Episode 134 – Bankruptcy For Chrysler, 2nd Half Outlook Good, UAW Agrees To Not Strike

April 30th, 2009 at 12:00pm

Runtime 7:14

Chrysler was unable to secure a deal with its creditors and is going to have to file for Chapter 11. A number of car companies see a better second half ahead. The UAW agreed to not strike for the next several years under the new deal with Chrysler. All that and more, plus a review of the redesigned 2010 Mazda3.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Well, looks like it is bankruptcy for Chrysler. Some car companies see a better second half. And the UAW agrees not to strike.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Thursday, April 30, 2009. And now, the news.

It was on, then off, then back on, but now it’s off. Chrysler was unable to secure a deal with its creditors yesterday and is likely going to have to file for a Chapter 11 bankruptcy. There is an outside chance that some sort of settlement could be reached before midnight tonight. But that does not look likely, and now the question is, can Chrysler get through a bankruptcy quickly, like in a couple of weeks.

Meanwhile, a number of companies see better times ahead. The Wall Street Journal reports that Renault sees big improvements in the second half of this year. It is increasing its second quarter production by 56% compared to the 4th quarter of last year. ArcelorMittal, the giant steel company sees markets recovering in China, Latin America and the United States (subscription required). But it may close steel plants in the U.S. that sell to the auto industry. And do not be surprised if Ford announces plans to increase production in the 3rd quarter. That announcement could be only weeks away.

The UAW agreed to not strike for the next several years under the new deal it signed with Chrysler. According to the Detroit Bureau, a strike would be considered a default under the terms of the government loans. The new contract calls for binding arbitration on financial issues for any contract negotiated in 2011 and again in 2015, if Chrysler still owes the U.S. government money.

As General Motors works to reorganize by the June first deadline, its bond holders — both big and small — are not too happy and are trying to make some noise. The Detroit News reports that a committee for the big bondholders will be getting some face time today with the auto industry task force to offer a counter proposal. If you’ll recall, the current plan gives the UAW and the U.S. government almost 80-percent of the “new” company’s stock. Well the bond holders want to switch places with the feds so they become the majority stockholders, which is a lot different than the 10-percent in GM’s plan.

And just so you know what else is going on in the world. Mazda reached an agreement to begin selling cars in Azerbaijan. Mazda will import the Mazda2, Mazda3, Mazda6, CX-7 and CX-9. Do you know where Azerbaijan is? I didn’t’ think so, maybe we’ll make that our next trivia quiz.

And speaking of Mazda, coming up next, a review of the redesigned 2010 Mazda3.

The Mazda3 has always been a great small car. Around the world it’s far and away the company’s best-selling model, accounting for something like a third of its global sales. This is why its redesign is big news. Here’s Autoline Daily correspondent Craig Cole with the scoop on the new 3.

Thanks for that report, Craig. I’m not sold on the new car’s styling yet, but if it’s as much fun to drive as today’s version I think I could get used to the look.

Hey, join us again later tonight for Autoline After Hours. It kicks-off at 7 p.m. eastern time, or 2300 hours GMT for all you international viewers. Of course Pete and Jason are going to be there, but we’ll also be Skyping-in Robert Farago, publisher of The Truth About Cars, to join the fray. You’re not going to want to miss this one.

Anyway, that’s it for today’s show. Thanks for watching, we’ll see you tonight and tomorrow.

18 Comments to “Episode 134 – Bankruptcy For Chrysler, 2nd Half Outlook Good, UAW Agrees To Not Strike”

  1. Topics about China » Archive » Episode 134 - Bankruptcy For Chrysler, 2nd Half Outlook Good, UAW Agrees To Not Strike Says:

    [...] John’s Journal placed an observative post today on Episode 134 – Bankruptcy For Chrysler, 2nd Half Outlook Good, UAW Agrees To Not StrikeHere’s a quick excerptRuntime 7:14 Chrysler was unable to secure a deal with its creditors and is going to have to file for Chapter 11. A number of car companies see a better second half ahead. The UAW agreed to not strike for the next several years under the new deal with Chrysler. All that and more, plus a review of the redesigned 2010 Mazda3. Transcript and Story Links after the jump . . . Here are today‚Äôs top headlines. Well, looks like it is bankruptcy for Chrysler. Some car companies see a better seco [...]

  2. John Barna Says:

    That’s nice of the UAW not to strike for several years.

  3. Alex Kajdi Says:

    John:

    You mentioned Chrysler’s pending bankruptcy, however what about Fiat’s involvement?
    What will happen to the Chrysler minivans, especially the Routan which they build for VW?

    I think the Minivan is what can save Chrysler again, like it did back in the 1980′s. Bring back All Wheel Drive option, and load it with iPhone Technology, and great fuel economy and it will be a hit.

    Honda has it right: “Respect the Van”!

  4. Andy Says:

    Instead of “iPhone Technology”, how about building products with a quality suspension, quality engine, quality transmission, QUALITY INTERIOR, and quality workmanship?

  5. Salvador G. Says:

    Azerbaijan : East of Georgia, South of Russia and North or Iran.

    John Mc.
    I saw President Obama talked on Chrysler and he seem like someone who got everything that he wanted and was robe right under his nose, he was not the cool costumer.

  6. Kit Gerhart Says:

    What Chrysler and everyone else needs to bring back in the way of minivans is a “box on wheels.” I bought a Caravan (which I still have) in 1989 for the purpose of transporting radio control model airplanes. It is great for that purpose. It rides better, gets better gas mileage, and cost less the the SUV’s and pickup trucks with toppers that people use for the same purpose. Now, about the only way you can buy a minivan is as a bus to entertain a bunch of kids. Isn’t there still a market for what I’d want, if I were to replace my ’89 van?

  7. G.A.Branigan Says:

    @ Kit:didn’t Chrysler make a cargo mini van?Also,I’m into rc Helis,another money pit ;}>

  8. Kit Gerhart Says:

    Yep, they made a cargo minivan, and, I think, had double rear doors available as an option to the lift gate.

    Mine is a passenger van, though. I wanted the carpeted floor and a little nicer interior than the cargo van, so I got a 5 passenger SE. The back seat has now been in my basement for 20 years. My van is a “1 of 405″ with the 2.5 turbo, manual transmission power train.

  9. Episode 134 - Bankruptcy For Chrysler, 2nd Half Outlook Good, UAW Agrees To Not Strike Says:

    [...] Original post by John’s Journal [...]

  10. mark p Says:

    The Chrysler minivan is at the top of quality, performance, and fuel economy out of all domestic and foriegn vehicles. Do your research before you come on here bashing the America.

  11. Sean T Says:

    @ Kit: The Transit Connect is coming…
    http://www.fordvehicles.com/transitconnect/

  12. pedro Fernandez Says:

    The Chrysler minivans were the best of the big 3, however when Honda and Toyota introduced their own, it took a lot of sales from Chrysler. The imports have proven to be more reliable in the long run, I speak from personal experience. If anything the older minivans have been more durable possibly because they were a lot simpler, w/o all the mandatory gadgetry that creates so much headaches in new cars.

  13. C-Tech Says:

    Sorry Pedro, Honda and Toyota minivans did not take many sales away from Chrysler. So-called “cultural Fashion leaders” have proclaimed the van for “Soccer Moms”and thus unfashionable and sales have dropped. Sadly a very practical and versatile vehicle is left off of many shopping lists because it is “unfashionable”.

  14. Salvador G. Says:

    Everyone should stop this already, always talking about what car or minivan Chrysler or the rest of the big three should had continue to make and remake or even why the Japanese or European are doing better.

    I dont disagree and I dont believe anyone disagrees with any of that, but the true is Management screw-up, GM & Chrysler management Screw-Up, so regardless of what good American car could have been made, they say “No, we want profit, and our bond holders and investors want profit and good cars cost too much to make” And now Chrysler will belong to FIAT and GM will go under in a month or two, I just hope they decide to sell GM to the Chinese at this point (or whoever got the money).

  15. pedro Fernandez Says:

    Here in So. Florida, there’s a lot of Siennas and Odysseys all over the place. So everyone of those represents on less sale for Chrysler.

  16. jeff mohr Says:

    The thursday nite live Farango interview was a great comparison pro or con big 3–DeLorenzo spoke volumes as to the substance behind auto comments as compared to time spend in the depths of the business—We can not give up on industry in this country,

  17. Azerbaijan » gunman,kill,12,azerbaijan,azerbaycan,ilham,aliyev,russian ... Says:

    [...] Episode 134 – Bankruptcy For Chrysler, 2nd Half Outlook Good, UAW …Mazda reached an agreement to begin selling cars in Azerbaijan. Mazda will import the Mazda2, Mazda3, Mazda6, CX-7 and CX-9. Do you know where Azerbaijan is? I didn’t’ think so, maybe we’ll make that our next trivia quiz. … [...]

  18. I3ziko Says:

    interesting to see mazda entering new markets. any idea why they are not present in Brazil?