I wonder what the impact of GM's decision not to sell Opel and Vauxhall -- revealed last night -- will be on its own finances and on Chrysler's situation.
(I realise Chrysler does not manufacture outside the US.)
DAS
To send an e-mail directly replace "spam" with "schmetterling"
Canada...
I was told the buyer the Germans wanted to buy it also has ties to the Russian gov. which is not in GMs best interest. Also the largest shareholder, the US treasury , was not consulted in this decision. so who knows what they will say to GM. i think they are a little too optimistic about the economy turning around just because of cash for clunks they had positive numbers for the first time in 22 months. watch what they report for the 4th qrtr. that will be the test.
i am more concerned with Marchionne's 5 year plan for Chrysler being announced today.......
Chrysler gives Marchionne chance to prove skeptics wrong again TURIN -- Tell most analysts that Chrysler Group's sales are going to rise to about 3 million in 2014 from roughly 1.5 million this year and here is the reaction you will get: No chance. That kind of skepticism is sure to follow the presentation of the struggling U.S. automaker's five-year plan by CEO Sergio Marchionne today in Auburn Hills, Michigan.
Marchionne's sales target is not outrageous to him. He is used to making bold promises and then pushing himself and his team until the doubters have to become believers. We have seen this before.
In November 2006, Marchionne gathered 250 financial analysts and investors in Turin to present a five-year plan for Fiat's then-ailing auto division.
Marchionne promised Fiat would start producing a net profit of $15 million a day by 2010, up from the $6.5 million it was losing daily when he took over in June 2004.
After the presentation many industry watchers were skeptical.
Max Warburton, at the time an analyst at UBS in London, said that hitting Fiat's ambitious 2010 target looked "at least as complex as splitting the atom."
Still, Marchionne delivered more than promised in 2006 and 2007. Even the
2008 goal looked attainable before the global economic collapse in September put Fiat's 2010 targets out of reach. Warburton, now at Bernstein Research in London, admits that he was in the process of eating his words before the economy turned.Chrysler is no Fiat
Despite Marchionne's dramatic turnaround of Fiat, Warburton is not sure the CEO can do the same for Chrysler.
"While superficially there may appear to be some similarities -- a damaged brand, a product hiatus, weak quality, low employee morale -- there are also some vast differences" between the two automakers, he said.
Warburton notes that even when it was sick, Fiat still had a huge share in its home market, something Chrysler lacks.
Marchionne also arrived in time to benefit from key models. Fiat has just launched the Panda minicar, which would win the 2004 European Car of the Year, and was about the debut the Punto subcompact, which quickly became one of the top-selling cars in Europe.
Chrysler does not have a breakout model hiding behind the curtain.
Finally, says Warburton, Marchionne's reign at Fiat has coincided with a massive increase in the company's business in Brazil. The automaker spent years investing in the country and now is benefiting from its booming economy and its strong demand for new vehicles.
Chrysler does not have a stronghold in a developing market that is on the verge of a massive boom. It sells about 90 percent of its cars in North America.
Chrysler is in position to benefit if the U.S. economy bounces back strongly.
In a volume-driven industry, rising sales can fix a lot of problems, says another analyst.
Adam Jonas of Morgan Stanley sees the restructured Chrysler breaking even once the U.S. market tops 11 million annual sales.
With some forecasts as high as 12.9 million next year and 14.5 million in
2011, Jonas expects Chrysler to report a $841 million operating profit in 2010 and a $952 million net profit a year later.If Jonas is correct, Marchionne would need just 30 months to accomplish something that right now seems like mission impossible.
Mexico
Huh? How about Dodge Ram production in Saltillo, Mexico?
OK, outside NAFTA.
Re Canada, it's southern Ontario, isn't it?
As a European immigrant to Canada told me not so long ago... there is the US
(Don't say that too loudly in front of Canadians...)
My point really was that Chrysler does not have a string of manufacturing plants around the globe like GM and Ford do.
DAS
To send an e-mail directly replace "spam" with "schmetterling"
Interesting points...especially about the US govt apparently not having been in the loop. (Like the management of the two UK banks with large govt shareholdings, they haven't got to grips with the fact that they can't treat the big shareholder quite so cavalierly.)
At the moment the British trades unions are very pleased, though they do realise nothing is secured. But as one labour leader said, "better the devil you know..."
The German government is embarrassed but, as a news commentator pointed out, at least the news came out after the recent regional elections in Germany. The support of the buy-out, with huge support from the German govt, was a major election issue.
DAS
To send an e-mail directly replace "spam" with "schmetterling"
Then that's what you should have said. :)
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