You are almost correct. They did have $20b in reserves, but that was about
to be eaten by the new labor agreements. Chrysler admitted that it did not
have the money for R&D and needed a partner. In 1995 Chrysler was the most
efficient manufacturer in bringing vehicles from the drafting table to the
assembly line. By 1998 it was among the least efficient. Resources were used
for better UAW contracts and big bonuses for executives. Chrysler would have
been cash poor by 2000 or so. That is why Eaton jumped into Juergen
Schrempfs arms.
Daimler made a bad situation worse, but it did not cause the problem. If
Dieter Zetsche was in charge from the beginning, things may have been
different. The new RWD cars and big trucks would have gone over well in 1999
and 2000 and maybe he wouldn't have let the passenger car business languish.
The idea that Chrysler was just fine prior to the merger (take over) is a
myth. I was trading Chrysler bonds at the time. I had the research and all
financial statement info at my disposal.
----- Original Message -----
From: <jon@dakota-truck.net>
To: <dakota-truck-moderator@bent.twistedbits.net>
Sent: Thursday, November 05, 2009 1:49 PM
Subject: Re: DML: AOL write up on Chrysler changes...
>
> "Mike Sykes" <mikesykes@cox.net> wrote:
>
>>>>After all, the people who
>> basically own and run Chrysler (hint: most of them have .gov e-mail
>> addresses) are the same idiots and/or scumbags who are doing their
>> level best to tank the economy and screw up the entire country. (I
>> don't think its a coincidence that the only one of the big three
>> currently turning a profit - Ford - is also the only one that didn't
>> latch onto the government "bailout" teet.<<<
>
>> While I make it a habit not to disagree with Jon, I have to say that
>> there
>> is no conspiracy on Ford's part here. Ford saw the economic hurtin' on
>> the
>> horizon and closed a bunch of plants and offered packages to employees in
>> preparation. Ford has their finger on the pulse of fleet sales, and that
>> has
>> always been a really good indicator of sales trends to come. Once fleet
>> sales started dropping off, Ford started preparing for bad news. Since Ma
>> Mopar and Chubby don't really see the fleet numbers that Ford does, they
>> probably didn't see it comin'... of course, poor business decisions and
>> being dropped recently by larger corporations didn't help either... =(
>
>
> I think I disagree that we disagree. ;-) I wasn't trying to imply
> that there was any sort of conspiracy or anything like that on Ford's
> part. My post was a compliment to Ford on their very smart decision
> to stay away from the toxic bailout cash. (As Mike pointed out, this
> may have had more to do with the timing of the way things worked out
> than anything else, but for whatever reason, Ford didn't take the
> money and thus didn't give the government even more control over
> dictating how the company must be run.)
>
> From what you are saying above, it sounds like Ford saw the storm
> coming, made preparations to deal with it and is weathering it well so
> far; they are to be complimented for that. It kinda reminds me of the
> situation Chrysler was in near the late 90s. Despite Bob Eaton's
> bungling, they were still doing fairly well, and were preparing for some
> hard times ahead ($20 billion in cash reserves, etc.). Then Eaton
> (with stockholder support) basically sold the company to Daimler who
> promptly blew all the cash, sucked the company dry and discarded the
> husk, leaving Chrysler in a bad spot. I think the Daimler "merger"
> was the beginning of the end. They've had two owners since then and
> the future is anything but certain for Chrysler. :-(
>
>
> --
> -Jon-
>
> .- Jon Steiger -- jon@dakota-truck.net or jon@jonsteiger.com -.
> | '96 Kolb Firefly, '96 Suzuki Intruder, Miscellaneous Mopars |
> `-------------------------------- http://www.jonsteiger.com --'
>
>
>
This archive was generated by hypermail 2b29 : Tue Dec 01 2009 - 18:23:04 EST