For those of you who do not know, on March 4th 2007 Chrysler has been put up for sale. Thats right, part of one of the "Big Three"

Ford isn't so far behind from doing the same...

Expect big changes in the automotive industry for America...

LINK IS HERE One of the "Big Three" falls...

Now that DaimlerChrysler has put the Chrysler Group up for sale, the long-expected massive restructuring of the American automobile industry might finally have arrived.

Take a snapshot for posterity, because today's U.S. automotive landscape won't look like it does for much longer. As a friend reminded me, it's like what happened in the rail business at the turn of the 20th century, when once-dominant steam locomotives gave way to diesel- and electric-powered ones. The entire rail industry was turned on its ear.

For the past couple of decades, experts have been predicting a major restructuring of the U.S. auto industry because of too much plant capacity (notably that owned by Chrysler, Ford and GM), too many employees and too many costs (especially employee costs). Automakers have tried to ward off this inevitable transformation by attempting a nip here and a tuck there, but cosmetic surgery will no longer be enough.

No matter who buys it — and the list of potential suitors is long — Chrysler as we presently know it is history. More than likely, Chrysler will be acquired and broken into pieces. Some parts might be sold to the highest bidder, while others could be tossed onto the trash heap.

And what's going to happen to Ford? Is a U.S. automobile industry without Ford possible? Even a now-retired Ford employee recently told me that he never thought it possible but now is reconsidering. Indeed, Ford's turnaround appears elusive. Only recently, Ford admitted it is not meeting the goals of its Way Forward turnaround plan and employees are losing faith.

And it's not just the automakers themselves that will be part of the restructuring. What's happening with Chrysler has been occurring in the auto parts business for the past couple of years. A massive restructuring, brought on largely by bankruptcies, has been ongoing, gathered speed last year, and looks destined to continue at full speed in the near future.

Dow Chemical might well be the next major casualty. Based in Midland, Michigan, the company sells to the automakers as well as the pharmaceutical, agricultural and packaging industries, and it looks to be a takeover target. The private-equity firms of Kohlberg Kravis Roberts & Co. (KKR), Blackstone Capital Partners LP and the Carlyle Group are reportedly interested in teaming up to buy Dow in a deal estimated to be worth $54 billion. All of these equity firms interested in Dow have coincidentally — or maybe not so coincidentally — also been mentioned as potential buyers of Chrysler.

The size of this $54-billion deal would surpass even the record $45-billion KKR and Texas Pacific Group recently paid to take over TXU, the Texas energy company. And that deal surpassed the record-breaking $39-billion Blackstone paid for Equity Office Properties in early February.

In fact, the deal for Equity Office Properties foreshadows what a buyer might do to Chrysler or any other automotive supplier. Before its first month of ownership was out, Blackstone had begun dismantling its investment and selling it in pieces.

For contrast, look at what is happening with the import brands. Most recently, Toyota announced that Tupelo, Mississippi, will be the home of its eighth assembly plant in North American. No surprise that Toyota picked the South, because it is far from the influence of the Detroit brands, UAW labor and higher wages. Every other import automaker has gone to the South as well — Honda's operation in Ohio is the northernmost of these operations.

The American automobile industry isn't going away, but the industry of tomorrow won't look like the one of today.

 

do you have a source/link for this? Or is this an opinion piece?

 

the glowing blue (or orange) text on line 5 is a link.

I put a Bold next to it to make it easier to see.

 

It's probably a good thing that giant monopolistic corporations will be "re-structuring". I just hope it results in better cars though and not crappier ones.

 

thanks sly...

that is a very dark blue and didn't look like hypertext, thank you for helping me to see it.

interesting stuff...

 

well, I think we all new it was coming and until the smoke clears we won't know the full impact

 

wait what? How is this a bye-bye to anything American?

Chrysler stopped being part of the Big Three a long time ago, which is why people refer to it as the Big 2.5... DCX is half German; hardly American.

This isn't news!

 

The whole article was mainly targeted towards Ford and Chrysler.

What about GM??

IMO, I think they'll be a little tougher to beat. GHm is going to have some great new porducts coming out in the next 2-3 years that, I think< will keep it on it's feet.

 

they said the same thing when chrysler was for sale the 1st time. GM wont die, its waaaaay to big. and ford is making big steps towrds getting better cars out there.

 

you gotta love freemarket..

put out overpriced pieces of ____ and go out of business..

I cant wait for the american industry to change. All they have to do is make cars that people will buy (like the tc, civic Si, camry, etc)..

I mean at least the cobalt is a little better than the cavalier, and companies like pontiac are putting out nicer cars, but ford and practically every is selling pure crap that I would never drive...

cant wait for the future cuz its gonna get really interesting..

whats that?? Is that a turbod 4 door that will compete with the sti and evo? Is that a 400 horse power family sports car that will compete with the s4 and the m3? how about a car that will compete with the civic and the tc?? how about a supercar other than just the ford gt??

^i for one cannot friggin wait until the day when I say I want an american car because it is gonna be something sick..

 

here's the latest on the subject http://www.autoblog.com/2007/03/07/z...ning-chrysler/
all i can say is that they did it to themselves.

 

This headline is older than March 4th. This started snow balling around mid January. DaimlerChrysler, while HQ'd in Detroit is no longer an American company. I thought this was a given since 1998. Most people outside of the "D" have no idea.

I love how everyone is wanting these companies to fail. That's just sick and twisted.

Are we bored of talking about Scion and now were bashing American automakers?

Stop the hate.

Peace

 

One issue with the american companies is the union presence and all the issues around it (Which are not occurring at toyota). The union has a million times too much power (they are the new mafia.. that is about it. They can bully anyone and not see any fall out from it) and the companies affected are forced to pay ridiculous wages, even if they are losing money. I know some will argue, but if you look at what has happened in nearly every large american company, you will see what I mean. It opens up the door for sub par workers to make the same overly high wages as the good employees. I have seen this first hand in many companies, including some that effectively dried up small towns because they folded when they had no choice but to pay someone $15 per hour to sweep a floor cause the union said so. The time and need for unions has come and gone in the US. And until that changes, the big three will continue to fall.

Granted, that is not the only issue. The lack of gumption to try something new and still build quality is not helping either, and recent attempts to change that may have come too late. If they do something new, it is too expensive for the average joe to purchase. Thier overhead is just too high.

My prediction is that Toyota is going to continue on and trump the last of the big three (GM), hurting them and forcing a restructure. Hopefully this will signal a slow regrowth and some major changes in these companies so they come back in a good way.

It is a shame, because I would buy american any day of the week if the product and quality were there, but it just isnt these days. Even the Chevy truck is going downhill. The corvette is putting a hurting on MUCH more expensive competition, but how many people are running out to buy a car that expensive? Same goes for the caddy. They have always been great with making a lot of power and keeping them efficient, but only in thier expensive cars. They provide nothing for the younger generation really.

Anyway, that is my take on it coming from my experience in an enormous corporation. Of course, different industries, but you see the same types of movements happening. The lack of ability to change fluidly and jump into new market segments is killing the american auto maker.

 

I think this is a car forum, not a political one, but regardless if there were no unions around everyone would be making wal-mart wages and the CEOs of these corporations would pocket even more. The unions may be too powerful in some cases, but everyone deserves to be paid enough money to feed their families. and another thing... I thought American cars were way cheaper than Japanese and German ones. And GM and Ford have been developing some interesting stuff recently. Both have very interesting hybrid concepts.

 

Well, the discussion started, so call it political if you want, but my post was just as relevant.

Sorry, but a sub par worker does not deserve to make the same wages as someone who busts their butt all day and does a great job. THAT is what the unions are doing these days. I dont know where people got the idea that you should be able to come into any job and half **** it and deserve the pay of a high level, high performing employee. And that mentality is forcing union companies to pay wages for low levels of work. Like I said, I know people who worked for a union company, worked thier butt off while half the people on thier shift were paid the same, or more (because of seniority only, another stupid mentality), screwed off half the day and even worse, could not be fired as long as they didnt screw up in just the right way so many times. The company shut the doors and dried up a small town because of this.

Toyota believes in paying people what they are worth, and is very successful at it.

I also was not putting down the american companies completely, but thier situation right now proves they are not doing things efficiently.

 

The vast majority of American workers are not union, and I see prosperity all over the place. In the U.S. it costs automakers over $50/per hour in labor (wages, benefits, etc.) to build a car. In Japan it's around $22/hour, and in South Korea it's less than $5.00/hour. Why so much in America? Unions. They foster mediocrity, and protect bad workers, and are why so many companies are shipping manufacturing offshore.

 

I'm not sure where you get this from. As a Computer Programmer for a small company, I do not belong to a union, yet I do not make so called 'Wal-Mart' wages.

 

Ok, I do love my tC and my fair share of import cars... but deep down I just feel like I have to ask... are people really, and I mean REALLY, ok with giving up the Mustang, GTO, and the rest? These are more than cars in many respects... many of these are legacies...

I don't know... a world without American muscle seems like a world without color to me...

 

no one's fault but their own...

 

Wait, everyone knows that the US automakers are in trouble... but to paint the picture that Chrysler did this to themselves is twisting it up a bit. Do some more research and read some other, NEWS articles (the piece originally posted is an 'expert insider column', not quite fact though she had a lot of facts)... and you'll read that a lot of people who worked for Mercedes are saying that they were just stretched to thin. How is that Chrysler's fault? For the most part, this is Mercedes fault for not managing their other half better! Another article I read even went on to say how Germans were very optimistic about the Damiler-Chrysler merger.

And the 'restructuring', while a big part of it is due to lack of financial performance, is just Mercedes shedding extra baggage before things get really mucked up. Even Dr Z said it himself... if they don't sell Chrysler now, there's going to be a buyout. What everyone sees as a negative is actually a positive for both Chrysler and Mercedes. Mercedes wants to get back to competing w/ BMW (cause BMW is killing them at the moment) and they can still make some money off of Chrysler before they totally drive it into the ground.

With Chrysler detached from Mercedes, they may get a better backing and not have to produce recycled Mercedes parts (like the ugly ___ Crossfire).

And I don't think it's an insult to say that the partnership with Mitsubishi hurt them pretty bad as well. I respect the Lancer/EVO, but I wouldn't drive any other Mitsu if you gave it to me for free. If you did, I'd take it straight to Carmax and sell it. LOL.

I'm not totally trying to defend the US makers... sales figures and stock analysis tell the story, but unlike Ford, I don't think Chrysler deserves to get beat up like this. Of the big 3, they've been doing the best. The 300 is a freaking mass-market hit... too little too late I guess though. The Dodge Challenger is coming... again, too little too late, but had Daimler-Chryler thought of these things a few years ago, it wouldn't be so dismal now.

Ford, on the other hand, just met with Toyota to suggest some kind of partnership... now there's an automaker who is in REAL trouble.

Anyway... as long as the Challenger is still a greenlight, I could care less what happens to Chrysler or who buys them.