With 80 percent of Chrsyler Group going to Cerberus for $7.4 billion, a major U.S. automaker will be in the hands of a private equity group for the first time.
Buzz Hargrove, the head of the Canadian Auto Workers, called the deal “very, very worrisome for us… I don’t have any bone to pick with (Cerberus), but the whole point of private equity is not to grow the business over the long term and that’s what we need.”
Chrysler aims to return to profit in 2008.
How do you think American carmakers will evolve over the next decade? And the industry’s workers? The Big 3 directly employed 377,000 at the beginning to 2006, according to the office of Michigan Congressman John Dingell.
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This seems to be part of a trend to reverse the buying that happened in the last 10 years. Perhaps more of the luxury (and some quality) car makers in Europe will return to independence. Ford sold Aston Martin in March but there are plenty of other brands and lines to be broken back out. Maybe it’ll happen to US brands too - Jeep as Jeep might do better than as Ford.
However, any business changes are going to challenge the unions. In the long run have the unions helped or hindered the car makers? The Japanese car makers in the UK negotiated very specific union contracts before building the factories in the North East of England. The workforce there was simply pleased to have any work at all, and didn’t fight for stronger unions. The success seems to speak for itself:
http://en.wikipedia.org/wiki/Nissan_Moto r_Manufacturing_%28UK%29_Ltd
- Posted by Anonymous CowardChrysler was worth $36B and now is worth $7.4B. That is what should worry the UAW. Why has that happened? Gas prices or rigid work rules or bad design or poor marketing? All of the above? Why is the group still worth $7.4 billion and why didn’t Daimler have to pay someone to take it? What does Chrysler and its workers and management do better than any other manufacturer of autos? Why do they still exist at all?
- Posted by riffconTHat depends of who comes out with an nder $15k car that gets
- Posted by dr burke50+ MPG with a 100k warranty; America or China. If we don’t, they will and the automotive industry in America will become a thing of the past. I seriously doubt if America will ever be in a position to beat China manufacturing cheap, good quality cars; because of their cheap labor and no health care cost. In ten years,
America may produce no cars at all and all will be imported. Labor and health cost will ensure this or we will outsource the building of cars to China.
Much of this could have been avoided had the American automakers focused more on electric (renewable resource) vehicles instead of monster SUV’s and other fuel guzzling beasts.
The film WHO KILLED THE ELECTRIC CAR, explains how big oil has influenced the auto industry and how it crippled the development of electric power vehicles. I strongly encourage people to watch this film and to learn more about Peak Oil, which is a growing concern that is getting little to no media attention, which is quite frightening.
There is a reason why the big three are now called the Little Three. Toyota understands that there is a growing concern regarding oil and they are determined to offer sound alternatives. It’s time for the US auto manufacturers to wise up and to break free from the iron fisted oil industry.
- Posted by Mark FreemanI drive a big car. As far as gas goes, its not too bad (23-27mpg on highway)I drive a big car because I am a fairly big guy (6′2″ 270, but not fat)so the little econoboxes just ain’t an option.
The government let the american car manufacturers off the hook when they changed the CAFE rules.
IF the community I lived had anything to akin to an efficient mass transit system I would use it (it doesn’t)
- Posted by Old Guyor
Build me a car that gets 40mpg and isn’t designed for Frodo and his buddies…
Who cares if China (and/or Japan) is first to land a marketable and more-relevant car before the “Big 3″ do? All that it means in the short run is that we’ll have a few more unemployed people; in the long run it means we have more people who were freed to do other things.
Now, whether you want to acknowledge it or not, all three vehicle manufacturers have been working with alternative fuels. But there are huge problems - namely infrastructure problems to a large extent. Depending on the fuel source, electric is just becoming relevant however it depends on the source and method that electricity is derived. The “charge” method hasn’t caught on because of generally limited range and/or recharge time.
Ethanol and other alcohol-based alternative fuels are generally considered easier and more relevant due to the reproducable nature of the fuel and the easier path to change from fossil to alchohol fuels. GM and others are still refining this process as a better means to achieve not only a renewable fuel source but one that is relatively clean.
The greater problem is with both environmental nuts who think that by legislation they can change things overnight and the Unions who, under guise of helping the worker, need to ensure they are still keeping their union bosses happy and fat. Greens cost money and Unions cost money - but there are not many consumers who want either one.
- Posted by colsonWe live in one of those desirable, all-American Zip-codes, complete with all the flags and bumper stickers to prove it. Of the 34 cars on our block, two are American… both ours. We used to have three, but had to get rid of one. And this time we opted for a Prius as a replacement.
I don’t think of our block as atypical or anti-American. You’d think that some American auto executives would have been paying closer attention to neighborhoods like mine. Evidence from most recent glitzy ads indicates they are not.
Let’s all with Chrysler’s new owners all the best.
- Posted by BeekeeperThe final outcome of this whole situation is pretty hard to predict at this point in time. However, I think that, at the very least, there will be some pretty Draconian cuts at Chrysler. I would expect that some slow selling models will be discontinued immediately. In addition, more plant closings are a virtual certainty. Hopefully research and development won’t be curtailed too much. At this point new, more fuel efficient vehicles are the only thing that will save Chrysler. Spinning off Jeep, for example, would probably hurt far more than it would ever help. Guess we’ll all just have to wait and see how this plays out.
- Posted by S. Brooten