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Low sales cripple Chrysler further

New cars sit in a Chrysler lot in Peabody, Mass., on Dec. 4, 2008. Chrysler’s 53 percent drop in December sales was far worse than Ford Motor Co. or General Motors Corp., and analysts doing the math say Chrysler probably won’t survive the year as an independent company, despite $4 billion in government loans and the possibility of more federal aid.

New cars sit in a Chrysler lot in Peabody, Mass., on Dec. 4, 2008. Chrysler’s 53 percent drop in December sales was far worse than Ford Motor Co. or General Motors Corp., and analysts doing the math say Chrysler probably won’t survive the year as an independent company, despite $4 billion in government loans and the possibility of more federal aid.

January 8, 2009

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— Even by the standards of battered automakers, Chrysler is in dire shape.

Its sales in December were down a stunning 53 percent, far worse than Ford or General Motors, and analysts say it probably won’t survive the year as an independent company — despite $4 billion in government loans and the possibility of more.

Things were so bad last year that a single Toyota model, the Camry/Solara midsize car, outsold the entire fleet of Chrysler LLC’s passenger cars.

‘No real possibility’

“There is no real possibility of turning this thing around as an independent company in my opinion,” said Aaron Bragman, an auto analyst with the consulting company IHS Global Insight in Troy, Mich.

U.S. sales of Chrysler, Dodge and Jeep brand vehicles fell 30 percent last year, the worst decline of any major automaker. It lost more market share than any of its peers, down to 11 percent. Analysts say most of Chrysler’s products don’t look, feel or drive as well as the competition’s.

Chrysler plans to introduce an electric car in 2010, but until then, there are few promising models to boost sales. Many analysts predict that by 2010, Chrysler will be acquired by another automaker or sold in pieces by its majority owner, New York private equity firm Cerberus Capital Management.

Chrysler’s chief financial officer has said the company needs $7 billion every 45 days to pay parts suppliers, and analysts question whether the company’s sales are generating enough cash for those payments. Analysts also say an acquisition by General Motors Corp. is still possible.

Nissan Motor Co. could be interested in buying Chrysler’s truck business. Chrysler is already signed up to make pickup trucks for the Japanese company.

Jonathan Macey, a Yale University law professor critical of U.S. automakers’ management, said Chrysler’s sales numbers are “further evidence of an unviable entity.”

When automakers went to Washington late last year, their aim was to get enough money to become viable again. They got only enough help to last through March, when Barack Obama might provide more aid.

Questions over aid

A Treasury Department spokeswoman noted that the agreement for the government’s automaker loans required that the administration designate someone to keep analyzing the companies’ finances and viability.

Macey, author of a book on corporate governance, said it’s too late for Chrysler and GM to solve their problems, including high labor costs and union work rules that hinder competitiveness.

To get the loans, GM and Chrysler had to agree to negotiate concessions from creditors and the United Auto Workers union, but the specifics have yet to be worked out. The government can call in the loans March 31.

Chrysler CEO Robert Nardelli, in a presentation to the Senate Banking Committee last month, said the company could stay alive in the long term with reasonable concessions, a $7 billion bridge loan and $6 billion more out of the $25 billion Congress allocated to develop new fuel-efficient technology.

The Bush administration provided a $4 billion loan. Now, Chrysler is counting on an additional $3 billion in aid for its financing arm, Chrysler Financial.

Comments

ariadne 5 years, 3 months ago

justaverage:what's wrong with your theory?i thought that your RepubliKLAN mantra was to let -'the market' determine values?

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justaverage 5 years, 3 months ago

The entire U.S. economy is being/has been ruined by greedy incompetent managers who are supported by greedy, dishonest, power hungry Democrats and Republicans in all levels of government. That pretty much covers it. I'm outta here for a beer and more ammo!!!

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ariadne 5 years, 3 months ago

while the certifiable 'wingnut' SNAP was driving her1977 Dodge Aspen above (presumably when new) - my ex-wife and i were driving a 1974 SAAB 99LE & 1969 FIAT 124 spyder back in '77.gee, i wonder which cars handled better than a shoebox.

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Marion Lynn 5 years, 3 months ago

Mr_Nancy_Boy_To_You (Tom Shewmon) says… I'm proud to say I've never contributed a penny to Chrysler's losses."Marion writes:Neither have I and I have owned probably over 50 Chryslers.

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BestSylvia 5 years, 3 months ago

It's hard for me to find the right fit in a car. I am a half inch shy of being 5ft. I always lie and say I’m 5ft because being shorter than 5ft seems freakish to me. I bought a Catalina 22 sailboat Rozinante almost 4 years ago without knowing how to sail.

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Tom Shewmon 5 years, 3 months ago

I'm proud to say I've never contributed a penny to Chrysler's losses.

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solsken66 5 years, 3 months ago

I had a 1994 Ford Aerostar which ran great. It had over 200,000 miles on it when traded. It was the XLT extended version with built in toddler seats which was so nice when my two children were small.

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solsken66 5 years, 3 months ago

I had my first and last experience with a Chrysler product. The mechanical failures of that vehicle were numerous and expensive.

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blue73harley 5 years, 3 months ago

I firmly believe in buying American whenever possible. I have posted several times about the great performance an dependabilty of my KC built Ford Escape. I also love old Mopars and owned a 1970 Roadrunner. That being said, many recent Chrysler products suck. In many cases, they had a great design (appearance) and poor engineering. Their power plants (before the most recent hemis) absolutely sucked and were years behind Ford and GM technology. One example was the the six cylinder motors used in Dakota/Durango trucks mid 2000s. What a POS!!! Their transmissions were equally antiquated. But they sure were purty!!!Chrysler aside - check out the Ford Fusion or Chevy Malibu if you need a mid-size. Both are great cars.

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cheapskate 5 years, 3 months ago

Well hope your luck is better than mine with a Ford minivan. I would not even ride in one after all the problems I had with my 2007 Ford that after 17 tows to the shop Ford bought back because they could not fix it. Sure like my 2008 Town and Country, Not a problem one.

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purplesage 5 years, 3 months ago

Worst money pit I ever owned was a Plymouth Grand Voyager (89 model). Took 4 transmissions, 2 Mitsubishi engines, 3 ac compressors, 2 radiators, half a dozen CV shafts, ball joints, steering rack, alternator (also Japanese) tie rod ends, several sets of power window track, etc. etc. to get to 213K when I sold it, for $300. I've had some others and, though there's been significant improvement, it is the same od thing - 250K mile engine in a 100K mile body. I didn't realize how crummy they were until I went back to my preferred brand recently - a Ford.

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Marion Lynn 5 years, 3 months ago

flamingdragon (Anonymous) says… That being said….Mopars make the best drag cars, and it would be a shame to see the company get killed off."Marion writes:How about a 413 Dart with all matching numbers, including the engine?Rough but all there!

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Marion Lynn 5 years, 3 months ago

You America haters should be reminded that the Nipese carmakers undermined the US auto industry by selling cars in this country at below cost after having been allowed to do so by bribing US congressmen and senators.You should remember that your precious United Auto Workers had saddled the industry with punitive contracts which turned the US makers into HMOs which sometimes build cars.YOU need to remember that YOU rejected safety features such as seat belts in the 1950s(Nash and Ford), that YOU rejected well-built cars which got excellent fuel economy (Nash, Rambler, Falcon, Dart, Valiant, Buick Special, Olds F-85, etc.), YOU need to remebmer that you have short memories and after the first gas crisis and the fits thrown by the EPA, went right back to buying big cars which did not get good fuel economy and encumbered the US auto makers with pollution requiremnts which could only be met by stopgap measures which only further worsened fuel econcomy.YOU need to remember that YOU rejected airbags in the 1970s when experimentally introduced by Oldsmoble as an option.YOU need to remember that after you have finished your disgusting celebration of the probable demise of the US auto insdustry, that YOU will be feeding, clothing, housing and providing medical care for the families of and the workers who will be unemployed while you drive around in your Nipmobiles.Thank you for your support!

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statesman 5 years, 3 months ago

Ah Marion! Just face it! The United States of America is no longer the industrial superpower it was and most likely will never be again. The American CEO's, coddeled and protected by the fat-cat Republicans, have raped and pillaged this nation's workforce to where there is NOTHING of value built in this country anymore. I'm the proud owner of two Japanese cars and I'll never buy American again. Same with about everything in my house.....all imported, as American engineering and design is inferior to that of Asia and Europe. This country had a great 200 year run, but its over with. Get used to it.

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Sigmund 5 years, 3 months ago

flamingdragon (Anonymous) says… "I dont know if anybody really cares, but people should know this about the auto industry:"BTW, I care and great post.

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Sigmund 5 years, 3 months ago

Godot (Anonymous) says… "It doesn't matter whether they make good cars, or not; the hedge fund that bought Chrysler took the goody out of the company and ran it into the ground. Call me crazy, but I do not have one iota of pity or sympathy for Cerberus Capital Management."Chrysler is my least favorite of the Big Three Detroit automakers, perhaps because they are privately owned by a bunch of MBA's in suits that might as well be building washer/dryers or widgets. I hope GM stays the hello away from them. Looks like that bailout money from TARP would have been better used to flush down the toilet. Stop bailing out the failures, it is costly and doesn't work.

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flamingdragon 5 years, 3 months ago

That being said....Mopars make the best drag cars, and it would be a shame to see the company get killed off.

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flamingdragon 5 years, 3 months ago

Hey, General motors almost did the same exact thing in the 80's to their own compnay. When Roger Smith took over from the accounting department of GM, the company was making record profits and production. Then, in order to become more "competitive", he ordered the closure of 30 U.S. plants and re-opened them in Mexico. The company almost folded up before the major shareholders finally woke up and kicked Roger out. They even kept his golden parachute....so you see, product reliability and financial well-being are not always as related as we conveniently would like to think.

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flamingdragon 5 years, 3 months ago

I dont know if anybody really cares, but people should know this about the auto industry: The cars you produce and sell and the your financial well-being never seem to really be related.It aint as simple as selling 1000 hotdogs a day, and being rich tomorrow.In Chrylser's case:Everyone remembers how they were on the brink of extinction in the late 70's, right? Well, they had sucky cars and no management ever since '73, so they had it coming. But then comes Lee Iacocca and He smooth talks Congress into a huge loan. Subsequently, Chrysler produces the K-car (total junk-but it was freakin cheap) and the company repays the loan ahead of time with interest. Then, there was this dude over at ford trying to design a "mini-van"...Ford had no interest, and he skipped on over to Chrylser, and a big boom insued. Chrysler certainly wasn't making a fabulous product, but they were making something people bought the hell out of. The company made record profit during this time, and with the advent of their new look "big-rig" trucks in the early 90's-they went from almost no share of the truck sales pie (3%) to big player (40%) by 1995. The company never had it so good, money-wise, but again, it wasn't just the product.You see, before Lee came on board-there was this thing called Chrylser sales division. Chrysler made cars-then 'sold' them to the sales division. The sales division then crammed them down the dealer's throats as much as possible. The GM, the financial, the marketing, the production, the design and developmental depts ALL got big bonuses for how many cars were made and then "sold" to Chrylser sales division. So there they were, making tons of cars that nobody wanted, and lining their pockets...This was the major reason why the company was floundering, cuz thousands of cars were just sitting around without buyers.This was one of the first things that Lee Iacocca torched.It was a major reason why the company thrived for the next 15 years...so what happened?A $55 billion surplus was sitting around at the time of Iacocca's retirement in 1992. The new GM immediately reinvented the Chrylser sales division and all the old games began anew. Daimler bought the majority of the stock in 1998 for 36 billion-then sucked the company dry of any usable resource, including the $55 billion (dollars work good, right?) The GM bailed with his $300 million golden parachute and daimler "paid to have its car towed away" to current owner cerebrus for $7.5 billion... Now the company is toast. Is sux too, cause the product line is as good as it has been since 1971. The Hemi is back, the charger is a good car, the challenger is really cool and pretty affordable (not practical-but so what?) but it doesn't matter about the product. The company has already been raped.

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gccs14r 5 years, 3 months ago

Marion conveniently ignored my reminder that he loves German cars, despite being eternally angry with the Japanese for the same war. Maybe he's mad at the Japanese not for fighting the Americans, but for not being able to help the Germans win.

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Marion Lynn 5 years, 3 months ago

Yeah, we got it without an engine and decided to install this one since it was just lying around:http://image.popularhotrodding.com/f/8929882/0506em_hemi_01_z.jpgThis is a street car, by the way; all licenced and insured.And yes, that is a 440 built to 520 with a hemi conversion.Runs on pump gas, and yes, both carbs work.Truly a nightmare from Hell for the "Liberals" and "Greenies"!Eat my dust!

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ArumerZwarteHoop 5 years, 3 months ago

I didn't relise they still made cars, Chrysler is second to last on my list of cars I would consider buying. Right above cars build in the former Yogoslavia.

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Marion Lynn 5 years, 3 months ago

Just acquired one of these and it will be finished in a month or so.Bring your Nip***mobile and we will play:My Dodge Aspen is like this one:http://rides.webshots.com/photo/1083588397044764569HcOolJ

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ariadne 5 years, 3 months ago

wow !it makes perfect sense that SNAP would have bought a Dodge Aspen in the 70's.no brains for sure

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feeble 5 years, 3 months ago

Some more numbers:http://www.autoobserver.com/2009/01/2008-us-auto-sales-are-worst-since-1992.htmlFor the year, only two Chrysler models posted positive results: the Jeep Patriot compact crossover (38 percent gain) and the Viper supercar (169 percent gain). With enthusiasts anticipating Viper's discontinuance, it was the only Chrysler model to gain in December, as well, discounting the paltry number of Journey midsize crossovers Chrysler sold late in 2008 to provide an outsized 3,822 percent gain compared to this December.Chrysler's total of just more than 1.4 million units sold for the year is the lowest total in the Edmunds.com data archives, which date to 1991. The total places Chrysler well behind its domestic rivals General Motors Corp. (2,980,688 units sold) and Ford (1,988,376), not to mention Toyota Motor Corp. (2,217,662), while topping Honda Motor Co. Ltd. (1,428,765) -- which has long nipped at Chrysler's heels -- by a mere 25,000 sales.The ability to offer consumers viable financing options "continues to be our biggest issue," said Press in a conference call with journalists and analysts.By division for 2008, Chrysler was down 38 percent, Jeep off 30 percent and Dodge was down by 26 percent.

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Godot 5 years, 3 months ago

However, having heard The Big O proclaim that he is now running the world, I have to check the Democrat party and Obama campaign donor list to see if Cerberus Capital made a handsome contribution; if so, no doubt, Chrysler will be "saved."

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Godot 5 years, 3 months ago

It doesn't matter whether they make good cars, or not; the hedge fund that bought Chrysler took the goody out of the company and ran it into the ground. Call me crazy, but I do not have one iota of pity or sympathy for Cerberus Capital Management.

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gccs14r 5 years, 3 months ago

Funny how Marion has such fondness for German autos, but can't stand Japanese ones. Chrysler hasn't built anything decent since about 1971.

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RETICENT_IRREVERENT 5 years, 3 months ago

This is Obama's fault.No doubt that if he would not have switched from that Hemi powered Chrysler 300C to that wimpy socialist Ford Escape Hybrid they would not be in trouble.At least he is better than Al Gore and his Toyota Prius.Damn Prii owners, thinking they are running on granola farts and worshiping Al Gore.Exodus 20 :5Thou shalt have no other gods before me.Damn Gorites, they are worse than the Obamaniac cultists.

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average 5 years, 3 months ago

My current (purchased used) Toyota was built in a UAW plant in California.My previous Dodge was built in a non-UAW plant in Mexico.And, for similar sized cars, the Toyota gets much better gas mileage. I guess I'd rather a thousand of my bucks goes to Japan than a thousand of my dollars go to Chavez, Putin, or the Saudis in increased foreign oil consumption.

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Kyle Reed 5 years, 3 months ago

The title should read "Years of quality issues and low consumer confidence cripple Chrysler further".

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Chris Ogle 5 years, 3 months ago

Marion, Here is my all-encompassing knowledge of autos: I buy the best car based on the most reliable, and affordable car that I can find. Period. In fact, I currently own a Chevy Malibu, not because it has an American name, but because it is a lot a car for the money. The good news, as Americans we have the freedom to disagree.

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Marion Lynn 5 years, 3 months ago

Enjoy your Nip***mobiles!You know why American cars cannot for the most part be sold in Japan?Let's test your all-encompassing knowledge of automobiles!

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Marion Lynn 5 years, 3 months ago

Before you knuckleheads start shouting, "Racism!"

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Marion Lynn 5 years, 3 months ago

The official name of Japan is "Nihon-koku" (日本国) or "Nippon-koku." But is more commonly referred to as "Nihon" (日本) or "Nippon." The Chinese characters (called Kanji) adopted for the name mean "sun," "origin," and "country," which is why Japan is often referred to as "the land of the rising sun."

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Marion Lynn 5 years, 3 months ago

Looks like the Nipponese won at Pearl Harbor after all!

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Flap Doodle 5 years, 3 months ago

I still bitter at Chrysler for having made my 1977 Dodge Aspen. I'm still bitter at myself for having bought it.

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jrlii 5 years, 3 months ago

Sad. I have to admit, Chrysler hasn't made a car I would consider buying in decades, but their larger pickups (3/4 & full ton) are very nice (especially with the Cummins engine) and noticeably heavier duty than their competitors from GM and Ford.Toyota, Nissan &c. don't even bother with trucks in those size classes.For some reason, trucks with a GVWR between about 7,000 and 10,000 pounds seem to be pretty much exclusive to the "Big Three."

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Chris Ogle 5 years, 3 months ago

Marion, I am proud to be American, partly because I can purchase the best product. It is really not my duty (as an American) to buy a Chrysler just because they are going broke.

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Marion Lynn 5 years, 3 months ago

http://www.walletpop.com/article/_a/bbdp/nissan-recalls-more-than-240000-suvs/297198?icid=200100125x1215849434x1201115584Nissan Recalls More Than 240,000 SUVs APposted: 22 HOURS 13 MINUTES AGO(Jan. 7) - Nissan Motor Co. is recalling more than 240,000 trucks in 20 cold weather states to fix a problem that could prevent front air bags from deploying in a crash.The government said in a posting on its Web site Wednesday that the recall affects the Frontier, Pathfinder and Xterra from the 2005-2009 model years.Latest RecallsNissan Motor Corp. / AP18 photos Nissan Motor Co. has recalled thousands of Frontier, Pathfinder and Xterra from the 2005-2009 model years to replace air-bag sensors that are vulnerable to damage from winter weather and road salt.In states where winter time road salt is used, a mixture of snow, water and salt could enter a crash zone sensor area and rust, interrupting the signal. The Japanese automaker said that could prevent the front air bags from deploying in a crash.Nissan spokesman Colin Price said the problem was discovered through warranty claims and no crashes or injuries have been linked to the issue. He said the red air bag warning light illuminates to alert the driver of the problem.A total of 242,720 vehicles are part of the recall and it involves trucks sold or currently registered in 20 states and the District of Columbia. The states are: Connecticut, Delaware, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia and Wisconsin.Price said owners in the cold weather states should be notified of the recall by mail later this month. Dealers will install a redesigned sensor at no cost.Owners in other states will receive extended warranty coverage to 10 years for the sensor, the company said. Owners may contact Nissan at (800) 647-7261.

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Marion Lynn 5 years, 3 months ago

You America haters disgust me beyond words.

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Chris Ogle 5 years, 3 months ago

Reality of the slogan " If you can find a better car... buy it." And so we did. Now we get to help "buy the car" without even getting the piece of s***.

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Godot 5 years, 3 months ago

Igby, you probably won't have the opportunity to buy another Chrysler product again, unless it is used. These guys are toast, and deservedly so.

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igby 5 years, 3 months ago

These Chrysler people are desperado's for sure.Never finance a car or truck through Chrysler Credit or they will call you 5 times each day until you make the payment. My payments due on one day and their calling me that same day, five times per day, even on Sunday or holidays wanting their payment. I use Western Union phone pay and they get their money that same day.Only 12 more months and I'm rid of them forever!I'll never buy a Chrysler product again because of their telephone calls that are so stupid.

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