Chrysler Comeback Made Possible ONLY by Completely Ignoring Dear Leader's On-the-Spot Guidance

Reaganite Republican ^ | June 3, 2011 | Reaganite Republican

[Reaganite Republican]

The Pickups and SUVs Obama had wished culled 

from the lineup in 2009 now drive sales, profitablity

Marchionne pretending to listen to statist bonheads

FIAT has been making a lot of positive news over the last week, first by paying off all $5.9B of the US/Canadian auto bail-out loans to the US/CN Treasuries (six years early), then three days later announcing the acquisition of the entire US Government stake. This provides FIAT-and-Chrysler CEO Sergio Marchionne with complete control of Chrysler, thus ridding himself and his companies of the Obama Administration's unhelpful influence.
Obviously Obama could use anything that resembles an economic success story right about now, so he's been quick to build a Detroit "comeback" into the latest campaign spiel. But how ironic that while the President is busy co-opting others' success at Chrysler, Marchionne is rushing to distance the company from a foolhardy White House and (unpopular) bail-out stigma. Although foreign owned, the new Chrysler is planning a IPO for 2012, and is now as free -as Ford has been- to pursue market-based success as best they know how.

Not hard to see why FIAT/Chrysler would want nothing to do with sinking ship Obama/bailouts as far as marketing images go. But Sergio Marchionne is used to operating his company with one hand while dealing with meddlesome liberal politicians on the other, thus he managed the opportunity very well and had little problem putting Obama in the trick-bag two years ago while quietly doing what it took to actually make the acquisition work.

More impressive on-the-spot guidance

Back in 2009 when FIAT was the only viable savior of Chrysler, Obama was more focused on brazen opportunism, punishing Republicans, stealing things for the UAW, and driving a goofy green agenda than creating any viable business plan for Chrysler. Dear Leader insisted that FIAT bring a 40mpg minicar to US shores (they did, the FIAT 500, alas made in Mexico), electric cars, and such.

But Marchionne had to make it work on the bottom line, not just Cloud Nine: he let Obama have his victory/photo ops there, and most of that product was in the FIAT development pipeline anyway. The electric FIAT 500 goes on-sale in the US for 2012, and the regular 500 has already hit the new FIAT dealerships. The meeting of such performance objectives brought FIAT a progressively larger stake of Chrysler, in part leading to the pending takeover by the Italian company.

Not one to let a good crisis go to waste, Obama fully exploited the opportunity in 2009 to screw creditors out of their money (at the gain of the union) and more than a few Republicans out of their Chrysler dealerships. He then pushed the FIAT/Chrysler to drop large gas guzzlers and focus on economy cars, electrics, hybrids, unicorn-rainbow power, etc. But on the issue of culling eight and six-cylinder cars/trucks from the lineup, Marchionne stood firm... leading to today's healthy and profitable Chrylser. 

How funny-strange it is then that Italian-Canadian Sergio Marchionne understands us -and what we like- better than our own president! He also knows that real American cars/trucks that people might actually want to buy -like the Chrysler 300, Dodge Challenger, Grand Cherokee, Dodge Durango, and Ram Pickup- make twice the profit per unit as any FIAT 500s or Puntos re-engineered for the US market ever will... there's simply too much pressure on margins at the entry-level from the South Koreans and others. 

No telling where it may strike!

In stark contrast to the expressed (and rebutted) Team Obama desires, Chrysler is not only doing extremely well with SUVs and trucks now, the future still includes a new Viper, more large Cummins diesels for pickups, even a new 6.4L Hemi V-8 bringing 450hp! Chrysler's Detroit Grand Cherokee plant is running at (3 shifts) full capacity, Toledo is expanding, and there are plans to export American-made SUV's to Europe, rebranded as FIATs and Alfa-Romeos... that means American jobs that wouldn't be there if they'd listened to Obama.

Over at Government Motors, the market has greeted the President's pet project -the Chevrolet Volt- with a collective yawn... they're selling less than 250/mo. Now Chevy dealers have  been caught registering the cars and taking the $7500 Obama tax credit for themselves, while unloading the now "used" Volt on used car lots. When questioned, one of the dealers explained this was to do with "high demand"- a dubious claim.

Following in the footsteps of capitalist genius Henry Ford, the last All-American car company -FoMoCo- has maximized it's freedom from government interference, even turning a profit at the bottom of the Great Recession. Ford CEO Alan Mulally possessed the luck/foresight to sell off underperforming brands and reduce debt prior to the crash, and when they saw the degree of control Obama was looking for in the bailout days, Ford said "pass" and found their own way in the capital markets.

Free-market Ford is now kicking butt, and they continue to take market share from GM... they're easily the healthiest of the Big Three on paper, and the product is just fantastic.

So as long as Barack Obama is trying bask in the glow of any Detroit renaissance, we need to hold his feet to the fire on the habitual dishonesty, mistakes, losses, cronyism, and corruption it took for him to get there, as well as the fact that the White House's harebrained product ideas had nothing to do with Chrysler's early return to profitability... rather, they had to resist and work around them.

Hemi-powered Hurst/Dodge Challenger

___________________________________________

More news/views/humor at Reaganite Republican

___________________________________________

The Detroit News   Allpar   FIAT Returns   Doug Ross@Journal   NLPC

[cableguymn]

FIAT has been making a lot of positive news over the last week, first by paying off all $5.9B of the US/Canadian auto bail-out loans

---

Lost me in the first line. That is COMPLETE b.s. a shell game. Money borrowed from one government agency to pay another.

[Cringing Negativism Network]

Selling one of America’s automobile companies to foreigners is a “comeback”?

[pnh102]

Screw Chrysler. This is the second time they've needed a taxpayer bailout. Maybe they should, um, make a product that people actually want to buy and price it at a level at which it will sell so they can make a profit.

The next time Chrysler screws up, let them go under. It is a waste of economic resources to prop up any company that cannot make money.

[Erik Latranyi]

First, the ONLY reason Chrysler was in trouble was because Daimler stole the $22 billion Chrysler was saving for a downturn in the auto market, then Daimler cheapened everything in the lineup and kept blaming their own woes on Chrysler.

Second, it is very likely that Fiat/Chrysler could be headquartered in Auburn Hills, turning it into a US-based company. Now that would be ironic!

Third, while I opposed the bailouts, you cannot argue that Chrysler’s current lineup does not evoke interest.

[Cringing Negativism Network]

To the contrary.

The 200 / 300 are hot, and don’t forget Chrysler also makes Jeeps.

Pretty sad day for America, when Fiat will be making Jeeps.

There seems no limit to what we are willing to tear down and sell to foreigners, which once created our former greatness.

Sad. And strategically stupid.

[Reaganite Republican]

There were ZERO other takers, and the last viable owner was German, anyway.

I’m against the bailouts politically, but FIAT did return them to profitablity... while Americans can own plenty of it if they wish, there’ll be a Chrysler IPO next year

[Reaganite Republican]

Agreed on all three points, imo you completely grasp the situation

[Reaganite Republican]

Can’t blame FIAT for borrowing money where it’s available at the best rate, but the point of my post is that Chrysler is selling cars and making $ far earlier than most thought possible, and the ONLY reason is the hot selling SUVs and trucks Obama tried to force them to drop!

If Marchionne hadn’t outwitted the Bolshevik Boy Wonder, Chrysler would be dead meat

[Poison Pill]

First, the ONLY reason Chrysler was in trouble was because Daimler stole the $22 billion Chrysler was saving for a downturn in the auto market

Daimler owned Chrysler. You can't steal what belongs to you.