Fiat Chrys not a done deal yet

[So Cal Mark]

http://www.reuters.com/article/innovati ... EQ20090328
It still hinges on Chrysler getting billions more aid from each of us

[lanciahf]

Its amazing what Obama's team is making the Auto Companies go thru compared to the no strings attached hand outs given to Wall Street. Change? Hope? My ass!

Do the Big three deserve to fail, you betcha but I rather see them get a helping hand instead of the fat cats on Wall Street who's favorite American past time is to off shore jobs then wonder out loud why Americans can not afford things. Idiots!!!!

[So Cal Mark]

things have taken a downturn in the deal today. Chrysler will have to come up with a better plan if we expect to see Fiat here again. Here is an excerpt from the press release;
Fiat alliance?
Frustrated administration officials said Chrysler cannot function as an independent company under its current plan. They have given Chrysler a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA, and will offer up to $6 billion to the companies if they can negotiate a deal before time runs out.

If a Chrysler-Fiat union cannot be completed, Washington plans to walk away, leave Chrysler destined for a complete sell-off. No other money is available.

[Kevin1]

And this:
-- Detroit Free Press -- "U.S. shreds auto plans": "President Barack Obama will give General Motors Corp. 60 days to craft a new survival plan without Chairman and Chief Executive Rick Wagoner, and set a 30-day deadline for Chrysler LLC to either partner with Fiat SpA or shut down. The do-or-die ultimatums delivered today to two of Detroit's pillar companies come with promises of additional aid, including up to $6 billion for a Chrysler-Fiat partnership. But senior administration officials also say even successful plans could require a so-called quick rinse in bankruptcy, and warn that without Fiat, Chrysler will get no aid in or out of court."

The administration just out Fiat in the driver's seat, so to speak, when it cimes to determining Chrysler's chances of survival. If Rick Wagoner woerked for AIG he would have received millions in bonuses instead of a pink slip. I hate to have to say it but this clearly illustrates which sectors of the economy will be promoted in the recovery, and which will be left to languish. All of us blue collar types are in real trouble!

[wengr]

Its amazing what Obama's team is making the Auto Companies go thru compared to the no strings attached hand outs given to Wall Street. Change? Hope? My ass!

Do the Big three deserve to fail, you betcha but I rather see them get a helping hand instead of the fat cats on Wall Street who's favorite American past time is to off shore jobs then wonder out loud why Americans can not afford things. Idiots!!!!

I do not understand why this is surprising. Obama and co. are no friends of the auto industry, or anything fossil fuel driven. It stands to reason that they will use the situation to leverage for changes they desire. Obama told us BEFORE the election that "the problem is not four dollar gasoline, the problem is that we got there too quickly". I understand they also want to implement significant taxes on natural gas and home heating oil in order to make "green alternatives" more competitive. Very scary - I for one don't have a furnace or car that runs on hope or change.

[wengr]

and another thing, I'd probably rather see fiat stay independent. If I was going to buy a mercedes benz, it surely would not be a post chrysler merger example.

[baltobernie]

You just know Sergio isn't going to sink $6M, let alone $6B into Chrysler. As I said in a post a year ago, I think the Chinese would find a nationwide distribution and dealer network already in-place an attractive incentive to launch their products in the USA. Might be a tough sell in the current political climate, though.

[So Cal Mark]

Why not buy Chinese cars? Ford and Chrysler already build cars in Mexico. I believe the hammering of the Big 3 is merely a tactic to wipe out the UAW. We're fast approaching the level of a third world country; mass population working for minimum wage or less, no health care, retirement or education. If I wanted to experience living in El Salvador, I'd go visit instead of bringing it here.

[Kevin1]

We already buy plenty of other Chinese heavy equipment - cranes, tractors, deisel generators, industrial compressors, etc. And let's not forget to mention all the scooters and motorcycles, plus electronics and other smaller products they export. China has pretty much taken over the world's manufacturing, and they are now turning out some very respectable products. If they were to enter the US automobile market with some decent cars, like the japanese did in the late 60's and 70's, I believe people would buy a Chinese car if it were well designed and well made.
Where a product comes from is making less and less difference to consumers as time goes on.

[wengr]

Why not buy Chinese cars? Ford and Chrysler already build cars in Mexico. I believe the hammering of the Big 3 is merely a tactic to wipe out the UAW. We're fast approaching the level of a third world country; mass population working for minimum wage or less, no health care, retirement or education. If I wanted to experience living in El Salvador, I'd go visit instead of bringing it here.

Who do you say is hammering the big 3? There is no denying that the uaw is a large part of the problem. Look at Honda US production - non union labor making a decent wage with good job security. the product works, the workforce works. The big 3 philosophy of selling cars with marketing as opposed to engineering is played out. and the uaw constantly biting the hand that feeds is unsustainable. I do hope the domestic auto workers have saved a large part of their inordinately high income to hold them over while they look for employment at toyota\honda\hyundai\bmw. Ah what am I talking about, Barack will mortgage my kids future to help em out.

[Kevin1]

have a look at this:
http://www.uaw.org/barg/07fact/fact02.php

The problem isn't really the hourly rate that UAW workers get paid. It is the legacy costs - all of the ongoing benefits, insurance, health and retirement costs that the automakers had agreed to pay over the years. Now I have nothing against all of those retired workers who were made promises, but it's time to face reality. GM has 339,000 retired workers currently collecting benefits but only 73,000 active UAW workers. That's 4.6 retired workers that have to be supported by each and every active worker. At Ford the situation is better, only 2.1 retirees for every active worker. Chrysler is in the best shape (at least in this sense) with 1.6 retirees for every worker.

All of those contracts and obligations hinged on one very wrong assumption - there would always be adequate industry growth to cover tomorrow's bills.

[mbouse]

GACK !!

i just read the "accomplishments" of Wagoner included laying off or firing over 80,000 employees, and in the same breath...reducing starting wage for new hires by $14/hour

so, how many new hires are there when you got over 50,000 on indefinite layoff? ZERO!

spin doctors really got things goin' on, don't they?

[Kevin1]

Mike, you are right, reading between the lines.
Under Wagoner's leadership GM has lost on the order of 82 billion dollars over the last 4 years, and cut it's workforce 37%. And they are still bleeding green. That's a lot of ground to make up.
I just read five minutes ago that the government has stepped in to guarante both GM's and Chrysler's warrnty obligations, so people can have faith in buying their vehicles - even if both companies go bankrupt.
Taxpayers, to the rescue!

[mdrburchette]

Obama has also kept the door open for temporary bankruptcy to get GM and Chrysler out from under some of their obligations but I'd bet it won't be squash the UAW. Afterall, they were key in getting him elected.
I think there was a time when the union was instrumental in keeping factory workers from being taken advantage of but we can't afford them any longer.

[wengr]

have a look at this:
http://www.uaw.org/barg/07fact/fact02.php

The problem isn't really the hourly rate that UAW workers get paid. It is the legacy costs - all of the ongoing benefits, insurance, health and retirement costs that the automakers had agreed to pay over the years. Now I have nothing against all of those retired workers who were made promises, but it's time to face reality. GM has 339,000 retired workers currently collecting benefits but only 73,000 active UAW workers. That's 4.6 retired workers that have to be supported by each and every active worker. At Ford the situation is better, only 2.1 retirees for every active worker. Chrysler is in the best shape (at least in this sense) with 1.6 retirees for every worker.

All of those contracts and obligations hinged on one very wrong assumption - there would always be adequate industry growth to cover tomorrow's bills.

Hello Kevin, I guess it depends on how you define the problem. we agree that the legacy costs are crippling. I believe however that the wages are out of line and unsustainable. Using the figure from the UAW site you provide, a "typical" worker is at $27+ to $29+ per hour of straight time. (and I suspect this is deceptive) By comparison, where I come from, this is more than my wife makes as an experienced registered nurse. When she obtains the masters degree she is currently working toward, it will still be more. Also the UAW worker benefit package will be superior, Also the pension plan is superior as my wife has NONE. We can show many other areas of employment requiring far more education and/or experience that do not produce the cost to the company that the uaw has achieved. I believe it's time to let nature take it's course which hopefully may result in the domestic auto makers reform in a fashion that will be more reasonable and fairer to all. Employees, stockholders, and consumers(many around here which would never be able to afford a new car in the current model).