Straightline

The car enthusiasts news blog from Inside Line

Government aid won't save Chysler

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Chrysler can not be saved, even with the proposed government financial aid. That's what CSM Worldwide forecasters say.

Chrysler "doesn't really have the scale, in most vehicle lines, required to survive in this market," so says Michael Robinet, CSM vice president of global vehicle forecasts.

"We think only unique Chrysler platforms will survive," Robinet said, citing the Jeep Wrangler and minivans. There could be a buyer for Dodge Ram.

CSM officials didn't see bankruptcy as the answer, but it may come to that. The result would be the same: dispersement of its assets, probably to more than one buyer. Congress' move to put Cerberus on the hook if Chrysler fails to live up to conditions of a loan could expedite the automaker's liquidation upon failure to find a buyer.

Full story here.

In a related story, the Senate appears likely to kill the rescue package. Full story here.

Here's Inside Line's take: Kill Bill: U.S. Senate on Track to Stop Auto Rescue Measure

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9 Comments

brn says:

05:52 AM, 12/11/08

I generally agree. I think Chrysler can survive, but not in it's current state. Chrysler is very strong in some areas and they need to focus on those areas. They're currently outsourcing their products to VW and soon to Nissan. Keep it up. Build vehicles to fill the gaps of others. They already make good diesels. Improve that product and sell it. They have some potential in electric vehicles. That's another opportunity. Everything else can either become a niche product or fade away.

mg1964 says:

06:23 AM, 12/11/08

I would like to see a full business case review for every company asking for participation in public loans or aid. The Government, and our tax dollars, are an investment. Bad investments and poor strategic decisions are what got us into this financial mess - more bad investments are not the way out. Chrysler - may you rest in peace when this is over. It'll be interesting to see where Jeep lands.

bbechtel16 says:

07:07 AM, 12/11/08

"They already make good diesels."
I believe all their diesels have been sources from either Cummins or Diamler.

Chrysler is pretty much doomed, and I'm not going to miss them. OK I might miss the RAM. Jeep will survive in some fashion.

firstwagon says:

08:23 AM, 12/11/08

I don't think Chrysler is doomed. It just needs good management who will fix the problems and a hedge fund company doesn't qualify as good management.

They had a terrible product line in the late 70's and they came back strong.

They wore out the product line by the early 90's and they came back strong.

Do it again.

flicmod says:

11:41 AM, 12/11/08

Chrysler bailed out by the government in the late '70s. Result: more poor financial decisions and a repeated decline of the company.

Lull in Chrysler's sales and designs by the '90s. Result: the creation of the Dodge Ram (and later Durango) during a time when American's were craving truck platforms. Essentially capitalizing on a fad of which the bottom fell out five years ago.

Now: economic turmoil under the ownership of an investment company that was looking to make a quick buck. Result: no small, fuel efficient cars that are appealing to mass buyers while trying to capitalize on another fad - crossovers.

It has to stop sometime. Either three strikes and they're out, or someone with divine power is looking mercifully on the company and bails them out again. No pun intended.

firstwagon says:

03:50 PM, 12/11/08

"Chrysler bailed out by the government in the late '70s. Result: " ... Chrysler went from broke to selling countless millions of K-cars , minivans, Lebarons etc. They then bought the dead AMC and came out with the huge hit, the Wrangler and the later the Grand Cherokee, the 1st luxury SUV that was reliable enough to be a daily driver.

The Ram has been a big seller from 1994 until this year (millions of sales). Not really a 5 year fad. The 2009 Ram has great reviews.

The Durango was a great seller until they made it too big and too ugly 5 years ago.

Also in the 90's there were some really good cars like the original Intrepid and Neon, the Sebring Convertible and the LHS (and 300M).

The 300C, Charger, Magnum and Challenger are all great cars. Only the G8 can match them in their class (Ford has nothing here).

True they don't have a compact car (the Caliber was a good idea done poorly) but Ford and GM have nothing either. The Focus and Cobalt are too big to be compacts, mileage is nothing special and they drive like rental cars.


I saw an article that says they are too small to survive but I think of the big 3, they are the only small enough to survive.

estreka says:

09:06 PM, 12/11/08

I think either Cerberus is going to break down and start funding Chrysler or they'll declare bankruptcy within a month and a half.

flicmod says:

07:58 AM, 12/12/08

"Not really a 5 year fad."

That's not what I said. I said the bottom of the fad fell out 5 years ago. Reread what I wrote.

"True they don't have a compact car (the Caliber was a good idea done poorly) but Ford and GM have nothing either. The Focus and Cobalt are too big to be compacts, mileage is nothing special and they drive like rental cars."

And this is reason to bail them out? C'mon. All three have gotten themselves in this mess. No one else. They were failing before the "economic mess" hit. They've been losing billion of dollars a quarter for how many years now?

Also, go look up the problems with the first generation Intrepids and Neons. More head gasket and tranny problems than anything else in the 90s.

The K-car, the Ram, and the Charger are the only vehicles they've produced in the past 20+ years that could be considered true hits. The former hasn't been sold for 18 years, and the latter two are through their "popular" stages. Which is my point. Chrysler needs to do the most to get back on track. And right now it doesn't seem likely. Especially not with a bailout.

cwc1 says:

07:23 PM, 12/12/08

What about the minivan? That has been a 25 year success for Chrysler.

Federal government policies and over regulation has also gotten the Big 3 into this mess, along with labor unions whose existence and organization fosters an adversarial relationship with the company, and federal laws that protect and encourage it.

The foreign plants don't have to deal with labor unions, which is one reason their manufacturers are more successful here.

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