Sunday, June 07, 2009

Chrysler & Fiat: The Shotgun Marriage Made in Bailoutistan

To no one's surprise, problems are now cropping up all over. Let'see, an incredibly complex, large transaction, involving billions of dollars, thousands of jobs, the UAW, multiple governments including the USA, Canada, and others, all done in record time.

What could go wrong? I mean, other than screwing over the Chrysler bondholders and state retiree pension funds? After all, it's not like Obama Car Czar Steve Rattner's background is looking increasingly sleazy or anything. (However, the Obama administration appears to view this as feature, not a bug.)

Chrysler' clearly destined for failure – after all, nobody thinks of Fiat as one of the great automotive engineering companies in the world, and if you combine that with the Enron accounting suggested by Tom Blumer above, set your scenario dial from “rosy” to “train wreck”.

Then there's the whole issue of Detroit's generally crappy product. Micky Kaus has been beating Detroit like a rented mule since Methuselah was a pup on these problems: Crappy Cars, Bad Management, and the UAW - The Trifecta of Incompetence. Just to take a dip into the most recent gumbo, see here, here, here, here, and here. And that's just some posts from this week.