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First of all, I'm fairly ignorant when it comes to business stuff like this. So, with the disclaimer out of the way, what is the worst case scenario here? I mean, the way I see it, Jeep may be sold off, but we're not actually looking at something that will affect us as Jeep owners, right?
 

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I really don't know what will happen if Chrysler goes under. I would assume there would have to be some recourse for any warranty contracts that are still in effect, by either Chrysler or the holding company.

However, I can imagine them tightening up on those claims and not allowing as many warranty claims through.

What happened when Plymouth or Oldsmobile folded earlier this decade? Weren't the warranties honored at respective parent dealers?
 

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I think if you do a search on this topic or jeep dicontinued as a topic, you'll find several threads starting about 2 years ago until present. I've seen a couple within the last few days... check 'em out.
 

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If Chrysler goes down, what would happen to the "Life Time Powertrain Warranty"? Are we out of luck on that one?
 

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I would assume that Cerberus Capital Mgmt would be liable for warranties if it's asset, Chrysler, were to go under. Maybe not, though. I'm not a lawyer.

I have a used one anyway, and the lifetime powertrain warranty does not transfer to subsequent owners after the original owner sells it. :(
 

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If Chrysler goes down, what would happen to the "Life Time Powertrain Warranty"? Are we out of luck on that one?

That's very possible for a lifetime warranty. People have to keep in mind that if any of the Big Three claim bankruptcy, that doesn't mean they will immediately cease to exist. That could happen down the road though...

Now that the Senate rejected the bailout package, the biggest danger is that it further hurts sales as potential buyers decide that it's not worth the risk to buy a new car from a company that may not be around long enough to honor a warranty or manufacture replacement/repair parts. In reality, that would probably never happen. In the event of a total collapse, warranties could be transferred to a third party company, similar to the ones already providing warranty coverage to millions of car owners across the country. Replacement/repair parts will always be available in the aftermarket. These aftermarket suppliers will also step up and begin offering the parts that are currently only available from the manufacturer (dealer only items) because there will be a future demand for them.

The problem here is that people don't think things out and many will not be willing to take the risk of buying from a company that seems to be in danger of going under. This is a really bad situation for GM and Chrysler (not so much for Ford) that needs to work itself out. The latest news I heard was that the White House was going to use some of the Wall St. bailout money to help the auto manufacturers, despite the fact that the Senate declined to pass the bailout package for them.
 

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IMO the Administration really doesn't have any choice other than to pull a few B$ from the TARP funds already authorized and appropriated by Congress. Ford announced today that they're hiring bankruptcy counsel, since if GM and Chrysler file the common supplier base could be so damaged so as to pull Ford down too. With roughly 3.5 million direct and indirect jobs tied to the Big Three, letting it all go down the drain amounts to a Depression in the midwest, and a whole lot of pain everywhere else.

That being said, if the worst happens and inaction causes Chapter 11 filings, sales plummet as a response to consumer warriness, and liquidation soon follows... all bets are off. Even with the worst case scenario - no warranties left standing - you'll still have the ability to purchase either OEM parts from existing stock or go aftermarket in any case. There are simply too many XKs on the road or in manufacturer/dealer inventory to not sell them.

Also, if there is any risk that OEM warranties will not be honored, you see that discount built into the selling price of the vehicle by the market. Fire sale comes to mind on new stock, and depressed prices for pre-owned to follow.
 

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IMO the Administration really doesn't have any choice other than to pull a few B$ from the TARP funds already authorized and appropriated by Congress. Ford announced today that they're hiring bankruptcy counsel, since if GM and Chrysler file the common supplier base could be so damaged so as to pull Ford down too. With roughly 3.5 million direct and indirect jobs tied to the Big Three, letting it all go down the drain amounts to a Depression in the midwest, and a whole lot of pain everywhere else.

That being said, if the worst happens and inaction causes Chapter 11 filings, sales plummet as a response to consumer warriness, and liquidation soon follows... all bets are off. Even with the worst case scenario - no warranties left standing - you'll still have the ability to purchase either OEM parts from existing stock or go aftermarket in any case. There are simply too many XKs on the road or in manufacturer/dealer inventory to not sell them.

Also, if there is any risk that OEM warranties will not be honored, you see that discount built into the selling price of the vehicle by the market. Fire sale comes to mind on new stock, and depressed prices for pre-owned to follow.
I'm torn on this issue... part of me agrees that the Big Three should be left to fix their own mess. It's important to remember that it's not the automotive industry itself that's in turmoil...it's the American auto industry with the big problems. The foreign manufacturers are in a much better position to deal with an economic downturn and to sustain their businesses for the rough economic times ahead. With this new global economy, pretty much everyone is affected by this economic mess we're in right now. When you get right down to it, the Big Three made their own bed and now they have to sleep in it.... piss poor management and "old school" thinking has come back to haunt them. If the government bails them out (with our tax dollars), does that fix the fundamental problems? Will they be back later asking for more money?

I'm starting to think that we should let them work this out for themselves. Sure, it will probably be a bitter pill to swallow, but the economy is already a big mess and while this will just add to the problems in the short term, it will probably help everyone in the long term as we eventually begin to recover and end up with better managed and more profitable businesses across the board.

Interestingly, I read an article the other day (Wall St. Journal, if I remember correctly) that claimed the Jeep brand was the only brand that had any real value in the entire Chrysler lineup.
 

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Well the biggest obsticle the Bailout had was the UAW not willing to reduce wages to help out the companies. Whether you agree or disagree with a bailout sacrifices will be made either way. My biggest fear about the bailout was that we would end up driving politcally correct car.
 

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FWIW, I think Treasury will come up with the interim cash until the new Presdient and Congress can take up more comprehensive legislation, and Chrysler will likely be merged with GM in a new structure where the only surviving brands will be Chevy, Cadillac and Jeep. Remember too that foreign manufacturers building in the US often use the same suppliers for parts and components that Detroit's Big Three do. A collapse of the supply chain could kill the global auto business for a year. http://www.freep.com/article/20081212/BUSINESS01/112120001/1014

Still going to be lots of job losses in the sector, but Wall Street and the country will be better off with a leaner and meaner auto industry that hopefully will be able to focus on QUALITY as well as alternative fuel vehicles.

At the end of the day, the lack of QUALITY is why American auto companies are losing the market share war. We should not be quick to demonize union wages, as it has been recently reported that Toyota (including $6-8000 bonuses paid to its workers) actually pays its employees around $30 per hour. The UAW renegotiated their new hire contracts to reduce wages to $14 per hour. If you sell cars that work, you make money. If your cars don't work, you don't make money. Now do the benefit packages and layoff pay deals with the UAW need to be revisited? Absolutely, but hourly wage is not why Detroit is not competitive with the Toyotas of the world.

Now Hyundai pays $14 per hour non-union in states like Alabama where the prevailing average manufacturing wage is just over $10 per hour.

Also it is relevant to note that all other nations regularly provide subsidies to their auto industries. Maybe it is just time to get with the program. It is kind of like campaign finance reform - the Big Three are the only companies with a "cap" on their spending.
 

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The Rover Car Company went down over here in the UK a few years ago, following being offloaded by BMW.

Rover owners were left with nothing....and I mean nothing!!! :grim:
 

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FWIW, I think Treasury will come up with the interim cash until the new Presdient and Congress can take up more comprehensive legislation, and Chrysler will likely be merged with GM in a new structure where the only surviving brands will be Chevy, Cadillac and Jeep. Remember too that foreign manufacturers building in the US often use the same suppliers for parts and components that Detroit's Big Three do. A collapse of the supply chain could kill the global auto business for a year. http://www.freep.com/article/20081212/BUSINESS01/112120001/1014

Still going to be lots of job losses in the sector, but Wall Street and the country will be better off with a leaner and meaner auto industry that hopefully will be able to focus on QUALITY as well as alternative fuel vehicles.

At the end of the day, the lack of QUALITY is why American auto companies are losing the market share war. We should not be quick to demonize union wages, as it has been recently reported that Toyota (including $6-8000 bonuses paid to its workers) actually pays its employees around $30 per hour. The UAW renegotiated their new hire contracts to reduce wages to $14 per hour. If you sell cars that work, you make money. If your cars don't work, you don't make money. Now do the benefit packages and layoff pay deals with the UAW need to be revisited? Absolutely, but hourly wage is not why Detroit is not competitive with the Toyotas of the world.

Now Hyundai pays $14 per hour non-union in states like Alabama where the prevailing average manufacturing wage is just over $10 per hour.

Also it is relevant to note that all other nations regularly provide subsidies to their auto industries. Maybe it is just time to get with the program. It is kind of like campaign finance reform - the Big Three are the only companies with a "cap" on their spending.
I wouldn't worry too much about the foreign manufacturers who build in the U.S.... they will find alternate suppliers even if they have to import the parts into the U.S. to continue building their vehicles.

I agree with you on the quality issue, but even more important is having a product line that is in demand. GM was caught with its pants around its ankles when gas prices started rising sharply and their best selling vehicles were nothing but SUVs and light trucks. The Big Three really need to get their heads out of their asses and do it quickly. As we all know, it takes time to change the product line, so they really need to be more proactive. The Chevy Volt should have been built at least four years ago to go head-to-head with the Toyota Prius.

And I do put a fair amount of blame on the UAW. The idiotic union leaders seem to be holding strong against wage cuts. What kind of crap is that? If they aren't willing to work with GM management, there might not be any jobs for their union members at all.... so cutting wages should be a better option than not having any wages at all, no? Seems very logical to me. Besides, if GM does in fact claim bankruptcy, then I believe that automatically cancels any remaining term for the collective bargaining agreement. In other words, no more union...

From what I've heard, the average UAW assembly worker earns 35 - 45 percent more per hour than non-union Toyota assembly workers in Kentucky. The funny thing is that the UAW has been trying for years to unionize the Toyota plant in Kentucky, but the workers keep voting them down year after year, despite earning a lower hourly wage. That's got to tell you something!!
 

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From what I've heard, the average UAW assembly worker earns 35 - 45 percent more per hour than non-union Toyota assembly workers in Kentucky. The funny thing is that the UAW has been trying for years to unionize the Toyota plant in Kentucky, but the workers keep voting them down year after year, despite earning a lower hourly wage. That's got to tell you something!!
Toyota in Kentucky according to this article pays more than the UAW, that's how they keep the union out. It's the same here in Canada, the transplants pay a tad more with better benefits but worse pensions.

http://www.miamiherald.com/news/politics/AP/story/809438.html



I can't believe some people think the average U.S autoworker gets paid $75-100/hr. They make $28/hr base rate with benefits which bring them to about $42/hr and new hires will start at $17. The $75 to $100 is if you were to devide the cost of the people already retired and that figure is no longer correct since the consessions taken in the last contract. Obviously not the Senator or the press were listening when Mr. Wagner said "WE ARE NOW AT PARITY WITH THE TRANSPLANTS"

If it were just the Detroit 3 that would be affected I would say definitly No Bailout, but because this is a Global recession and the other countries are bailing out their auto industries the we also have to lend them the money. We have to lend them the money because of the MILLIONS of people that would be affected should they go down. Everything from parts makers, dealers, transports, advertising, industrial machinery, not to mention the business's around the factories and tax base. Many parts makers would not be able to stay afloat with the huge imediate loss of contracts and could therefore bring down the imports as well.

Now you can throw all the money you want at the Detroit 3 and the autoworkers could work for free and the other Japan, France, etc, throw all the money they want at Toyota, Honda, etc, and there autoworkers work for free and still have no effect because ultimately it's the people that have to start buying cars again. Again, it's not just the Detroit 3 that are in trouble because of the 6 million drop in car sales, ship loads of imports are being turned back because there's no room to put them.
 

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Just a thought....if the "Big 3" go under, and the gov't takes over.....would the new company be called "American Motors"?...sorry I couldn't resist.-43:icon_biggrin:
 

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Toyota in Kentucky according to this article pays more than the UAW, that's how they keep the union out. It's the same here in Canada, the transplants pay a tad more with better benefits but worse pensions.

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If that's true, then I think it's relatively new. I remember following the whole UAW/Toyota mess for a few years and I was amazed that the UAW was promising Toyota workers in Kentucky that they would receive wages equal to what the other UAW workers were earning. At the time, I remember reading several different news stories reporting that the Toyota workers in Kentucky were not making a comparable wage to similar UAW workers.

Here's an article from 2007 (The Washington Post) that has a different view of UAW/Toyota wages:

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/25/AR2007052502458.html

I did read in another more recent article that the Toyota assembly line workers in Kentucky have recently passed the average UAW assembly worker's annual wages for the first time in history, but that was because a $6000 bonus put them over the top this past year and the U.S. domestic assembly workers didn't get a bonus at all, except for Chrysler's small $600 annual bonus. And the Toyota workers are still not unionized...
 

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Just a thought....if the "Big 3" go under, and the gov't takes over.....would the new company be called "American Motors"?...sorry I couldn't resist.-43:icon_biggrin:
Now that is funny............ :bowdown:

I'd like to see the UAW put out of business once and for all, their day has passed and they are a drain on American Industry. I'd also like to see reasonable caps put on executives salaries and bonuses, some have recieved 7 figure salary and bonus packages...... I'd also like to see serious Federal sponsorship of true alternatives for mass transportation, fuel/power for vehicles. Oh, and while you guys are at it, can you purchase me a winning lottery ticket?
 

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American Motors........... lmao

I also believe the Unions themselves have too much power and that power is not controlled by the members. Used to be "you are the union", now it's more like you're a paying member of a gym membership. You can use the facilities but you cant set the rules or run it. I don't know how the UAW works but here the CAW leader is not elected by the individual member, so the direction of the union is set by the executive. Example, Buzz Hargrove pretty much decided who would replace him and if you didn't agree then you're out.
 

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I used to work for the Defense Department and was talking to a few friends also gov related, and we had a discussion regarding the same topic. From what I've heard Chrysler will not be going under - I dont' have a guarantee obviously however if that actually does happen at some point, Chrysler satellite garages will remain open to service Jeep/Chrysler etc for a couple of decades. The vehicles are on the road and are popular, and by law, the terms and conditions of the contract made by purchasing the vehicle are not null and void if the corporation goes bankrupt.
 

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The Rover Car Company went down over here in the UK a few years ago, following being offloaded by BMW.

Rover owners were left with nothing....and I mean nothing!!! :grim:
Tell me about it! I owned two of them (for my sins) - check out the 'previous rides' thread.

http://www.jeepcommander.com/forums/showpost.php?p=87688&postcount=88
http://www.jeepcommander.com/forums/showpost.php?p=87689&postcount=89

I offloaded that puppy pretty sharpish, that's for sure!
 

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My opinion is it's all a scam to transfer our hard earned tax dollars to big companies ... but that's nothing new the government has aleays done that.

If one of the big three DOES go under ... the POINT will be to cut losses ... no warantees will be honoured you can bet on that.
 
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