100 billion...
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Filed under: Etc. , Chrysler, LLC. , Ford , GM , Volkswagen In 2001, General Motors needed a revival and Bob Lutz was anointed The One. It was widely accepted that if anyone could breathe life into a struggling car company, it was him. Fast-forward seven years, and GM is in the midst of a possible government bailout while its stock price sinks faster than a HUMMER's gas gauge on the freeway. It would seem that Maximum Bob's legendary straight-talking reputation for taking no prisoners and slicing through corporate red tape hasn't produced the results his supporters expected. So if Bob Lutz can't save Detroit, who can? Steve Jobs, that's who. At least that's what Pulitzer Prize-winning Thomas Friedman says in his New York Times column. While some might be averse to the company, its products and/or its leader, Apple has made a ton of money while re-defining the computer, music and mobile phone industries. Isn't innovation what Detroit needs most? What Friedman...
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Filed under: Etc. , Chrysler, LLC. , Ford , GM , Volkswagen In 2001, General Motors needed a revival and Bob Lutz was anointed The One. It was widely accepted that if anyone could breathe life into a struggling car company, it was him. Fast-forward seven years, and GM is in the midst of a possible government bailout while its stock price sinks faster than a HUMMER's gas gauge on the freeway. It would seem that Maximum Bob's legendary straight-talking reputation for taking no prisoners and slicing through corporate red tape hasn't produced the results his supporters expected. So if Bob Lutz can't save Detroit, who can? Steve Jobs, that's who. At least that's what Pulitzer Prize-winning Thomas Friedman says in his New York Times column. While some might be averse to the company, its products and/or its leader, Apple has made a ton of money while re-defining the computer, music and mobile phone industries. Isn't innovation what Detroit needs most? What Friedman...
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Filed under: Car Buying , Minivans/MPVs , Marketing/Advertising , Chrysler, LLC. , Humor If only the Chrysler Town & Country were this butch... click image to see it in the dealer ad "Truth-enhanced" car dealer advertising is nothing new. After all, how many times have you seen a newspaper ad for a special on, say, a base model, when the accompanying image shows a fully-optioned, range-topping version of the car instead? It's your job to read the fine print and stay informed so that you're not disappointed by the crank-window special the salesman presents when you get there. To that end, we'd like to offer a helping hand to potential customers of Lynnfield, MA's Kelly Jeep. If you visit their website and click on "New Vehicle Specials" (under New Vehicles), you'll find a listing for an '08 Chrysler Town & Country. Okay, fine -- but the image that's paired with the listing is the one above. It's the Photoshop love child of the Euro...
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Filed under: Car Buying , Chrysler, LLC. , Dodge Joining Denny's, Dunkin' Donuts and Dairy Queen, Dodge has rolled out its version of a discount for the geriatric among us. While the aforementioned restaurants will cut prices for anyone generally over the age of 50, Dodge is seeking card-carrying AARP members (it's $12.50 per year, in case you need to join). Presenting a valid AARP card at the time of sale will get you "Employee Pricing" (or better) on all 2008 and 2009 Dodge vehicles except the Sprinter, Challenger, and Viper SRT 10 ACR models. According to the fine print, the program isn't compatible with other national incentives and it expires (the incentive program, not Chrysler LLC) on January 2, 2009. There's also a $200 fee just to be eligible for the offer, which our penny-pinching parents aren't going to like one bit. Thanks for the tip, MarkWeb! [Source: Dodge , Photo by taberandrew | CC2.0] Senior Discount! Dodge offers employee pricing to AARP...
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