Chrysler to cut 25% of white collar work force

Chrysler is talking about merging with Ford. If that happens they can cut a number of back office, R&D, and other white collar jobs. Then cull through their respective model lines, and reduce rendundancy and close plants, eliminating more jobs. The auto industry has too much production capacity, especailly the U.S. companies. I wonder if this is the precursor to the merger.
 
Anthony said:
Chrysler is talking about merging with Ford.
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The news reports I saw all had them in discussions with GM...basically, GM needs Chrysler's cash hoard, and Cerberus Capital Management (the folks who bought Chrysler from Daimler) wants GMAC.
 
Anthony said:
Chrysler is talking about merging with Ford. If that happens they can cut a number of back office, R&D, and other white collar jobs. Then cull through their respective model lines, and reduce rendundancy and close plants, eliminating more jobs. The auto industry has too much production capacity, especailly the U.S. companies. I wonder if this is the precursor to the merger.
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I question the true synergy they can generate. Chrysler, as a firm, has been notoriously resistant to integrating it's design and production systems with other firms (see: Daimler deal).

So, while you have the "economies of scale" synergies down, I'm not sure how much more they can generate beyond chop and drop. And, personally, I think that it is just a way of delaying the inevitable for them.

FWIW, I wouldn't be surprised to see a GM <-> Ford merger, where they could generate some true synergy (shutter the GM trucks business, build up Ford's truck business, integrate the small car lines with GM and Ford small car brands, invigorate and attack the mid-size sedan dominance of Toyota and Honda). But I do not think either board has the cajones to drive a deal like that together, and I also think UAW could make it hell to deliver on.

Cheers,

-Andrew
 
Andrew, I want to see all three remain independent, and I naively believe that they can do so.
 
SCCutler said:
Andrew, I want to see all three remain independent, and I naively believe that they can do so.
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Based on my read, and my friends in industry (or ex-industry), I think they can do that out of momentum alone. Personally, however, I think that some integration between two of them could help turn around the industry in the US. Too much overlap, IMO.

Cheers,

-Andrew
 
astanley said:
FWIW, I wouldn't be surprised to see a GM <-> Ford merger,
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That will never happen.

There is just too much Ford Blue stock (aka Ford Family stock) out there and they ALWAYS vote to maintain control of Ford. Which is why Damiler bought Chrysler (the Ford family told them no way).

The Ford Family would not have enough power in a combined GM/Ford and they will vote it down. As long as the Ford Family votes as a block, no one can out vote them at Ford.

Missa
 
These mergers will do nothing to solve the biggest problem: the liability "tail" of the retired employees health and retirement plans. Those liabilities add a lot to the per unit (car, truck) price and make them not competitive compared to the Japanese manufacturers.

The only way I know of to wipe out those liabilities is bankruptcy. And we're not talking chapter 11 here, as the unions will (legitimately) fight this one to the end.

-Skip
 
Skip Miller said:
These mergers will do nothing to solve the biggest problem: the liability "tail" of the retired employees health and retirement plans. Those liabilities add a lot to the per unit (car, truck) price and make them not competitive compared to the Japanese manufacturers.

The only way I know of to wipe out those liabilities is bankruptcy. And we're not talking chapter 11 here, as the unions will (legitimately) fight this one to the end.

-Skip
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Hah! Their liability stems from putting out undesirable cars. Deep six Buick and Pontiac. Deep six Dodge. Cut down on the badge engineering. GMC trucks AND Chevy trucks? The Germans aren't price-competitive with the Japanese but they still manage to compete. It's not all about the price. If anything their cost structure is worse than ours. The answer is to put out a good product. GM thinks saving a few pennies by using a cheaper knob is the way to go. Dumb.
 
I wonder how long it will be before the government proposes helping those that can't afford their car payments? Heck, why doesn't the government just pay for everything? How about my aviation fuel bill? That puts a strain on my budget!
 
KennyFlys said:
Feeling a little tight around your white collar, Kevin? :)
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Now that I have a few more minutes...I'm as safe as anyone, and more so than most, at Nissan. My department is about to launch a major nationwide initiative in April and I'm one of two project managers. While neither one of us is indispensable, losing either of us would postpone launch by many months. We just finished running the numbers last night and every month postponed, the ROI drops precipitously.

All of this is predicated on finance signing off on the P.O. The good thing is our VP is 100% on board and met with the CEO last night for a final push.

Regardless of what happens, the auto business hasn't been this bad since 1991. I lived through several head count cuts then and hope for a repeat performance.
 
kevin47881 said:
Regardless of what happens, the auto business hasn't been this bad since 1991. I lived through several head count cuts then and hope for a repeat performance.
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We have a firm in town that manufactures parts for GM.

Just last fall they moved an entire new line here, at a cost of tens of millions. Now, all those positions are being eliminated. GM has no cash, and can't get credit, so all their suppliers are in deep you-know-what.

This is starting to look like the 1970s again...
 
flyersfan31 said:
NO, this is what the 70's looked like
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Hey -- I lived in Kenosha, WI from 1980 - '87. They weren't making Matadors like that anymore (although ALL the police cars in the area -- even the "unmarked" ones -- were Matadors, which sure made 'em easy to spot!), but (for a while) they made "Motor Trend's Car of the Year" -- the AMC Alliance.

My wife had the misfortune of buying one, brand new. It was a Renault/AMC product (I called it the "Appliance") and was the single worst piece of crap car I've ever driven. Luckily, the only lasting result of owning that car is that I have NEVER again purchased Motor Trend magazine.

Then Chrysler bought the company, stripped off the profitable Jeep line, and sh*t-canned the rest. Kenosha instantly had 6,000 of the laziest, most over-paid former auto "workers" in history on their welfare rolls -- a situation that remained unchanged well into the 1990s.

Michigan is about to go through the same thing, just 25 years later...
 
they made "Motor Trend's Car of the Year" -- the AMC Alliance.

My wife had the misfortune of buying one, brand new. It was a Renault/AMC product (I called it the "Appliance") and was the single worst piece of crap car I've ever driven.
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My roomate had one back in the mid-80's. It had a automatic transmission which made it seem even MORE underpowered. One night going to an all night ski in the Poconos, with three guys in the car, one very large (not me) the Appliance could hardly make 20 MPH up the hill. It was HORRIBLE. Its like they took the worst features from the Gremlin, Pacer and Renault 11. Ugh!
 

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smigaldi said:
Wanna hear about my burnt orange AMC Javelin from High School?
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Javelin -- now THAT was a sweet rig. It's like AMC blew all of its creative energy on one car.

Funny about the Alliance , I was just thinking yesterday that I hadn't seen one in a long time. I guess they all fell apart. How 'bout that Fuego!!!
 
flyersfan31 said:
Javelin -- now THAT was a sweet rig. It's like AMC blew all of its creative energy on one car.

Funny about the Alliance , I was just thinking yesterday that I hadn't seen one in a long time. I guess they all fell apart. How 'bout that Fuego!!!
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How about the AMC Pacer? I had one of the first Ford Taurus wagons. I still think that thing looked like a pregnant Pacer.
 
flyersfan31 said:
Javelin -- now THAT was a sweet rig. It's like AMC blew all of its creative energy on one car.

Funny about the Alliance , I was just thinking yesterday that I hadn't seen one in a long time. I guess they all fell apart. How 'bout that Fuego!!!
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And if you had the right powder blue leisure suit and mirrored aviator glasses watch out!!!


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Jay Honeck said:
OMG. Is/was that really you, Scott????

:hairraise:
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I'm gonna have nightmares tonight about Scott dancing to "Saturday Night Fever".

"Stayin alive....Stayin alive......ah ah ah ah Stayin aliiiiiiiiiiive!" :hairraise:

Scott, please tell me you were in a play or something. :rofl:

When was that taken? 70?
 
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Anthony said:
My roomate had one back in the mid-80's. It had a automatic transmission which made it seem even MORE underpowered. One night going to an all night ski in the Poconos, with three guys in the car, one very large (not me) the Appliance could hardly make 20 MPH up the hill. It was HORRIBLE. Its like they took the worst features from the Gremlin, Pacer and Renault 11. Ugh!
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Sorta lke the first Die-sel Rabbit. Or the Audi Fox.
 
wsuffa said:
Sorta like the first Die-sel Rabbit. Or the Audi Fox.
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I used to work for a guy who had a Rabbit. His son liked it so much, he bought one. At the time, most thought of the diesel Rabbit as more of a novelty. Little did they know!
 
I still have a bunch of the old Renault parts microfiche at work. 90% of the stuff is no longer available thru Chrysler, but its fun to watch the other guys try to make sense of the stuff. One of my customers has 3 Alliance convertables. 1 actually runs and drives.
Chryslers parts and service website has a header disclaiming any possible mergers, but rumours are running rampant about talks with GM, or Renault-Nissan. etc.
Our dealers are sucking wind right now (even the import guys) but the parts sales operation is still averaging 5 million plus a month.
 
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Ah, the days of OBC (Oil-Based Clothing).

And don't be dissin' the great AMC Matador coupe- that was one of the coolest-looking cars ever, especially in Oleg Cassini trim.

Actually, the original AMC automobiles (pre-Renault) were some pretty well-built cars, if your standard for "well-built" includes running for damned-near forever on basic maintenance. They were nearly always behind the curve on design (as well they might be, with the absence of budget...), but they sure tried. Of course, they blew their wad on the Pacer, a complete change of direction based upon the promised GM-built Wankel rotary, which was (of course) never delivered. It was funky-looking, 'tis true, but did you ever ride in one? They were huge inside, well-packaged.
 
SCCutler said:
Ah, the days of OBC (Oil-Based Clothing).

And don't be dissin' the great AMC Matador coupe- that was one of the coolest-looking cars ever, especially in Oleg Cassini trim.

Actually, the original AMC automobiles (pre-Renault) were some pretty well-built cars, if your standard for "well-built" includes running for damned-near forever on basic maintenance. They were nearly always behind the curve on design (as well they might be, with the absence of budget...), but they sure tried. Of course, they blew their wad on the Pacer, a complete change of direction based upon the promised GM-built Wankel rotary, which was (of course) never delivered. It was funky-looking, 'tis true, but did you ever ride in one? They were huge inside, well-packaged.
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My dad had a Pacer. Lot of room and great views around. I never knew what happened to that car. he was getting sick, Alzheimer's, when he had it. One day he just stopped using it and would never tell anyone what happened. It was probably left somewhere and he forgot. But at the time we had bigger worries than where his car was.
 
flyersfan31 said:
Hah! Their liability stems from putting out undesirable cars. Deep six Buick and Pontiac. Deep six Dodge. Cut down on the badge engineering. GMC trucks AND Chevy trucks? The Germans aren't price-competitive with the Japanese but they still manage to compete. It's not all about the price. If anything their cost structure is worse than ours. The answer is to put out a good product. GM thinks saving a few pennies by using a cheaper knob is the way to go. Dumb.
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Andrew, I'm in pretty close agreement with you, but I do think the liability tail from pensions, retirement, and other past labor liabilities really challenge the firm. One of my peers in a previous life was an MBA/finance guy who fled Chrysler. He estimated that they threw away 50% of their yearly effort on "exploratory" projects that existed to justify the huge raft of people in the "management development program".

One of the upsides (oh dear, SZ here we come) of the European way of doing things is that the companies that can survive under the onerous taxation and social cost structure essentially remove all long-term labor liability from their books. Stop paying the salary, and someone else takes over (versus the American system). Their current cost structure is higher but they can compete on other aspects of the product, and not bottom line price. Fewer companies make it to the top, but when they do, they have a nice comfortable position.

The biggest downside is that it is very difficult to make it to the top, and the free market isn't actually in play in many cases, which is anathema to most.

Cheers,

-Andrew
 
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smigaldi said:
No that was for real. It was taken in about 1975 or 1976.
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Hee hee!

I've got a picture somewhere taken in '75-ish. I'm "truckin'" (of course!) up my parent's driveway, wearing (I'm not kidding) yellow & black plaid bell bottoms, a shiny polyester, skin-tight shirt, and two-tone platform shoes.

God almighty, what WERE we thinking?

I was driving my mom's '68 Pontiac LeMans back then, which was an awesome car -- until *I* got ahold of it. By the time my dad traded it, that poor thing had done about a thousand burn-outs, I'd torn BOTH rear tires off the rims sliding around corners, and the whole thing rattled like a kid's toy. Teenagers are hard on the equipment...

...as I'm discovering now with my kids. (My parents are looking down right now, laughing!) I've got a '97 Subaru Outback -- the toughest, safest car I could find -- for my kids to drive, and it's STILL not enough. My son has only hit things with it twice -- once backing into MY truck...and my daughter starts driver's ed this winter.

What's left of my hair will be white by next summer, I fear...

:goofy:
 
SCCutler said:
Ah, the days of OBC (Oil-Based Clothing).
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Steve Martin: Do you know how many POLYESTERS HAD TO DIE TO MAKE THAT SUIT?

SCCutler said:
And don't be dissin' the great AMC Matador coupe- that was one of the coolest-looking cars ever, especially in Oleg Cassini trim.

Actually, the original AMC automobiles (pre-Renault) were some pretty well-built cars, if your standard for "well-built" includes running for damned-near forever on basic maintenance. They were nearly always behind the curve on design (as well they might be, with the absence of budget...), but they sure tried. Of course, they blew their wad on the Pacer, a complete change of direction based upon the promised GM-built Wankel rotary, which was (of course) never delivered. It was funky-looking, 'tis true, but did you ever ride in one? They were huge inside, well-packaged.
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I remember going to the Chicago Auto Show and watching the stage show with the go-go girls swinging their hips while singing about the Javelin.

I had a mechanic customer who said the later AMC models like the Eagle never had the same parts from car to car. AMC would use a Chrysler or GM alternator depending on which they could get a deal or credit to buy that week.
 
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Scott - sweet duds, sweet rig. Ahhhh, the 70's, when expensive gas cost $0.75 and polyester was hip.
 
My brother in law had what I consider the all time crappiest car ever imported to our fair country.

Who can forget the
Renault Fuego
​
 

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SCCutler said:
Ah, the days of OBC (Oil-Based Clothing).

And don't be dissin' the great AMC Matador coupe- that was one of the coolest-looking cars ever, especially in Oleg Cassini trim.
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My first employer had a couple of them. One in baby **** brown. They were broken more than they ran. Basic maintenance nothwithstanding.

Hence the name: bastador.

The Rambler, however, wasn't quite so bad. Decendant of the Nash.

Of course, they blew their wad on the Pacer, a complete change of direction
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Wayne's World! Wayne's World!
 
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