Auto Bailout Will Cost Taxpayers $30 Billion

Wednesday December 16th, 2009 at 8:1212 AM
Posted by: michael.leroy

GM Chrysler bailout
$30 billion is gone, but it could have been worse

This was a bad year for both the auto industry and the American taxpayer. The Obama administration’s effort to save General Motors and Chrysler will cost taxpayers $30 billion. The Detroit News reported last week that the losses were less than expected. Earlier forecasts projected a loss of $44 billion of the $82 billion loaned-out.

GM received $50 billion of the money, with $43 billion given in exchange for 61 percent of the company.
A large portion of the $30 billion loss is due to Chrysler. Chrysler has had much of its $12 billion debt forgiven. The government is requiring Fiat to pay back $6 billion in loans before it can increase its 20 percent stake in the company, said Detroit News.

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Honda Jumps to #4 in US Auto Sales

Friday December 11th, 2009 at 1:1212 PM
Posted by: michael.leroy

honda fiat chrysler logo
Honda laps a broken down Chrysler to become No. 4 in US auto sales

Honda, the company that got its start selling mopeds, has replaced Fiat-Chrysler as the No. 4 automaker in the US.

If you think Honda gained the No. 4 spot by selling a few extra Civics from the cash for clunkers program, think again. The Japanese automaker has sold over 1 million cars this year and has crushed Fiat-Chrysler with a sales lead of 200,000. Last year, Chrysler outsold Honda by 25,000 cars.

Fiat-Chrysler has insisted that this is just a temporary setback and they will regain lost ground after their new products hit the US market. Honda is going to stay at No. 4 for the time being because it’s going to take years to fix Chrysler.

Sergio Marchionne, the CEO of Fiat-Chrysler, announced last month a five-year plan to restructure the company. Deadweight like the PT Cruiser has been axed, but its replacement may not come until 2012.

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Fewer Dealer Cuts For GM and Chrysler

Thursday November 5th, 2009 at 1:1111 PM
Posted by: tonyb

GM Chrysler

Look, it’s even more good news out of Detroit. What with Ford actually making a profit, it looks like all the doom and gloom about the number of dealers set to be shuttered might have been estimated on the high side.

At least that’s the case if you believe David Cole, who is Chairman of the nonprofit Center for Automotive Research. Cole told federal investigators that he thought General Motor’s and Chrysler’s projected dealership cuts will reduce market share in small to mid-sized markets. Cole summed it up by saying, “These cuts didn’t make any sense to me.”

David Cole cautioned the investigators that he has no research expertise or experience working directly with dealerships, and that he was asked to come speak only after he sent a letter to the Obama administration’s auto task force earlier this month stating his case for fewer dealership terminations. Although Chairman Cole did agree that terminations in larger metropolitan areas were in fact justified, he made the case that the automakers would be harming their historical stronghold in rural areas as well as modest-sized markets with many of the planned dealership terminations.

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Dodge Ram Hybrid Coming In 2010

Wednesday October 28th, 2009 at 9:1010 AM
Posted by: tonyb

Hybrid Two-Mode HEMI

You can call this a good news/bad news sort of thing. The bad news is that Chrysler’s two-mode hybrid joint development program has been disbanded, and the good news is that the hybrid Ram pickup is coming in 2010.

The joint development program, which was a very big deal for a while, was created several years ago between Chrysler, General Motors, Daimler, and BMW to work out a two-mode hybrid system for light duty vehicles, is now effectively over. The four automakers involved have either launched or are about to introduce versions of the two-mode hybrid system, so the program is being wound down and the engineering office will be closed by the end of this year.

But the Ram pickup hybrid should be in dealerships by 2010.

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Chrysler Sweetens Cash for Clunkers Offer

Thursday July 23rd, 2009 at 8:77 AM
Posted by: m35man

Chrysler Group LLC said Wednesday it is offering up to $4,500 in cash toward the purchase of a new vehicle as it seeks to match a government incentive for people to trade in their old gas guzzlers. The automaker said it will offer cash or zero percent financing for six years on most of its 2009 Chrysler, Dodge or Jeep models. The incentive begins Thursday and lasts through Aug. 31.

Chrysler said in a statement that buyers are eligible for the new incentive even if they are not trading in a vehicle under the government’s “cash for clunkers” legislation. Smart move. In this economy, people have been holding on to their vehicles, in many cases, praying they continue to run while foregoing maintenance to save money. Now, they can get a huge rebate toward a new car. It’s a brilliant marketing move and I expect other car makers to copy it soon.

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Obama Defends Auto Bailout

Friday July 17th, 2009 at 6:77 AM
Posted by: m35man

President Barack Obama defended his bailout of General Motors Co. and Chrysler Group LLC, citing their speedy exit from bankruptcy and saying the consequences of doing nothing would have been catastrophic.

“I agreed that they should be held accountable. But I also recognized the historic significance and economic prominence of these companies in communities all across Michigan and all across the country.”

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Fiat May Have Technology to Save Chrysler

Friday July 3rd, 2009 at 7:77 AM
Posted by: m35man

Fiat 500

Rinaldo Rinolfi may just have something up his sleeve to make Fiat SpA’s partnership with Chrysler Group LLC work.

The 62-year-old engineer, who designed the Fiat diesel engine in the 1990s that became an industry standard and powers some of Europe’s most energy-efficient cars, has a new invention he says will cut fuel consumption by at least 10 percent. His work is at the heart of the Fiat technology that Chrysler said was worth $10 billion when they formed their alliance.

“We needed to do something radical with the gasoline engine,” Rinolfi said in an interview at Fiat’s research center in the northern city of Turin, the company’s headquarters.

Chief Executive Officer Sergio Marchionne, seeking to turn around Chrysler after two previous owners failed, has engineers flying between Detroit and Italy every other week on the project as Fiat prepares to offer models that meet stricter consumption and emissions levels required by President Barack Obama.

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A Brand New Day for Chrylser

Friday June 12th, 2009 at 7:66 AM
Posted by: m35man

Sergio MarchionneChrysler Group LLC employees officially met the new boss earlier this week–and he’s not anything like the old boss – which is probably a very good thing, indeed. Chrysler is now run by Fiat, and the first item on the new agenda is profitability—something the old bosses didn’t seem to be all that concerned about.

In his first day on the job, CEO Sergio Marchionne announced sweeping changes including his senior management team and a reorganization that will force every brand to be profitable on its own.

This is the age of bailouts and acquisitions. And a bailout is a weird thing, because it’s a happy moment, yet so many questions arise. Will it be a success? Whose heads will roll? Who will get hired to turn things around? It represents a new beginning, but one burning question keeps coming up—will it be better this time or will the mistakes of the past repeat themselves?

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Fiat & Chrysler: A Match or a Mistake?

Thursday May 28th, 2009 at 9:55 AM
Posted by: m35man

Fiat Chrysler

The future for Chrysler LLC remains unknown after a hearing to sell its assets to a group headed by Fiat SpA ended late Wednesday evening without resolution.

During testimony in a packed Manhattan courtroom Wednesday, the value of the Auburn Hills automaker was central to arguments heard in U.S. bankruptcy court here. Lawyers for Chrysler said the sale of the assets was critical to the company’s future and that without approval by June 15, it would result in the liquidation of the company.

How will this play out? Will Fiat get what it wants? I believe they will, primarily because they seem to be the only company willing to take on Chrysler. Sure, Fiat will end up getting a lot of concessions. But, that’s what you get when you’re buying a ticket on the Titanic. If Fiat is willing to take on this problem child, they deserve some major breaks, the way I see it.

The hearing was to continue today before Judge Arthur Gonzalez. If he approves the sale of the assets, the new company, Chrysler Group LLC, will prepare to start operations to build and sell Chrysler, Dodge and Jeep vehicles as soon as possible.

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Chrysler Won't Be Flying Into Bankruptcy

Friday May 15th, 2009 at 8:55 AM
Posted by: m35man

Gulfstream 550

Chrysler LLC asked a bankruptcy court earlier this week to terminate its leases on two corporate planes — a company asset that had drawn scorn among lawmakers.

You can be certain of one thing. As executives for Chrysler try to dodge a full-blown collapse, they’ll be flying commercial, just like most of us out there in the real world. The next question is: Do you think they’ll be flying first class or coach? (take one guess!)

Chrysler, General Motors Corp. and Ford Motor Co. came under fire in November when their CEOs flew private planes to congressional hearings on the auto industry. The executives drove to a subsequent hearing.

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