Autoblog

AZMike @ Feb 19th 2008 11:18AM

not entirely true. first, the lowly K-car and its many variants, including the minivan, are what carried Chrysler thru the 80's. Jeep didn't come on board until 1987.

you are right about several things. first, this recession is totally different. I was a Dodge dealer from 1983-1993, and can remember the prime interest rate being in the 16.5% range in 1983. an "A" tier customer would be paying about 17.9% interest for a new car then.

you are absolutely correct about the cycle that Chrysler is going thru. for all those who think Cerberus will fail, you're wrong. I seriously doubt someone like Jim Press would have given up his lifetime career at Toyota to jump on a sinking ship. you're just not old enough or just don't remember that this has happened before.

there is one big difference this time:$$$. when Chrysler hit the skids back in the early 80s, they didn't even know how they would be making payroll the next week.

once they received loan guarantees from the government (this was not a "bailout" as many believe; the government never gave Chrysler a dime), they made the company a lot leaner, just like they are doing now.

in 1982, they asked the workers to forgo wage increases, instead offering Chrysler stock, to be redeemed after 1985. two things happened: 1) Chrysler paid the bank loans back seven years early, and 2) the average Chrysler worker was now a millionaire, as their wage-concessions-turned-into-stock were now worth over 50 times more than their original face value.

Chrysler will rise again.

AZMike