The Grass Is Greener…

September 23, 2010

…over at the Jefferson North Chrysler plant in Detroit. In fact, the grass is green, the beer is cold, and the malt liqour comes in 40 oz. bottles.

This is why Chrysler needed a bailout.  And this should be their new logo:

All that bailout money… up in smoke.



In the Auto Dealer Closures, The Plot Thickens…

June 5, 2009


Conspiracy alert! Interesting news coming out of bankruptcy courts handling the closure of Chrysler dealerships around the nation.

Tyler Durden at Zero Hedge is reporting some very interesting statistics, which if they can be verified, strongly suggest that favoritism cronyism Chicago-style business as usual played a fairly large part in at least some of the dealer closures. Mr. Durdin writes:

The dominant theme among all dealers is that virtually all acknowledge they were compliant with both Project Alpha and Project Genesis: the key cut off criteria that Chrysler stated it had used in determining who gets terminated and who stays. In fact, the bulk of the dealers had significantly above average statistics from a sale, MSRP, customer satisfaction and service point of view within the entire Chrysler dealer universe…

One particular declaration caught my eye, that of Ethel L. Cook, a dealer based in downtown Little Rock, a town near and dear to the former resident. I believe readers can draw their own conclusions based on Mr. Cook’s sworn testimony (highlights mine).

On May 13, 2009, I received a letter from Chrysler notifying the Dealership that Chrysler had elected to “reject” our Dealer Agreement. I am obviously very familiar with the Little Rock, Arkansas dealer network and was surprised because both Cook and Crain, the only Chrysler dealers in Little Rock, were both rejected. Therefore, Chrysler’s action would, on its face, result in a complete lack of representation in a major American city. Since that would be a ludicrous result, one can only infer that Chrysler has a more sinister motive.

Because it is inconceivable that Chrysler will not have a dealership in Little Rock going forward, the only conclusion that one could draw is that, after review, the evidence in other markets in the region, that Chrysler now intends to “give” the Little Rock market to a Landers-related dealer.

Having reviewed the pattern of assumption and rejection of dealers throughout their region, I have detected a pattern: In every market where there is a dealership connected with former Penske Automotive executive Steve Landers, or his new automotive partnership with “Mac” McLarty (former Chief of Staff for President Clinton) and Robert L. Johnson (majority owner of the Charlotte Bobcats), the competitors are rejected.

In the Little Rock, Landers Chrysler Dodge Jeep is located far out of town in Benton, Arkansas. Nevertheless, the two Little Rock dealers, Cook and Crain were rejected.

Cook goes on to give five more concrete examples of dealerships associated with Landers/McLarty being accepted despite being inconveniently located to their local markets, while dealers closer to the market were rejected.

Mr. Cook ends his testimony with the following statement:

Favoritism and cronyism towards preferred dealer group is not a valid exercise of business judgment.

Sure it is, Mr. Cook. It’s the Chicago way.

We’ll be watching Zero Hedge, as well as Doug Ross, who is also  doing excellent reporting , to see if anything comes of this.

Exit question: Isn’t this the type of incisive investigative journalism that our expert, impartial, professional mainstream media is supposed to be doing?


H/T: Malkin

Chrysler: It’s All About the Unions

May 7, 2009


I just read a great article by Megan McArdle, explaining — in case anyone didn’t already get this — why the Chrysler bailouts have to do almost exclusively with the unions. She makes her case eloquently, by examining other possible motives and subsequently discarding them, for good reasons:

Chrysler is a good company caught in a bad situation.  Chrysler has been a bad headache for years.  Daimler bought it for $36 billion in 1998, and actually paid $650 million to have Cerebrus take the company off their hands in 2007.

Clearly, that dog won’t hunt.

The administration isn’t kowtowing to the unions; it’s trying to prevent massive job loss.  Chrysler employs about 60,000 people.  This is a rounding error in the number of jobs that have been lost since this recession began. 

Nope, try again. Ms. McArdle lists out other possible opportunities and explains why she finds them all lacking, and ends with an elegantly simple coup de grâce:

I am unaware of any evidence that a single industrial failure has ever precipitated the kind of massive, widespread hardship that followed, say, the failure of Jay Cooke & Co Intervening to prop up a company that has been struggling for a decade is almost textbook bad economic policy. [emphasis mine]

And she’s right.


Obama, the Big Three, and “Restructuring”

December 8, 2008

Obviously, it’s too early to tell about how Obama will actually deal with the Big Three, but the rhetoric from yesterday’s “Meet the Press” is interesting to say the least. Catch the following phraseology

“They’re going to have to restructure … And all their stake holders are going to have to restructure… Labor, management, uh… shareholders, creditors…”

“Restructuring”… Let’s see… Wikipedia defines “restructuring” as:

… the corporate management term for the act of partially dismantling or otherwise reorganizing a company for the purpose of making it more profitable. Also known as corporate restructuring, debt restructuring and financial restructuring.

Restructuring is often done as part of a bankruptcy or of a strategic takeover by another firm, such as a leveraged buyout by a private equity firm.”

“Lawyer speak” is a creeping thing… If I were the UAW, I’d be watching my back right about now.

Alan Speakman

Some Dare Call It Hubris

November 20, 2008


I understand the occasional need for important people (read CEOs of huge companies and the like) to be able to get from point A to point B as quickly as possible, to have face-to-face contact with peers. I really do. Corporate jets are a part of corporate life and will be for some time to come.

But there is a time and a place to use them. And there is most definitely a time and a place not to use them. That time and place would have been Tuesday in Washington DC, where the CEOs of Ford, GM, and Chrysler went begging, hats metaphorically in hand, for $25 billion of our money to keep their failing businesses afloat. All very well and good. But they came begging in high style. Each CEO flew from Detroit to Washington DC in one of their company’s coroprate jets. It has been calculated that these trips cost each company up to $20,000.

Rick Waggoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler all argue that corporate jets are used for security purposes (and are non-negotiable). I’m not sure how dangerous commercial air travel is, but if they were afraid of arriving late for their star turns, they could have caught earlier flights.

If these CEOs can’t see the affront to the taxpayers in their chosen method of travel, if they are still in a “business as usual” mode, then perhaps those businesses need new leadership that can not only run a business effectively, but also have the common sense to think about how their actions will be perceived by the rest of the country.

In the meantime, I say let them fail or succeed on their own. A good first step when they all get home might be to auction off those jets on eBay.


What’s Gone Wrong With the Economy – Look in the Mirror

November 17, 2008

With all the talk of bailing out the auto industry (as if the $25 billion that we doled out last Sept wasn’t enough), at some point, the engineer in me starts to ask, “What is the root issue here?”

The answer to that question is too stark and too painful for most I’m afraid…

Here are the simple facts

  • Cash flow isn’t the bottom-line issue, and simply throwing money at the problem isn’t the answer (see the link above)… We tried that and it didn’t work – not with this new global economy.
  • Surprise! Unions have skyrocketed us completely out of reality. Does a union auto worker really earn $70/hr? I’m an engineer with three degrees and enough experience to choke a horse and I don’t command that kind of money. If this madness wasn’t so pathetic and destructive to our country, it would be funny.
  • And speaking of the pathetic… We’ve somehow managed a generate a staggering number of young “Mall Rats”. You can view a sickening trailer here. To get a better glimpse of the numbers, consider “Study Shows China as World Technology Leader“.
  • We refuse to live within our means and what our work is really worth.

It all adds up to this… Believe it or not, we’re too fat and too happy – the stars may lie, but the numbers never do.

h/t HotAir

Alan Speakman