Cuda340

The February 24, 2009 Forbes issue had an article regarding the plight of the American auto industry. Here is what it had to say about Chrysler:

"Understand that without support, Chrysler and General Motors could go out of business. If those companies collapse, the country could easily lose another half a million jobs as the impact spreads to suppliers, dealers and other workers tied into those companies. Such a scenario could negate the hundreds of billions in government spending to restart the economy.

Even with generous amounts of government aid, including the extra money asked that would push the bailout total to $39 billion, the surviving industry would be nothing like the Detroit of just two years ago.

Chrysler may manage to avoid bankruptcy and a total collapse, but it will likely lose its independence. The Auburn Hills, Mich., company is in serious negotiations with Fiat (nyse: FIA - news - people ), in which the Italian automaker will gain a 35% stake and the right to raise it to 55% in the future.

That aside, Chrysler is likely to benefit more from a deal with Fiat than it has under the yoke of its current owner, Cerberus Capital Management. Fiat's chief executive, Sergio Marchionne, is a sharp businessman and auto executive who led that company's brilliant revival.

Chrysler has thinned its employee ranks so severely that it probably cannot create new cars on its own. New vehicles are the key to survival in this business. Chrysler had only 10,891 salaried employees at the end of the year and only 38,257 in all. That is less than half the 94,875 head count Chrysler had in 2000. The company has said it would cut another 3,000 jobs and kill three more modelstwo big SUVs and its famous PT Cruiser. The relationship with Fiat could provide Chrysler with crucial design and engineering talent to create new small cars and other vehicles."

lear4406

S. Until they even the playing field they will be continue to fall behind. Let the dinosaur go extinct, as painful as that is, its the only way. Restucture and be competitive. Or continue the now short spiral down. Be honest with yourself and kick the crutch to the curb. Let them find a real job and stop with the parasitic loss.

Axel

The new 2011 Fiat Challenger, with gas saving 1.8L 4 cylinder with 2 cylinder deactivation, MPG is in the range of 30 and 40. HP ratings are 106 at 6600 RPM, and this is the SRT 8 model.

Ok, I think I just made myself sick.

BobT

I agree, we need to keep our auto companies alive. I lived throught the impact losing little bitty American Motors and what it caused to the economy in Wisconsin, Then Chrysler came and revived it only to end up shutting it all down and keep Jeep going-But move everything from WI short of a couple parts suppliers. Think of Fiat or someone else moving all the small parts jobs overseas, and just assemble a few things here -say just enough to bypass certain tarriffs. I was only a kid then when this happened to AMC but My neighborhood paid the price, I heard parents talk about losing their jobs,I remember kids(and their families) in my school moving and never seeing them again.I will get down off the soapbox now. Sory for whining a bit.

Jeremiah 29:11

I don't like thinking about that but your post made me laugh.

RLSH700

I think Chrysler can pull through this. Fiat seems as though they have a good product and a good person in charge. I don't think this is going to be the wife beating experience that was the DAIMLERchrysler merger. They won't have absolute control as Daimler had. On top of this, Daimler had a reputation of mismanagement. Chrysler and Italian car makers have a good history together. GM just needs to down size. I think they need to consider better utilizing Buick and Pontiac and look into downsizing Chevrolet as not everybody wants a Chevrolet. Some people like a raw performance brand (Pontiac), some people like an affordable luxury (Buick). Adding Saturn to GM to replace Olds was a mistake. Saturn should have remained independent. Saab was also a mistake. I never liked Hummer, I'll have a real Jeep, half as expensive and has better off-roading capabilities still. I question the need of both a Chevrolet and GMC truck division.