I've flamed you before.....

..... but I gotta admit... that was pretty good.

Although you aren't entirely wrong, I'll say Blackflag is pretty close to right this time, too.

Timothy F. Geithner's been president of the Federal Reserve Board, worked on the International Economics department at the Treasury, and was director of the Policy Development and Review Department (2001-2003) at the International Monetary Fund. The guy knows finance.

Ray LaHood is a republican politician, but Diana Farrell is the director of the McKinsey Global Institute, McKinsey & Co.'s economics research arm.

Austan Goolsbee's background is economics, and was one of the first people to point out (on a sunday news show I believe) that a collaspe of the US auto industry would be disasterous for the economy. He is from the National Bureau of Economic Research.

There are also additional outside advisors, business experts, bankruptcy experts, and a whole trove of people who actually know what they are talking about.

Sure, there are policy people involved. There are people who work either in various agencies or far particular people in government who are also involved. But this is clearly being run by financial and Economics people who are looking closely at plans, asking the right questions, and have by every account I've heard or read, aren't afraid to learn something new.

The first thing to come out of this group was a reccomendation for the first number under the new CAFE standards.... which just so happened to p*ss off a chunk of enviromentalists as not being aggressive enough.

These guys are doing very well IMO, and the fact that they are being respected by such a large cross section of people and agencies is saying something about their honestly. Their agenda is clearly both saving the US auto industry, while at the same time, saving US taxpayers from wasting their money on useless, unrealistic plans.

They called both GM and Chrysler out.

Although GM's results should surprise no one, Chrysler's was an insight to what really has been happening since Cerberus doesn't have open viewing as to Chrysler's status anymore.

They've done a great job, called both company's BS, and put a spotlight on them to improve.

Now it's up to GM and Chrysler.

 

What they're missing, it appears, are people who have actually run a business...but what else is new.

 

For Chrysler, they basically say:

1. Your claims of having small cars in your pipeline is BS (I guess the Hornet was all they had )
2. You depend too much on a only a few models for income.
3. You don't make enough to keep your entire line of cars competitive, and you don't have enough of a global reach to draw from.
4. Your quality next to your competitors suck, and at the rare you're going, you'll never catch up.

But there is also positive:

1. Chrysler's plan to reduce salaried workers is dead on.
2. Chrysler's reduction in overcapacity is dead on.

and it points out what needs to change:

1. You don't make enough to spend what you need to keep your products competitive.
2. You aren't big enough to leverage better quality and better costs from your suppliers.
3. You only started fixing quality since January last year and it's going to take a long time to catch up with everyone else.
4. Because Fuel standards will go up, and you depend on trucks, you will likely have to restrict the sales of some of those to meet the new standards, which decrease you income, which means you'd become less... not more viable.

Other items noted:

* Chrysler had only 4 nameplates in it's 2014 lineup.
* 3% of Chrysler's R&D (compared to 5% at GM, Toyota, & Honda) was devoted to powertrain research.
* Chrysler is behind other makers in flex-assembly technology.
* Chrysler's buyer mix is skewed towards those with low FICO scores, which hits it hard whenever credit is tight.

In short, they say the fact that Chrysler is too small to fund itself and make the changes it needs to, hooking up with a company that can increase Chrysler's leverage, and already has small cars on which to fill Chrysler's gapping hole in small car development will likely fix those issues.

It does specifically mention Fiat "or other prospective car maker".

I like Chrysler, and pull for them (even had alot of Chrysler stock that I made money on during the 90s, and a good chunk of this decade via Daimler), I appriciate this honest assesment.

I hope Chrysler and Fiat make this deal work.

Warren Buffett is a unofficial advisor.

I'd imagine that Bob Gates also has had his phone ring a few times.

Those are only the guys who have publically indicated that they've talked to anyone.

 

I agree with a lot of their points, but they've latched on to the 'you're small' point, and won't let it go. They were small in the past, and they were profitable. And there are car companies smaller than Chrysler that are profitable. So I don't know that that holds water.

I think they wanted the conclusion of 'go merge with somebody,' then they looked for reasons to get to that conclusion.


I don't know a lot about him, but I don't think he's run a business...I think he's always been an investor.

Just people who run companies would be nice, instead of academics and politicians. I don't think that's unreasonable.

 

Just because you run or head a company, doesn't makes you smart.
Look what's happening with so many companies nowadays.

 

He is the chairman and CEO of the insurance-focused holdings company Berkshire Hathaway, and has been since 1970.

Berkshire Hathaway is a very successful company. Their stock has dipped, along with everything else lately, but anything that sells for nearly $90,000 per share when the market is down must be doing something right. (They have an alternative stock which buys a smaller share of the company, currently selling for a bit under $3000).

http://www.google.com/finance?tkr=1&q=NYSE:BRK.A
http://www.google.com/finance?q=NYSE%3ABRK.B

You apparently know nothing about him.

 

Yeah, Berkshire is a holding company. It doesn't actually do anything, it just invests in sub-companies that have their own management teams. Same relationship between Cerebrus and Chrysler. Buffett doesn't claim to know how to manage businesses on a day-to-day basis.

 

I don't know what he does and doesn't claim, but a holding company is still a company, and he still runs it. There are certainly common elements between managing one multi-billion dollar company and managing another.

 

Anyone who runs a large corperation has run a business on a day to day basis at some time in their career. Despite what some kid fresh out of college may think, you don't go from school straight to CEO.

Bottom line is Warren Buffet is the head of a company, that has quite alot of employees, providing a product, meeting a payroll, needs strategic planning & forsight, and has to compete with other companies.

Sure, he doesn't run an industrial company, but most businesses (in fact, most all businesses) in the US are service oriented.

You said no one running a business was involved in any of this.

In reality, there are quite a few.

 

I don't think you guys are admitting the difference between an investor and a manager. Buffett is only an investor and a financier, and that's all he claims to be. If an investment fund owns billions of dollars of company stocks, you wouldn't claim they run the companies they own.

And I still think the people on that list are primarily academics and politicians...which isn't really surprising.

 

Who? Who on that list has half as much experience as Wagoner?

 

My point wasn't that these people didn't know business, my point was in response to the context of Blackflag's post, which said none of these guys were actual government employees, rather they were consultants/contractors, which is false.

While the perception is there, just because a person is a government employee, doesn't mean they are slow or don't know what they are doing.

 

As a government employee I'd agree with that comment. Some do fit the stereotype, however most are extremely intelligent and took government jobs because we hoped to make a difference in people's lives.