User profile: grvande

Joined: Jan. 10, 2009

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Posted on: Chrysler doesn’t deserve bailout

You need to get your facts straight before making comments about Chrysler. In 1997, Chrysler was reported to be one of the premier auto makers in the world. Chrysler was attractive to Mercedes (Daimler) as a merger partner specifically due to the fact that it was so profitable, efficient, and had a large cash reserve. While combining Daimler and Chrysler was legally a merger, operationally, Daimler management was in control of Chrysler during the merger.

Daimler management used the Chrysler cash reserve and profits in the first years of the merger to fund the development of the Mercedes vehicle line up while systematically removing almost every Chrysler senior executive. Profits from the Chrysler financial were credited to Daimler, not Chrysler during the merger. Investment in Chrysler products was kept to a minimum and internal cross-charges were used to transfer significant amounts of cash from Chrysler to Daimler.

By the time Daimler decided to devest itself of Chrysler, the cash situation was critical and the product line was suffering due to almost ten years of Daimler mismanagement. Unfortunately, Chrysler became a stand alone company at the worst time since the Great Depression. Starting with gas prices in the US over $4 per gallon and complicated by the credit crisis. I am not sure if Chrysler "deserves help", but it is clear that these unfortunate circumstances are negatively effecting every auto manufacture in the world, on every continent. The European, Chinese, Korean, and Japanese auto manufacturers are all going to suffer this year, even Mercedes and Toyota. Many will post a loss for 2008 and many more in 2009. Helping Chrysler and the other US manufacturers is critical to the recovery of the US economy. Other countries are helping their automotive manufacturing concerns. Finally, are we so dishonest to claim that we (the US taxpayers) are not "helping" the transplants when we give huge tax abatements to Toyota, Mercedes, Honda, etc for building a plant in the USA.

Are we really certain that we want to become a country with no manufacturing base that relies on other countries for all of our production requirements?

(Suggest removal) 1/10/09 at 2:55 p.m.

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