Chrysler threatens to pull out of Canada

[jdobbin]

http://toronto.ctv.ca/servlet/an/local/CTV...311?hub=Toronto

Chrysler president and vice chairman Tom LaSorda told MPs Wednesday the company is seeking US$2.3 billion from the Canadian government -- roughly a quarter of what it's asking from the White House.

He also said Canada's tax agency must agree to not demand more cash or collateral in a tax fight with the company. The Canada Revenue Agency is withholding $300 million in tax rebated and has put a $500-million lien on Chrysler's Brampton plant.

Talk about threats.

[blueblood]

http://toronto.ctv.ca/servlet/an/local/CTV...311?hub=Toronto

Talk about threats.

If they want to play games like that, I'd say nationalize and sell to Toyota/honda/nissan/subaru etc. for a nice discount.

When things sort themselves out, the dynamic of the auto industry will have shifted. The demand for cars will always be there, the difference is the players meeting that demand. By the looks of things the demand for Japanese/Euro companies is higher than domestics.

[bush_cheney2004]

If they want to play games like that, I'd say nationalize and sell to Toyota/honda/nissan/subaru etc. for a nice discount.

A desperate demand in desperate times.....Chrysler will only remain in spirit...the brands will go elsewhere....the same way Chrysler got them.

When things sort themselves out, the dynamic of the auto industry will have shifted. The demand for cars will always be there, the difference is the players meeting that demand. By the looks of things the demand for Japanese/Euro companies is higher than domestics.

Don't agree on this....we will not see 16,000,000 units per year in Norte America for a long time.

[blueblood]

A desperate demand in desperate times.....Chrysler will only remain in spirit...the brands will go elsewhere....the same way Chrysler got them.

Don't agree on this....we will not see 16,000,000 units per year in Norte America for a long time.

I was saying for the Canadian gov't to nationalize Chrysler's Canadians assets if they want to play games. If Chrysler wants taxpayer help, they can get it by us showing them the door.

Also since the import brands are not subject to union nonsense, they can cut back on production much more easily. With oil prices inevitably going to rise, I would think the imports would welcome factories being liquidated by the Canadian gov't. The imports market share will rise even though production won't quite be 16 million units.

Your going to have to define a long time...

[bush_cheney2004]

I was saying for the Canadian gov't to nationalize Chrysler's Canadians assets if they want to play games. If Chrysler wants taxpayer help, they can get it by us showing them the door.

Can't blame Chrysler...they have gotten many such incentives in the past.

Canada can't/won't nationalize Chrysler.

[blueblood]

Can't blame Chrysler...they have gotten many such incentives in the past.

Canada can't/won't nationalize Chrysler.

I don't blame them either, I'm suggesting that Chrysler shouldn't play with fire, if the Canadian gov't decides it's for the "common good" they can expropriate Chrysler's assets. It happened in NFLD when Abitibi Bowater played the same game.

However you are correct that it won't happen, although I do love speculating on the possibilities.

Chysler it seems is asking for a bank loan and doesn't want to put down any assets for collateral. If Chrysler wants to borrow from taxpayers, then they should put up their factories as collateral.

[bush_cheney2004]

....Chysler it seems is asking for a bank loan and doesn't want to put down any assets for collateral. If Chrysler wants to borrow from taxpayers, then they should put up their factories as collateral.

Chrysler is just crunching the numbers.....profitable models are made in Canada, and it would cost a lot to move production elsewhere. So this is their last stand......

[madmax]

If they want to play games like that, I'd say nationalize and sell to Toyota/honda/nissan/subaru etc. for a nice discount.

Nationalize is a word even the NDP are afraid to put into writing because of the backlash.

My first response was "Don't let the door hit you fall off on your way out"

But I like your idea more.

Nationalize it, get the technology back, and we already know that Chrysler was building trucks and such for the Japanese, so its time they build the cars

Somethings got to be done, other then tossing Hundreds of Millions at Billionaires.

[Progressive Tory]

Somethings got to be done, other then tossing Hundreds of Millions at Billionaires.

You're absolutely right. The question is what? Even General Motors is on the verge of collapse.

GM raises possibility of bankruptcy ahead

"Even with billions more in government financing, General Motors, the symbol of 20th century American industrial might, may yet collapse and be forced into bankruptcy."

Should the 'Big Three' become the 'Ginormous One'? We're talking a lot of jobs if these companies go under, and give foreign made cars the monopoly on the industry. Maybe a merger would work better than the dreaded 'state ownership'.

Edited March 12, 2009 by Progressive Tory

[Topaz]

I was watching last night when Chrysler announced that wouldn't be following the pattern set by GM. This company has been in trouble for years and if it wasn't for the loss of jobs here in Canada, I tell him go pound salt! Chrysler did say the Windsor mini van plant was the best in the world and yet they want to unions to give up $20.00 hrly??? Would you? Would the politicans who are giving the money? How much is the CEO's of this company giving up?

[Progressive Tory]

Would you? Would the politicans who are giving the money? How much is the CEO's of this company giving up?

Exactly. Maybe if all the executives agreed to work for $ 1.00 a year until the mess got straightened out, they'd have more support. I doubt any of them have to worry about where their next meal was coming from.

[Renegade]

I was watching last night when Chrysler announced that wouldn't be following the pattern set by GM. This company has been in trouble for years and if it wasn't for the loss of jobs here in Canada, I tell him go pound salt! Chrysler did say the Windsor mini van plant was the best in the world and yet they want to unions to give up $20.00 hrly??? Would you? Would the politicans who are giving the money? How much is the CEO's of this company giving up?

The unions should do what make sense to the workers? They can refuse a $20/ hour and wage reduction and potentially lose all their wages or they can accept a $20/hour reduction and make it more likely that they will keep still lucractive wages. What CEOs or politicians do is irrelevant.

[Renegade]

Exactly. Maybe if all the executives agreed to work for $ 1.00 a year until the mess got straightened out, they'd have more support. I doubt any of them have to worry about where their next meal was coming from.

If you think that executives shoudl agree to work for $1.00 a year, then you are free to ask your MP to make that a precondition of any bailout.

It is interesting that you think that minimium wage legislation should apply to everyone but auto executives.

[madmax]

The unions should do what make sense to the workers? They can refuse a $20/ hour and wage reduction and potentially lose all their wages or they can accept a $20/hour reduction and make it more likely that they will keep still lucractive wages. What CEOs or politicians do is irrelevant.

Kinda like what happened to the UAW in the states. An operation that was purchased by Magna, dropped wages from $30 to $20 and then Magna came back 1 year later with a $13 proposal, and then closed the company 3 months later.

Yeah, what CEOs do is irrelevant. Lets ignore CEOs.

[blueblood]

Nationalize is a word even the NDP are afraid to put into writing because of the backlash.

My first response was "Don't let the door hit you fall off on your way out"

But I like your idea more.

Nationalize it, get the technology back, and we already know that Chrysler was building trucks and such for the Japanese, so its time they build the cars

Somethings got to be done, other then tossing Hundreds of Millions at Billionaires.

I'm only saying nationalize because they are after taxpayer money to stay afloat. They apparently will have gotten money and are yet asking for more. If they leave when they have received money, it's only fair that the taxpayers get a return on investment.

[Wilber]

Cerberus Capital has one interest only, filling the pockets of its own shareholders. It doesn't care about the companies it owns other than what it can get out of them. The government should tie lots of strings to any money they advance to Cerberus so that it actually goes to the survival of Chrysler and not one penny of Chrysler profits goes into the pockets of Cerberus shareholders until the government is reimbursed.

[bjre]

I wish Canada has more its own industry.

Like ATI before it was acquired by AMD

[noahbody]

There are simply too many players in the automotive category. That's reality.

The death of Chrysler will help the others survive.

[madmax]

There are simply too many players in the automotive category. That's reality.

The death of Chrysler will help the others survive.

The players will remain, as they always have. Production will be moved around the globe like it always has. Demand for vehicles will increase in the future and even more vehicles will be made.

Mergers and Aquistions will continue as they always have. Cross supplying and manufacturing will continue as it always has.

I don't want to see the "Death" of Chrysler, because I enjoy their styling. Just a long love affair with Mopar.

However, Wilber has correctly analysed the ownership of Chrysler.

And in response to BlueBlood. If any company were ever to be Nationalized it could be Chrysler. And putting lots of strings on any dealings with Cerberus is the only option, as I don't consider Cerberus as a manufacturer of anything.

I disagree with most people when I hear the "too many players" bullshit.

We are in alot of this mess because we have reduced the level of competition, through mergers and aquistions, and eliminated the competition completely in many cases.

The worst thing that could happen is the Auto Industry get more entangled within itself.

But, I think Noahbody is thinking like many other players in the Automotive Manufacturing business.

Get Rid of the competition and their can room for us to grow, and corner the market.

Toyota made a huge, huge, huge mistake in overproduction. How will getting rid of Chrysler Minivians aid in resolving Toyota from making to many Camrys?

[daniel]

If Canada invokes the AutoPact, then when Chrysler pulls assembly out of Canada, they can't sell in Canada.

[M.Dancer]

Mergers and Aquistions will continue as they always have.

In this case, perhaps not. M&A requires access to vast amounts of ready capital and one of the fallouts of the credit crisis is that the capital pools are limited....and I doubt there will be many lining up to lend money to buy any failing automotive giants.

GM has a market cap now of 1.28 B

Ford is 4.9B

Neither have enough cash...

Toyota on the otherhand has a market cap of almost 93B...but why would they want to acquire a debt load and a union shop?

I think most likely if they can't make it they will go tits up and their assets will be auctioned off.

[madmax]

If Canada invokes the AutoPact, then when Chrysler pulls assembly out of Canada, they can't sell in Canada.

1) Essentially Auto pact no longer exists.

2) Portions of the Auto Pact, incorporated in Under the NAFTA changed the wording "Canadian Content" to "NORTH AMERICAN" content which includes Mexico. The entire Vehicle can be made in Mexico for that matter, and its good to go here.

3) The Japanese Auto Manufacturers challenged the Autopact Portions of NAFTA and won.

[M.Dancer]

Toyota made a huge, huge, huge mistake in overproduction. How will getting rid of Chrysler Minivians aid in resolving Toyota from making to many Camrys?

Toyota started scaling back production last year. There is still a waiting list for Rav 4s, and Highlanders. You can get a Matrix or a Camry in a few weeks....you can get a sienna PDQ...and the Lexus is not, mass, mass produced to begin with.

Toyota is a far better run company...

[madmax]

I think most likely if they can't make it they will go tits up and their assets will be auctioned off.

I don't disagree with you.

[Oleg Bach]

I heard that guy - that Chrysler executive state in no uncertain terms - "Give me two billion bucks now or I am going to screw you and thousands of people up" - Which does not make sense this kind of extortion because - they will just suck up the money and leave anyway - leaving a mass of unemployed workers...why is everyone handing money over to these guys - THIS IS AMBITIOUS MIDDLE MANAGEMENT ATTEMPTING TO PULL RANK - The big guys are long gone and these persons a scavengers - big time garbage eaters - and we respect them enough to hand billions into private hands with no guarentee of honouring a deal - because there really is no deal to speak off.