Giving Money to Chrysler is Insanity

Wednesday, January 21st, 2009 2:05 pm by Neal

Are you aware that one Toyota car model, the Camry, outsold the entire fleet of Chryler last year? We’ve already given billions to Chrysler, and now they want more. Read Toyota model outsells Chrysler fleet:

DETROIT (AP) — Even by the standards of battered automakers, Chrysler is in dire shape. Its sales in December were down a stunning 53 percent, far worse than Ford or General Motors, and analysts say it probably won’t survive the year as an independent company — despite $4 billion in government loans and the possibility of more.

Things were so bad last year that a single Toyota model, the Camry/Solara midsize car, outsold the entire fleet of Chrysler LLC’s passenger cars.

“Basically they’re done,” said Aaron Bragman, an auto analyst with the consulting company IHS Global Insight in Troy. “There is no real possibility of turning this thing around as an independent company in my opinion.”

Chrysler will not comment on speculation about its future, spokeswoman Shawn Morgan said Wednesday.

“We are completely focused on our plans to ensure the future viability of our company,” she said.

U.S. sales of Chrysler, Dodge and Jeep brand vehicles fell 30 percent last year, the worst decline of any major automaker. It lost more market share than any of its peers, down to 11 percent. Analysts say most of Chrysler’s products, especially its cars, don’t look, feel or drive as well as the competition’s.

Remember how we just gave billions of TARP money to Chrysler? Well, consider these points from the article:

Chrysler’s chief financial officer has said the company needs $7 billion every 45 days to pay parts suppliers, and analysts question whether the company’s meager sales are generating enough cash to make those payments. …

Jonathan Macey, a Yale University law professor who has been critical of U.S. automakers’ management, said Chrysler’s sales numbers are “further evidence of an unviable entity.”

When automakers went to Washington late last year, their aim was to get enough money to become viable again. They wound up with only enough help from the Bush administration to get them through March, when President-elect Barack Obama will be in office and might provide more aid.

Macey said giving the carmakers any money is burning cash.

“I’m a big fan of not throwing good money after bad,” he said. “The idea that you would enter into a financing relationship like this without any parameters is more evidence of the complete insanity of all this.”

Insanity indeed. We’re crazy. We’re fools, and a fool and his money soon go separate ways.

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