Chrysler won’t be repaying the federal bailout money in the amount of $7 billion. Taxpayers will however be receiving something for their money in the form of Chrysler stock, which will be sold at a later date once the company recovers. This has the potential to actually make money for taxpayers if the company can complete the turn around and start making money again.
Chrysler Bankrupt
May 1, 2009 — ColioneIt didn’t take long for Chrysler to take one to the head. Chrysler filed for bankruptcy Thursday 4/30/09 and today announces 4 plants identified to close by the end of 2010. If they’ve identified them, why wait almost a year and half to close them? Shut them down in 2 months (legally required 60 days notice for large layoffs). I’m sure they could ramp down production in that time and have a fire sale on the equipment, or move it to more productive factories. The Obama administration in Washington states the process will be relatively quick (30-60 days) and the deal with Fiat will also close during that same time period.
According to government officials, a new company will be formed that will buy all the assets of Chrysler including contracts relating to suppliers, labor and dealers. Everything else will be dumped by the bankruptcy court.
As part of the deal, Chrysler Financial will be completely shut down and all loans will be made through GMAC which will affect 3,400 jobs.
CEO Robert Nardelli will be leaving the company after the merger and bankruptcy are completed. Fiat will take over all management functions of the company at that point. One bright side is that Fiat has committed to building small cars that it now builds in Europe and sells in the US.
The ownership is as follows:
UAW – 55%
Fiat – 20% (option to increase to 35%)
US Governement – 8%
Canadian Government – 2%
The four plants slated to close include: (About 5,000 jobs)
1. Sterling Heights, Michigan – Assembly plant for the Chrysler Sebring and Dodge Avenger.
2. St. Louis assembly plant that for the Dodge Ram pickup.
3. Twinsburg, Ohio stamping plant.
4. Kenosha, Wisconsin engine plant.
Company spokesman Ed Garsten said all affected workers will be offered positions in alternate locations depending on how fast Fiat ramps up production of it’s small cars.
Chrysler buyout offered to all employees
February 4, 2009 — Colione
Chrysler has announced it is offereing buyouts for all of it’s employees as a way to cut costs and provide a way out for workers that are nervous about the future of the auto industry. The offer is for up to $50,000 for all of the 27,000 U.S. workers and also includes a voucher for up to $25,000 off a new car.
Chrysler Shutting Down Production for 30 days
December 18, 2008 — Colione
Most car companies shut down production for two weeks beginning Christmas Eve, but this year is obviously going to be different. Chrysler is leading the way as they announce they will be shutting down production and employees will be told not to come back to work until Jan. 19th. While this may seem like a good thing for the company as a way to save money and allow demand to catch up with supply, this will affect many more than just Chrysler and it’s employees.
Suppliers will be affected as they will also have to slow or stop production, which will cut their income, but will mean layoffs for their employees as well. This will lead to a trickle down effect and will cause some crunches when it comes time to turn the machines back on.
Chrysler stated that there is a lack of credit because people want to buy in their dealerships, but can’t get the credit necessary to do so. This is in contrast as to what the competition is saying. Ford and GM state they have available credit, but demand is down sharply. The question is, what are the requirements for qualifying for credit?
