Chrysler Fiat Deal….And the US Gov’t in the Warranty biz
It is my hope that the steps I am announcing today will go a long way towards answering many of the questions people may have about the future of GM and Chrysler. But just in case there are still nagging doubts, let me say it as plainly as I can—if you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warrantee will be safe.In fact, it will be safer than it’s ever been. Because starting today, the United States government will stand behind your warrantee. reuters
The Chrysler/Fiat deal might make sense but 30 days is awfully fast for a “real” deal. Shotgun marriage sounds more plausible.
The fact Obama is talking bankruptcy suggests that he realizes that the sense of urgency needed to get the deals done is missing. Bankruptcy is a useful prod.
The warranty promise is, I suspect, a matter of the US government putting up the money necessary for the existing and forward going warranties to be honoured. I wonder how much that would be? Billions; but how many?
March 30th, 2009 at 12:01 pm
Chrysler and Fiat? Didn’t GM loses multi-millions/billions getting out of their joint venture deal with FIAT?
Actually, my understanding (as Fiat was among the least reliable cars in the EU after Jaguar) that they used the compensation to turn their company around.
And at our expense a 2nd time?
Better to invest again in DeLorean?
March 30th, 2009 at 12:45 pm
The question that immediately springs to my mind is: where’s the incentive for the company to make a decent product?
I stopped buying Jeeps after the last one spent 1 of every 6 days in the shop for one reason or another during the year I owned it. And I had to fight and fight with Chrysler to have them replace it under the lemon laws. After owning a couple of Fords, I swore I’d never own another American car and I haven’t, nor have any of my family.
That’s why the automakers are in such trouble. Let them and their union workers who don’t give a damn about doing a good job, rot, I say.
March 30th, 2009 at 8:22 pm
I’m trying to remember the name of the British Columbia forestry company that was publicly owned. They owned a mill in Nelson at one time. It didn’t work out very well at all, and only delayed the inevitable.
What will be interesting is what will the US gov’t do now that they are in the car business towards competition. Toyota and Honda have substantial market shares, and are a hobby horse of the autoworker unions. Maybe something has to be done to protect the taxpayer’s investment?
Funny how all this stuff feels very familiar, very old. It didn’t work last time, why should it work now? I notch this one up to the foolishness of youth.
Derek
March 30th, 2009 at 9:25 pm
Now that Comrade President has mandated that they get together with Fiat that really gives them a strong bargaining position at the table. Right???
March 31st, 2009 at 4:51 am
Like I said, Ford gets my patronage for being a true American corporate citizen and refusing this fascist economic bait and switch.
March 31st, 2009 at 7:46 am
I saw this coming a number of years ago when the car companies had 5-10 year warranties and cars that only lasted for 1/2 the time. The only thing I missed is the government picking up the tab. I just assumed they’d (car companies) go out of business. Now it is becoming clear to me….
March 31st, 2009 at 10:43 pm
I just woke up from a terrifying nightmare; something about Ottawa warrantying my car…
April 1st, 2009 at 5:36 am
All I can say is let them go.
I drive a re-leased Chev. SUV and it is off lease in a few months. The original buy back/residedual value was set when these things were popular and now one cannot sell them. People only remember too well the costs when gas was high.
GMAC - the GM Banker will not negotiate on the “Buy Back” price and instead will put it up for sale at an auction and get about $5000 less than what they want and several thousand less than I would pay. Sure inspires customer loyalty. Even the Dealers are shaking their heads.
There is something wrong with this picture. I can only surmise that GM really wants a “controlled bankrupcy” like that of Nortel which allowed Nortel to dump a lot of debt – like health care, severance and pension commitments.