What does everyone think of this:
The United Auto Workers union will own 55% of a restructured Chrysler LLC and its retiree health care trust will get a seat on the board if union members vote to approve contract concessions this week.
Chrysler stock could even be traded publicly again, as there are mechanisms for the UAW to sell shares to fund the health care trust.
Factory-level union leaders voted unanimously Monday night to recommend approval of concessions that union President Ron Gettelfinger said would help keep the automaker out of bankruptcy.
Are there any other union owned organizations out there like this? The only thing I have ever heard of like this was the case of Weirton Steel, a local steel operation when I was growing up that some way or another was purchased by the employees in the 1980’s, saving it from bankruptcy.
Also, what is the general consensus regarding the Chrysler brand? A number of you in the thread the other day talked about how Chrysler is dragging Jeep down, so it would seem that Chrysler has many issues. I know that my father will never own another Chrysler after a lemon in the 70’s (this really horrid brown station wagon that never, ever worked), but personally, I really liked the look and feel of their 300 series in either the late 90’s or early 2000’s. I had to drive my friends car from West Virginia to Dallas (he was in the U-Haul towing car #2 and his pregnant wife flew), and I really enjoyed the experience. I liked the look of the dash and the interior, it seemed to have plenty of power (remember, I was driving an 83 Celebrity at the time so my opinion may be skewed), and handled really well.
Your thoughts?
Napoleon
God, my dad in the 70’s had a God awful Plymouth Fury that was burnt orange and would “diesel” and put out death fumes when you turned it off.
PS, there are several examples of mid-size companies like Weirton that are owned by the employees via an “ESOP”.
joe from Lowell
They seem to be doing well enough with the new Dodge Charger. Police departments seem to like them.
Booferama
I’ve never been crazy about their cars, but they have been quietly working on hybrids and plug-ins over the past couple of years. If they survive through the end of 2010, they’ll be able to get some of them on the market. It’s a long shot, but it could save and redefine the company the way the minivan did.
beltane
I’ve heard nothing but bad things about Dodge trucks as compared to Chevy, Ford or Toyota. The Dodge Caravan used to be OK, but the new ones have to be the ugliest things on the roads today. What else (besides the Jeep) does Chrysler make?
Svensker
I’m too old. Chrysler to me is the car that the local balding and fat plant manager would drive — not expensive enough for the CEO, but big and ugly enough for mid-level dorky management types to like. Totally unhip. But my college-age son thinks Chryslers are kind of cool and he has some friends who have them. Weird.
fester
yeah, Employee Stock Ownership Plans (ESOPs) are fairly common for medium and small size firms, not too common for Fortune 100 firms, but the structure is similiar, especially as the employees are the ones who are getting the biggest shaft on job cuts, wages, pensions and healthcare, giving them some upside interest in return for massive and immediate concessions is equitable.
Mudge
I have had a Stratus, Sebring and Neon within the last 10 years. All have been mechanically dependable and in the last two cases still running with well over 100,000 miles each, as was the Stratus before its demise. Then again, I hear few folks complain about the dependability of cars these days of any brand.
"Fair and Balanced" Dave
My neighbors had a Chrysler Sebring that was in the shop more often than it was on the road (one of many reasons why I thought the proposed merger of Chrysler and Fiat would be a boon to the job market for auto mechanics).
PaulW
I drive a PT Cruiser. I’ve had about the same issues with it as I’ve had with my other two cars, but I enjoy the ride a lot better (great legroom, I’m 6’2″ and need all the cabin space I can get).
They had a sweet thing with the PT early on this decade, but then the brand went flat, I guess because all the people who were into customizing their cars ran out of chrome or something.
Joey Maloney
I have a soft spot for them because my first car, passed down to me from Mom, was a Plymouth Satellite station wagon. 1970 or ’71 vintage, I believe, with the 318 V8 and the damn thing was indestructible. Sure, it got like 18 miles to the gallon, but it did a whole lot of miles for me. I owned it from the time I got my license until sophomore year in college, and it never failed me.
Which says exactly nothing about the company’s current quality or prospects, but I’m just woolgathering over my coffee.
Tom Brandt
I think that all Chrylser has now is Jeep. The rest of their lineup is nothing special. I drove a rental 300 a few weeks ago, and it was crap. Cheap, plastic interior and 70’s-like steering – you had to begin turning the wheel a little before you had to make the turn. I hated it.
I worked at Chrysler when Lee Iacocca came from Ford. It seems like the company has been in permanent crisis since the late 70’s.
Scott H
I have been impressed with the styling of Chrysler cars lately. The 300, as John Cole notes, was particularly elegant. Apparently they were crap? I don’t know.
A few years ago, a Chinese leader note that the US was closer than any other country to the ideal of the means of production being owned by the workers (stocks).
RememberNovember
Didn’t American Airlines save itself through employee ownership?
r€nato
I loved the Prowler, but christ did they ever really think that thing was going to become a moneymaker? How much money did they spend developing this ultraniche factory hot rod?
You would never see the Japanese wasting their time and capital on something like that.
Changing the subject to GM… they should have dumped Pontiac long ago. They are going to dump Saturn too, which is too bad but they f’d Saturn in the a some time back so IMHO they should have sold it off or dumped it at least five years ago.
If you go back five years, all the automakers were looking pretty good which tells you the extent to which fat SUV/truck profits were papering over the deep rot at these companies.
Slaney Black
A union-owned company? Maybe Obama really is a socialist (in a good way). That’s just friggin’ fantastic. More please…
1. Chrysler K-Cars (those boxy models from the 80’s that all look alike) last forever. I see 15+ year old models driving around Baltimore all the time. Sure who’d want to be seen in one, but they do last forever.
2. PT Cruiser: Sure, gimmicky looking and horrible turning radius and iffy gas mileage, but a real breakthrough in design. I rented one to move one time. That thing has interior space like you wouldn’t believe. Probably more usable space than your average maxi-SUV.
3. Chrysler’s large cars and trucks are the best-looking out there. They were ahead of the curve on the RWD resurgence (with the 300 etc.), which sadly DaimlerBenz wouldn’t let them extend to mid- and compact- sized models.
4. Unfortunately, the small car platform they were developing with Mitsubishi got sandbagged by DaimlerBenz. The Caliber and new Sebring are much poorer cars than the Lancer that’s built on the same platform.
r€nato
@Scott H:
never driven a 300 so I can’t talk about the interior or the ride, but I hate ’em because they look like a car that only a Soprano would drive. I’m pretty sure, in fact, that one of the Soprano mob’s hoods drove one in the series. (Silvio?)
Brian
I’ve been very happy with my PT Cruiser – actually the second one I’ve owned. I was doing a lot of driving for a couple of years, and it was the most comfortable car I’ve ever owned. I do wish it was more fuel efficient, though. Too bad they are dumping that model…
WMass
While I am no Chrysler fan, it’s a bit unfair to say they are dragging Jeep down. As cool and fun as Jeep Wranglers are, it’s worth noting that they are not particularly well designed. Their saving grace is that they are beefy, solid, and can take a lot of abuse. Here in the US they don’t really have any competition, so they can get away with fairly serious design flaws. For decades, under different owners, Jeep has gotten away with lazy engineering that is several years out of date. Anyone else used to have a 70’s FJ40? It’s a shame, with a bit of competition to keep them on their toes Wranglers could be much better vehicles.
low-tech cyclist
I had a couple of 1980s-vintage Dodge Ram pickups, both of which did quite well. (I finally had to give up on the 1987 pickup 4-5 years ago, much to my regret.)
ChrisS
I don’t know. I know I probably won’t buy a domestic vehicle. And for me, the biggest turn-off is that the resale value plummets. And the repetitive vehicles, they should focus on their top-end vehicles from each brand and consolidate: Jeep Grand Cherokee and Wrangler; Dodge mini-vans and trucks, Charger and Viper; Chrysler premium vehicles. 10 years ago there were three vehicles in the Jeep line, today there are seven. Imagine a Chrysler sedan that competes with a BMW 3 and 5-series. I drive a lot of different rental cars and too often when I get into a domestic car, everything feels cheap and plasticky (fake burled wood dash accents? seriously?).
Somewhat releatedly, on NPR last night there was an editorial by a guy who stated that even though GMC Sierras are nearly identical to a Chevy Silverado, if GM discontinued the GMC line, then the 100,000 loyal customers wouldn’t buy a Chevy and would buy a ford, toyota or dodge instead. Which makes little sense to me.
Slaney Black
Basic “problem” with the 300 is the weight. That means it won’t handle like a sports car (though it wasn’t meant to). It also means the fuel economy will never be great. And you need a huge engine. The base model comes with a comically underpowered engine, which makes the whole exercise kind of useless.
If you get the higher-powered engine, are content with just cruising around land-yachtically, and are willing to pay a lot for gas, it’s a fine car.
The Prowler was actually a good exercise for the company. They knocked around a lot of styling ideas that were used in commercial successes like the PT.
Japanese companies actually put a lot of effort into making concept cars (do a search for “mazda auto show” and you’ll see some really outlandish s*&#). Just they don’t usually produce them for market. Prowler was limited enough production and high enough profit margin I don’t think they took a big hit on it.
Saturn story is real sad. One factory, one platform, three models; real simple. Lightweight and fuel efficient and fun. And then they just let it wither and die, with no improvements for years. Then alla sudden it’s emergency time, so they junk the whole concept and then just rebadge whatever crap they have left over.
That’s a common problem at GM. You get more credit for pioneering a new project than for steadily improving an old one. Good reliable revenue streams get treated like used whores, and everyone’s chasing the next big thing (which usually doesn’t pan out).
Ash Can
Our ’95 Concorde has been a workhorse, I have to admit. It’s had things go wrong with it, but once they’re fixed they stay fixed. And the mileage is pretty good for a car that size, too. On the other hand, we rented a Sebring last year and it was a piece of crap. Poorly designed dash, uncomfortable to drive, didn’t handle all that well. All in all, I’d say Chrysler has its moments, but they’re not at the top of my list of choices for my next car.
Slaney Black
Hey! Obama used to drive one.
Original Lee
I have a soft spot for Chrysler because my first car was a 1960 Plymouth Fury with push-button transmission. Relatives in the car industry tell me that the styling on Chrysler cars is generally good and often pretty cool because somebody fairly far up in the product development division has an art history degree, so the designs have to meet his aesthetic standards before the go forward. Unfortunately, this same person knows bupkis about engineering, so a lot of the technical aspects of the cars are decided via political maneuvering. All industry gossip, but an interesting perspective, I thought.
ChrisS
Then alla sudden it’s emergency time, so they junk the whole concept and then just rebadge whatever crap they have left over.
Indeed. What kind of effort do these vehicles get from their design teams. I’m not sure, but it seems like they’re behind the curve quite often.
Napoleon
@ChrisS:
For whatever it is worth, about 10 -12 years ago my brother was looking at buying a Suburban (which he did) and for the exact same thing the GMC was more expensive then the Chevy.
Axe Diesel Palin
I bought a new Dodge Grand Caravan in 1997 when my 2nd child was born. Loved it. Never had problems. My brother in law still drives it at 150K miles – no major repairs ever needed.
A few years ago we bough a new Chrysler Town and Country. It has 40,000 miles. Love that too. No complaints. No major repairs needed.
Yes, I would buy another Chrysler (if I had any money left).
Boudica
I have owned a Dodge Caravan and a Chrysler Town and Country. Would never buy another Chrysler. I loved the style and look and amenities, but the continuous electrical problems drove me nuts….electric sliding doors stopped working, radio went out, a recall for a clockspring in the steering wheel, speedometer would stick at 0…it was crazy.
Persia
@Slaney Black: Yeah, we had a Geo Metro that we loved. Great first car. And then they phased out Geo and eventually took the Metro out altogether, because they were busy making SUVs and didn’t want to bother with the rest of the market.
Now I drive a Toyota.
vishnu schizt
I rent quite a lot of cars, and when a Chrysler product shows up I wince. The exterior styling is OK, i.e. the 300, PT Cruiser. But every interior looks like it was designed by some fan of the art sale at the Ramada, you know. ART FOR SALE!, total liquidation…..ugh. That analog clock looks like something out of your company’s longevity catalog. Hey, you have been here five years, pick something out of this as your gift…. I took the steak knives.
Also, that goddamned black velvet fabric on the seats! I really don’t want to see what is left of the latte the last person spilled. Jesus could anything look worse?
greynoldsct00
I’m driving a 2005 Sebring convertible. I never thought I’d have a domestic car, but I always like the style of this one and I got a good deal from a reputable dealer. My uncle has owned three since they debuted in 1994 (he used to sell them) and has never had issues. Knock on wood, I haven’t had any either. The 80’s cars were a nightmare and I never would have bought any of those.
I’d like to read more about the union owning 55%, employee ownership could revitalize it and they will definitely see how the costs might be hurting the business. That being said, I wish someone would guarantee MY healthcare.
Krista
Did it kill your enemies and become jealous of your relationship with your girlfriend? ;)
Krista
In high school I drove a little red ’92 Geo Storm. That car was awesome. Fast, super-easy on gas, easy to handle, fun to drive, and it looked seriously cool in the parking lot compared to my friends’ second-hand Impalas and Tercels. :)
Bootlegger
My first car was my parents’ avocado green Dodge Coronet wagon with the 318 that they “gave” me when it through a timing chain. I fixed it and drove it until I totaled it (teenage driving).
I currently own a ’93 extended cab pickup, V6, with 240k miles. It’s got rust spots all over and the interior is falling apart but the damned thing starts first crank every morning.
I drove a Dodge Caliber the other day from the rental agency and it sucked.
I’d say Dodge is up and down with its brands, maybe the Union deal can turn them around. I think there’s hope in the brand.
Napoleon
@Persia:
That car was a Suzuki (my wife had one).
BDeevDad
@Napoleon: I thought the Geo Metro was a Toya-let (Toyota-Chevrolet)
someguy
This isn’t worker owned, it’s union owned. There’s a bit of a difference there. Nothing against the national UAW but I’m not sure their interests are perfectly aligned with the Chrysler workers’ interests – UAW also represents the other manufacturer’ workers, and many workers in the component parts industry.
Still, union ownership has to be much better than private stock ownership, where the only concern is making a profit.
NonyNony
I think it sounds like the workers controlling the means of production, actually.
And I find it abso-freaking-lutely hysterical. Because I will bet money that, because Cerberus is in the pocket of big Republican Money Guys, there won’t be massive outcry on FOX News and other outlets about this actual example of real honest-to-Grod socialism. Plus, I seem to recall Bob Corker from Tennessee demanding that something like this be done to pay off the unions (which struck me as hysterical at the time because a Republican was demanding that the workers control the means of production – whoda thunk it?)
As far as a business decision, I think it’s a good one. The guys in the union are owed a shit-ton of money that Chrysler doesn’t have. Unlike the corporate raiders who normally sit on boards, the union guys have a HUGE incentive to keep the company actually productive (rather than just “looks good on paper so we can sell it” productive). And that means a healthier company long term, if less profitable on paper in the shorter term. My only complaint would be that if they own 55% of the company, they should have more than a single member on the Board of Directors.
GM’s restructuring plan had something similar, with the union getting somewhere in the neighborhood of 40% of the company. If both Chrysler and GM survive and implement these plans, we could be seeing the first salvo of a massive shift in how American-style capitalism operates in the 21st century. Interesting times indeed.
Napoleon
@BDeevDad:
No, there were 3 Geo models. The Metro was a Suzuki. There was the Storm someone mentioned above that was an import but off the top of my head I do not recall who made it. There was also the Nova which was made in the joint Toyota/GM plant in Fremont, CA. The Toyota were Corolla’s, I think (the pland currently turns out the Matrix for Toy. and Vibe for GM).
Dan
I rented a Bonneville in the early 90s. Loved the way it drove, the way it looked, drove it all over San Fran for a week. I swore that someday I would own one. They were always out of reach $-wise, and now I have no interest.
Napoleon
@Napoleon:
Correction, it wasn’t the Nova but the Prizm that was the Toyota. The Storm was an Isuzu.
Sarcastro
The Chrysler 300 is an interesting peak into how bad Chrysler had gotten. It’s a much, much better car than anything they’d made in the 30 years before it. That is mainly due to it being built on the last generation Mercedes E-Class platform. Funny thing is that gen of Benz is considered possibly the worst Mercedes platform ever created (from when Mercedes decided that over-engineering was costing them money…. turns out over-engineering is what their customers WANT).
So basically, Mercedes’ worst post-war car ever was the basis for the best Chrysler in decades.
Other than that I don’t know too much. They don’t make many cars I’m interested in. Crossfire is an overweight pig pretending to be sporty. ACR Neons and SRT4s were apparently quite fun, but fail-wheel drive puts them off my list. Prowler looked like a hot rod but had no heat. Viper is awesomely fast, mind bendingly difficult to drive and apocalyptically priced.
90 Large? On a Dodge!?
I mean, yea. Nissan has a $90k super sportscar too. But the GT-R is awesomely fast, apocalyptically priced and so easy to drive stupid-fast that it’s just plain sick.
I’d still have a Porsche – no matter how much slower – for my 90 grand though.
fish
United Airlines was (and probably still is) majority owned by its employees.
BenA
@someguy:
That’s my one concern… IT MIGHT put the union at odds with the worker… BUT I think the pros still FAR outweigh the cons.
geg6
I used to have a Stratus. I now have an Intrepid. I’ve got nothing bad to say about either car, though I like my Intrepid better. Just roomier, especially the cab forward stuff. And the interior design is a little bit more luxe (though only in comparison with the Stratus).
I honestly love, love, love this idea purely from an ideological standpoint. I have no idea how workable it is. But I think it’s awesome anyway.
ppcli
A lot of the paper mills in northern Ontario and Quebec went worker-owned (though not, I believe, union-owned) in the seventies and eighties when the multinational parents wanted to shut them down. It worked OK for awhile, but then people sold their stock, and the company consolidated into a big corporation called Tembec (an outgrowth of one of the original government-aided worker purchases in Temiscaming, Quebec).
.
Though Tembec’s slogan is “A company of people building their own future”, I have the impression that it has largely lost the “worker-owned” character and has become just another big pulp n’ paper company. But my American exile has lasted long enough that I’m a bit out of touch with what’s happening up north. Maybe I’m wrong about Tembec.
ArtV
Not a Chrysler expert, but have spent more than half my career in the design side of the auto industry, and worked about a mile from Chrysler’s headquarters.
Jeeps and the minivans are about the only thing that they have going for them anymore. Most of their current cars are based on either a Mercedes or Mitsubishi sourced platform.
The 300 is built on a refreshed (read cheapened) Mercedes E class platform from the late ’90’s. It’s a decent driving car, but as someone else mentioned, it’s heavy. I’ve only driven the V6 model, but I’m sure the V8 powered versions are a bit more brisk. It’s quality was pretty good for Chrysler, but Chrysler has traditionally had the poorest quality of the Big 3, and I’d still place it last among the American makes. That said, American cars have come a looong way in the past decade, so it’s not as though they fall apart.
Styling-wise Chrysler was very cutting edge for much of the 90’s, in both interior and exterior designs, but after the Daimler “merger”, it seemed to lose focus.
The most recent cars that Chrysler has launched are the Caliber, which replaced the Neon, and the Sebring/Avenger twins.
While I haven’t heard huge complaints about the Caliber in general, the idea that they could replace the cute little Neon with the butchish Caliber seems pretty misguided, as sales numbers have shown.
The Sebring/Avenger have been a complete fiasco, however. Horribly styled inside and out, about the only place you’ll see one is in the upper midwest and your airport rental lot. The interiors were so poorly designed and put together that one of the first things Cerebus did after acquiring the company was to order a complete refresh of the interior, which is unheard of for a car that was only 2 years old at the time.
This is really long already, so I’ll end it by saying that the other thing that has hurt them is the same thing that’s hurt the other 2; too much of a fixation on the truck market. About 4 years ago Chrysler launched a bunch of new vehicles, and every single one was an SUV or CUV or whatever euphemism you want to apply to a tall-riding, 2-box truck-style bodied vehicle and I don’t think any of them has sold particularly well.
Sorry for the wall of text. Hopefully it’s slightly useful.
Scott
We recently retired our 1995 Chrysler Eagle, a rebadged better looking Dodge Intrepid, after 130 K miles. One of the best cars we’ve owned. Loved driving it and not tiring on long trips. Maintenance was typical of any car with some more major issues arising only in the waning years. Traded last year for a Chevy; what’d we know…
Our other vehicle is a 1996 Chevy Siverado, 156K miles and still going strong… A little rust, but this is Western NY
Maxwell James
There are a lot of employee-owned companies – you can see a list of some of the biggest ones here.
But of course, it strikes me that being owned by UAW is a shade different from being owned by Chrysler employees who happen to be members of UAW.
renegademom
I have a PT Cruiser and love it. I have three kids (11, 12, 14) and the four of us, plus luggage can all fit. I can also fit all my dj equipment inside it.
It cost 13k brand new, and I have had NO problems with it since 2005.
The mileage isn’t fabulous, but it is good enough.
A solid car.
If they came out with a PT Cruiser hybrid, I’d be a customer for life.
Egilsson
Here’s the thing I don’t understand. Bob Corker and the rest of the wingnuts wanted to screw the auto workers because he felt they made too much money (so much for free markets for organized labor…), which made US cars too expensive and added too much in costs.
I bought my PT Cruiser because it was easily $5 or 6k CHEAPER than any Toyota or Honda equivalent. I also really liked the interior and the upright driving position.
At 60k miles I had to spend $1k on a head gasket, so figure this car was STILL $4 or 5k cheaper than an import equivalent.
I buy american just because that’s what I do. I’m not jinjoistic or foolish – and if I could get a cheaper Toyota Tundra or something, I would. But I don’t believe that US cars are more expensive and that that is what has made them less competitive – despite what the republicans said about auto wages / benefits.
PeakVT
What does everyone think of this: The United Auto Workers union will own 55% of a restructured Chrysler LLC and its retiree health care trust will get a seat on the board if union members vote to approve contract concessions this week.
It’s the only chance the UAW has to cover retiree health care, and probably a lot of the pension obligations as well. However, I think the company is just too far gone and the value of those shares will end up being zero.
That is mainly due to it being built on the last generation Mercedes E-Class platform.
This idea has circulated for a while but it’s not true. There were some parts borrowed but the chassis is different.
Part of the reason that the C-MB “merger of equals” didn’t work is that DCX refused to share most MB parts with C for fear of polluting the MB image. Thus projected cost savings were never realized and instead product development at C was cut.
stickler
I think the workers will end up getting screwed: they’ll own 55% of a corpse (and one taking its orders from Rome, no less).
Jeep as a brand will be around for a long while yet — people still love Jeeps, so the brand alone is worth probably more than the UAW’s 55%-of-a-corpse. You can’t really expect to sell Jeeps to Americans unless at least some of them are made in the USA, so expect a factory or two to survive, no matter how bad the Carmageddon gets.
Chrysler’s vans, ugly as they are, have value too, and the Mopar trucks (just redesigned this year) might be salvageable if the economy turns around and truck sales rebound.
But the rest of the company? I dunno. I think Chrysler is essentially a dead man walking, and the UAW takes whatever deal it can, no matter how awful.
Richard
After a decades long string of German and Japanese cars (last was a Honda Passport which was really an Isuzu made in Indiana), in September, 2007 I purchased a 2004 Sebring GTC convertible. Talk about depreciation. I got a three year old loaded vehicle with 38,000 miles (a lease return) out the door for less than half of what the thing stickered for new.
Don’t drive it much as I mostly bicycle commute, but it has been bulletproof.
Sadly, the new Sebring convertible is reported to be as bad as the first and second generation were pretty good. And they took a quite handsome car and made it one of the ugliest on the road.
And I wish I had the 1970 Dodge Challenger that my late mother had. Underbraked and undertired, but God that thing was fast!!
baldheadeddork
I don’t know how anyone can honestly say that Chrysler is dragging Jeep down. It’s not just that Jeep is as much a SUV-centric brand as Hummer and the SUV market has cratered. Jeep’s lineup is loaded with some of the worst SUV’s on the market. The Compass, Patriot, Commander and Liberty are all junk. The Grand Cherokee is the best thing in their lineup, but it’s at the end of it’s production run and there isn’t a lot of demand for five thousand pound cars that get 14mpg. Jeep fanatics will talk about the Wrangler, but that’s a sub-niche vehicle. The days when Jeep was an attractive company just because of the Wrangler are long gone.
Chrysler’s core problem is that it’s too small to compete globally as an independent company. The costs of developing a new model have become so great that you have to be able to sell it worldwide in order to be profitable. Chrysler has never had that international presence, and by the mid-nineties they realized they had to find a global partner or they would eventually be forced out of the business.
That led to the Daimler deal in 1998. The plan behind that merger was actually smart. Daimler would take the last generation of platforms for their small and midsize Mercedes models and turn them into Chryslers. (The 300 you liked was developed from the Mercedes E-class sedan.) This spread the development costs for M-B and gave Chrysler access to platforms that were much more sophisticated than what you could get from GM and Ford. In the other direction, Daimler would get access to Jeep’s then class-leading technology to get M-B into the SUV market.
The only huge risk in the deal was all of the debt that Daimler took on to buy Chrysler, but that was all it took. The savings from the merger didn’t fully materialize and Chrysler’s sales fell 20% between 1999 and 2006. Daimler had to get rid of Chrysler. Just nine years after buying Chrysler for $36 billion they sold it to Cerberus for $7.4 billion.
Now Cerberus – a private equity fund with no expertise or real interest in the car business – owns a car company with an ancient model lineup (remember that the best cars in Chrysler’s lineup are based on ten year-old Mercedes) and no cash to develop new models. They hired the guy who almost destroyed Home Depot to run their new car company. (For bonus schadenfreude points – this whole thing was Dan Quayle’s deal.)
Cerberus’s plan was to hold Chrysler for a year or so and sell it to a foreign make looking to get into the US market. Then the banks collapsed, and car sales collapsed. Chrysler had no money for new model development and now it doesn’t have enough money to service its debt.
This is why Fiat was able to come in last January and buy a 35% stake in Chrysler just for letting Chrysler use its platforms for new models, and they’ll get the rest of the company for no more than a couple billion in cash – if that much. If that deal falls through, Chrysler will go into Chapter 7 bankruptcy. The financial wreckage on their books is too extensive for a reorganization.
If everything goes well, Fiat will replace Chrysler’s car lineup with Americanized versions of its existing models. Some will be built here, some won’t. Chrysler will continue to develop and build it’s pickup lines, plus the Wrangler and the Grand Cherokee, but that’s all that will survive from Chrysler’s current lineup. Chrysler will essentially be the American face for Fiat.
If it doesn’t work, Chrysler is gone.
South of I-10
I had a 1994 Concorde, the transmission went out at approximately 35,000 miles. In high school I drove a 1980 Plymouth Trail Duster, which was a completely indestructible tank.
Church Lady
@Napoleon: We had the same question in 2002, when comparing the 2003 Chevy Suburban to the 2003 GMC Yukon XL. They were the exact same car, but the GMC carried a price tag about $5k higher. We were told that the Suburban was built on a line in Mexico and the GMC line was in the US. I guess they were inferring labor costs.
We purchased the Suburban. Our son drives it now. It’s got almost 93K miles on it now and it’s still chugging along. Other than a few minor repairs, it’s been worry free.
agua fruta
Lowe’s is a big company with employee investment (one reason i shop there instead of home depot):
“Lowe’s ESOP was cited as one of the reasons for the company’s recently being named No. 80 in Fortune magazine’s list of the 100 best companies to work for in America.
…
Ed Spears, Lowe’s vice president for compensation and benefits, said, “Our company is not 100 percent employee owned, but between ESOP and employee investment in our 401(k), the employees own $960 million worth of the company.” Together, current and retired employees own about 20 percent of Lowe’s.
“The ESOP is our primary retirement plan,” Spears said. “Over the last 15 years the company has never contributed less than 13 percent of an employee’s pay. If an employee earns $20,000 a year, he’s getting $2,600 worth of stock in his retirement plan.” Lowe’s contributes cash or treasury shares to the ESOP, which distributes shares of company stock to the employees’ accounts.
The beauty of that system for the employee is that it requires nothing of the employee; the shares just appear in his or her retirement account… People who have been with the company 20 or 25 years may well have high six- or even seven-figure retirement accounts, Spears said.”
http://74.125.47.132/search?q=cache:nZpN286jDEAJ:www.andassoc.com/news/Doc/other_98-02_triad.doc+lowes+esop&cd=1&hl=en&ct=clnk&gl=us&client=firefox-a
BruceFromOhio
@Axe Diesel Palin:
I have a 2006 Chrysler T&C van with the “Stow & Go” seats. Other than a cranky power steering cooler that died just days before the end of the warranty, the thing is built like a tank and a pleasure to drive long distance. Mom’s 1998 T&C is still running at 140k.
I would buy another if the need arose. I hope Chrysler survives.
The Raven
It sounds to me like the UAW is being tapped as investor of last resort. But Chrysler is a poor investment and Fiat makes awful cars–they don’t even market in the USA. It’s possible, though, that union ownership will result in a better and more marketable product. The employees, as part owners, are willing to make big concessions to make the business profitable and it’s likely they care more about the product than the previous management. New design technologies may also make rolling out new models less expensive. So it’s a risky plan, but there is some hope in it.
Karen
My sister-in-law & her husband were looking at Chrysler cars, back in the early 90’s. He has always been a big time comparison shopper. He noticed the significant difference in price between Chrysler & everything else, even though the vehicles were basically the same in every other way. When he asked the sales person about why Chrysler vehicles were so much higher than the competition, the answer he received made his mind up to go to the competition. “Because it’s a Chrysler” was the answer he got.
Jeep would do much better if Chrysler wasn’t attached.
liberal
My family bought a Dodge Aries 1985 sedan at a state Dept of Transportation auction. I had it for a few years. That car was awesome. Only time it had trouble was when an O2 sensor burned out.
Generally though, the brand sux.
liberal
Jeeps and SUVs are the spawn of Satan.
Though IIRC things like Grand Cherokee have unibody construction, so less likely to murder people in cars.
liberal
@Egilsson:
I like the looks of the PT Cruiser, but the turning radius sucks a$$. I mean, amazingly so. Truly pathetic.
liberal
@agua fruta quoted:
The ugly of employee ownership is that there’s too much risk: not only is one’s job, but also one’s retirement, dependent on a single company.
A showstopper, IMHO.
J.D. Rhoades
I had a Plymouth Horizon back in the mid-80’s. It was a total POS, and the dealership screwed me by doing a bunch of expensive repairs I hadn’t authorized, couldn’t afford and, according to a mechanic who’d looked at it before, didn’t need. I had to sell one of my guitars to get my car out of the shop and the damn thing still stalled out at every stop sign (which was the original problem).
Fuck Chrysler.
Brachiator
@fish:
From further down in the Wikipedia article:
In short, union ownership does not guarantee success. And note that some of the Chrysler plan resembles the initial United Airlines 1994 union set up, in whic , United’s pilots, machinists, bag handlers and non-contract employees agreed to acquire 55% of company stock in exchange for 15% to 25% salary concessions.
The typical problem is that short-sighted unions squander the opportunity to help run their company and focus almost solely on securing salary and benefits for their members.
Brachiator
@fish:
From further down in the Wikipedia article:
In short, union ownership does not guarantee success. And note that some of the Chrysler plan resembles the initial United Airlines 1994 union set up, in which United’s pilots, machinists, bag handlers and non-contract employees agreed to acquire 55% of company stock in exchange for 15% to 25% salary concessions.
The typical problem is that short-sighted unions squander the opportunity to help run their company and focus almost solely on securing salary and benefits for their members.
patrick
The 1995 Dodge Intrepid was the best car I ever owned. It’s hood was short and swept down so it never felt like you were driving as big as car as it was. It was totaled by a hit-and-run driver while parked on a street in Chicago and had over 120,000 miles on it when that happened. It was a large car, but I got about 28 mpg on the highway.
Screamin' Demon
The 318 was a great engine. Chrysler kept it in production in one form or another for 35 years. But the Slant Six was the best Mopar engine by far, in terms of reliability. I had a 1971 Dodge Demon (the better-looking sister car to the Plymouth Duster) with a Slant Six, and I can personally attest to the fact that you cannot destroy those engines. You can run them completely out of oil, and the sons-a-bitches will keep running (the Subaru boxer engine can take the same punishment). I had the Demon while in college, and back then I spent more Pell grant money on Oly stubbies than I did motor oil. Priorities.
Ted
The LX platform cars (300, Magnum (RIP), Charger & Challenger) are excellent at what they aim to do, which is provide a rear wheel drive alternative to the plain vanilla Camry types. If you order the Hemi they do it at a comparable price to the 6 cylinders of the competition while getting similar gas milage and WAY more power. Interior is plasticky and visibility isn’t great, but that’s the trade off for the price and style, take it or leave it. They simply crush the only other RWD competitor for fleet sales, the Crown Vic. panther platform Fords. The chassis is actually from the old Mercedes E-class, and it shows when you drive it.
The Dodge Ram is ahead of the Toyota Tundra, but slightly behind Ford and GM trucks for utility, while being better than the others in terms of ride comfort and handling. The Ram dualie w/ diesel is fantastic for towing, but I think they’ve lost some of the option flexibility that GM and Ford offer (not sure about that). Toyota only gets props for the Tundra b/c they impressed everyone with an actually competitive product, but a lot of the initial hype was due to it’s release being timed to compete with outgoing domestic models, all due for an update.
The Wrangler does have competition, from the Nissan Xterra for instance, but remains the only real icon in it’s class and price range (at least in America). Tis Awesome.
The Sebring is the second worst car available in the domestic market, just being beat out by the Mitsubishi Gallant for that honor. Chrysler needs a car in this class to succeed to have a business.
The Caliber could’ve been decent, but is mostly just ugly instead, while the PT Cruiser was never really updated (some blame Daimler for this, probably true) and is going away. This is another class that Chrylser needs to be competitive in to survive.
Chrysler minivans are incredibly competitive, provided price is an issue in your purchasing decision. Otherwise the nod goes to Honda then Toyota in this segment.
The Grand Cherokee is another icon (of semi-luxury SUV’s) that has been severly neglected of late. If the redesign works they should be able to reclaim a decent presence in the market.
Basically Chrysler is considered a loser brand b/c they’ve failed in two of the most important segments for their brands. In a perfect world this could be fixed (say with Fiat FWD products), I’m not so optimistic though, considering the state of the auto market. There simply isn’t the time.
Screamin' Demon
Oh, jeez, another one. Someone in the Pontiac thread yesterday had the same complaint. So you had one Mopar with problems, therefore they’re all bad. I had a ’96 Chevy Monte Carlo that shredded the timing belt. Cost hundreds to repair; didn’t stop me from buying an ’06 Chevy HHR. I still have the Monte. The dealer didn’t want it, and it’s worth more to me as a second car.
The HHR is a great ride, by the way. More room than a PT Cruiser, and nowhere near as butt-ugly.
Ted
And I agree with baldheadeddork’s derision of the Jeep pseudo-SUV’s. They all should have been coat-hangered in their early development.
wrb
Lincoln Electric, the welder manufacturer, has had a high level of employee ownership for decades and has been highly successful.
The story is interesting:
http://www.fundinguniverse.com/company-histories/Lincoln-Electric-Co-Company-History.html
Egilsson
@liberal:
I guess the turning radius is poor, but I have no problem taking 90 degree turns. Maybe I can’t really do donuts in the parking lot or something, but it’s just not a problem to me, and something I really don’t notice.
Dr. Squid
I’ve had a Neon for 7 years without a shred of trouble.
I actually parked next to a Horizon yesterday. I had no idea any of them were still left.
As for the Chevy HHR, don’t like it. I’ve got wide shoulders, and I have to scrunch them up to fit into the front seat, as opposed to a PT Loser.
tammanycall
Jeeps are very popular with 16-28 year old women – I see them everywhere.
Slaney Black
Yes they do! In the 1980’s!
But here in the 2000’s Fiat makes some hot little subcompacts and some great mid-luxury Alfa Romeos!
KS in MA
I’ve driven Stratuses as rental cars and thought they were perfectly OK, except that I had to sit on a pillow to get a decent view out the windshield because the seat height couldn’t be adjusted. (I’m 5’6.”) It’s fine with me if Detroit wants to design cars for tall people; I’m just not part of that market.
DPirate
Some plywood manufacturers and/or lumber mills went cooperative in the 60s-80s in the NW. No idea how they did or are doing.
reid
@J.D. Rhoades:
Ditto here, though it was my parent’s car. I forget the year, but our mid-’80s Horizon was always stalling out. I dreaded driving the POS.
After that, the Datsun/Nissan Pulsar was underpowered but kind of cool for an 18 year old. And the LeBaron turbo was the first car I drove that has some oomph. (Basically another POS, though.)
Hm, 2 for 2 POS, Chrysler….
Ben Mays
I had a 94 Concorde and a 96 Town and Country. Bought them both used with about 75-100k on them. Both had already replaced the original transmission. My wife and I put another 200k on them before they died. The Concorde got about 27-28 MPG for my 100 mile commute (one-way). They were both great vehicles for us.
Times change and I bought a new KIA Spectra and a one year old Sedona as replacements. While not as luxurious, they’re pretty good.
Gravenstone
’93 Plymouth Laser (crossbreed Mitsubishi Eclipse and cross badged with Eagle Talon at the time). At 6500 miles it ate the timing belt in downtown Skokie (a couple hours from where I lived at the time. Fortunately, it was 100% warranty coverage so no out of pocket expense for the repair, just the tow and rental for 2 weeks. **ouch** A week after I got the car back – I get the recall notice for “premature timing belt failures”. You don’t say?
Second timing belt ate itself a few years later, out of warranty. However, since I didn’t get the first repair filled under the recall provision, it was again 100% paid for – pleasant surprise, that.
Other than that issue, the car was bulletproof and a pleasure to drive. 32 mpg highway, snappy pick up and decent handling (reflecting its Mitsu heritage) and plenty of room (I’m 6’5″). I sold it after 7 years and 120k miles or so to take on the lease of my late sister’s Ranger. Unfortunately, the kid I sold it so wrapped it around a tree only a few months later.
So yeah, my experience with Chrysler was mixed, trending to positive. Hopefully the corporation will survive in its new configuration.
Also, hope Jeep continues strong, because if they go out, Toledo (where I still have family) will just be crushed. Worse than they presently are.
Gravenstone
Weird how I focused solely on the ’93, since that was actually my third consecutive Mopar product. Maybe because it was my first ever new car purchase.
Used ’84 Plymouth Laser (issues aplenty, but it turned out to have been an accident rebuild so I blame that more than the manufacture) followed by a used ’88 Shelby Daytona Z preceded the ’93. The latter had it’s own glitches – worst being a door locking mechanism that would freeze in the closed position in cold,wet weather (living in MI at the time, this was, uh, fairly common). But a kick to drive. So yeah, even with occasional problems in all my Mopar products, I was a loyal customer for over a decade.
KevinD
Will Ferrell drives a Dodge Stratus