Chrysler reports strongest quarter in 13 years

[Ausm]

Where are you looking... the 1979 Encyclopedia Britannica?

http://lmgtfy.com/?q=GM+unfunded+liabilities

I'm talking about this smartass....

Chrysler has moved to a 401K plan.. but because the way the bailout was handled... the unions got to keep current pension and benefits. So now there is a at huge unfunded liability.

 

[Ferocious]

I think their newer trucks are the best looking and also have the best ride. Their diesel trucks are especially good for hauling.

 

[Genx87]

They're doing well now because consumer demand has propped back up due to improvements in the macro-economy. They needed a bailout because the macro-economy had tanked. If they had structural problems before that which made them more susceptible to the broader economic downturn, then the government needed to step in and fix them, assuming private investors would not. They needed to do this for one basic reason - too many people's jobs depended on it. If they're all out of work, they go on unemployment, an automatic increase in government spending and decrease in tax revenue, then their demand for consumer goods and services goes down, putting more people out of work.

I don't see any scenario where letting GM and Chrysler go out of business is better for the American economy. The market is a tool, a means to an end, not an end in and of itself. It's a system for distributing resources, like any economic system. It isn't God. We've had a mixed economy for a long time now and we're doing pretty well, relatively speaking. The current status of these companies is a product of market forces and some government intervention working in concert.

The Volt is proof of concept. You can find statements from GM going back 4 years stating that they knew it would lose money for many years. Yet GM is doing fantastically well right now. The point of the Volt is to position them in a market that will expand in the future. They never expected to profit from its early generations.

- wolf

Why stop at GM and Chrysler? Lots of businesses went under and go under every year. Each putting a strain on the supply system they used.

 

[DominionSeraph]

I agree with the GOP on this one, they should have let GM and Chrysler sink. They would have been replaced by something more efficient eventually

Of course they would have been replaced by something more efficient. The problem is that that efficient replacement would've been Chinese.
America is losing its manufacturing base and you do cannot sustain an economy when nobody actually makes anything.
We had the automaking infrastructure in place. It was already paid for. Keeping it running was worthwhile. Better those jobs stay in the US than move overseas and make products that Americans can no longer afford because we don't have the jobs to pay for them.

IF that was the case, then all the government had to do was offer loans to some of the suppliers to temporarily help them sustain operations. There was no need to bailout the entire industry.

Sustain operations for who? The other automakers did not have the capacity to make up for GM and Chrysler's production. Do you think they were going to make a several hundred billion dollar gamble in a tanking economy to buy new facilities to utilize those suppliers' capacity?
Propping up GM and Chrysler meant you were still making the end product. Propping up suppliers only means you would have warehouses full of useless parts that fill no demand.

 

[5150Joker]

Of course they would have been replaced by something more efficient. The problem is that that efficient replacement would've been Chinese.
America is losing its manufacturing base and you do cannot sustain an economy when nobody actually makes anything.
We had the automaking infrastructure in place. It was already paid for. Keeping it running was worthwhile. Better those jobs stay in the US than move overseas and make products that Americans can no longer afford because we don't have the jobs to pay for them.

If Americans can't afford those products, China would be the first one to feel the economic pain from it. I don't buy the slippery slope argument entirely. Yes outsourcing all our industry is obviously a bad idea but there's no indication that the automotive industry would have shifted to China. A more likely scenario is that another company would have taken over the existing infrastructure and improved upon it.

 

[Genx87]

Of course they would have been replaced by something more efficient. The problem is that that efficient replacement would've been Chinese.
America is losing its manufacturing base and you do cannot sustain an economy when nobody actually makes anything.
We had the automaking infrastructure in place. It was already paid for. Keeping it running was worthwhile. Better those jobs stay in the US than move overseas and make products that Americans can no longer afford because we don't have the jobs to pay for them.

Chinese? Have you seen a Chinese car for sale anywhere?

 

[Fern]

All this talk of going out business if not the bailout: Bah.

Without the bailout they would have gone through bankruptcy (as they did anyway). And it's unlikely to have a been a liquidation bankruptcy, they would have come out after having debts modified etc.

I think the big difference is who would have taken it in the shorts. In regular bankruptcy proceedings the unions would have been hit (contracts modified, voided pension plans, HI etc.) and the bondholders would have maybe taken a haircut, but not been wiped out.

Bailout or no, bankruptcy was guaranteed. I think the govt intervention just switched who took it in the nuts. The unions came out waaaay ahead under the govt deal.

Fern

 

[DominionSeraph]

Chinese? Have you seen a Chinese car for sale anywhere?

Who ever heard of Japanese electronics? Oh, wait, but that happened.
Who ever heard of Japanese cars? Oh, wait, but that happened.
Who ever heard of Korean electronics? Oh, wait, but that happened.
Who ever heard of Korean cars? Oh, wait, but that happened.
Who ever heard of Chinese electronics? Oh, wait, but that happened.
Who ever heard of Chinese cars? :hmm:

The automotive industry in the People's Republic of China has been the largest in the world measured by automobile unit production since 2008.

 

[BoomerD]

Who ever heard of Japanese electronics? Oh, wait, but that happened.
Who ever heard of Japanese cars? Oh, wait, but that happened.
Who ever heard of Korean electronics? Oh, wait, but that happened.
Who ever heard of Korean cars? Oh, wait, but that happened.
Who ever heard of Chinese electronics? Oh, wait, but that happened.
Who ever heard of Chinese cars? :hmm:

With the shoddy quality of MOST Chinese products, we can only hope that Chinese cars never hit American shores.
Most of the cars above were of pretty poor quality when they first were imported to the US...Korean cars are still considered to be of poor quality.

 

[CPA]

Wait, I thought Bush started the bailouts. Where's his credit?

 

[First]

Korean cars are still considered to be of poor quality.

WTF? Since when are Korean cars considered poor quality? This is 2012.

 

[CrackRabbit]

IF that was the case, then all the government had to do was offer loans to some of the suppliers to temporarily help them sustain operations. There was no need to bailout the entire industry.

How do you keep a business afloat when a large chunk of your customer base simply evaporates overnight?
A loan to a business with no one to sell to isn't going to do much good and is simply a waste of taxpayers money.
The Gov did the right thing in loaning both automakers money and guiding both through a clean bankruptcy instead of a messy CH.7s.

 

[actuarial]

WTF? Since when are Korean cars considered poor quality? This is 2012.

+1. My family has a lot of Hyundai's in it (my wife's family to be exact, and in her immediate family they are currently driving 6 of them) and they have nothing but good things to say about them. I love our Sonata.

 

[desy]

Yep I wouldn't consider Korean to be poorly built cars anymore

They should call Chrysler the Phoenix corporation, if it wasn't for Mercedes stealing all their cash and mismanaging it terribly they probably wouldn't have needed any govt money

 

[ElFenix]

WTF? Since when are Korean cars considered poor quality? This is 2012.

hyundai's pretty good nowadays but kia isn't built to the same levels, intentionally.

 

[Zstream]

hyundai's pretty good nowadays but kia isn't built to the same levels, intentionally.

Are you serious? I have never heard of this. That's why all warranties usually show quality.

Sent from my Lumia 900 using Board Express

 

[Ausm]

Why stop at GM and Chrysler? Lots of businesses went under and go under every year. Each putting a strain on the supply system they used.

Would you feel the same way if your favorite defense contractor was going down the tubes?

 

[Svnla]

A rhetorical question?

Not one bit.

IIRC, GM had ads that stated they did pay the government loan early. In reality, they still owe big time (totally overall amount).

http://www.politifact.com/truth-o-m...ceo-says-gm-has-repaid-government-loans-full/

So the loan portion of the GM bailout was, in fact, settled, with interest, five years ahead of schedule.

But the U.S. government is still on the hook for the bulk of its investment in GM. Again, the U.S. Treasury owns $2.1 billion in preferred stock and a 60.8 percent stake in the company.

and Obama, GM, and their backers surely did not tell the taxpayers this.

But the prospects for the government getting all its money back don't look promising. On March 18, 2010, the government's nonpartisan Congressional Budget Office projected the government will end up losing $34 billion in TARP funds extended to the automotive industry. The CBO didn't break out how much of that is tied to GM, but it's fair to say most of it.

While we found a GM official quoted as saying he thinks taxpayers will eventually get all their money back, few industry experts agree.

 

[soulcougher73]

I'm not a republican but i think the bailouts should not have happened either. I dont enjoy the idea of tax payer money keeping private businesses alive. If they cant sell a product the people want to keep them in business then let them fail. Yeah it sucks people will lose their jobs, but its the companies fault not mine as a taxpayer. I mean where does it stop. Should they= gov jump in an save Best Buy from the impending doom they are going to be facing some year? Screw that.

 

[senseamp]

Wait, I thought Bush started the bailouts. Where's his credit?

Bbbbuuttt Bush. Yeah, he deserves credit. Problem is GOP's current candidate, Romney said, "Let Detroit Go Bankrupt."

 

[DominionSeraph]

Wait, I thought Bush started the bailouts. Where's his credit?

I've given him props before for this.

I'm not a republican but i think the bailouts should not have happened either. I dont enjoy the idea of tax payer money keeping private businesses alive. If they cant sell a product the people want to keep them in business then let them fail. Yeah it sucks people will lose their jobs, but its the companies fault not mine as a taxpayer. I mean where does it stop. Should they= gov jump in an save Best Buy from the impending doom they are going to be facing some year?

"Best Buy" is nothing but a name on a a bunch of big boxes. Remove the name and the big boxes are still there -- anyone can move in and use those buildings as retail outlets. There is no economic chain to collapse; they don't produce anything.

Please think before you post.

 

[CrackRabbit]

I'm not a republican but i think the bailouts should not have happened either. I dont enjoy the idea of tax payer money keeping private businesses alive. If they cant sell a product the people want to keep them in business then let them fail. Yeah it sucks people will lose their jobs, but its the companies fault not mine as a taxpayer. I mean where does it stop. Should they= gov jump in an save Best Buy from the impending doom they are going to be facing some year? Screw that.

I'm with you in letting capitalism run it's course, most of the time.
But I have to ask the question, if Best Buy closed up shop tomorrow, would it take an entire sector of industry with it?
Would all of the companies that supply them, Amazon, Costco and so many others go bankrupt as well?

We both know the answer is no.
That is the big difference between what was happened with the auto industry bailouts and just about anything else.

 

[ElFenix]

Are you serious? I have never heard of this. That's why all warranties usually show quality.

jd power results:
http://www.jdpower.com/consumer-ratings/ratings.htm?study=909201119

if you tick over you can see hyundai is a tick or two better in just about every category than kia.

 

[Matt1970]

Chrysler and Chevy would not have went bankrupt. They would have done the same thing Ford did and borrow the money from banks.

 

[RampantAndroid]

WTF? Since when are Korean cars considered poor quality? This is 2012.

Hyundai Genesis is known to have issues with no airbags deploying on off angle frontal collisions.

Shoddy? Yeah...