The Wondering Mind

There’s been lots of press over the Chrysler and GM bankruptcies. Only time will tell how they will work out.

My personal view is that buying Chrysler is a mistake for Fiat. Chrysler has done much over the years to destroy the brands it owns. So much so that Jeep is about the only brand with any kind of goodwill of value left. (I realise that there are undoubtedly fans of various Chrysler brands still out there, but I suspect the benefits they bring to owning the company is easily outweighed by the negatives.)

And for that prize, Fiat is taking on a company whose problems are legion. As many commentators have pointed out already, Fiat has pulled off a remarkable turnout of its own in the past few years, but it still has a long way to go to finish the job. There are arguments to made that if Fiat really wanted to enter the U.S. market for the sales volume, they may have been better off purchasing Saturn for the dealership in the U.S. They could have supplied the excellent and relatively new dealership network (probably much better than Chrysler’s), with vehicles from existing factories, or from greenfield sites which do not suffer all the issues of legacy, both good and bad, that come with Chrysler plants.

As for GM, being unburdened of some of its debt will help, but it needs to start producing better products or it will fail. The reason not enough customers bought GM cars wasn’t because they didn’t like the fact that GM workers supposedly got better pay than those in a Toyota plant (why does the customer care, as long as the price is right?); it was because they did not design and build sufficiently attractive cars.

What I really hope GM does in bankruptcy though, is to treat its dealers better than Chrysler has. While they did need to shed dealers, and they did need to do it far more drastically than the dealers would have liked, many of the tactics smacked of callous opportunism. Pressuring dealers to take on excess inventory, with promises that they would then survive the coming dealer cull, literally days and weeks before they were axed was clearly cynical and dealing in bad faith. Refusing to take back inventory while hiding behind bankruptcy is just pathetic.

What I didn’t know, and what many people probably don’t, is that the axed dealers only have a short time to sell their inventory of new vehicles. After a deadline, it is illegal for them to sell those vehicles!

This only adds to my opinion that those running Chrysler are scum and bad enough things cannot happen to them. And just to confirm the righteousness of that stance, I noted this in the last paragraph of the article referenced above.

Chrysler points out that since it hasn’t produced vehicles since May 1, many dealers are hungry for inventory, and they’ve been buying vehicles from the soon to be closing retail stores.

What a load of crap! The reason Chrysler hasn’t been producing vehicles since May 1 is that it’s been months (actually, more like years) since they’ve been able to find enough people crazy enough to buy their horrendous products! They still have inventory built only God-knows-when, sitting on their lots waiting for a buyer. The only reason anyone seems to be buying Chrysler these days is the dealers who were canned by Chrysler are practically giving them away to get rid of them.

If these vehicles really were in demand, there is no reason why the company could not take them back from the closing dealers and simply send them to the dealers who are still open.

The other possibility is that the vehicles are in demand, but this way Chrysler can give a bonus to the remaining dealers of bargain-basement deals on their inventory. It’s at the expense of the closing dealers, but Chrysler has already demonstrated they don’t actually care about those dealers.