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The lessons of the 1979 Chrysler loan guarantee - 11/23/2008 12:10:58 PM   
celticlord2112


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The lessons of the 1979 Chrysler loan guarantee

If we must provide assistance to the auto industry, history may provide some guidance on how to do it effectively.

The $1.5 billion in loan guarantees the government gave Chrysler was contingent on at least $2 billion in concessions from all stakeholders, including the UAW.

What concessions will management, the UAW, and others make to save the Big Three?


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RE: The lessons of the 1979 Chrysler loan guarantee - 11/23/2008 1:19:28 PM   
Arpig


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As few as possible I suspect.

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RE: The lessons of the 1979 Chrysler loan guarantee - 11/23/2008 2:25:17 PM   
Vendaval


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Quoting from the OP, at least two reasons to admire Lee Iacocca.


"Iacocca agreed to work for a $1 a year until Chrysler turned a profit. He traveled between Detroit and Washington on commercial airlines.

"You don't fly around on your private jet when you're asking the government for a big loan," said Reginald Stuart, who covered the 1979 rescue as The New York Times' Detroit bureau chief and wrote a book about it."

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RE: The lessons of the 1979 Chrysler loan guarantee - 11/24/2008 7:27:54 PM   
Termyn8or


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A story I heard about Iacocca on a tour of the plant.

He ran across this guy just standing there. He asked him "What are you doing", the reply was "Nothing" to which Iacocca responded "You're fired".

I do not stand in awe of Iacocca, he was actually a salesman, but IIRC an engineer as well. Alot of people could have saved Chysler with that kind of money and probably built a better product. Even though Iacocca was instrumental in the development of the Ford Mustang, he still got fired.

I think most cars built between about 1978 and 1986 were shitcans. Chryslers especially, but the others were no engineering marvels either. I am not talking about poor drivetrains, I am talking about critical chassis components that were not built to last. The same was true of the Ford Mustang. They saved alot of weight, but the car became dangerous to drive after several years. We are talking poor mechanics, upper a frames tearing off their mounts (on the Mustang) and even GM, with lower a frames breaking in half. They are all guilty. I am fully aware of the sprung weight to unsprung weigh ratio and what it means, but they went a little bit overboard.

In about 1986 GM came out with the 3800 engine and a redesigned front wheel drive system that made those cars fast, fuel efficient and agile. I have owned several. Nearly every car in the class has four wheel independent suspension, and the 3800 could rev as it came with a roller cam stock. A more advanced fuel injection system, I believe, along with the other factors, made these the best US made cars of the time. 

You could literally have a fast luxury car that was agile and sure footed, and still get about 20 miles to the gallon. The problem I found is that after so many years a certain place on the body would rust away and the engine would literally fall out. So much for the best cars. I don't see that happening to cars from the 1960s.

In the old days you almost never saw cars with one of the wheels laying down because some major suspension component broke. People drove with bad ball joints for years, and the design kept alot of them from getting killed or maimed.

While I do not stand in awe, I do have some respect. I know what it takes to build a car, and then to meet all the standards and requirements imposed by government as well as the market is no easy task. But the Japanese are doing it.

Anyone remember the movie "Gung Ho" ?.

T

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RE: The lessons of the 1979 Chrysler loan guarantee - 11/24/2008 7:58:13 PM   
rachel529


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i do.  "it handled great".  and norm from cheers!

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