I've been waiting for this. I find it VERY interesting that the UAW went after Chrysler next, and not Ford.

Cerberus has near-bottomless reserves of cash, very generous cash flow, and they have been carefully hiring seasoned industry veterans to consult on this deal. Chrysler has plenty of inventory. A year-long standoff wouldn't put a dent in their finances. I'm thinking this has the potential to turn out much differently than the GM deal.

Soup, you seem a lot more frazzled lately. Everything alright there buddy? Would think you'd be giddy as a schoolgirl with the Bush'ist Junta (tm) almost at an end.

Why
 

Why do unions still exist when we have OSHA.

Redundancy?

lol, so you feel their actions as of late were good for them? You can't have it both ways Sup. Is the management inept or not

I'm fine, Dave. The remodeling project in my basement is going really well. I'm going home with a couple of pre-hung doors I sourced at the used building materials place. Electrical is largely done. As usual, I am the only construction worker on the project but since I ride a desk all day and argue with frustrating ignoramuses like you during the day, it's nice to put a tool belt on, grab a beer and pound some nails. Thanks for the concern. I'm pretty happy. I've always enjoyed frustrating ignoramuses. It's a character flaw.

I virtually don't have to find out how much inventory Chrysler has, or how deep its investors' pockets are to conclude that it would not survive a year-long standoff. Not a chance. That's fantasy. As I said during the GM thing, folks who are guessing usually estimate direct labor costs WAY higher than they really are. Debt service would be much higher, for example. In a prolonged strike, the company saves direct labor costs, which is a relatively small piece of the "cost pie." And their revenues would fall to zero, pretty quickly. Inventory is virtually still a part of the production process. That is, if inventory were drawn down to zero at the time the strike ends, it would be months before most dealerships would see cars.

Also, I don't think UAW "went after" anybody. They don't control the timing, typically. The agreement expires. That determines the timing, unless the parties agree to an interim agreement in order to continue talks.

And again, one thing that seems easy for some of you guys to forget is that there are two organizations that negotiate and sign these labor agreements. One of those organizations has responsibility to the stockholders and the other one does not.

I'm not following, Len. There is no contradiction. Management's actions of late are what management perceives to be in their best interest. Some folks here think that dismissing the union is an option. I won't say that's entirely impossible, but it would be a very very dramatic decision that would have massive consequences and I notice that nobody's management team appears willing to take that gamble. I think there's a reason for that. I think it is in the best interest of both parties to stay at, or return to, the table. And it's not self-serving. I make money either way. When there are negotiations, I guide the parties. When there is labor relations catastrophy, I am even more sorely needed.

My best personal AND professional advice to the parties is to sit back down at the table. Contractors seeking court action have heard me say that I would not let go of any control levers as long as they are in my grip. When you are at the bargaining table, your hands are on the controls. When you go to court, you release. And the decision maker knows NOTHING about your situation or industry.

Contractors wanting to reach out and kick Labor in the groin have heard me say yeah, that sounds like it might be fun. But then you'll be negotiating with someone who's got sore balls.

Get back to the table. Work it out. There is a solution. Perhaps it just has not been found yet. The workers, and management, need little help really. They know what they need. They know what is possible. They know what the opportunities are. They both want something. Something they can get from the other side.

Some of us would like to see an American car company that is profitable.


Daimler-Benz had a lot of smart guys and all they got was several billion euros down the toilet.

1. Ignoramus? WTF? When I come on these threads I base my opinions on rock-solid facts. How many people on this board have read all the articles on Cerberus published in the last 3 years? You will have some respect, please - you're in my house when it comes to Cerberus.

2. Debt service? Shareholders? Labor costs? Are you listening? Cerberus could shut the company down tomorrow and not miss a beat. All that would be left are hard assets and IP, which they could liquidate at their leisure. Is that likely? Of course not - in fact, I think the strike may be over.

Resume slinging. I cannot fathom why I've ventured back into this forum.

Why does one member, who is apparently blessed where so many others are lacking, constantly feel the need to constantly inundate the PP board members with this union drivel? I, for one, will not, let me repeat, will not work for an organization that has a union - plain and simple. The reasons why unions have lost their stronghold have been repeated here ad nauseam yet juvenile-like belittling statements are quickly dealt from the same party every time - and it is getting old. Apparently, you possess a much higher intellect than the rest of us as all I can see is the continued decline of unions for pretty obvious reasons. I do not know whether this latest facade from the UAW/Chrysler is over and frankly I do not care; however, soon someone is going to call their bluff and we will see who is eating crow then.

Consider for a second that the GM and Chrysler strikes have nothing to do with negotiating or GM and Chrysler.

I'm willing to predict that Ford faces a short strike as well.

I've heard that spending by union bosses is discretionary during a strike. Maybe a few wanted some new vacation houses?

Cerebus is a brilliant compant at investing.
here is my wild prediction.
Cerebus will break chrysler up if the union doesn't submit to their demands.
Jeep will be sold to Mercedes or GM (goes nice with hummer)
Dodge and Chrysler will be sold to the Chinese, giving them the instant market for their cheap cars...which then flood the market.

Remember that Cerebus is FIRST and FOREMOST, an investment company, they invest to make money, not friends. They are ruthless and really good at making their clients money...The fat lady is singing to the UAW I think.
note that the GM deal is only tentative....nothing is signed or done there either
it is also worth noting that Chrysler has a HUGE overstock right now save the 08 minivans and 4dr wrangler...

to further this, when Cerebus took chrysler from Daimler, they did not assume any debt and only paid like 5 billion for the entire company...it was said that Jeep itself was worth 4 times that.....and should the company break up, Jeep
would easily pay their investers well...VERY WELL.

This could be the death knell to Chrysler as we know it
I personally invest with Cerebus...btw.and I have done well.

Not the first time Nick! Cerberus excels at sniffing out undervalued assets. If you read between the lines of the deal, Daimler basically paid Cerberus to take the company. Have met a lot of Cerberus people including one of the partners, they are absolutely brilliant.

Ops, looks like autoblog was wrong, they did end the strike, here's the updated link.
http://www.autoblog.com/2007/10/10/darn-forbes-was-right-uaw-strike-against-chrysler-is-over/

It isn't that he doesn't get it, he just pretends not to get it for the sake of argument

Nick, you hold the title, "Smartest Man in the World," for the day. of course some major portion will be sold to the Chinese at a huge profit. It's brilliant on so many levels, but clearly it's about real estate even more than U.S. brand equity. Let's say a Chinese automaker wanted to open dealerships in the U.S. It would be easier to open a nuclear waste site in your town than a Chinese auto dealership. At best, China could buy up brownfields.

Anyway, yes, in one fell swoop, China will have a national chain of dealership locations that they can do anything with (it's the real estate dummy) and Cerberus will be quadrupally wealthy (at a minimum) from the deal. When the deal goes through, I'm sure some of the suitcases of U.S. dollars the Chinese give to Cerberus will have a U.S. Treasury logo on them, from the repayment program for the War in Iraq loan schedule. :(

Interesting, get called out on one thread, so go start another on the same subject. Cute.

I don't think any Chrysler brand will be sold to the Chinese. Much like the illegal immigration thing, public opinion is incredibly monolithic here. I don't think any deal will get past regulators, but even if it did, Congress (both parties) would be all over this--it would be a race to prove who was right first. Anybody remember the UAE ports deal?

This could be the most warped and counterfeit parallel logic I've ever seen on this board.

Yes and no, I don't believe the parent company has any ownership in the real estate of the dealerships but yes a portion could easily be partnered with/sold to the Chinese.

Nice ad-hominem. Do you have any substance to counter with?

You don't seem to be aware that dealerships are independent franchises whose land is owned by individuals. I think we would see a wave of Chrysler (Dodge, Jeep, etc.) dealerships defect to GM and Ford rather than sell Chinese crap. The simple truth is that at this point, no one would buy it, and it would be a huge money-loser for a dealership.