In the grim darkness of the near future, there is only... Walking apparently.
So in the past couple of weeks it's become apparent that things are bad in automobileland.
Chrysler is bankrupt.
It's a sure thing at this point, and apparently it's worth more to fiat in a bankruptcy court than as a stable entity.
How bad off is Chrysler?
Last month, the Obama administration told Chrysler it would provide up to $6 billion in financing if Chrysler and Fiat could complete a deal by the end of this month. Fiat originally agreed to take 35 percent of Chrysler, but the stake was subsequently reduced to 20 percent. The administration said it would provide up to $6 billion in financing if the two companies agreed, on top of $4 billion in federal assistance that Chrysler has already received.
Now, Fiat isn't actually paying anything for Chrysler. This 6 billion is essentially a gift from the treasury to Fiat in order to pay off creditors, dealers, etc. That's right, Chrysler is worth negative monies. And even so apparently Fiat has turned down this offer, preferring instead to salvage what it wants from a bankruptcy proceeding, thus avoiding having to pick up the tab for retirements, dealer agreements, etc.
But Chysler has been screwed since Daimler bought them and essentially shitcanned their entire R&D department in favor of having them sell rebadged 90's E-class Mercedes and Mitsubishis, so no big surpise here. How's our other troubled company doing?
Yes, according to the new plan in order to (maybe, possibly) avoid bankruptcy, GM will be converting debt to stock in a deal which will leave the company owned 51% by the government and 38% by the UAW...
Also Saab, Saturn, Pontiac, Hummer, they're all gone by the end of the year. Get your G8s and Saturn Skys while they last folks.
Also apparently Toyota lost 7 billion dollars this quarter.
If you find it, call up their offices in Tokyo, there's probably a reward of some kind.
As a side note, Toyota finished the first 3 quarters up 3 billion or so, so they've wiped that out and are looking at a loss for the year. This means that somehow they are managing to lose about 2.5 billion a month for the last quarter . GM at its worst was losing about 2.9 billion a month. A Toyota spokesman stated that the company is proud that they are once again on the cusp of overtaking GM in a key industry performance metric.
On the bright side, Ford only lost 1.4 billion in the 1st quarter.
In celebration, Ford stocks jumped 15 percent. I'm not kidding.