Chrysler sold too late
By Doug Thompson
Chrysler’s been sold. It’s too late, as far as my family’s concerned.
We’ve replaced the transmission in our minivan three times. One didn’t last four months, as I recall.
We’ve read all the company’s stuff online about how their transmission likes only one particular type of transmission fluid. We’ve also read the sites blaming mechanics and oil change places for pushing unneeded transmission fluid changes.
I couldn’t resist looking up the hometown paper of Kokomo, Indiana on Monday. That’s where a transmission plant that employs 5,000 people and supplies Chrysler. The paper informed me there are no immediate plans to shut down the plant.
I’d noticed before that this struggling company decided to invest $3 billion – that’s with a “b” – in transmission, axle and drive train manufacturing to “improve fuel economy.”
Sorry, but can you really blame me for believing that’s a likely story?
Even if Chrysler ever convinced me they’d fixed the problem, they’ll never convince my wife.
Remember the “Exxon Valdez”? It was an oil tanker that spilled in Alaska in 1989. My wife has never pulled into an Exxon station since. Chrysler has joined that select list of companies that are dead to her.
My second-oldest daughter turned 16. She wanted a Chrysler Sebring convertible for her first car. Her mother’s response was so chilling, so definite, and so well-founded in personal experience that a 16-year old with her heart set didn’t argue with her.
After all, we would have been able to afford a better car for her if we hadn’t spent so much replacing transmissions.
Not only did we buy a Honda, the car we bought before that was a Toyota. The day Toyota passed Chrysler in size as a carmaker in 2006, my wife sent them an e-mail telling why we helped.
Daimler supposedly gets $7 billion out of the deal, but business reporters added the numbers up. The company was dumped. Most of the $7 billion isn’t payment to Daimler, but capital investments into Chrysler by the new owner, Cerberus Capital Management Limited Partnership of New York, N.Y.
Doing the math shows that Cerberus actually paid $650 million for 80 percent of a company Daimler bought for $36 billion nine years ago.
Chrysler’s such a turkey, Daimler shares still went up after the deal was announced and so did the Daimler bonds. The shares have gone up more than 25 percent in three months, after Daimler said it was looking for a buyer.
Significantly, the United Auto Workers did not protest the deal. The leadership, at least, didn’t even express any objections. After all, the deal saves $18 billion worth of liability on health insurance and pensions.
Options were limited. It isn’t a “beggars can’t be choosers” situation, but it bears an unmistakable family resemblance.
On second thought, maybe it is a “beggars can’t be choosers” situation – and both sides are beggars. UAW couldn’t stop Daimler from unloading the company, and the new owners can’t possibly afford a strike. That would destroy whatever was left of Chrysler.
Beyond that, analysts are guessing that UAW got some assurance that Cerberus isn’t going to kill the company and sell the parts. At least one, according to Bloomberg Business News, thinks a deal’s already been struck. UAW does not want Chrysler to start slashing benefits, not with the union’s three-year cycle of contract negotiations starting this summer.
Unions get a lot of the blame for management blunders in the U.S. auto industry. Those “inflated” union wage and health benefits were negotiated when U.S. automakers dominated the North American market. It was management that lost that market. There’s nothing wrong with first-rate wages and benefits – as long as management insists on first-rate work on first-rate designs.
My lousy transmissions were well-built examples of lousy designs that were not fixed because management did not insist on transmissions that work.
Packard was an American car company. Duesenburg – which gave the language the now almost-forgotten phrase “It’s a duesey,” meaning it’s excellent – was an American carmaker.
Give the American worker a good design, and he’ll put it together.