uh oh, chrysler closing ALL plants for 1 mos

[unknownroad]

Originally Posted by RACER X

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!

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

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...

[ducati_atx]

Originally Posted by unknownroad

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".

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.

[unknownroad]

Originally Posted by ducati_atx

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.

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

[ducati_atx]

Originally Posted by unknownroad

Shuttering Chrysler is hardly inevitable.

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

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?

[ducati_atx]

Originally Posted by unknownroad

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.

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.

[unknownroad]

Originally Posted by ducati_atx

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.

[Papa_Complex]

Originally Posted by unknownroad

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.

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

[RACER X]

Originally Posted by unknownroad

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

...

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.