Gas Guzzling SUV Sales save Chrysler Corp
& Faker@whitehouse.gov Black Irishman O'Bama
Payne: SUVs saved Chrysler
Henry Payne/ The Michigan View.com
Chrysler and the White House will celebrate the Detroit icon's $5.9 billion
repayment of government loans Tuesday in a ceremony that will be hailed by
both sides for the same reason: The government bailout had become a
liability for both entities.
In fact, government-free Chrysler is hardly off the debt hook, but is simply
refinancing its debt with private rather than public debt-holders. For its
part, the U.S. government will still have a 6.6 percent equity stake in
Chrysler - but by removing itself as the company's loan shark, the White
House can boast of the unpopular bailout's success in returning taxpayer
loans 6 years ahead of schedule. That's an important sound-bite in an
election year.
But there is one inconvenient truth you won't hear at the Sterling Heights,
Mich. ceremony: Chrysler wouldn't be here had it not defied its green White
House masters. Chrysler's return to profitability is a direct result of the
fabulous success of its SUVs.
The White House hand-picked Fiat to shepherd Chrysler out of bankruptcy in
June, 2009 because of Barack Obama's obsession with remaking Detroit's
automakers in the image of their European peers. Convinced that Americans
craved small cars to fight the warming scourge, the president demanded Fiat
bring its best-selling 500 Eurobox to the States as part of the acquisition
deal. Obama was convinced that Fiat could reform the immoral, gas-swigging,
SUV-dependent Chrysler.
The exact opposite occurred.
Two years later, the little 500 is about to go on sale in dealer
"boutiques" - but it is the resurgence of America's appetite for trucks that
has brought Chrysler back from the dead. Chrysler Group reported sales were
up 17 percent to 1.1 million vehicles in 2010 on the strength of its wildly
popular, redesigned Jeep Grand Cherokee and Dodge Durango SUVs. For CEO
Marchionne, the SUVs success in the U.S. market has been a revelation and he
is planning to expand the SUV lineup into Europe with Alfa Romeo and
Maserati-badged trucks. Marchionne is no starry-eyed green - he has realized
that trucks like the Cherokee typically rake in twice the per-vehicle profit
of cars (thus the beleaguered company's speedy repayment of U.S. loans).
Chrysler's truck sales - largely ignored by Obama's green media parrots -
has also been good to UAW workers as Chrysler's Detroit assembly plant is
now at full, three-shift capacity.
But there is one more inconvenient truth: Chrysler has been here before.
After it repaid its 1980s loans under the legendary hand of Lee Iacocca,
Chrysler was unable to diversify into smaller vehicles.Today, as the truck
boom fades before the specter of $4-a-gallon gas, Chrysler is still heavily
dependent on truck sales.
Chrysler is back. But is it just 1980s déją vu all over again?
Henry Payne is editor of The Michigan View.com
From The Detroit News:
http://detnews.com/article/20110524/MIVIEW/105240374/Payne--SUVs-saved-Chrysler#ixzz1NK3kYqmn