Monday, February 09, 2009

Fiat takes stake in Chrysler

Chrysler, best known for its Jeep and minivan models, has been hurt by its reliance upon slow-selling trucks and sport utility vehicles and analysts have said it may not survive the year as an independent company despite receiving a $4 billion government loan late last year.

The company was hit especially hard by last year's industrywide drop in North American auto sales. Its sales plunged 53 percent in December and it posted a 30 percent drop for 2008.

Nardelli said the partnership would provide a return for taxpayers on the loan, "securing long-term viability of Chrysler brands," boosting consumer confidence and "preserving American jobs."


Chrysler refuses to die. The government bailed them out with $1billion in the late 70s, they need more bailout money now while Ford sits by and watches, and now they need yet another partnership from a European company to save them. Chrysler is a macrocosm of people in our society: neurotic and constantly looking for a savior to bail them out.

To Nardelli's credit above, though, he's correct in that the only way to boost confidence and preserve American jobs is through businesses sorting this stuff out for themselves. The economy is receding; we should let it continue to recede until it's done, then allow it to grow back naturally - and don't forget organically. The big joke this week is that the dollar is recovering, so all the hyperinflation nonsense goes out the window. Don't misunderstand strength for deflation, which, in fact, IS closely followed by hyperinflation.

Let's hope Fiat follows through with its plan to sell Fiat models in the US for the first time in nearly 30 years. Once their models begin to outshine those of Chrysler, Fiat should spin off Jeep into its own company and kill Chrysler for good, rebadging the entire company as Fiat Automotive.

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