Showing posts with label Chrysler. Show all posts
Showing posts with label Chrysler. Show all posts

4.26.2018

The end of the Sedan?



Ford To Phase Out 'Traditional Ford Sedans' Such As Fusion And Taurus In The U.S.

Excerpt:

Ford Motor Co. reported a $1.7 billion profit for the first quarter of 2018, but the company says it's planning big changes — such as phasing out all cars except for the Mustang and a crossover vehicle in the North American market, so it can focus on SUVs and trucks. 

"Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America," Ford said.

The cuts will take place over the next few years, Ford said. Over that time, it will phase out longstanding brands such as the Ford Fiesta and Taurus from the North American market.

Ford says that Lincoln sedans, including the Continental, will not be phased out.

With the planned cuts, Ford will say farewell to the Fusion sedan, of which 43,176 have been sold so far in 2018 — and the Focus, of which Ford has sold 35,046 cars this year. Over the same period, Ford has sold 19,164 Mustangs.

The Mustang and the upcoming Focus Active crossover are poised to become the only cars Ford sells in the North American market. The new U.S.-market version of the Focus will be made in China.
Ford And Chrysler Killing Sedans Is Great News For Their Japanese Competitors
Excerpt:

Ford Motor announced Wednesday that it's cutting traditional sedans from its U.S. lineup, except for the venerable Mustang, saying goodbye to the Fusion, Focus, Fiesta and Taurus so it can double down on trucks and sport utilities. (The Focus nameplate will stick around but in the form of a future crossover utility.)

"Ford realized it can't be everything to everyone, and in today's market that could be okay," said Jessica Caldwell, executive director of industry analysis for Edmunds. "The key to success is focusing on where your customers are and where your strengths lie, and for Ford doubling down on trucks and SUVs could be just what the brand needs."

Ford is not alone. Fiat Chrysler Automobiles already killed the Dodge Dart and Chrysler 200 to focus on more profitable Jeep SUVs and Ram pickups. General Motors has been cutting back on sedan production, too, eliminating a shift at its factory in Lordstown, Ohio, that makes the Cruze compact. Reports say the Chevrolet Sonic and Impala could be axed, too, while Cadillac is retooling its luxury lineup to focus more on SUVs.

The Detroit Three say they're simply following consumer preferences, which have shifted squarely in favor of SUVs and crossovers. And they're playing to their strengths, too: None of the domestic carmakers had a leading position in the passenger car market, so they might as well concentrate where they have the strongest following -- and higher profit margins.

Detroit's withdrawal from the sedan market is great news for the foreign-based players who remain: Toyota, Honda, Nissan and Hyundai, the latter of which has particularly been struggling in the U.S. due to its slowness in responding to the market turn to SUVs. With less competition, they ought to be able to raise prices and squeeze a bit more profit out of their traditional cars.
General Motors Sticking With Sedans As Ford Kills Off Most Cars in North America

Excerpt:

On a conference call with reporters to discuss first-quarter earnings, GM Chairman and CEO Mary Barra laid out why the automaker feels comfortable sticking with its stable of sedans and hatchbacks—for now—even as the market continues to shrink. The company poured a lot of money into refreshing most of the vehicles in question since 2015, and with those expenses in the rear view mirror, Barra believes it has a competitive lineup that won't require a lot of money to update over the next few years.

"The segments are still significant," Barra said, as highlighted by Ward's Auto. "Because we’ve made the investments, we need to deploy little to no capital going forward, so we view [cars] as an opportunity. What you’ll see us do is play very efficiently in a segment that, although it is declining, there is still an opportunity."

She has a point: Sedans and hatchbacks still account for a third of all car sales in this country, and the timing of Ford's exit has far more to do with the cost of redeveloping its aging lineup rather than overall consumer trends. And its decision to maintain the Ford Mustang roughly parallels the way Fiat-Chrysler killed off most of its small cars in 2016 and maintained the Dodge Charger, Challenger, and Chrysler 300, which are all built on the same decade-old platform.

That doesn't mean General Motors won't be making moves, though. The company will reportedly ditch the Chevrolet Sonic subcompact car as soon as this year, and it recently cut production of the Cruze in response to slowing demand. Chief Financial Officer Chuck Stevens added that his team examines the cost of producing each car model on a "weekly" basis.

But despite rumors of their demise, the Chevrolet Cruze, Malibu, and Impala should survive in the near term, along with the newly-launched Buick Regal and LaCrosse. There's still the question of Cadillac, though, whose CTS and ATS sedans and coupes are among the oldest cars in the GM lineup. Don't forget, former CEO Johan de Nysschen was ousted last week in part because he didn't respond quick enough to the crossover craze.

Comment: I'm a sedan guy! Our Buick LaCrosse has about 12K miles ..... and has gotten 27 mpg over it's short life. I've never had an SUV or a mini-van. I rented a Taurus on a family vacation once - very nice. Sad to see it go!


Our most recent cars:

1988 Crown Victoria

1996 Saturn wagon

2000 Impala

2002 Impala SS 

2007 Buick Lucerne (V8)

2017 LaCrosse
Related:


Below: My brother-in-law is trading in his Caddy for an SUV. Me? I would by a Caddy sedan:


Posted by Jim Peet at 4/26/2018 06:10:00 PM 1 comments

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6.25.2009

Chrysler bankruptcy: Attorney rip off!

Chrysler bankruptcy lawyers rack up $12.7M bill in first month

Excerpt:

During bankruptcy, just about everyone involved with the affected company is going to feel the pain in some form. That is, of course, unless you're a lawyer. New York law firm Jonas Day has represented Chrysler during its time spent in Chapter 11 bankruptcy, and Automotive News is reporting that the firm billed $12.7 million for the month of May alone. That figure included 72 partners working on the case, in addition to another 193 lawyers chipping in. About $256,000 of that figure accounts for expenses, and the rest encompasses some hefty legal fees.

We're not all that surprised that it takes over 250 lawyers to execute a Chapter 11 bankruptcy of Chrysler's magnitude in only 40 days, but the figures for the firm's head lawyer, Corinne Ball, are staggering. Ball booked 15 hours a day, seven days per week for the entire month, at a bill rate of $900 per hour! That's $401,310 to you and I. On average, lawyers on the case billed $477 per hour, while paralegals came in at $224.


Comment: Someone is getting rich at taxpayers' expense!

Posted by Jim Peet at 6/25/2009 02:59:00 PM 1 comments

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3.30.2009

Government Motors

U.S. Forces Out GM CEO Wagoner

Excerpt:

The Obama administration used the threat of withholding more bailout money to force out General Motors Corp. Chief Executive Rick Wagoner and administer harsh medicine to Chrysler LLC, marking one of the most dramatic government interventions in private industry since the economic crisis began last year.

The administration's auto team announced the departure of Mr. Wagoner on Sunday. In a summary of its findings, the task force added that it doesn't believe Chrysler is viable as a stand-alone company and suggested that the best chance for success for both GM and Chrysler "may well require utilizing the bankruptcy code in a quick and surgical way."

The move also indicates that the Treasury Department intends to wade more deeply than most observers expected into the affairs of the country's largest and oldest car company.

After more than a month of analysis, the administration's auto task force determined that neither company had put forward viable plans to restructure and survive. The verdict was gloomier for Chrysler. The government said it would provide Chrysler with capital for 30 days to cut a workable arrangement with Fiat SpA, the Italian auto maker that has a tentative alliance with Chrysler.


Comment: If you take the government money they can make you "dance to their tune". I have a Fiat story: Back when I was in seminary school ('78-80) we needed a new car. Our old Plymouth was a gas hog and had well over 100,000 miles on it. We looked at a Fiat 128. Years ago people used to joke that FIAT stood for "Fix It Again Tony".

Update: President Obama's remarks on U.S. car industry

Excerpt:

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.


Comment: You probably will need to stand in line at the post office or petition the IRS to get warranty work done! Maybe they can start "means testing" the owners to see if their income is low enough to have work done on their car!

Posted by Jim Peet at 3/30/2009 10:29:00 AM 2 comments

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2.23.2009

Why Cerberus won't do it!

Why Can’t Cerberus Foot the Bill?

Excerpt:

For its $5.3 billion — on top of the $4.3 billion it has received since December — Chrysler offered little more than an assurance that it has already cut costs and accomplished most of what it had to do to become a valuable, viable company. It offered to trim production by a paltry 100,000 units — leaving it with capacity to make almost one million vehicles more than it will sell this year — on the questionable assumption that demand, and its market share, will bounce back next year.

Chrysler said the only reason it was back asking for more money so soon was that the car market was worse than it had expected two months ago.

This cavalier approach to the public purse raises a very big question. If Chrysler is really on track for a turnaround and all it needs is some financing to get over a bad patch in sales and debt markets, why doesn’t Cerberus Capital Management, which owns 80 percent of the company, put up the money itself? Why should taxpayers have to take the risk? That’s what private equity funds like Cerberus are supposed to do.

Cerberus and Daimler, which retained a stake in Chrysler, have promised to convert $2 billion in loans to Chrysler into equity, which should help reduce its debt. But Cerberus said giving fresh money would violate its fiduciary duty to investors, breaking company rules limiting how much it can commit to any given investment.

We suspect these rules would be more pliant if Cerberus deemed Chrysler to be a good deal.

It seems the secretive private-equity fund is willing to gamble on Chrysler’s survival with the taxpayer’s dime, but not its own.

Chrysler warns that if it doesn’t get more money from Washington it will have to declare bankruptcy.


Comment: Cerberus won't do it because it is a bad investment. Maybe someone in the Obama administration should get a clue from this fact.

Posted by Jim Peet at 2/23/2009 10:49:00 AM 1 comments

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1.20.2009

Chrysler: "Fix me Tony"

Fiat Acquires 35% Stake in Chrysler

Excerpt:

The deal would allow Chrysler to use Fiat’s technology and vehicle platforms to build more fuel-efficient, small and midsize cars at its factories and sell them in North America. Fiat would give Chrysler access to distribution networks in other parts of the world, particularly Europe. The companies said they expect “substantial cost savings opportunities” but did not specify an amount.

“This initiative represents a key milestone in the rapidly changing landscape of the automotive sector and confirms Fiat and Chrysler commitment and determination to continue to play a significant role in this global process,” the chief executive of Fiat SpA, Sergio Marchionne, said in a statement.

“The agreement will offer both companies opportunities to gain access to most relevant automotive markets,” Mr. Marchionne said, “with innovative and environmentally friendly product offering, a field in which Fiat is a recognized world leader while benefiting from additional cost synergies.”


Comment: FIAT: "one widely circulated joke within the industry was that the company’s name stood for Fix It Again, Tony"

Posted by Jim Peet at 1/20/2009 07:02:00 AM 3 comments

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1.07.2009

Chrysler: "Basically they're done"

Is Chrysler a lost cause?

Excerpt:

Things were so bad last year that a single Toyota model, the Camry/Solara midsize car, outsold the entire fleet of Chrysler LLC's passenger cars.

"Basically they're done," said Aaron Bragman, an auto analyst with the consulting company IHS Global Insight in Troy, Mich. "There is no real possibility of turning this thing around as an independent company in my opinion."


Comment: My Dad - dead for 9 years - would have never believed it

Posted by Jim Peet at 1/07/2009 10:18:00 PM 6 comments

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