The Carmagedonn Thread: FCA and "Consolidation"

[ND4SPD]

So Magna, the Canadian company that bought Opel wants to bring Opel to Canada. They've also agreed with GM to keep Opel out of the U.S. I find that pretty interesting.

 

[a6m5]

A Honda Insight for $12k?

In theory, maybe. Good luck with that. j/k

So Magna, the Canadian company that bought Opel wants to bring Opel to Canada. They've also agreed with GM to keep Opel out of the U.S. I find that pretty interesting.

I find it smart. I think Opel would most certainly fail in the U.S. market today.

 

[Joey D]

Uhhhh what?

Chrysler restarts with the Viper

Chrysler will soon be making cars again.

Chrysler Group announced Monday that it is restarting a factory, after shutting down all of its manufacturing for nearly seven weeks following the bankruptcy of Chrysler LLC. Chrysler Group is the new company that emerged last week with most of Chrysler's assets and a new ownership structure.

The first plant to reopen is the one that makes the Dodge Viper sports car.

The Viper has a 600 horsepower V-10 engine and a price tag that starts at about $90,000. The Viper was introduced in the 1992 model year, and only 25,000 have been sold since then.

The Conner Avenue Assembly Plant in Detroit that makes the car employs 115 people.

Chrysler LLC had announced last year that it intended to sell off the Viper brand. The high-performance, 10-cylinder sports car sells in low numbers. Ultimately, Chrysler said it had not received any bids that met its requirements.

Chrysler's other plants remain idle.

"At this time, we cannot give exact timing in regards to the start of production at our other manufacturing facilities," Chrysler Group said in a statement.

The Viper brand and the plant that makes the car, the Conner Avenue assembly plant in Detroit, were taken over by the "new" Chrysler that emerged last week from bankruptcy.

The Chrysler Group is owned by a combination of the Italian automaker Fiat, the United States government, the United Auto Workers union's retiree trust and the Canadian and Ontario governments.

Am I missing something or does this seem like an odd choice to go ahead and open back up? A $90,000 sports car in an economic climate that probably isn't really going to support it all that well. I can sort of understand the philosophy of starting back with your halo car, but is this really what my tax dollars are funding?

 

[Philly]

If there's a market for them, I don't see why not. But who knows how many unsold Vipers are sitting on lots.

 

[ND4SPD]

I thought I heard Vipers were selling very well recently.

 

[YSSMAN]

Odd, but if there is demand, we really can't blame them. I was under the impression that the folks here in Grand Rapids purchased the rights to the car, I guess that was wrong. Hmmm.

 

[Philly]

I guess the court fiasco they had a little while back about selling the Viper line to the GR folks may have led to Chrysler not selling it at all. I certainly can't complain...

 

[YSSMAN]

I really can't either, despite my hometown pride. Chrysler has otherwise done a consistently good thing with the Viper, regardless of their owner(s), and I don't see much changing with the new FIAT (Ferrari, Alfa Romeo, Maserati) owners. Although we could certainly talk in circles as to how poorly the car performs in CAFE exams, and how it is otherwise a direct-competitor to in-house products (lets not even discuss the criss-cross situation with the aforementioned brands), its still a pretty popular car for Chrysler... One that continues to make a lot of money, regardless of the economic situation.

 

[Jim Prower]

One thing that was hammered over and over on a certain "Customer Advisory Board" that I was invited to join was that the Viper was a profitable vehicle, even now. Truth be told, the big, nasty Mopar Monster is pretty long in the tooth, yet still competitive with it's refresh a couple years ago. It's kinda the 1st-gen all over again.

 

[Joey D]

I don't think it looks real good to the American people though. Many people are still upset over their tax dollars going to Chrysler, so I can't imagine this really makes them any happier about the whole thing. You remember how grumpy people got over new Chrysler's ad campaign and the amount of money they spent on a "thank you" ad for the bailout.

 

[Jim Prower]

The general public has been raised to hate large corporations in general, that they're big polluters and the evil of society, who care about nothing but money. Remember "Captain Planet?" AXE. TO. GRIND.

 

[YSSMAN]

Given the way most Chrysler products sell, I'd be surprised if most Americans could name three cars that the company produces - much less be able to understand what companies fall under that portfolio. All of these automotive magazines and websites constantly make a big hubbub about how the fact that government money is going to make cars like the Corvette and Viper go away, when in fact, that would be about the dumbest decision the companies could make. If they're making bazillions of dollars on each car sold, they're going to want to keep them. Government money has little to do with the way the company is being operated on a day-to-day basis, and I'm willing to bet that it will have little effect on the product portfolio overall in the future.

 

[Jim Prower]

That's the problem: people hear the words "Government Investment" and immediately think "Soviet Union." I don't think that's necessarily the case, here.

 

[Philly]

I don't think it looks real good to the American people though. Many people are still upset over their tax dollars going to Chrysler, so I can't imagine this really makes them any happier about the whole thing. You remember how grumpy people got over new Chrysler's ad campaign and the amount of money they spent on a "thank you" ad for the bailout.

That's the people's problem. If they want GM and Chrysler to be building money-losing tree-hugger utopiamobiles, by all means, let them throw their money at the company to keep it alive. But otherwise, we bailed out a corporation, and the job of a corporation is to make money so it just wouldn't make sense to tell the corporation they have to stop making profitable things as soon as we save them.

That's the problem: people hear the words "Government Investment" and immediately think "Soviet Union." I don't think that's necessarily the case, here.

I don't really know where people are getting that from. Some people are definitely blowing everything out of proportion that every government mandate is socialist or communist now that there is a Democrat in office.
/offtopic

 

[Joey D]

That's the people's problem. If they want GM and Chrysler to be building money-losing tree-hugger utopiamobiles, by all means, let them throw their money at the company to keep it alive. But otherwise, we bailed out a corporation, and the job of a corporation is to make money so it just wouldn't make sense to tell the corporation they have to stop making profitable things as soon as we save them.

I think they need to look at the bigger picture though, yes the Viper's do sell at a profit, but really how many do they sell a year? Is is enough to even make the effort with? Even here in domestic friendly southeast Michigan I see more 911's than Vipers, and they are similar in price.

Really GM or Chrysler needs to a develop a small, fun to drive car that people want to combat the slew of European and Asian cars that already fit that bill. If they could come up with something to compete against something like the Mazda 3 they'd probably be able to sell them quite well. GM tried with the Astra but it was awful and Chrysler tried with the Caliber which was also equally as awful.

===

The news this morning was talking about how our governor Jenny-from-the-Block was fighting harder than ever to get GM to move the small car plant here to Orion (Ore-Ree-Un). Really? Wow if she just would have fought that hard to keep businesses here and attract new business maybe we wouldn't have a 14.1% unemployment rate.

 

[YSSMAN]

It just seems like it would be in GM's best interest to keep the Lake Orion plant open. There is far more positive press to come out of keeping a plant at home, furthermore, having the parts suppliers even closer, not to mention the engine and transmission plants close-by. The Lake Orion facility had been quite busy for some time, producing both the Malibu and the G6, but Malibu production is being shifted back to Kansas entirely.

I dunno. I guess it would just make more sense to have a "triangle" of small cars produced in Detroit, Lake Orion and Lordstown (OH).

 

[Philly]

I think they need to look at the bigger picture though, yes the Viper's do sell at a profit, but really how many do they sell a year? Is is enough to even make the effort with? Even here in domestic friendly southeast Michigan I see more 911's than Vipers, and they are similar in price.

Really GM or Chrysler needs to a develop a small, fun to drive car that people want to combat the slew of European and Asian cars that already fit that bill. If they could come up with something to compete against something like the Mazda 3 they'd probably be able to sell them quite well. GM tried with the Astra but it was awful and Chrysler tried with the Caliber which was also equally as awful.

If the Viper is bring more into the company money-wise than it is costing, I don't really see why it could be a bad idea. I can see that it might give a bad image for the eco folks, but a Viper is like a rolling advertisement. Put it next to a dealer and you're going to sell some more cars due to the "Oh snap check that car out. Let's go look at it" factor. That and they make Dodge cars look cooler to whoever they pass on the road.

GM and Chrysler do need a good small car. They have the new Grand Cherokee done, now Chrysler needs to get a new Sebring and a 147/149 based car developed ASAP. GM has the Cruze coming, but I am pretty scared that it will fall short of the competition in this competitive segment. It'll be interesting to see what GM comes up with with the Viva.

 

[YSSMAN]

Impressions on the other side of the world have been otherwise positive on the Cruze, but a lot of changes can happen in a short amount of time. Volkswagen has the MKVI Jetta and Golf on the way, and I'm sure we're not far off from getting a new Civic. Eventually. Otherwise, it will be class-competitive, I'm sure. That, and I'm sure that if they add a sport suspension on the 1.4LT model, it will be fun to drive.

But I do agree on the Viva part. GM has a lot to gain from that car if they do it right. But, once again, the Fiesta exists. Problems.

 

[Philly]

Cars like the Fiesta, Polo and 500 do demonstrate that an excellent car in that class can be made. If there's anything I want GM to do with my tax dollars, it's build an incredible small car. And yet I get the feeling that they'll come up short.

The other option is to more or less ignore the segment and save all that money they would have to spend to create a fantastic car to beat the Fiesta and put it somewhere else. But if FIAT provides Chrysler with a good platform to put a compact on, I don't think GM has any choice. Although I think ignoring the segment would be suicide, seeing that small cars are becoming the new SUV. So GM had better build an amazing car here if they want to prove that they've got what it takes.

 

[Omnis]

Cars like the Fiesta, Polo and 500 do demonstrate that an excellent car in that class can be made. If there's anything I want GM to do with my tax dollars, it's build an incredible small car. And yet I get the feeling that they'll come up short.

Yeah, I want them to build an incredible small car too... and then give us back the money they got the Thugvernment to take from us plus interest.

What could possibly give you the feeling that they'd come up short?

 

[Northstar]

Uhhhh what?



Am I missing something or does this seem like an odd choice to go ahead and open back up? A $90,000 sports car in an economic climate that probably isn't really going to support it all that well. I can sort of understand the philosophy of starting back with your halo car, but is this really what my tax dollars are funding?

Rich people are still rich.

 

[Mt. Lynx]

Rich people are still rich.

Exactly. Look at what companies that still sell with a profit, and you´ll see nothing but supercar- and luxury makers. Going for the Viper I think is the best way to go for now, since that car at least has a fair chance of selling profitably.

 

[Joey D]

Rich people are still rich.

No kidding. My point is Chrysler probably doesn't really pull a ton of money from selling a $90,000 sports car which only appeals to a small group of people. Inexpensive and good transportation will sell right now and actually make a good bit of money.

 

[TheCracker]

No kidding. My point is Chrysler probably doesn't really pull a ton of money from selling a $90,000 sports car which only appeals to a small group of people. Inexpensive and good transportation will sell right now and actually make a good bit of money.

No, but the profit margins are likely to be much higher on a low-volume car and the costs of re-opening a relatively small factory (150ish people?) are also going to be lower. Some profit is a better start than none at all.

 

[Joey D]

No, but the profit margins are likely to be much higher on a low-volume car and the costs of re-opening a relatively small factory (150ish people?) are also going to be lower. Some profit is a better start than none at all.

They don't need to be wasting their efforts with cars like this though when in the grand scheme of things it's going to make very little difference. Also like I said, it's really bad PR on Chrysler's part. I've already here numerous people in the local media go off about how this is wasting tax dollars. Whether they are or not doesn't really make much of a difference because if people hate your company you are going to be doomed.

 

[YSSMAN]

Joe, its all a bunch a heat with no light - on both sides of the state. People can talk all they want about how they don't like this or that which Chrysler-FIAT and GM may be doing... But if they want to have money coming into the state, we're going to have to let it happen.

Given the change in power at Chrysler-FIAT, my guess is that Burlesconi (sp?) made the call on re-opening that plant, among others. I trust the man, as he has a solid track record with his FIAT work years ago. People are still buying Vipers, and there is a healthy profit margin on the car, so they'll continue to make them. GM is running the same game on the Corvette as well.

Otherwise, I totally agree on the small car deal. Thing is, we're at least two years away from getting any of the FIAT-based, "re-imagined" Chryslers. Or, even then, the 500, which won't be here until next fall.

 

[Joey D]

Ya I get that, but really how much money is really coming in from build a couple thousand Vipers? I'd be real curious to see the profits made by that one plant and how much time and effort went into reopening. Something just doesn't sit right with it.

 

[a6m5]

Ya I get that, but really how much money is really coming in from build a couple thousand Vipers? I'd be real curious to see the profits made by that one plant and how much time and effort went into reopening. Something just doesn't sit right with it.

I'd be very interested in the actual reasons for this as well.

 

[Northstar]

Ya I get that, but really how much money is really coming in from build a couple thousand Vipers? I'd be real curious to see the profits made by that one plant and how much time and effort went into reopening. Something just doesn't sit right with it.

Well if the person who said there is a waiting list is right it makes perfect sense. With the Viper they know they will sell because they already are sold. However say they re-open the Ram factory, those aren't guaranteed to sell and could possibly sit on a lot for awhile.

 

[Joey D]

More cuts planned for GM:

GM to Shed About 4,000 U.S. Salaried Jobs by Oct. 1
June 23 (Bloomberg) -- General Motors Corp., shrinking operations as it reorganizes in bankruptcy, will offer buyouts and retirement incentives to eliminate about 4,000 U.S. salaried jobs by Oct. 1.

Employees began receiving notices today, and involuntary cuts will be needed if Detroit-based GM gets too few volunteers to leave, a spokesman, Tom Wilkinson, said in an interview.

The reductions will pare the salaried workforce by about 15 percent, deepening Chief Executive Officer Fritz Henderson’s plans to slash a U.S. non-union payroll that had 29,650 jobs at the start of 2009. On April 27, GM projected cutting to 26,250 positions, and the new buyouts will trim the total to 23,500.

Henderson also plans to trim the executive ranks at the biggest U.S. automaker by about 35 percent this year, to about 850.

Employees who volunteer to retire will receive enhanced benefits, Wilkinson said. Those not eligible to retire will receive as much as six months of pay and benefits, or as much as a year for executives, he said.

GM’s government-backed rescue may complicate the decision on whether to take a retirement or buyout, said David Kudla, CEO of Mainstay Capital Management in Grand Blanc, Michigan, who advises about 2,000 GM, Ford Motor Co. and other automotive employees on retirement options.

“Everyone has an emotional decision to make,” said Kudla, who presents educational seminars for GM employees on retirement offers. “Are they ready to go? Can they afford it?”

GM’s restructuring plan calls for trimming union and salaried jobs, shutting plants, dropping brands, shedding dealers and chopping debt to return to profit amid the worst U.S. auto market since the 1980s.

GM has offered retirement incentives and buyouts valued at as much as $115,000 plus a $25,000 vehicle voucher to its United Auto Workers employees to cut its hourly workforce to about 40,000 by 2010 from about 61,000 last year. Hourly workers have until July 24 to accept.

===

And one survey shares some rather worrying news for GM's public perception.

POLL: 54% of Americans against Cash for Clunkers, 59% expect GM quality to dip under gov't. ownership
America's "Cash for Clunkers" bill is on the cusp of being signed by President Obama, but according to a new survey by Rasmussen Reports, a majority of U.S. citizens aren't in favor of the plan.

According to the telephone survey, fully 54% of those queried are against the measure, while 35% are in favor and 12% aren't sure how they feel about it. That's up from a similar survey done last month, in which just 34% were against consumer vouchers for trading in older, less efficient cars and trucks. In fairness, Rasmussen Reports indicates that the change could have been influenced by a change in the wording of the respective surveys (the initial survey did not indicate how much the program might cost the government).

While that news may not perk up the spirits of Capitol Hill, the survey's findings that 17% of those asked say they are "very likely" to purchase a new vehicle this year because of the program (and a further 18% admit they are somewhat likely) ought to cheer up a few members of Congress.

Perhaps most interesting of all is news that many Americans would appear to have little faith in the ability of the government to help General Motors improve its fortunes, with 41% expecting for GM's quality to deteriorate under federal ownership. (Presumably, this leaves 59% of those surveyed that feel otherwise or are undecided). Perhaps more damaging is that the study's findings say that fully 57% of those questioned believe that the government is likely to pass laws and regulations that give Chrysler and General Motors unfair advantages over other automakers that did not receive bailout funds.

Oddly, Rasmussen Reports' findings to not disclose the number of people it surveyed, or any +/- accuracy estimates. Perhaps one has to have a 'premium membership' to get access to that data. In any case, check out the link for more of the study's findings.