Something for nothing?

Chrysler Headquarters,
Auburn Hills, MI,
Image via Wikimedia CommonsS0... Fiat (late of greenmailing GM not to merge with them after GM foolishly signed up, to the tune of 2B USD) gets 35% of Chrysler.

What did they give in exchange? Billions of dollars? Some factories? 35% of themselves? Nope. None of the above. They gave nothing except the promise of some future advice and access to technology.

Great work if you can get it...

Tell you what, Mr. Nardelli, give me .0035% of Chrysler and I'll give you some advice. Or maybe I'll just give it to you for free. You should have actually come out with the Durango Hybrid back when you first started talking about it. You know, in 2000? Then you'd have some technology experience by now. And stop giving away your company for nothing.

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Bail out the Big Three?

Image via WikipediaEveryone's talking about it, so surely this is just one more voice in a sea of noise...

Bailing out the Big Three (Chrysler, General Motors, Ford) automakers is a bad idea. They should be allowed to restructure. Even if that means bankruptcy. Why? Because without restructuring, we are just postponing the day of reckoning and making it worse when it does come.

Look, I'm from Michigan. It will be painful. Hugely. People will lose their jobs. But the alternative is worse. The Big Three made some bad decisions. Bankruptcy is a way to take the useful assets and try something different.

Some will say that bankruptcy means everything shuts down. Nope. The automakers will still be making autos, still be making spare parts. Just not under current management and with current contracts. Airlines keep flying. Railways keep running. Stuff just gets cut.

Some will say that no one will buy cars from a bankrupt maker. If the maker is bankrupt it doesn't mean the car that was OK to buy yesterday all of a sudden falls apart. Nor does it mean that parts will never be available or that cars can't get repaired. Parts come from a network of suppliers. Ford hasn't made Model T parts in over 70 years, but they're out there, in the aftermarket. Repairs are carried out by dealers. And dealers make most of their money from service, not sales... dealers will continue to repair things, they'd be foolish not to.

So... let them fail, if they're going to. And let them KNOW they will fail if they can't sort things out themselves... that will give them incentive.

Schumpeter speaks of creative destruction. Let it create. This is a case where the village has to be destroyed in order to save it.

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From the "read the fine print" department

If Chrysler still made this
maybe I'd buy it!
Image via WikipediaIn case anyone hasn't noticed, we in the US are now paying 4.00 USD or close to it per gallon for our gas... (yes, I know, the one European in my readership has been paying way more than that for years... we get it, we were lucky)

The US auto industry has been hit hard (and that means Michigan has been hit very hard) by this. Automakers are scrambling to compensate for the lost sales.

Seems Chrysler has come up with a gimmick to move some metal languishing on their dealer lots... 2.99 gas! The basic idea is that you buy a new car, they give you a passthrough credit card that you buy gas with, and they don't charge you more than 2.99 for it, up to a certain number of gallons per year, for 3 years.

Seems like a not too shabby gimmick, as far as gimmicks go. Until you read the fine print. This only counts for 87 octane gas. But Chrysler's own owners manuals suggest 89 for most vehicles and there are a few that require 91, no less. Chrysler will subsidise your gas, but only if you buy the kind that violates your warranty. If you want 89, that's 15 cents extra. If you want 91, it's 30 cents extra. Since the markup usually is 10 or 11 cents per grade step, that's a bit less of a deal.

No thanks. I think I'll stick with my 11 year old Stratus a bit longer.

(OK, two car posts in a row, what's up with that?)

Have you seen any silly gimmicks that make you scratch your head lately?

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