03 June 2011

Unlikely Chrysler Comeback Made Possible ONLY by Completely Ignoring Dear Leader's On-the-Spot Guidance

The Pickups and SUVs Obama had wished culled 
from the lineup in 2009 now drive sales, profitablity

Marchionne pretending to listen to statist boneheads

FIAT has been making a lot of positive news over the last week, first by paying off (by refinancing) all $5.9B of the US/Canadian auto bail-out loans to the US/CN Treasuries (six years early), then three days later announcing the acquisition of the entire US Government stake. This provides FIAT-and-Chrysler CEO Sergio Marchionne with complete control of Chrysler, thus ridding himself and his companies of the Obama Administration's unhelpful influence...

Obviously Obama could use anything that resembles an economic success story right about now, so he's been quick to build a Detroit "comeback" theme into the latest campaign spiel. But how ironic that while the President is busy co-opting others' success at Chrysler, Marchionne is rushing to distance the company from a foolhardy White House and (unpopular) bail-out's stigma. Although foreign owned, the new Chrysler is planning a IPO for 2012, and is now free -as Ford has been- to pursue market-based success as best they know how.

Not hard to see why FIAT/Chrysler would want nothing to do with sinking ship Obama/bailouts as far as marketing images go. But Sergio Marchionne is used to operating his company with one hand while dealing with meddlesome liberal politicians on the other, thus he managed the opportunity very well and had little problem putting Obama in the trick-bag two years ago while quietly doing what it took to actually make the acquisition work.

More impressive on-the-spot guidance

Back in 2009 when FIAT was the only viable savior of Chrysler, Obama was more focused on brazen opportunism, punishing Republicans, stealing things for the UAW, and driving a goofy green agenda than creating any viable business plan for Chrysler. Dear Leader insisted that FIAT bring a 40mpg minicar to US shores (they did, the FIAT 500, alas made in Mexico), electric cars, and such.

But Marchionne had to make it work on the bottom line, not just Cloud Nine: he let Obama have his victory/photo ops there, and most of that product was in the FIAT development pipeline anyway. The electric FIAT 500 goes on-sale in the US for 2012, and the regular 500 has already hit the new FIAT dealerships. The meeting of such performance objectives brought FIAT a progressively larger stake of Chrysler, in part leading to the pending takeover by the Italian company.

Not one to let a good crisis go to waste, Obama fully exploited the opportunity in 2009 to screw creditors out of their money (at the gain of the union) and more than a few Republicans out of their Chrysler dealerships. He then pushed the FIAT/Chrysler to drop large gas guzzlers and focus on economy cars, electrics, hybrids, unicorn-rainbow power, etc. But on the issue of culling eight and six-cylinder cars/trucks from the lineup, Marchionne stood firm... leading to today's healthy and profitable Chrysler

How funny-strange it is then that Italian-Canadian Sergio Marchionne understands us -and what we like- better than our own president! He also knows that real American cars/trucks that people might actually want to buy -like the Chrysler 300, Dodge Challenger, Grand Cherokee, Dodge Durango, and Ram Pickup- make twice the profit per unit as any FIAT 500s or Puntos re-engineered for the US market ever will... there's simply too much pressure on margins at the entry-level from the South Koreans and others. 

No telling where it may strike!

In stark contrast to the expressed (and rebutted) Team Obama desires, Chrysler is not only doing extremely well with SUVs and trucks now, the future still includes a new Viper, more large Cummins diesels for pickups, even a new 6.4L Hemi V-8 bringing 450hp! Chrysler's Detroit Grand Cherokee plant is running at (3 shifts) full capacity, Toledo is expanding, and there are plans to export American-made SUV's to Europe, rebranded as FIATs and Alfa-Romeos... that means American jobs that wouldn't be there if they'd listened to Obama.

Over at Government Motors, the market has greeted the President's pet project -the Chevrolet Volt- with a collective yawn... they're selling less than 250/mo. Now Chevy dealers have  been caught registering the cars and taking the $7500 Obama tax credit for themselves, while unloading the now "used" Volt on used car lots. When questioned, one of the dealers explained this was to due with "high demand"- a dubious claim.

Following in the footsteps of capitalist genius Henry Ford, the last All-American car company -FoMoCo- has maximized it's freedom from government interference, even turning a profit at the bottom of the Great Recession. Ford CEO Alan Mulally possessed the luck/foresight to sell off underperforming brands and reduce debt prior to the crash, and when they saw the degree of control Obama was looking for in the bailout days, Ford said "pass" and found their own way in the capital markets.

Free-market Ford is now kicking butt, and they continue to take market share from GM... they're easily the healthiest of the Big Three on paper, and the product is just fantastic.

So as long as Barack Obama is trying bask in the glow of any Detroit renaissance, we need to hold his feet to the fire on the habitual dishonesty, mistakes, losses, cronyism, and corruption it took for him to get there, as well as the fact that the White House's harebrained product ideas had nothing to do with Chrysler's early return to profitability... rather, they had to resist and work around them.

Hemi-powered Hurst/Dodge Challenger


Bungalow Bill said...

Yeah, it's got a Hemi. Screw you Obama! Vroom, vroom, eat my exhaust you Bozo president that doesn't understand what it means to be an American. We want our muscle cars, trucks, and SUVs.

Reaganite Republican said...

The difference between businessmen providing the market what they want and a Statist telling them what they need couldn't be more glaring, eh...

Woodsterman (Odie) said...

I asked my Chevy dealer, when I had my truck serviced, "Where's the Volt"? They refuse to carry the big losers. I would cost the dealer $100,000.00 for their own charging station.

Reaganite Republican said...

Oh, exactly... that's a big part of the problem, the electrical infrastructure pretty much doesn't exist, and the cars are in-effect coal powered anyway!

Andrew33 said...

It is a not so well kept secret that in order to keep up with ZL-1 Camaros and Shelby Mustangs, Dodge intends to put the viper V-10 in the Challenger.
As a muscle car fan, I love it. However, as you point out, it is the definition of hypocritical for the "green giant" aka our pResident to call for everyone to drive fuel efficient vehicles while both automakers he stole from American taxpayers are making just the opposite. GM is making more gas guzzling missiles than Chrysler. Nobody is asking just how the taxpayers are going to get paid back on the stimulus. I think taxpayers should get a car to do with as they please, and those holding GOOD STANDING mortgages held by banks that took bailouts should get either said amount reduced or if that amount goes beyond what is owed, the banks should be giving up titles! The real taxpayers will never see a dime of any of the bailout money paid but it will be reported that the taxpayers got paid back. That is bovine scatology.

Left Coast Rebel said...

Great post, linked at LCR (I wrote about Dear Leader in OH today even before I read this, you connect the dots perfectly).

Reaganite Republican said...

Thanks a lot Rebel, much obliged as always-

Matt said...

Good news for Chrysler. Bad news for the greenies...I like it!

Government Mess said...

Great job telling what the Obama liberal lap-dog media is trying to with hold from the citizenry of this great nation. They (Lib Media and Obama) continue to lie through their teeth by saying General Morors has paid off its debt to the federal government. It certainly has not, in fact I read a story just yesterday that said they expected a 14 billion dollar unrecoverable loss in the Auto Bailout Disaster.

This administration is campaigning on out right lies. The real scary part is that nearly half of this country is stupid enough to believe it.

Keep up the good fight fellow conservatives! Great job again sir, well done.

Specter said...

Thanks for the FULL story, RR. As you're probably already aware, the Lamestream Media has done nothing but repeat: "Chrysler wins because of Obama bailout!", "Chrysler wins because of Obama bailout!", "Chrysler wins because of Obama bailout!" ad nauseum until all the little proglodytes believe it as gospel.

Amusing Bunni said...

They lie so much, it's neausating.
I was happy when the people at the car place BOOED the booger.
Of course the LSM didn't play the whole clip, the booing went on for a LONG TIME.

Reaganite Republican said...

Yeah bunny, that was in Toledo at the old Jeep plant... when Obumbles tried to make some joke about the economy hitting a rough spot "even the Wrangler would have trouble with"- what a lame joke, maybe he got the boos for just being too corny lol

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