Chrysler supposedly in 'chaos', suppliers could demand COD
GM is getting the lion's share of the glaring national spotlight due to the immediacy of the company's cash crunch, but Chrysler's situation is easily just as dire. Employees at the Pentastar know this, as evidenced by the fact that a full 25% of its salaried workforce took voluntary separation packages to get while the getting is good. Those 5,000 people weren't just sitting around at Chrysler headquarters, though. They had responsibilities, and Automotive News and the Dow Jones News Service is reporting that chaos is settling in due to the personnel vacuum.The report cites three sources with knowledge of Chrysler's supplier dealings as saying that suppliers are nervous about bankruptcy, and as a result may beginning to ask for cash on hand in return for parts. A Chrysler spokesperson called the 'chaos' term unwarranted, and said that the loss of jobs will help the company to "continue the transformation of our company." Mega-supplier Borg Warner, for one, told Automotive News that all of the Detroit automakers are currently paying their bills on time, and there have been no reports of Chrysler not paying any large suppliers.
[Source: Automotive News subs req'd]






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Reader Comments (Page 1 of 5)
Greg Hoffman 12:17PM (12/06/2008)
People need to buy more American Products and stop this blanket statement foreign is better. Simply not true at all.
Look at Apple in silicone valley. There computer are manufactured in China now used to be in USA. All the programming jobs and engineering jobs are still in cupertuno. Now if everyone bought a Chinese ripoff I phones all the jobs in cupertuno go away. Cupertuno housing prices falls. If the Chinese came in then and put in a plant making their I phone here in the usa do you think the factory workers would be able to afford a 1 million dollar house. NO it lowers your quality of life.
Buying any foreign product where every its made is bad for the USA. We purchase way too many products made overseas foreign the quality of our products lower. People buy a cheap TV sets therefor RCA had to lower the quality to sell.
Same with CARS in some ways. Toyota and Honda spend the profits overseas where paying the American worker small amount of money.
Research engineering and engine manufacturing says in japan.
The real issue is the future you will lose the ability to manufacture because you design base is exported.
The American public had been eroded for years from PR from Toyota making people think that 8% of a cars parts are USA. Labor to make a car is little and does nothing to make our future more competitive.
But the huge 4000 profit goes to Japan.
If you want to see the USA get worse just keep on buying foreign products.
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Toledo Guy 12:33PM (12/06/2008)
"Same with CARS in some ways. Toyota and Honda spend the profits overseas where paying the American worker small amount of money."
Don't let the facts get in the way of your tired argument. Honda, Toyota, Hyundai, Kia, Subaru, BMW and MB have invested profits from US sales by building plants in the US. Chrysler, Ford and GM at the smae time were building plants outside the US.
I currently have a Ford and a Jeep in my garage. The Ford replaced a Honda. In fact, that Honda was the 5th in a row. The profits from every one of those Hondas was reinvested in the US. Honda alone built or expanded many new plants in the US, while the big 3 expanded in China, where they could pay pennies on the dollar. My father's Toyota Tundra was built in a new plant in Texas, built with US profits, and paying good wages to US workers. Workers who haven't been jettisoned during the current economic downturn.
Your argument that foreign based makers don't reinvest profits in this country is tired and untrue. Quit spouting the UAW line and look at the facts. You only show your own ignorance and inability to look at the issue objectively.
Stumpy 12:41PM (12/06/2008)
I have owned 5 cars in my life. I bought 4 American Models, they ALL had issues or recalls. I got sick of it, so I bought a Honda.
110,000 miles later, no problems, no issues and the original clutch is still going strong.
The only American car I would buy right now, is not even in the United States, cause Ford choice to give us Americans crappy cars and the Europeans got all the good stuff. (Yes, I know my rant is a run on sentence).
I want to buy American, but I want my moneys worth when I spend thousands of dollars.
Eddie 12:55PM (12/06/2008)
The G8 is built in Australia, the Astra is built in Germany. However, the Tundra is built in Texas.
Something tells me the American economy makes more off the Tundra.
Flashpoint 1:25PM (12/06/2008)
As an owner of a Chrysler 300, let me be first to say...
Chrysler deserves to die.
They have nothing on the drawing board.
They have wasted opportunities to improve their line.
They released that stupid gas guzzling Challenger and They have actually been bailed out before and have barely improved since then.
To hell with em. Give the money to GM and Ford.
refugee7 1:46PM (12/06/2008)
Love the idealism. Let's spread it and believe that we can make the world perfect by trying this. Good luck.
And RCA is really not the best example to go with.
MUSASHI66 5:55PM (12/06/2008)
@ Flashpoint
I am not sure if Chrysler is quite as bad. They just came up with the new RAM, a great pick up, and there are still some nice margins on pickups. New Phoenix engine should debut soon if Chrysler is still alive, and it should be a great engine, if we are to believe the reports. They will build the new pickup for Nissan as well. 300C was a game changer, and although it is an old car, it still decent. They do have a very bad lineup in passenger cars - Avenger and Sebring are horrible, but next generation should be better, hopefully.
Same applies to both Ford and GM; they need to weather this storm, restructure, get rid of some products (is is happening - Taurus X, PT Cruised convt, Commander etc.), and concentrate on your good products.
Mike 6:44PM (12/06/2008)
Toledo guy,
Glad to hear you did give the domestics a chance and put them in your garage despite your previous Hondas.
I do have to disagree, however, that your Honda spent money was re-invested in the U.S.
Small amounts were re-invested, the rest was sent directly into the economy of an overseas foreign country. The amounts that were spent in the U.S. make up the smaller portion of the amount spent on a vehicle too. R&D and supply are much more responsible for the cost of the vehicle than assembly. Assembly that, by the way, was subsidized to the hilt by the state that won the plant.
Meanwhile the domestics are forced to move over the boarder (arguably much of that money still finds it's way back to the U.S.) and close plants here to try to stay competative. Those plant closings are directly attributable to the influx of forein competition. Still, despite that, the amount of U.S. domestic plants still overwhelmingly outweighs the transplants combined. Plus that R&D money and larger supply base is still spent here.
If the transplants stayed at home, our economy would be in much better shape, I have a hard time believing that anyone is naive enough to believe otherwise.
happy_penguin 9:56PM (12/06/2008)
People can talk all they want about foreign made "American" cars and "American" foreign brand cars but the fact remains that the United States has a $700 billon trade deficit with the rest of the world. The content of your vehicle has everything to do with how much of those dollars you spent stay in the United States regardless of the final assembly point. Just because Honda builds a car in Ohio does not mean that you have reinvested more money back into the US economy than a Mexican built Chevrolet. If it matters to you, check the content. If it doesn't matter to you then just buy what you like but don't get on some high horse about your American made Toyotas and Hondas which in fact may have a majority foreign content.
redcars 12:24AM (12/07/2008)
Buy American is as unrealistic as it's simplistic. America exports grain, Cat construction equipment, software, medicine and surgical equipment, Boeing planes, and all kinds of defense gear. You really don't have to export an "American" car for every "import" - I use those terms loosely - bought.
In a global economy from which the US cannot disengage primarily because of its need for oil, subsidizing all inefficient enterprises will turn it into a 2nd rate nation.
Jon Hervé 12:57AM (12/07/2008)
I bought a Toyota car made in America by Americans.
My neighbor bought a Honda car made in America by Americans.
My boss bought a Subaru car made in America by Americans.
My father bought a Ford car made in... Mexico.
Foreign manufacturers are opening new factories and creating new jobs in America while the Big Zeroes are asking for federal funding paid by American taxes while they lay off American workers to replace them by underpaid Mexicans.
I really hope that we can get the Big 3 back in good shape, but they need to make good, compact, fuel-efficient and reliable cars. I think they found the right track with the Cruze, euro-Focus and.... well... good luck to Chrysler.
I think the Big 3 can improve their reputation at least as much as Hyundai and Kia did.
I will never buy an American car only because it's American. Especially if it's crap.
Anyway, my Toyota is an American car.
And whatever good SUV an American or foreign manufacturer can make, I'll never buy an overpowered garbage-truck-sized 7-seater unless I can fill all passenger seats every day of the week. And even then, I'd still own a compact car for my own sanity.
happy_penguin 2:03PM (12/07/2008)
Your Toyota is anything but an American car. True it supports some US jobs but unless it has at least 75% North American content from Canada, Mexico or United States, it is not domestic. Not only that, if you buy from foreign owned companies you contribute to the trade deficit no matter where the vehicle was assembled. Do you think Toyota is more interested in supporting the US economy or Japan? So even if it has enough content to be considered "domestic", you still support the trade deficit. That's your choice and you are entitled to it but don't call it a horse when it's really an elephant.
Randy 2:11PM (12/07/2008)
I had 6 recalls on a 04 Honda Accord LX lease!
Didn't have one on 6 Fords!
The moral? Each experience is unique!
Jon Hervé 4:40PM (12/07/2008)
@happy_penguin:
If you consider a car as American when it has 75% of North American contents, how can you know what contents is domestic and foreign? Is there a label or something? I'm curious. If you think you can tell my Toyota is a "horse" or an "elephant", please tell me how.
We're in a global economy, large companies are not there to support one country's economy in particular, they care about their stock value. If they would care only about their home country's economy, Japan would build cars only in Japan and Ford would build cars only in US.
When I buy something, it's not to support any country's economy, it's to use it. And to use it, I need it to work. And to make sure I buy something that works, I buy it from a company that has the reputation it makes reliable products that I can afford. In the end, I can only hope it supports my country's economy.
When I'll shop for my next car and a Toyota and some American manufacturer's car offer the same utility, efficiency, quality and reliability for the same price, and both are made in my home country, I'll chose the Ford car over the Toyota one, that's for sure.
Earlier this year, when I had to chose between an AWD Matrix and an AWD Caliber, there was no competition from Chrysler, GM (you know the Vibe is a Toyota) or Ford.
happy_penguin 6:32PM (12/07/2008)
Yes, there is a label. It's called the window sticker and the content is found there.
I am well aware that companies are not here to support an economy. That's up to you. If it doesn't matter to you that's your choice. Just like it's my choice to drive a gas guzzling SUV if I choose to. It's none of anybody's goddamned business.
"Of the 35 most popular U.S.-built 2008 and 2009 models based on sales through May 31, 2008 43 percent of GM, Ford and Chrysler contenders had domestic content ratings of 75 percent or higher. In comparison, just 25 percent of the Nissan, Honda, Hyundai and Toyota models on the list achieved that."
http://www.cars.com/go/advice/Story.jsp?section=top&story=amMadeParts&subject=ami
Plenty of American cars are still built in the United States. Don't use the fact that Ford builds some models in Mexico as an excuse. It's up to you to make your choices.
Again, if you don't care about the content of your car that's fine. But do not say you bought an American car just because you bought a car that was assembled in the United States. And know this: There is a reason why the United States has a $700 billion trade deficit and it's due in part to lazy consumerism, chasing after the cheapest price at Walmart instead of asking where that lead infested baby toy was made. Unfortunately we've allowed it to get so bad that you can hardly buy an American made product. That is why we have such a staggering trade deficit and that is not what globalization is supposed to be about. We have a one way free trade and it does not favor the United States.
Jon Hervé 12:49PM (12/08/2008)
@happy_penguin:
Thanks for the info! :-)
That would be nice if there was a full directory somewhere on the internet...
Maybe the Canadian window sticker is different from the American one... I didn't see it, when I ordered my car it was not in the showroom yet.
My current car is 65% american and it's made in Canada, that's good enough for me, too bad it's 10 points down from my last one.
happy_penguin 2:46PM (12/08/2008)
Well that's pretty good. You've supported North America pretty well and supported your own country by buying a product produced in Canada. I still think it's more conducive to North America's economic good health to buy American/Canadian rather than Japanese, but again you have free choice, as you should.
I don't know about Canadian window stickers but here in the United States I have seen domestic content stickers on Ford, Honda and General Motors products. There certainly should be a country of origin sticker somewhere on the vehicle. I can't seem to find any list on the internet, it certainly would be nice to find something clear and concise so those who care to utilize the information could do so. Still, the information is out there so if it matters to you, find it.
iCameiSawiConquered 12:22PM (12/06/2008)
Chrysler is easily in the worst shape here and has been for many many years, partly thanks to Daimler.
If one of the 3 has to go under, Chrysler should be the one to go. At this point they are probably 10 years away from even coming close to "restructuring" and being able to produce quality stuff people will buy. I say let Chrysler file for bankruptcy and help the other 2 automakers which have real shots of turning things around.
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Auari 12:26PM (12/06/2008)
I agree 100% with you. We don't need Chrysler and our country is losing money because of them.
GM and Ford need to stay.
D 12:45PM (12/06/2008)
I don't agree with you. The easiest thing to do is to blame Daimler.
I believe that Chrysler reached this point because of their incapacity to read the actual demand, coupled with the costs associated with having to work with UAW. Give them money and I bet, they'll keep building trucks and boats (read Charger, Magnum, etc).
It's sad, but if a bailout package it's approved, the govt. should take over these companies, just as it happened with some of the banks in Europe. Otherwise, we'll talk about the same things in a couple of years.