Diary

The real title should have been *crash* for clunkers

I see Fiat’s Folly, a.k.a. Chrysler, is tossing their hand picked management team overboard already. According to AP, one guy has “has resigned to pursue other interests” and another one “has resigned for personal reasons.” I think that’s press release code for escorted-out-by-security. They’ve taken the step to spin off their trucks into their own Ram division and left the car operation in the hands of their head design guy, Robert Gilles, which would be fairly innovative if Government Motors hadn’t already done something similar with their Caddy design guy. A guy named Diaz will head up the car operations, coming in from something called the Denver Business Center, whatever that might be.

But the reality is, it probably doesn’t matter because the impact of cash for clunkers is now evident. I think everyone– except the legacy media of course– realized that auto sales would crash back to earth when cash for clunkers expired. In the case of Chrysler and Government Motors, it’s more of a case of crash for clunkers.

Edmunds.com predicts GM will sell 152,000 units in September 2009, down 46.1 percent compared to September 2008 and down 37.8 percent from August 2009. GM’s market share is expected to be 20.6 percent of new vehicle sales in September 2009, down from 29.4 percent in September 2008 and up from 19.5 percent in August 2009.

Edmunds.com predicts Chrysler will sell 55,000 units in September 2009, down 48.7 percent compared to September 2008 and down 40.7 percent from August 2009. This would result in a new car market share of 7.4 percent for Chrysler in September 2009, down from 11.1 percent in September 2008 and flat compared with August 2009.

The chart that accompanies the story tells the year-to-year total sales story — Chrysler down nearly 51% from 9/08, GM down a shade over 48%. I think it’s fair to ask, with Fiat’s sales in Europe down more than a quarter and its parent company eyeball deep in debt, will Chrysler survive another year? The AP says it’s an 18 month slog to get to something the public wants to buy. Having heard this sort of happy talk from the used-to-be Big Three for years, I don’t see the next K car over the horizon. Neither do Chrysler partisans; at the Mopart news blog, as one guy put it,

It probably does not have the capital to wait through another year of low US car sales with a market share that is almost certainly to stay below 8%. It does not have models tailored to the current market tastes. Chrysler is going out of business. The company just hasn’t made it official.

The AP says the Treasury won’t pump any more money into this thing. Still it’s an open question in my mind whether The One will try to stampede everyone into sinking more money into this corpse of a company. I’d say it’s a toss up.