Chrysler + Fiat = ?????
The car news today is Fiat's acquisition of a 35% interest in the dying Chrysler corporation. I am absolutely in support of this. purely for selfish reasons: I own a 2004 Chrysler Concorde LXI and still owe a couple years of payments on it (I got it for low $$ last summer. the dealership was a ghost town).
These guys are much more cynical about the reasons underlying this newsflash. I think the cynicism is sadly warranted.
UPDATE: Very warranted. The Chrysler-Fiat Deal Needs U.S. Loans. In fact, Fiat says the only way it is willing to go forward with this is with a guarantee of further US loans. New GOP hero Sen. Bob Corker says this is "troubling." I'd say that's an understatement. Are US taxpayers really going to foot the bill for a foreign car company, especially one that abandoned the US market long ago (leaving behind plenty cute vintage cars) because it couldn't make it here?
The current stasis in Chrysler's business makes a mockery of the free market. All they are doing is waiting until March to see if they will get more funds. Meanwhile, their factories are idle. Their workforce is furloughed (and their best employees no doubt took the $$ and ran). They are no longer making good cars; everyone of their available models flunked "Consumer Reports" reliability tests this year. Most fatally, they are not developing new cars. Their "plan" is to simply enter into a series of partnerships with other automakers like Nissan and Fiat, and simply rebadge those companies' offerings as Chryslers. So, they are willing to destroy the brand in order to save it?
Chrysler is not like Lehman Bros. or Bear Stearns. Its wealth is not paper wealth dependent on failed risk models. Chrysler has things of value: factories, testing grounds, the Auburn Hills complex, the Jeep brand (which is being cheapened and abused), the Dodge pickups, the Dodge muscle cars, the Chrysler mini-vans. Someone (not Cerberus!) could probably make something of these assets, but instead they are all lying fallow because people whose historic memories don't extend past the death of AMC can't imagine a world without 3 US automakers, and want to keep pumping $$ into an empty husk.
This will obviously do the taxpayers no good, but it will do GM no good as well. If we really want to "save" the domestic auto industry, then we need to focus on Ford (which claims to not need the $$) and GM (which is building some good cars and is at least making some noise RE: the UAW, its dealers, and its lenders). But there is no good rationale to save Chrysler, except that its BK would lead to the supposed cascade of failures among part suppliers. Well, then the $$ we might spend propping up Chrysler should go to those guys, as they have viable businesses. Chrysler? Forget it.
