Welcome to the North American Subaru Impreza Owners Club Thursday July 31, 2014
Home Forums WikiNASIOC Products Store Modifications Upgrade Garage
NASIOC
Here you can view your subscribed threads, work with private messages and edit your profile and preferences Home Registration is free! Visit the NASIOC Store NASIOC Rules Search Find other members Frequently Asked Questions Calendar Archive NASIOC Upgrade Garage Logout
Go Back   NASIOC > NASIOC General > News & Rumors > Non-Subaru News & Rumors

Welcome to NASIOC - The world's largest online community for Subaru enthusiasts!
Welcome to the NASIOC.com Subaru forum.

You are currently viewing our forum as a guest, which gives you limited access to view most discussions and access our other features. By joining our community, free of charge, you will have access to post topics, communicate privately with other members (PM), respond to polls, upload content and access many other special features. Registration is free, fast and simple, so please join our community today!

If you have any problems with the registration process or your account login, please contact us.
* Registered users of the site do not see these ads.
Reply
 
Thread Tools Display Modes
Old 05-11-2009, 04:25 PM   #1
Nateness
Scooby Newbie
 
Member#: 51339
Join Date: Dec 2003
Vehicle:
1993 RX-7 R1
Brilliant Black

Default Chrysler's Sorry State Revealed

Quote:
Chrysler's sorry state revealed
Bankruptcy court filings reveal the complications the auto business - and just how much trouble Chrysler is in.



NEW YORK (Fortune) -- Among the thousands of pages of documents filed in connection with Chrysler's Chapter 11 bankruptcy are affidavits from Chrysler executives that open up a window on the auto business previously closed to outsiders in this intensely competitive business.

They reveal an almost unimaginable complexity in the design, manufacturing, and distribution of new cars.

But what's more revealing is that the affidavits expose Chrysler's inability to successfully compete and the dangers facing the company in a prolonged bankruptcy.

Consider:

Chrysler pays its suppliers 45 days after delivery. So if it suspends production - as it has now - for more than 45 days, the suppliers would have to resume manufacturing without their regular source of revenue. According to Scott Garberding, Chrysler's chief procurement officer, this imbalance of expenditures and revenues would be "catastrophic" to these marginally profitable companies.
As long as Chrysler remains in bankruptcy, it will suspend development of new models. But it can't simply restart development months from now and expect to pick up where it left off because, in the words of Frank Ewasyshyn, a top engineer, "we lose some of the learning and expertise" about the new model. In the affidavit, he figures that work done after a restart will take one-and-a-half times longer than work done before.
The longer Chrysler suspends production, the more it will cost to start back up, according to Ewasyshyn. The fluids that flow through the lines and equipment are perishable and must continue to flow, even when cars aren't being built. Paint is a particular problem. "Paint should be removed and stored after 21 days at a cost of $2 million," he said. "After 69 days, paint would need to be replaced at a cost of $15 million."
Chrysler can't start making 2010 models until it finishes building the 2009 models presently sitting on the assembly line. So the longer Chrysler is shut down, the later its 2010 models will be to reach showrooms.
Chrysler vehicles are such slugs on the market that 20% to 25% of the wholesale cost goes to dealer incentives, according to Peter Grady, director of dealer operations. Yet not only were there 286,687 2009 models - more than three months supply - sitting on dealer lots at the time of the filing but there were 36,370 2008 models left. In other words, they had been sitting around unsold for more than a year.
Dealers depend on cash flow to support their operations, but as Chrysler neared its financing deadline, the checks stopped coming. A West Palm Beach dealer named James Arrigo reported that Chrysler owed him $639,000 in consumer rebates, $426,000 in warranty and parts receivables, $13,000 in new vehicle receivables - in total $1.7 million. The dealer reduced his monthly expenses from $2.1 million to under $1.3 million in an effort to stay afloat.
Chrysler's dire condition explains why vice-chairman Tom LaSorda has been so busy trying to sell the company - and why he has been so unsuccessful. LaSorda revealed in his affidavit that he had spent two-and-a-half years trying to find a partner for Chrysler. He approached most of the world's top auto companies: GM (GM, Fortune 500), Volkswagen, Toyota (TM), Honda (HMC), Nissan, and Hyundai - as well as India's Tata Motors, Russia's GAZ, parts maker Magna, and a number of Chinese companies.

"No party except Fiat emerged as a viable and winning alliance partner for us," LaSorda reported. After reading the affidavits, you begin to understand why.

You also begin to understand why the chances of Chrysler emerging from bankruptcy in any shape that resembles intact looks increasingly unlikely.

(Additional reporting by Doris Burke)

First Published: May 11, 2009: 2:10 PM ET
Sounds like they knew this was coming for some time.
* Registered users of the site do not see these ads.
Nateness is offline   Reply With Quote
Old 05-11-2009, 04:42 PM   #2
JC
NASIOC Supporter
 
Member#: 692
Join Date: Dec 1999
Chapter/Region: SCIC
Vehicle:
2006 Pontiac GTO M6
Triumph Street Triple R

Default

I'm really surprised Cerberus bought them in the first place. I would like to see their plan on how they were going to make money.
JC is offline   Reply With Quote
Old 05-11-2009, 04:52 PM   #3
Spenk
Scooby Guru
 
Member#: 7164
Join Date: Jun 2001
Location: Arizona Bay
Vehicle:
2000 Miata LS
Evo Orange Mica (1/644)

Default

GAME OVER.


I want my tax $$ back.
Spenk is offline   Reply With Quote
Old 05-11-2009, 05:14 PM   #4
Indocti Discant
Scooby Specialist
 
Member#: 138000
Join Date: Jan 2007
Chapter/Region: BAIC
Location: et ament meminisse periti
Vehicle:
L Bo Hope you meet
the spirit in the sky

Default

Quote:
Originally Posted by JC View Post
I'm really surprised Cerberus bought them in the first place. I would like to see their plan on how they were going to make money.
cut costs, sell in 2 yrs. they had their head so far up their ass they could see their own tonsils.
Indocti Discant is offline   Reply With Quote
Old 05-11-2009, 05:17 PM   #5
Not-EWRX
Scooby Specialist
 
Member#: 158043
Join Date: Aug 2007
Chapter/Region: RMIC
Location: SLC
Vehicle:
2013 Wrx Hatch
SWP

Default

Not-EWRX is offline   Reply With Quote
Old 05-11-2009, 05:18 PM   #6
Yotsuya
Scooby Guru
 
Member#: 935
Join Date: Feb 2000
Chapter/Region: MWSOC
Location: ಠ_ಠ
Vehicle:
Jack Soo Fan Club

Default

Quote:
Originally Posted by JC View Post
I'm really surprised Cerberus bought them in the first place. I would like to see their plan on how they were going to make money.
I would posit they were looking to make a quick sale but didn't know just how bad things were. Even business 'experts' can make huge mistakes. Hubris, maybe?
Yotsuya is offline   Reply With Quote
Old 05-11-2009, 05:31 PM   #7
SCRAPPYDO
Scooby Guru
 
Member#: 873
Join Date: Feb 2000
Chapter/Region: TXIC
Location: Just outside of Houston TX
Vehicle:
2013 F150 King Ranch
Datsun 71 240Z & 68 2000

Default

Let it die, give not one red dime to Chrysler, instead, keep the vendors afloat, as GM and Ford still need them.

Cut off the head, but keep the body on life support so to speak
SCRAPPYDO is offline   Reply With Quote
Old 05-11-2009, 05:51 PM   #8
imprezaowner27
Scooby Specialist
 
Member#: 131299
Join Date: Nov 2006
Chapter/Region: NESIC
Location: MA
Vehicle:
2006 Impreza
Aspen White

Default

Why are we even trying to save chrysler? really thou?

they make mediocre cars, at mediocre prices, that NOBODY wants, people just buy it because they can get a decent deal on it

i dont know, maybe im ignorant, but i couldnt tell you a model name for one, besides the sebring convertible because i see some around, but other than that...i got nothing
imprezaowner27 is offline   Reply With Quote
Old 05-11-2009, 07:03 PM   #9
Dex
Scooby Specialist
 
Member#: 163775
Join Date: Nov 2007
Location: Ceti Debent
Vehicle:
1992 Cat 245D
Yellow rust

Default

Quote:
Yet not only were there 286,687 2009 models - more than three months supply - sitting on dealer lots at the time of the filing but there were 36,370 2008 models left. In other words, they had been sitting around unsold for more than a year.
Talk about waste. Jeeez. Just give them all to Enterpise Rental.

This is going to be interesting.
Dex is offline   Reply With Quote
Old 05-11-2009, 07:04 PM   #10
Lboogie
Scooby Specialist
 
Member#: 171611
Join Date: Feb 2008
Chapter/Region: BAIC
Location: Silicon Valley
Vehicle:
2014 FiST
Blk

Default

Worst part is, this isn't Chrysler's' first time at the rodeo:

- Bailout in 1979 to the tune of $1.5 billion, thus avoiding bankruptcy. Company sold off defense subsidiary & repaid loans emerged profitable by 1983.
- Purchased by Daimler-Benz in 1998, then sold to Cerberus Capital Management in 2007.
- U.S. Govt gives Chrysler/Cerebus a couple handfuls of BILLONS of taxpayer $$ to stay afloat until Fiat can come save Chrysler.

Isn't that 3 strikes? Shouldn't Chrysler be gone??
Lboogie is offline   Reply With Quote
Old 05-11-2009, 07:08 PM   #11
controler
Scooby Newbie
 
Member#: 100271
Join Date: Nov 2005
Chapter/Region: South East
Default

Quote:
Originally Posted by JC View Post
I'm really surprised Cerberus bought them in the first place. I would like to see their plan on how they were going to make money.
They bought them for Chrysler Financial, the manufacturing was a "free-be". With their share of GMAC, Cerberus now has the largest share of auto loans in the industry.
controler is offline   Reply With Quote
Old 05-11-2009, 07:13 PM   #12
Dex
Scooby Specialist
 
Member#: 163775
Join Date: Nov 2007
Location: Ceti Debent
Vehicle:
1992 Cat 245D
Yellow rust

Default

Quote:
Originally Posted by Lboogie View Post

Isn't that 3 strikes? Shouldn't Chrysler be gone??
I don't think Captain K is coming back with the Le Baron to save the day, so they are probably done.
Dex is offline   Reply With Quote
Old 05-12-2009, 01:08 PM   #13
rbl2
Scooby Newbie
 
Member#: 172925
Join Date: Feb 2008
Default

Quote:
Originally Posted by controler View Post
They bought them for Chrysler Financial, the manufacturing was a "free-be". With their share of GMAC, Cerberus now has the largest share of auto loans in the industry.
That was a pretty stuipid move as well. Chrysler Financial is in the midst of shutting down.

The new Chrysler will not have a dedicated finance arm.
rbl2 is offline   Reply With Quote
Old 05-12-2009, 04:43 PM   #14
KidCorporate
Scooby Newbie
 
Member#: 199947
Join Date: Jan 2009
Default

I feel sorry for Jeep.
KidCorporate is offline   Reply With Quote
Old 05-12-2009, 10:44 PM   #15
hkerekes
Scooby Specialist
 
Member#: 66310
Join Date: Jul 2004
Chapter/Region: South East
Location: Removing passenger seat
Vehicle:
2012 Orange

Default

Quote:
Originally Posted by KidCorporate View Post
I feel sorry for Jeep.
I dont. 1980's Jeep look about the same as 2009's Jeep.

I heard a Chrysler dealer owner on the news the other day. " Business is great, we have good deals on good cars, etc, etc, Chrysler has been in trouble a few times before and they always bounce back better than before". Keep trying, you will eventually get it right.
hkerekes is offline   Reply With Quote
Old 05-12-2009, 11:06 PM   #16
GuyLR
Scooby Specialist
 
Member#: 21811
Join Date: Jul 2002
Chapter/Region: South East
Location: Atlanta, GA
Vehicle:
2003 WRX Wag/01 OBS
WRB and SM

Default

Quote:
Originally Posted by Lboogie View Post
Worst part is, this isn't Chrysler's' first time at the rodeo:

- Bailout in 1979 to the tune of $1.5 billion, thus avoiding bankruptcy. Company sold off defense subsidiary & repaid loans emerged profitable by 1983.
- Purchased by Daimler-Benz in 1998, then sold to Cerberus Capital Management in 2007.
- U.S. Govt gives Chrysler/Cerebus a couple handfuls of BILLONS of taxpayer $$ to stay afloat until Fiat can come save Chrysler.

Isn't that 3 strikes? Shouldn't Chrysler be gone??
Your facts are wrong. The 1979 "Bailout" was in the form of loan guarantees. Chrysler went out on the open market for the 1.5 billion and the government guaranteed them against default. No taxpayer money was used that time and Chrysler even paid off the loans early. But that was still the old Chrysler and not the shell left behind by DB and Cerebus.
GuyLR is offline   Reply With Quote
Old 05-13-2009, 02:11 AM   #17
brianbot5000
Scooby Specialist
 
Member#: 44000
Join Date: Sep 2003
Chapter/Region: NWIC
Location: Seattle
Vehicle:
2013 2013 WRX Hatch
1997 Toyota Tacoma

Default

Quote:
Originally Posted by KidCorporate View Post
I feel sorry for Jeep.
I think that Jeep is a strong enough brand that, if Chrysler doesn't survive, Jeep could be sold off as a separate entity. At least, that's a hope...I'm not a huge Jeep fan, but they do have a certain mystique and history.
brianbot5000 is offline   Reply With Quote
Old 05-13-2009, 02:18 AM   #18
Dave D.
Scooby Specialist
 
Member#: 130990
Join Date: Nov 2006
Chapter/Region: NWIC
Location: Menzel Lake, WA
Vehicle:
06 Red Ltd.Wagon
I need a new tuner!

Default

Quote:
Originally Posted by brianbot5000 View Post
I think that Jeep is a strong enough brand that, if Chrysler doesn't survive, Jeep could be sold off as a separate entity. At least, that's a hope...I'm not a huge Jeep fan, but they do have a certain mystique and history.
Well, Jeep's gone from Willys to AMC to Chrysler -- who's next?

I say Honda buys Jeep to compete with the Land Cruisers and 4Runners.
Dave D. is offline   Reply With Quote
Old 05-13-2009, 01:48 PM   #19
SlideWRX
Scooby Specialist
 
Member#: 3803
Join Date: Jan 2001
Chapter/Region: MWSOC
Location: South Carolina
Vehicle:
07 Mustang GT
285 is a wide tire!

Default

Some articles, during the '79 bailout, and in '83 afterward, are eerily familiar to what we are going through now.

http://www.time.com/time/magazine/ar...947356,00.html

http://www.heritage.org/Research/Regulation/bg276.cfm
SlideWRX is offline   Reply With Quote
Old 05-13-2009, 03:10 PM   #20
Yotsuya
Scooby Guru
 
Member#: 935
Join Date: Feb 2000
Chapter/Region: MWSOC
Location: ಠ_ಠ
Vehicle:
Jack Soo Fan Club

Default

Maybe Renault will buy Jeep back.

right!
Yotsuya is offline   Reply With Quote
Old 05-13-2009, 03:53 PM   #21
Masterauto
Scooby Specialist
 
Member#: 198376
Join Date: Dec 2008
Location: Delaware
Vehicle:
X5D Subaru BRZ
Nissan GT-R

Default

Unfortunately Citizens burdened with bailing banks, Car Co's and state and city Govt may no loner afford to buy any cars . Both disposable and discretionary income are crumbling if you still have an income. This wall of dominoes may go tumbling wild. I guess we can all ride the billion $ railroad upgrades Obama wants.
Masterauto is offline   Reply With Quote
Old 05-13-2009, 06:29 PM   #22
Yotsuya
Scooby Guru
 
Member#: 935
Join Date: Feb 2000
Chapter/Region: MWSOC
Location: ಠ_ಠ
Vehicle:
Jack Soo Fan Club

Default

Bold makes it so, and off to pee pee you go...
Yotsuya is offline   Reply With Quote
Old 05-13-2009, 11:23 PM   #23
Dex
Scooby Specialist
 
Member#: 163775
Join Date: Nov 2007
Location: Ceti Debent
Vehicle:
1992 Cat 245D
Yellow rust

Default

Quote:
Originally Posted by Yotsuya View Post
Bold makes it so, and off to pee pee you go...

Silly veteran. The rules thread isn't really supposed to be read, it's just to make the forum look official.


Edit. In re-viewing the rules. It left out all bold. Just leet, MySpAcEtArd, and all caps.
Dex is offline   Reply With Quote
Old 05-15-2009, 01:43 AM   #24
hondahata
Scooby Specialist
 
Member#: 64905
Join Date: Jun 2004
Chapter/Region: South East
Location: Sliding Fast Towards Old Age
Vehicle:
2004 WRX/STi
Rally Blue

Default

And the West Palm beach dealer is a big one.....that guy must have 400-500 new cars on his lot.
hondahata is offline   Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
new bugeye pics! now on coilovers, but NOT hellaflush, sorry EastCoast02 Member's Car Gallery 43 06-06-2010 03:32 PM
Holy damn: New analysis of 40-year-old recording of Kent State shootings reveals... masskillingspree Off-Topic 40 05-11-2010 12:25 PM
Chrysler's Details of Separation Packages to be made to Salaried Employees NYCshopper Non-Subaru News & Rumors 1 02-23-2007 05:54 PM
Ford OKs engine program "Hurricane" to combat Chrysler's 'Hemi' NYCshopper Non-Subaru News & Rumors 15 03-29-2006 12:21 PM
SPY PHOTOS REVEALED!!!!!! Auto-Xer's BEWARE! 56k-sorry dropmech South East Region Forum 31 07-05-2005 09:00 AM


All times are GMT -4. The time now is 08:10 PM.


Powered by vBulletin® Version 3.7.0
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Powered by Searchlight © 2014 Axivo Inc.
Copyright ©1999 - 2014, North American Subaru Impreza Owners Club, Inc.