uh oh, chrysler closing ALL plants for 1 mos
 

http://blogs.abcnews.com/moneybeat/2...er-to-tem.html

"ABC News' Charles Herman reports: Chrysler has announced that at the end of this Friday's shift, all manufacturing facilities will be closed until January 19, 2009."

guess alot more people are going to be around to stick out their hands asking for some bailout money.

3 Chrysler dealers in st louis closed up this week

Now that's a shitty christmas bonus.

Anyone want to go to congress with me, I am asking for a billion for myself.

Dumb question:

Do the unions still require that chrysler pay the union employees during a shutdown? I thought they were.

Obviously this would save them material cost and supply/demand issues with the pricing of their cars.

Im in, but might ask for a little more as my graduation present.

me too, I'm gonna ask for about 2.6 million for a late graduation present, and throw it into a swiss bank account so I can enjoy life on the interest.

I am SO in!! Lemme know when we head out!

Road Trip with Trip :lol:

Sucks, the permanent full time employees will continue to be paid during the shut down, slightly less than their regular wages.... I'm originally from Detroit, and most of my family worked in those plants, most have retired but a few are sure to be at home chillin for at least a month if not longer.

im down, if i dont have to pay it back....

Is there a pool on if they'll actually reopen again?

Gettin paid to sit on ones rear..... gotta wonder why people think unions destroyed those companies.

Since Daimler dumped Chrysler into its own entity, it's only been a matter of time before it was chopped up and sold. I'd bet that the month's downtime is just to do inventory and to formalize an already "agreed in principle" sale. The Jeep division is likely worth the most money to another brand. The Truck Division might make for a good capacity augment for an existing brand that wants capacity here in the US. The Car Divisions? Meh. Chopped and sold. Its Kekorian's way...

I believe that they still do. It means that they won't be producing cars that won't sell and won't have to light, and heat the facilities that they close. That'll save them a bundle.

i heard the normally get 2 weeks during x-mas anyways, paid i'm sure........i would bet the next 2 are paid as well.

Just what do you think will happen if they all close?

Do you think that'll cost less than a bailout loan?

I believe Ford is closing for 3 weeks as well.

I know for sure they do close for at least a week during the holidays. That is a standard across the board in automotive. That's the only thing I miss about that industry, normal vaca that you accrue, and then that bonus week between Christmas and New Years.

and they wonder why they're going belly up.

Not an issue. Sales are down in that period, so more stock isn't needed. People would likely be taking some vacation time anyway, so the workforce would be depleted. The transport systems are overloaded, so their "just in time" manufacturing is taxed.

I've worked for several companies, in the past, that closed between Christmas and New Years.

i've never worked for a co. that shut down for the holidays (for 2-3 weeks) let alone pay + x weeks of vac. on top of that.

Yup. I dont believe the bailout on the auto industry will ever end.

I also believe that those jobs will be replaced by people working in the states for Toyota, Honda, etc at wages/benefits more inline with industry standards and proportional to their experience/education. As demand grows, so will the other automakers who are actually modern and progressive not thinking what it was like 50 years ago. "Back in my day sonny...."

n

Pick your jobs better then redflip

And in the meanwhile people default on mortgages, auto loans, etc. and the economy takes a major dump, possibly to Great Depression levels.

Have you looked at Toyota and Honda's sales figures the last couple months?

1M jobs (as proclaimed by the auto industry) vs a country with 300M+ people? Not the end of the world.

Have you seen that they arent asking for bailouts? ;)

A lot of our customers close down over the holiday, and if we don't have billable work, we're suppose to take the time off, you can take vac and get paid, or not and don't.

I don't know for sure how the big 3 or other companies work it out, but the company I worked for figured it in as part of your total compensation package. :shrug: I have rarely worked in an industry where there was jack shit to do during that period of time. As PC pointed out, a lot of people are on vaca anyway.

Not yet, But I think they're about the only automakers who's not out looking for options.

Let me ask you, would you be as okay with this if it was Intel and AMD getting ready to close up?

I don't get why you think the world would be better with our choice of a Honda or a Toyota?

Yup - cause there will be jobs doing the same thing at ARM, IBM, SUN, Apple, Nvidia, Cisco, Mot, Freescale, Centaur, BroadCOM, Cadence, Synopsys, TSMC design services, UMC, etc. :) Plus, that industry isnt extending its hand - rather they are cutting expenses to work through this by themselves. :)

As those in the Auto manufacturing industry can work in other stateside manufacturing - of which I assume there are 1000s of companies out there doing similar work.

Nice attempt at deflection though.


(I did a few ninja edits)

Is that DIRECT jobs? The latest estimate for just the Province of Ontario is that up to 500K jobs could be lost, in both the auto makers and the attendant supply chain (parts sub-contractors, dealerships, etc.).

Will this seems a lot like cutting off your nose to spite your face, I'm just trying to understand why.

That was the auto industry's rollup for all primary and supplier jobs if the big 3 folded. I could look up the exact number and quotation if you wish. From memory it was ~1M jobs.


Edit: I also dont believe that just because a company goes into bankruptsy protection means that it will completely fold operations up. companies do it all the time. It however will mean that they can renegotiate their union contracts as well as stop paying benefits to former employees.

No its apples and oranges... one is a job who's main qualification is who you kow to get the job. The other is a series of jobs where a majority of the population has MBAs, Masters or PhDs who are skilled enough to get jobs in other parts of the sector. In addition, the salary rates arent above industry norms. :)

It doesn't really suck

Yeah they get paid... the last 2 weeks are "un-enjoyment" but still pay for doing nothing

True...

But here's the thing people..

STOP LISTENING TO THE FUCKIN MEDIA!!

They all close their plants EVERY fucking year this time. Same thing in June. Its the fuckin media that is taking this out of reference!!!

it use to be just the week between christmas and new years. Then they expanded it, and expanded it again. Been this way for fuckin years.

Its a good time for them, cause they don't have to pay holiday OT, the workers like it this way. Then they also don't have to worry about coverage and people wanting vacay time during the holidays.

This is fuckin normal...

It's normal to close, but they are closing for longer this time around.

check out this:
http://economix.blogs.nytimes.com/20...the-big-three/

It would be good to see the actual quote, if possible. Just think though; based on your number that's 1M fewer people paying taxes and receiving an income, with the attendant drain on unemployment support. That's 1M possible foreclosures on property that is worth far less than it was, with little chance of recovering the financial outlay from institutions that cannot take that strain.

Normal for the auto industry perhaps.....

Id love to take June and December off while getting paid. Makes that 30/hr look a little different if one factors in the actual time worked. ;)

Become a professor then.

And C.A.R says that 40-59% will have their job back by 2011, course that means there's still over a million out of work collecting benefits, as well as all of the retired workers who lose their pension, that we'll be paying for.

or school teacher. ;)

or we could continue paying them billions and billions of dollars to subsidize their losses. Perhaps we should just put huge tariffs on foreign auto imports so that we dont have to change a thing and pass the cost on to american people while we're at it. :)


This isnt a short term gig - the Big 3 have been pretty good at losing money well before the credit crunch and house bubble.


BTW: Im not alone in my belief that people dont support a bailout of the auto industry. Heck, > 1/2 of our reps voted against the bailout plan for them - and that plan was only to hold them over til Q1.

We haven't paid anything yet, and if they close it definitely will cost money, if it's a loan, and they can restructure their labor costs I think they can make it. But restructuring their labor will move the retires over to the federal program (or at least I believe it will). So that's going to be a wash.

The problem is that people in congress who actually see their financial statements and do this for a daily basis now-a-days dont believe they can "make it."

In addition, the UAW has already said they wont take a pay cut cause it isnt their fault. Not sure how they get labor under control when their labor pool says no.

You are getting the auto industry confused with AIG

lol, you think the people in congress are qualified to read a financial statement, let alone understand the Auto Ind, most of them are lawyers!

Again, much of the problem is legacy cost. We are either going to let legacy cost put them out of business, possibly for good, or we're going to have to let them out of their labor contracts. In either case the tax payer is going to be hit with much of the legacy costs. Wouldn't you rather those 2-3 million keep working to pay some of those taxes?

1) Im guessing that a lawyer (one who's been through post HS education for 6-7 years) who has managed to garner enough funds to get themselves into high levels of the government is more than able to read and understand a financial statement. We arent talking about the sub 80IQ "joe sixpacks" here. In addition, I assume the days and days worth of meetings going over such things as the Big-3's finances are a little more than reading a couple CNN articles.

2) Im guessing the cost of those employees on medicare would be much less than the "primo" benefits they are currently getting. :) Sure, they will take a drop in their benefits, but sometimes life takes a shit on people...

AIG was different, b/c its failure would have brought down our entire financial system. They had counterparties in banking, insurance, investment banking, trading houses, etc., and the govt. had to step in to prevent a total meltdown.

BTW, the TARP funds have already generated over 3% return in the first 30 days or so - not bad!

Tomorrow is my last day in the office until 1/2/09, and this is the 12th yr. in a row I've taken this time off. My company, which practically shuts down between Christmas and New Year, is certainly being impacted by the economy, but we're still liquid, profitable, and not looking for handouts.

is this vac. or is your co. just shutting down?

thats the difference, the auto industry shuts down, pays these people and then pays them for x weeks of vacation on top of that. CRAZY!

Usually 5 of those days (out of the 11 or so for the year) are company holidays. We get all the big holidays like 4th of July, mem, labr, t-giving, but skip the bs ones like presidents day to save up for dec.

Well, this was what 15 years ago, But I'd be surprised they're more knowledgable about finances now than then (they just might not be able to get away with bouncing checks)

House Banking Scandal

This is sounding less like business expertise and more like jealousy over people having more vacation time than you do :idk:

The company my Mom works for also shuts down from Christmas week until after New Year's, and has for the twenty-odd years she's worked there. The owner is German (dual-citizenship), and takes a more European view on vacation time. It's not unheard-of.

Chrysler has a surplus of vehicles waiting to be sold. There's no point in running at full capacity right now.

Meanwhile, it's generally not a good idea to tell your employees that they're going to be taking a month of mandatory unpaid time-off starting- SURPRISE!- next week. People work because they need an income. If they lose a month of pay, when you start back up, you're going to be missing a lot of your best workers.

Now, without a Union contract, the company would indeed be free to tell its workers "Hey, guess what- your monthly budget is about to be cut in half! Merry Christmas, hope Santa brings you enough to cover the mortgage and electric for the month".

I'm sure that sounds just super to you, but there are quite a few people out there who would prefer not to have that happen...

Yup, its much better to keep paying them not to work while sticking ones hand out asking for more government money. To me, its just postponing them firing all the workers.

Or heaven forbid - those workers making 30/hr actually having savings so they could pay for the mortgage if shit hit the fan.

so you think more companys just close up shop for the last 2 weeks of the year then those that stay open? and lets leave retail out.

From what all the talking heads on the news are saying, the first two weeks are what happens every year. It's paid vacation. The second two weeks will be paid by unemployment benefits.

union unemployment?

In the last tough market around '01, my company forced everyone to take 1 week unpaid time off during a quarter. You could take it anytime, and the last week's paycheck in the quarter was docked.

They're doing it again this quarter, ex. it's voluntary and from 1-5 days.

We also just got the news today that reg. Q1 raises will be postponed until Q3 (at least) to maintain competitive wages (implication being that we're overpaid vs. current market). It's a little bit of a bummer, but I'm blessed to still have a good-paying job. I wouldn't even complain about getting forced into mandatory unpaid time off now.

Well that is only if the rumors end up being true... rumor is that some of the chrysler plants may stay closed thru Feb. THEN that would be different

No shit... those bastards should be guilty of fraud... remember the auto's are asking for a loan... not a handout.

Shuttering Chrysler is hardly inevitable.

It was only a year and a half ago that they were bought out by Cerberus. With grand promises-

"Our plan really is to provide patient capital," says Cerberus spokesman Peter Duda; to "free management from quarter-to-quarter results and allow them to focus on a long-term recovery and transformation plan."

In 2007, they had $49 B in revenue, and 72,000 employees
(http://money.cnn.com/galleries/2008/...fortune/4.html)

Or maybe $59 B in revenue

(http://www.bloomberg.com/apps/news?p...d=aalBEC_fQHRE)

But either way, the consensus is that they lost money- $1.2 B in the Bloomberg article above, or maybe closer to $3 B (http://www.usatoday.com/money/econom...54538415_x.htm)

Hey, a few billion here or there. Whatever.

So let's take the most conservative scenario- $49 B revenue, with a $1.2 B loss. Rounding for convenience, that means they managed to lose $50 Billion dollars in a year.

$50,000,000,000

With 72,000 employees, that works out to a bit over $706,000 per person. Which is a damn sight more than even the wild-ass "$72/hour average wage" figure (a hair under $150k/year).

In fact, even if they did pay all 72,000 employees an average of $150K in 2007, that would only account for a fifth of the loss- they'd still be able to give away 1.4 Million cars at $30,000 net loss per vehicle before they hit the big negative $50B! The three domestic manufacturers together only sold 16 Billion cars that year.

So there's plenty of money moving around- far too much for anyone honest to be crying poverty.

The trick is finding anyone honest in a game with numbers that big :idk:

If Chrysler was such a great investment - why isnt Cerberus going to private equity to find ways of bringing more people into their glorious investment. Or, why arent they selling off their other investments to help pay for the failed one they already have?

Oh wait! Cerberus refused to invest any more cash into Chrysler... i wonder why?

This statement is wildly confusing... or you dont understand the diff between what revenue is and what loss is. Their cost of biz was 50.2B and they sold 49B worth of goods.

Re your high 700k+ figure - that isnt unexpected when someone is assembling high priced parts with a small margin. you are throwing around numbers, but do you actually know what they mean? they do have material costs, SG&A, etc.

Your post was some of the sketchiest financial math Ive seen in ages on a messageboard.

I'm quite aware that losing $1.2 B on $49 B in revenues requires spending or otherwise eliminating via accounting principles $50.2B. I guess I should have said "spend" rather than "lose".

I obviously did not propose my figures as my reasonable assumption of Chrysler LLC's unpublished 2007 P&L (especially since the mid-year sale makes the whole thing an even bigger fucking mess).

What I was pointing out was that even at this ridiculous $72/hour average, labor costs comprise little more than 20% of COGS.

I draw a number of conclusions from this:

1. Anyone who insists that unions are solely to blame for the downfall of the domestic auto industry is a moron.

2. Claims that "the domestic auto industry is doomed to fail because domestic cars are all crap and nobody buys them" are willfully ignorant.

3. The higher-ups at Cerberus must be very well-connected.

4. If I had to choose between an extra two weeks paid vacation, and getting paid $19 Million to be CEO for a year without even having to make a profit, I know damn well which one I'd choose.

5. I can't remember #5. :pwhore2:

To start with, you can toss out that $72.00/hr. figure. It's bullshit. Does that make your suppositions seem more reasonable?