Chrysler creates Ram brand; Gilles steers Dodge; Fong leaves in shakeup
10-07-2009, 04:18 PM
#16
Registered User
Join Date: Mar 2001
Location: The Golden State
Posts: 13,711
Here's where I disagree and why.
1. He sarcastically asks how Fiat managed to dodge (no pun intended) the transparency that GM is forced into. Answer is pure and simple. GM is 60% owned by the US Federal Government. All government activity is open unless it's a national security issue. Chrysler is priomarily owned by the UAW's health care fund. Therefore, it doesn't have to be as open. No mystery there.
2. While I also question the wisdom of separating the Ram brand from Dodge, the way Fiat plans to take Chrysler does make the decision to separate Ram logical and consistant with the goal. Dodge is to becaome a common-man's version of Alfa Romeo. A name associated with a history of performance selling performance oriented cars. Dodge trucks have been the 800 pound gorilla in the room, and at various times has been the sole bread winner for the entire company. Ram is being incorperated into Fiat's truck division that already makes semis. Sidenote, when Daimler left Chrysler, they took the Sprinter Van (licensed by Daimler) with them. Fiat will be supplying the replacement.
3. He says the owners of Chrysler don't know where they are going, or how to get there. But he completely ignores the plans Fiat has already layed out. I'm only part-time, freelance press, yet I can gain access to what's going on at Chrysler. Why can't he? Why doesn't he? Is he ignoring what's been talked about so far? If so why? That brings into question objectivity or at least, selectively ignoring what's out there.
4. He was very right in one aspect. Fiat didn't think Chrysler would be a good investment if they had to lay out cash for it. And they were right. Cerberus bled Chrysler dry of product after Daimler bled them dry of money. Why put money into something that would continue to burn money while you spend more money getting new product out. Why deal with a bunch of vulture-investors that want to liquidate the company to get their money, with zero concern about shutting Chrysler down. Why deal with a UAW & CAW whose leadership position depends on standing up to the companies they work for. Let the whole thing go through bankruptcy, and pick up the parts to build a new company. The UAW financed it, the US government paid for the proceedings, anything that has too much liability, simply don't "buy" it. Yet, Mr. Howes treats that as some devious plan or incompetence. Hard to tell which in his article.
5. Finally, he tips his biased hand (in case no one noticed by the time you get near the end). He calls fiat a "a middling European automaker with geographically limited appeal". Same could be said with General Motors (try selling a Buick outside the rust belt, or a non G8, Solstice, or GTO Pontiac on the west coast.... or try selling most any GM-NA volume product elsewhere in the world). Yet, the following line he proclaims " and yes, he persuaded Team Obama to finance Fiat's return to the lucrative North American market.". If Fiat is truly an unimpressive company in Europe, is a return to North America going to be any more lucritive than it was the last time when they had to shut down and leave North America???
There are some opinion pieces that Daniel Howes writes that's on the mark. But there are few (this one is a big example) that are a wild shot in the dark.
He ignored alot of relatively free information. He displayed quite a bit of loathing towards Fiat. He's perfectly fine with Chrysler simply liquidating. He simply glosses over GM and their own issues. He skipped over the fact that Fiat actually is doing well in Europe (No Ford or Volkswagen, but has done an admirable job keeping things going during a disasterous industry downturn).
Some executives he sacked or resigned. Most seem to have been brought in during the final days of the old Chrysler Group or were put in position during or immediately after bankruptcy. The dust will settle at Chrysler (like GM) not a few months after coming out of bankruptcy reorganization, but like GM, it's going to take at least a year before we see where the company is going and if what's happening during these reorganizations today will actually have an impact.
I know this, and Mr Howes I'm sure does as well.
However, I don't depend on getting and keeping people's attention on an almost daily basis in my writings in order to keep the bills payed.
In that context, I don't chastize him or his opinion.
I simply disagree with it.... with explained reasons.
10-08-2009, 12:49 PM
#17
Registered User
Join Date: Feb 2005
Posts: 146
Pure opinion.
Here's where I disagree and why.
1. He sarcastically asks how Fiat managed to dodge (no pun intended) the transparency that GM is forced into. Answer is pure and simple. GM is 60% owned by the US Federal Government. All government activity is open unless it's a national security issue. Chrysler is priomarily owned by the UAW's health care fund. Therefore, it doesn't have to be as open. No mystery there.
2. While I also question the wisdom of separating the Ram brand from Dodge, the way Fiat plans to take Chrysler does make the decision to separate Ram logical and consistant with the goal. Dodge is to becaome a common-man's version of Alfa Romeo. A name associated with a history of performance selling performance oriented cars. Dodge trucks have been the 800 pound gorilla in the room, and at various times has been the sole bread winner for the entire company. Ram is being incorperated into Fiat's truck division that already makes semis. Sidenote, when Daimler left Chrysler, they took the Sprinter Van (licensed by Daimler) with them. Fiat will be supplying the replacement.
3. He says the owners of Chrysler don't know where they are going, or how to get there. But he completely ignores the plans Fiat has already layed out. I'm only part-time, freelance press, yet I can gain access to what's going on at Chrysler. Why can't he? Why doesn't he? Is he ignoring what's been talked about so far? If so why? That brings into question objectivity or at least, selectively ignoring what's out there.
4. He was very right in one aspect. Fiat didn't think Chrysler would be a good investment if they had to lay out cash for it. And they were right. Cerberus bled Chrysler dry of product after Daimler bled them dry of money. Why put money into something that would continue to burn money while you spend more money getting new product out. Why deal with a bunch of vulture-investors that want to liquidate the company to get their money, with zero concern about shutting Chrysler down. Why deal with a UAW & CAW whose leadership position depends on standing up to the companies they work for. Let the whole thing go through bankruptcy, and pick up the parts to build a new company. The UAW financed it, the US government paid for the proceedings, anything that has too much liability, simply don't "buy" it. Yet, Mr. Howes treats that as some devious plan or incompetence. Hard to tell which in his article.
5. Finally, he tips his biased hand (in case no one noticed by the time you get near the end). He calls fiat a "a middling European automaker with geographically limited appeal". Same could be said with General Motors (try selling a Buick outside the rust belt, or a non G8, Solstice, or GTO Pontiac on the west coast.... or try selling most any GM-NA volume product elsewhere in the world). Yet, the following line he proclaims " and yes, he persuaded Team Obama to finance Fiat's return to the lucrative North American market.". If Fiat is truly an unimpressive company in Europe, is a return to North America going to be any more lucritive than it was the last time when they had to shut down and leave North America???
There are some opinion pieces that Daniel Howes writes that's on the mark. But there are few (this one is a big example) that are a wild shot in the dark.
He ignored alot of relatively free information. He displayed quite a bit of loathing towards Fiat. He's perfectly fine with Chrysler simply liquidating. He simply glosses over GM and their own issues. He skipped over the fact that Fiat actually is doing well in Europe (No Ford or Volkswagen, but has done an admirable job keeping things going during a disasterous industry downturn).
Some executives he sacked or resigned. Most seem to have been brought in during the final days of the old Chrysler Group or were put in position during or immediately after bankruptcy. The dust will settle at Chrysler (like GM) not a few months after coming out of bankruptcy reorganization, but like GM, it's going to take at least a year before we see where the company is going and if what's happening during these reorganizations today will actually have an impact.
I know this, and Mr Howes I'm sure does as well.
However, I don't depend on getting and keeping people's attention on an almost daily basis in my writings in order to keep the bills payed.
In that context, I don't chastize him or his opinion.
I simply disagree with it.... with explained reasons.
Here's where I disagree and why.
1. He sarcastically asks how Fiat managed to dodge (no pun intended) the transparency that GM is forced into. Answer is pure and simple. GM is 60% owned by the US Federal Government. All government activity is open unless it's a national security issue. Chrysler is priomarily owned by the UAW's health care fund. Therefore, it doesn't have to be as open. No mystery there.
2. While I also question the wisdom of separating the Ram brand from Dodge, the way Fiat plans to take Chrysler does make the decision to separate Ram logical and consistant with the goal. Dodge is to becaome a common-man's version of Alfa Romeo. A name associated with a history of performance selling performance oriented cars. Dodge trucks have been the 800 pound gorilla in the room, and at various times has been the sole bread winner for the entire company. Ram is being incorperated into Fiat's truck division that already makes semis. Sidenote, when Daimler left Chrysler, they took the Sprinter Van (licensed by Daimler) with them. Fiat will be supplying the replacement.
3. He says the owners of Chrysler don't know where they are going, or how to get there. But he completely ignores the plans Fiat has already layed out. I'm only part-time, freelance press, yet I can gain access to what's going on at Chrysler. Why can't he? Why doesn't he? Is he ignoring what's been talked about so far? If so why? That brings into question objectivity or at least, selectively ignoring what's out there.
4. He was very right in one aspect. Fiat didn't think Chrysler would be a good investment if they had to lay out cash for it. And they were right. Cerberus bled Chrysler dry of product after Daimler bled them dry of money. Why put money into something that would continue to burn money while you spend more money getting new product out. Why deal with a bunch of vulture-investors that want to liquidate the company to get their money, with zero concern about shutting Chrysler down. Why deal with a UAW & CAW whose leadership position depends on standing up to the companies they work for. Let the whole thing go through bankruptcy, and pick up the parts to build a new company. The UAW financed it, the US government paid for the proceedings, anything that has too much liability, simply don't "buy" it. Yet, Mr. Howes treats that as some devious plan or incompetence. Hard to tell which in his article.
5. Finally, he tips his biased hand (in case no one noticed by the time you get near the end). He calls fiat a "a middling European automaker with geographically limited appeal". Same could be said with General Motors (try selling a Buick outside the rust belt, or a non G8, Solstice, or GTO Pontiac on the west coast.... or try selling most any GM-NA volume product elsewhere in the world). Yet, the following line he proclaims " and yes, he persuaded Team Obama to finance Fiat's return to the lucrative North American market.". If Fiat is truly an unimpressive company in Europe, is a return to North America going to be any more lucritive than it was the last time when they had to shut down and leave North America???
There are some opinion pieces that Daniel Howes writes that's on the mark. But there are few (this one is a big example) that are a wild shot in the dark.
He ignored alot of relatively free information. He displayed quite a bit of loathing towards Fiat. He's perfectly fine with Chrysler simply liquidating. He simply glosses over GM and their own issues. He skipped over the fact that Fiat actually is doing well in Europe (No Ford or Volkswagen, but has done an admirable job keeping things going during a disasterous industry downturn).
Some executives he sacked or resigned. Most seem to have been brought in during the final days of the old Chrysler Group or were put in position during or immediately after bankruptcy. The dust will settle at Chrysler (like GM) not a few months after coming out of bankruptcy reorganization, but like GM, it's going to take at least a year before we see where the company is going and if what's happening during these reorganizations today will actually have an impact.
I know this, and Mr Howes I'm sure does as well.
However, I don't depend on getting and keeping people's attention on an almost daily basis in my writings in order to keep the bills payed.
In that context, I don't chastize him or his opinion.
I simply disagree with it.... with explained reasons.
Second the UAW did not finance the new Chrysler. They were given an equity stake in both GM and Chrysler to help pay for the VEBA.
Third, Fiat has not issued a plan to address Chrysler's restructuring. That should come on November 2.
Fourth, Fiat did not put up any money to finance Chrysler because they do not have much and their European operations are not doing well in Europe even with cash for clunkers over there. If there is a serious hangover in Europe as is beleived will be the case, Fiat could have a very serious problem in its home market.
http://www.fiatgroup.com/en-us/shai/.../default.aspx#
Do not forget about the role of politics in the Obama Administration's decision to hand over Chrysler to Fiat. Preserving jobs played a big part in it and it was not that expensive given the billions thrown at the banks. Politically the administration had to give Chrysler the money given an almost $1 trillion stimulus plan.
Howes is right on in his Op-Ed column to question what is going on at Fiat-Chrysler. Fiat is the company's third owner in 10 years. Chrysler for the most part has not been profitable since the early years of the merger with Daimler and certainly not profitable when Cerberus took over. In the subsequent upheaval at Chrysler, the company has burnt through over $10billion in hard cash plus government bridge loans. In addition the company also liquidated much of it technical staff and expertise. Given the poor state of the economy, a very soft auto recovery, poor sales, poor market acceptance of its current product, and lack of near term new product to drive revenue, to be bullish on Chrysler is assine. Hence Howes scepticism. Yes it is an Op-Ed however there are plenty of sources and data to back that scepticism.
It is not bias, it is the realities of the situation. The business case was never made to support the Fiat-Chrysler deal in the first place beyond the arbitrary cost savings from shared technology for fuel efficient vehicles. However to take advantage of economics of scale takes product cycles and Chrysler does not have that time. Every month that passes, Chrysler's scale diminishes. It is certanly not like Fiat can federalize Fiats and get them to market in short order and actually produce in the US.
The LX replacements and Jeep GC if they see production certainly will not sell in the volume they once did to sustain the operations. There are still issues with those programs that have to be worked out with Daimler. The economy, CAFE and fuel prices will also surpress sales. Furthermore, the sales expectations for those vehicles were way over optimistic for my taste. So where is the cash flow going to come from? Does Chrysler intend to go back to serious fleeting again? Howes was actually lobbing a soft ball in his line of questioning.
Saying they want to remake Chrysler into a notch above Cadillac or Dodge into a performance brand just does not cut it.
Fiat ranks last in UK JD Power survey, bodes poorly for Chrysler
http://www.motorauthority.com/blog/1...y-for-chrysler
Makes one wonder about the lip service. Sounds nice in theory but...
Last edited by evok; 10-08-2009 at 02:38 PM.
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