Chrysler Corporation Files for Chapter 11 Bankruptcy Protection

I think the title of "Big Three" is a little misleading. Gm, Ford, and Chrysler are the three largest in the US. Chrysler is actually 13th in the world behind Daimler based on 2008 sales.

Fiat and Chrysler merger is a gamble. Good for Fiat to open a market in the US. But Fiat's biggest sellers are generally small, light with good styling. Americans only buy these when fuel is high, we may talk about the environment and conserving resources but given a choice between comfort and economy we go big.

We will soon know if GM (second largest in the world behind Toyota) ends up taking the same route.

Ford (Fourth largest) is currently positioned OK given the current state of the world's economy. They have not had to take any government money, but are getting concessions from the unions the same as GM and Chrysler.

Interesting to note that Chrysler's bankruptcy didn't seem to effect the stock market at all.
 
I understand that President Obama reckons this a good deal , with Fiat input to get Chrysler into the manufacture of smaller, environmentaly cleaner cars for that market, and no immediate job losses, thanks to a quick 4.5 billion support. He claims it to be a saver for Chrysler. Here's hoping. Oh yes, and clear of bankruptcy in 30-60 days.
 
The Other Guy said:
Or when American Motors hooked up with Renault.
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Or when Chrysler bought American Motors in 1987, or Daimler-Benz bought Chrysler in 1998 for 36 Billion and sold it to Cerberus Capital Management in 2007 for 5 Billion.*
(source LA times business section May 2, 2009)

Fiat might just be able to make it work concedering they are not paying much of anything for it, but gain a lot of infrastructure in the US. And I don't believe they will take it over until after it emerges from bankruptcy.
 
I'm starting to wonder whether or not Jeep is a sort of Typhoid Mary... every corporation it has been a part of has either filed for bankruptcy or been on the verge of it (Willys Overland, American Motors, Chrysler).
 
No surprise .......

I don't know why anybody is surprised over this. It was reported very early on, that some of the biggest Chrysler debt holders were hanging tough and wouldn't meet management half way .. matter of fact, some of them are as intransigent now, as they were on the first day that a stock-for-debt offer was tendered.

Bankruptcy, places the whole mess before a neutral judge and it could mean that those who were responsible for the "no deal" outcome of the settlement talks, might find themselves receiving 10 cents or less on the dollar instead of the stock-for-debt offer that was originally offered ... in essence, they could very well end up big losers.

Time will tell .. however ... every indication is that Chrysler will come through the bankruptcy and will survive.
 
the_13th_redneck said:
Goodbye crappy big cars.
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That's just it; the reason that they're bankrupt. The cars aren't as bad as they are considered to be. In reality, GM, Chrysler, and Ford have some really nice autos that are in some cases better than their Japanese or Korean Counterparts. But it's the bias created by the 30 years of CRAP from 1971-2000 that's killing them. You don't hear about how good the Saturn Astra is; you hear about how awful the Chevy Chevette was.

The other thing that killed them? Resistance to change. Every time a new regulation came out the Big Three (Biggest three domestic auto manufacturers) would spend tons of money to fight it tooth and nail to get the deadlines extended and generally just whine about having to change their cars. The Japanese companies would spend the same amount or less money actually updating their car to be as good as or better than it was before the regulation change.
 
The Other Guy said:
That's just it; the reason that they're bankrupt. The cars aren't as bad as they are considered to be. In reality, GM, Chrysler, and Ford have some really nice autos that are in some cases better than their Japanese or Korean Counterparts. But it's the bias created by the 30 years of CRAP from 1971-2000 that's killing them. You don't hear about how good the Saturn Astra is; you hear about how awful the Chevy Chevette was.

The other thing that killed them? Resistance to change. Every time a new regulation came out the Big Three (Biggest three domestic auto manufacturers) would spend tons of money to fight it tooth and nail to get the deadlines extended and generally just whine about having to change their cars. The Japanese companies would spend the same amount or less money actually updating their car to be as good as or better than it was before the regulation change.
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So they pretty much deserved it? It seems as if they didn't do much to improve their image after the three decades of crapness. I guess the average consumer was not out to get stung a second or third time. If a product or service of a particular brand was serving you well, would you try out another or even go back to the original one that sucked?

During my college years, I used to work as a Best Buy associate catering to business customers. Whenever people would go in there to purchase a new computer, they would either stay away from the brand that they had previously and had given them a bunch of problems OR they would continue to buy the brand that had served them well for X years. I, however, knew that it was all crap because all the manufacturers bought from the same suppliers and most of the time the customers' "problems" were viruses which is software-based...

I think the "Big 3" should just shut down their businesses. My heart goes out to the thousands that will lose their jobs but let's get real here. Toyota has overtaken GM (along with all the other puny companies GM owns) as the world's leading auto manufacturer and my tax dollars are just ladles scooping out water from a sinking ship. GM and Chrysler are piling debt faster than we Americans can bail them out. Let them die out and other stronger American auto companies will rise from the ashes.
 
The Other Guy said:
That's just it; the reason that they're bankrupt. The cars aren't as bad as they are considered to be. In reality, GM, Chrysler, and Ford have some really nice autos that are in some cases better than their Japanese or Korean Counterparts. But it's the bias created by the 30 years of CRAP from 1971-2000 that's killing them. You don't hear about how good the Saturn Astra is; you hear about how awful the Chevy Chevette was.
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ASTRALdragon said:
So they pretty much deserved it? It seems as if they didn't do much to improve their image after the three decades of crapness. I guess the average consumer was not out to get stung a second or third time. If a product or service of a particular brand was serving you well, would you try out another or even go back to the original one that sucked?


I think the "Big 3" should just shut down their businesses. My heart goes out to the thousands that will lose their jobs but let's get real here. Toyota has overtaken GM (along with all the other puny companies GM owns) as the world's leading auto manufacturer and my tax dollars are just ladles scooping out water from a sinking ship. GM and Chrysler are piling debt faster than we Americans can bail them out. Let them die out and other stronger American auto companies will rise from the ashes.
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And the uninformed bias continues....

"I think the "Big 3" should just shut down their businesses."

1. Ford is not currently in danger of bankruptcy, and has taken no bail out money.

2. "Toyota Motor Corp. lost US$7.7 billion, about 765.8 billion yen, in the January-March quarter - a bigger loss than General Motors reported - resulting in its worst fiscal year since the Japanese automaker was founded in 1937." quoted from link below.

http://ca.news.yahoo.com/s/capress/090508/business/toyota

"Let them die out and other stronger American auto companies will rise from the ashes."

Some how I don't think Chrysler being sold to Fiat is going to make for stronger American companies.
 
ASTRALdragon said:
I think the "Big 3" should just shut down their businesses. My heart goes out to the thousands that will lose their jobs but let's get real here. Toyota has overtaken GM (along with all the other puny companies GM owns) as the world's leading auto manufacturer and my tax dollars are just ladles scooping out water from a sinking ship. GM and Chrysler are piling debt faster than we Americans can bail them out. Let them die out and other stronger American auto companies will rise from the ashes.
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What American companies? There are only three of them left. Certainly you don't expect Saleen or Panoz to become world players?

And besides, it's not just the Big three that go in that situation. It's their suppliers too. What do you suppose happens to Pittsburgh Plated Glass, who supplies windows to their cars? Or Goodyear, who makes their tires? Or DieHard, who makes the batteries? Or one of the companies that make the brake pads, Distributors, Spark Plugs, etc. that make up an American car? Certainly you don't expect the Japanese companies to break their contracts with the companies who make their parts just to save these other ones.

Better to spend a few more tax dollars than save them and not have anywhere to spend them when the companies go bust.
 
Chukpike said:
And the uninformed bias continues....

"I think the "Big 3" should just shut down their businesses."

1. Ford is not currently in danger of bankruptcy, and has taken no bail out money.

2. "Toyota Motor Corp. lost US$7.7 billion, about 765.8 billion yen, in the January-March quarter - a bigger loss than General Motors reported - resulting in its worst fiscal year since the Japanese automaker was founded in 1937." quoted from link below.

http://ca.news.yahoo.com/s/capress/090508/business/toyota

"Let them die out and other stronger American auto companies will rise from the ashes."

Some how I don't think Chrysler being sold to Fiat is going to make for stronger American companies.
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How is my statement uninformed? I was merely stating that the US government should stop wasting their money on floundering companies. And of course it's biased; it's my opinion!

1. I apologize. I forgot about Ford because yes, they have been under the radar lately with all the bailouts going around. I applaud them for running their business soundly and evolving in a time when business models are required to be flexible.

2. I don't see how quoting profits and losses is going to help GM and Chrysler. The only thing that matters right now is which company can pay their bills (and employees) and ride out the recession. The difference is that Toyota can soak the loss whereas GM is getting bailout help.

http://consumerist.com/5249141/gm-bankruptcy-is-probable

Even with free money they can't even get it right. So what did my tax/bailout money do? It let them live a couple months longer to make more bad decisions, that's what.

The Other Guy said:
What American companies? There are only three of them left. Certainly you don't expect Saleen or Panoz to become world players?

And besides, it's not just the Big three that go in that situation. It's their suppliers too. What do you suppose happens to Pittsburgh Plated Glass, who supplies windows to their cars? Or Goodyear, who makes their tires? Or DieHard, who makes the batteries? Or one of the companies that make the brake pads, Distributors, Spark Plugs, etc. that make up an American car? Certainly you don't expect the Japanese companies to break their contracts with the companies who make their parts just to save these other ones.

Better to spend a few more tax dollars than save them and not have anywhere to spend them when the companies go bust.
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No, I do not expect one of the smaller companies to take over as a world player, although it would be ideal. I think a new player(s) would be great. Kind of like how SpaceX is taking the reins in field of American space exploration. A small company that impressed NASA and is now getting government funding and technology. I guess it's time for a new "Ford" or "GM" to take flight and pave the way.

As I stated above, my heart goes out to these suppliers that will be affected but there are other car companies out there. Chances are, they will undergo huge job cuts to survive but will recover when more car companies enter the playing field. The power vacuum will be filled.

A few dollars of bailout was what it was last year. Now, both companies are asking for more. Dealerships are clearing out and factories are taking breaks. They're not the only companies that need a bailout. Even my bank went under (WaMu)! All of it adds up. I don't want me or my future kids to be stuck paying off a ballooning debt that could have been much less. The US government can pump all the bailout money they want but are people like you and me buying the cars from GM and Chrysler? It doesn't look like it. Would you buy a car from a company that may or may not be here in 2 or 3 years?
 
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ASTRALdragon said:
How is my statement uninformed? I was merely stating that the US government should stop wasting their money on floundering companies. And of course it's biased; it's my opinion!

1. I apologize. I forgot about Ford because yes, they have been under the radar lately with all the bailouts going around. I applaud them for running their business soundly and evolving in a time when business models are required to be flexible.
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Your statement, "I think the "Big 3" should just shut down their businesses.", coupled with your apology to Ford answers your question about being uninformed.


ASTRALdragon said:
2. I don't see how quoting profits and losses is going to help GM and Chrysler. The only thing that matters right now is which company can pay their bills (and employees) and ride out the recession. The difference is that Toyota can soak the loss whereas GM is getting bailout help.

http://consumerist.com/5249141/gm-bankruptcy-is-probable

Even with free money they can't even get it right. So what did my tax/bailout money do? It let them live a couple months longer to make more bad decisions, that's what.
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If you are not uninformed, then you should be aware that Chrysler and GM only got part of the original bailout and would need to meet certain government terms to receive additional funds. The current restructuring was to meet those government terms.

The bailouts to the automakers are supposed to be re-payed, they were/are intended as loans. Complete failure of GM and Chrysler will mean no repayment and you and your kids will be on the hook.

Either you are not aware of this (uniformed) or you can not understand what the bailout is about.
ASTRALdragon said:
No, I do not expect one of the smaller companies to take over as a world player, although it would be ideal. I think a new player(s) would be great. Kind of like how SpaceX is taking the reins in field of American space exploration. A small company that impressed NASA and is now getting government funding and technology. I guess it's time for a new "Ford" or "GM" to take flight and pave the way.
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I think it is great SpaceX is succeeding, but building a handful of shuttles or space vehicles is a long way from being compared to millions of vehicles.

ASTRALdragon said:
As I stated above, my heart goes out to these suppliers that will be affected but there are other car companies out there. Chances are, they will undergo huge job cuts to survive but will recover when more car companies enter the playing field. The power vacuum will be filled.

A few dollars of bailout was what it was last year. Now, both companies are asking for more. Dealerships are clearing out and factories are taking breaks. They're not the only companies that need a bailout. Even my bank went under (WaMu)! All of it adds up. I don't want me or my future kids to be stuck paying off a ballooning debt that could have been much less. The US government can pump all the bailout money they want but are people like you and me buying the cars from GM and Chrysler? It doesn't look like it. Would you buy a car from a company that may or may not be here in 2 or 3 years?
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If you do not want you or your future kids paying off a ballooning debt you should pray the bailout works. If it doesn't the cost in unemployment and a continued down state of the economy, caused in a big way by practices of your bank (WaMu) and others, will cost a lot more than the bailout money.

Quite simply the ongoing bailout of lending institutions far exceeds the money spent on Chrysler or GM.

PS: WaMu did not go under it was bought by Chase and accounts are being honored, I also manage an account with them.
 
ASTRALdragon said:
No, I do not expect one of the smaller companies to take over as a world player, although it would be ideal. I think a new player(s) would be great. Kind of like how SpaceX is taking the reins in field of American space exploration. A small company that impressed NASA and is now getting government funding and technology. I guess it's time for a new "Ford" or "GM" to take flight and pave the way.

As I stated above, my heart goes out to these suppliers that will be affected but there are other car companies out there. Chances are, they will undergo huge job cuts to survive but will recover when more car companies enter the playing field. The power vacuum will be filled.

A few dollars of bailout was what it was last year. Now, both companies are asking for more. Dealerships are clearing out and factories are taking breaks. They're not the only companies that need a bailout. Even my bank went under (WaMu)! All of it adds up. I don't want me or my future kids to be stuck paying off a ballooning debt that could have been much less. The US government can pump all the bailout money they want but are people like you and me buying the cars from GM and Chrysler? It doesn't look like it. Would you buy a car from a company that may or may not be here in 2 or 3 years?
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I agree that that would be the best solution, but we can not make something out of nothing; no such company exists or can exist; it is simply to expensive.

More companies? What companies? There are no more and the market has grown so large that no new companies (unless they have a highly successful product elsewhere, such as Hyundai or Kia) can get in. During the Great Depression 97% of the Auto Industry failed. It was new then; only about 40 or so companies survived. There were no massive networks of dealers or parts distributors. Each company made their own parts back then, and the cars were hand built, save for a few major companies like Ford. But when those companies all failed, there were other ones of equal or greater size to fill the void; no longer the case.

And a tiny measly bailout is what they were given. Congress (who saw nothing wrong with giving the banking industry a HUGE bailout, no questions asked) was extremely touchy about giving GM or Chrysler a cent. And I don't want my kids to be paying off debts either. But I'd rather them have a job with which to pay off said debts than no job and no money.

Look what happened when the government bailed Chrysler out with a HUGE bailout in the 1980s, when the company was on the brink of collapse. They paid it back and more within a year. It's American stubbornness against change, if anything, that is holding these companies back.

And you could say the same about any company possibly not existing in 2-3 years. Look at formerly stable companies that collapsed, like Ameritech, WorldCom, Enron, and Bear Stearns. It only took a few days for them to completely collapse.
 
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