Is anyone's glass half full?

[Ed62]

With the announcement of Chrysler shutting down operations for a month, does anyone think the auto industry has a fighting chance of staying alive? Would a bailout or bankruptcy do the trick, or will people still not buy cars because of the shape the industry is in? Think about the warranty.

Ed

[Uncle Cracker]

This is only my gut feeling, but I think Chrysler will belly-up, but GM will get by. I don't think Chrysler has really been healthy, in spite of what the analysts might say, since the days prior to the Lee Iacocca bailout. They always seem to be trying to catch up. As for GM, they killed Oldsmobile, keep re-making Pontiac, the Buick loyalists are now getting up there in age, but I think the Chevy and Caddy brands will be strong. I believe GM is well enough diversified to weather the storm.

[just started]

"Closing" a plant for a month is a joke since they still have to pay the union holdup money, the only savings is the material cost and electric to run the line and welders.

[Alex Franke]

This is only my gut feeling, but I think Chrysler will belly-up, but GM will get by. I don't think Chrysler has really been healthy, in spite of what the analysts might say, since the days prior to the Lee Iacocca bailout. They always seem to be trying to catch up. As for GM, they killed Oldsmobile, keep re-making Pontiac, the Buick loyalists are now getting up there in age, but I think the Chevy and Caddy brands will be strong. I believe GM is well enough diversified to weather the storm.

I think you hit the nail on the head. I hope Ford and GM are able to take the business Chrysler leaves behind, though.

[chopnhack]

I really do hope that GM pulls through, they have a new car that is do out soon called the Chevy Volt that can get 40 miles on a charge. Thats roundtrip for probably 90% of america's daily commute. What an impact that would have on oil consumption! Imagine being able to thumb our noses at the saudis

[jackellis]

It's kind of ironic that many of you think Chrysler, which was bought by a private equity firm, will disappear. Private equity firms are supposed to be masters at turning around and improving businesses with otherwise good prospects that have not been managed well for a variety of reasons.

This is Bob Nardelli's third strike - he failed to get the top job at GE, he failed to invigorate the Borg, and now he's failed to revitalize Chrysler.

As for the industry's prospects, I'd note that Warren Buffett has not taken stakes in any of the auto makers and I doubt he will. They're in a lousy business with lousy economics.

[Uncle Cracker]

I really do hope that GM pulls through, they have a new car that is do out soon called the Chevy Volt that can get 40 miles on a charge. Thats roundtrip for probably 90% of america's daily commute. What an impact that would have on oil consumption! Imagine being able to thumb our noses at the saudis

Actually, Chevy announced today that they are putting the Volt factory construction on hold. Don't know if they will tool up to make it somewhere else.

[jlm]

...a new car that is do out soon called the Chevy Volt...

Unfortunately, estimates are that the Volt will cost close to $40,000, and it won't be on sale until 2010. Too little, too late for GM, I fear. They should've started work on that car five years earlier.

GM could go either way, but if Rick Waggoner stays in charge, I wouldn't expect good things to happen. That guy is clearly unable to lead GM out of the mess he and his team have created. Among other things, GM needs to dump some of their brands - who even considers buying a Buick these days? Why does GMC even exist, since all they produce are rebranded Chevy trucks?

Ford will make it through - compared to GM and Chrysler, they're in a decent position. Chrysler is history, though. Cerberus (the private equity firm that bought them from Daimler last year) just wants to take the bailout money and run, leaving Chrysler to collapse. Is it a coincidence that Cerberus paid $7 billion for Chrysler and that's the exact amount that they're asking the government for? The best thing Chrysler can hope for at this point is some kind of forced merger with GM as a condition of a government bailout. It seems pretty clear they can't survive on their own.

[JoeyGee]

Unfortunately, estimates are that the Volt will cost close to $40,000, and it won't be on sale until 2010. Too little, too late for GM, I fear. They should've started work on that car five years earlier.

They did--more like 15 years ago. They had a viable electric that people loved, but they pulled the plug on it (pun intended). Watch the documentary Who Killed the Electric Car--not political at all. It's a fascinating story.

I for one, believe all will survive. Once the econmomic "downturn" is over, they will survive--if they agree to work leaner and smarter. This country loves it's cars too much for them to fail.

[dkerfoot]

What I thought was a joke was GM wanting to buy Chrysler - yeah that is GM's problem, not enough divisions!

I don't know enough about the business to comment (at least intelligently) but I have appreciated Chrysler's innovation. The original mini-van, The various Jeeps under their ownership, the Viper, the Prowler, the PT Cruiser, the Crossfire, the Pacifica and the Town & Country which I feel is the best van available. (When my kids were commenting on the price of gas and gas mileage, etc, I pointed out that our T&C got well over 100 MPG - when there are 5 or more of us in it!)

If I had to guess, the Chrysler name and product designs will live on. Bankruptcy may be necessary for them to relocate to Mississippi and start over with new labor contracts and a new dealership structure.


.

[jlm]

They had a viable electric that people loved, but they pulled the plug on it (pun intended).

I think it's a bit of a stretch to call the EV1 "viable". It was a "working" electric vehicle, but from a business standpoint, far from viable. GM never released production cost figures for it, but knowledgeable estimates are $20K - $30K just for the battery pack. One of the reasons they only leased the cars, and didn't sell them to people, is because nobody would have bought them at the $50K or so price tag it would have had to have to make a profit. This was at a time when gasoline was under a buck a gallon in some parts of the USA.

The EV1 was a testbed for technology that GM could have continued to develop (which would have put them way ahead of the game today), but it was never intended to be a real production vehicle itself. If they had continued to develop the program, though, maybe we'd have a truly viable electric car today.

[mschrank]

....Chrysler's innovation. The original mini-van, ...

Excuse me, but.....

[Wood_workur]

If GM and Chrystler go under, I wouldn't be too concerned. (Yes, the job losses would suck, but I think there are plenty of jobs that still need to be filled) Toyota I believe has the most work done on its car, such as parts made and assembled, in the US compared to any other auto manufacturer.

[JeffG78]

I am an engineer at Ford and things are pretty ugly. I feel better than friends at GM and Chrysler, but only barely. I too see Chrysler going under, but I think Ford and GM will make it with some help. The problem is that if even one goes under it puts a huge strain on the remaining companies. They all rely on the same suppliers, so if an account is lost, the volumes will drop and suppliers will begin failing. This will mean retooling elsewhere with new verification testing and higher prices due to lower volumes.

Michigan is in deep trouble. Nearly everything in SE Michigan relies on the auto industry. It doesn't take much to create a perfect storm around here. We can't even leave for another state because the housing market is so bad. Houses here were very expensive a few years ago compared to most places, so now that the bottom has fallen out, most of us are not leaving unless the economy rebounds or we lose everything and start over elsewhere in a huge hole. Ford is dumping another 2200 engineers in January and it will be far from the last of the cuts. We have had six rounds of white collar cuts in the last three years with no end in sight. GM and Chrysler started their cuts much later, but they will be forced to catch up quickly for any chance of survival. Hopefully, I still have a job next month.

[DaveS]

Suddenly the "lifetime" warranty we have on our Chrysler Town and Country doesn't seem nearly as valuable as it did a short time ago.