Chrysler To Turn a Corner, Maybe

I saw this headline in the NY Times today – Chrysler Lost $4 Billion but Sees Signs of Improvement.  What?  Now that’s an optimistic outlook and refreshing.  A car company out to improve.  But how?

Apparently Chrysler-Fiat plans to reintroduce the Alfa Romeo and Fiat brands to the U.S. market and clean fuel efficiency technology including some diesel engines. Alfa Romeo would roll out an S.U.V. and a small roadster looking machine called the MiTo.  And Fiat has plans to sell the Fiat 500, which looks a little like a VW bug or one of those toy cars that you roll on the floor and then release.   Diesel, roadsters, S.U.V.’s, and a VW or Mini Cooper look alike. That’s the plan to turn Chrysler around?

First, Americans won’t buy diesel.  No way.  And diesel fuel is too expensive.  When I think of diesel, I think of a Mack truck.  And where can you buy diesel fuel?  No one wants to fill up a car at a truck stop.

Second, as long as we have a weak global economy and high gas prices, what kind of market is there for a new S.U.V., particularly an Alfa Romeo?  Most Americans are going to associate Alfa Romeo with exotic race cars.  No one is going to want to buy an exotic S.U.V.  And the MiTo.  I don’t think so.

Third, Fiat is not a brand with much of a reputation in the States.  Remember the Fiat X19 back in the late 70’s – early 80’s? I didn’t think so.  Japanese cars drove them right out of the market and the country.

I have an idea for Fiat.  Bring over the Fiat Panda.  Sell them cheaply.  Market them cleverly in urban areas where parking is difficult to find and expensive.  Do one in black with a white racing stripe or something.  Sell them to rental car companies and Zipcar.  And Fiat, don’t allow Chrysler to make cars anymore. Have them make boats, or outboard motors or skateboards, mopeds, anything but cars.   Have them sell Fiats (the Panda) anyway.  And maybe allow them to bring back the Dodge Dart and Dodge Colt, with Italian styling.

Looks a bit like a Yugo, no?

Bail Out the Big One – GM

The Big Three want a bailout – to be rescued from their own incompetence, demanding immediate loans – a little slice of the 700 billion pie.  Interestingly, in two week’s time, their demands went from 25 billion to 34 billion.  With the new Jobless Report out signaling the worst numbers in 34 years, the Big Three just got the big break they needed to compel Congress to dole out the loans.

The “rescue” loans are on top of the 25 billion they have already been promised by Congress to help meet fuel efficiency standards.  However, it’s not clear when these monies will be released.

Ford seems to be along for the ride; they don’t need a loan, but would like to have 9 billion just in case, according to a NY Times editorial.  Hey, I’d like to have a little 9 billion cushion just in case I lose my job or miss my mortgage payment or fall behind on my daughter’s future college tuition payments.  Ford, do us a favor – go home.

Now, what to do with the Big Two?

GM has proposed to do away with product line, the details of which have not been disclosed.  I have some suggestions for GM that I think would help the company become solvent.  First, do away with Buick, Pontiac, Oldsmobile and GMC.  I never understood the difference between Buick, Olds and Pontiac anyway; there are simply too many overlapping models,  the majority of which have proven to be unreliable.  Eliminate the 14 mpg Hummer, which means lobster in German, and sell SAAB to Ford or back to the Swedes.  Keep only Cadillac, Chevrolet and Saturn.  Turn Saturn into a hybrid and plug in factory.

And why doesn’t GM sell its Opel or Vauxhall lines in the States?  Not that I would, but some might chose an Opel over a Toyota.  The Agil, below, looks a lot like a Yaris.  Any Europeans out there with an opinion on GM’s European lineup?

Cadillac should make but two cars:  the CTS and the Escalade Hybrid –  that’s it.  Stop production of all others.   Chevy should only make the Cobalt, the Impala, the Silverado pickup, and a Van, and eliminate all  crossovers.  No sporty versions of anything.  Goodbye Corvette.

There should be a gasoline and hybrid version of each model.  The gasoline models should get 35 – 40 mpg and the hybrid models 40-60 mpg.  New plug in models like the Volt should also be developed and sold under the Chevy brand.

Who owns Chrysler, Jeep and Dodge anyway?  The German Daimler group sold 80% of its stock to Cerebus Capital Management Group.  I don’t consider a management group an automaker, so we should not bail them out.  Anyway,  Chrysler, Dodge and Jeep models are some of the least reliable cars sold in America and I have no faith that a management group could turn around a car company with a quick loan in this economy or in any economy for that matter.

Obviously, the potential of Chrysler failing and GM and Ford’s restructuring plans will mean plant closings and massive layoffs.  However, laid off workers could be reemployed immediately in Obama’s Public Works Campaign, which will require expertise at all levels.  Those who are not keen on public works could work in the public education sector.  Following the model of Teach for America, dislocated workers could become certified K-12 or Adult Education teachers and work in urban and rural school districts or with community based organizations.  And there’s no better investment than an education!