Nardelli Speaks Out On Bailout, Big Auto's Future

Oct. 1, 2008
...no word from him on the future of Big Box stores with orange and white logos, but he does address hybrids and electric cars in a recent interview with CNBC. He also makes the case that the $25 billion dollars that the government just tossed their way ...
...no word from him on the future of Big Box stores with orange and white logos, but he does address hybrids and electric cars in a recent interview with CNBC. He also makes the case that the $25 billion dollars that the government just tossed their way is not a bailout like those banking guys are getting (which is not a bailout either -- it's a giveaway -- but that's a matter for another thread). Here are a couple good quotes:"Well, as you remember, Detroit did have an electric car. It didn't have near the sophistication and the innovation technology that we have today that we're working on, but it was rejected by the customer." Now there's some dispute about that fact -- in fact, there's an entire movie out (Who Killed The Electric Car?) with the premise that GM intentionally scuttled sales of the Impact EV in order to more aggressively market/sell the much higher-margin SUVs. That was their decision to make. However, it was an extraordinarily bad decision, both for them and for us. Thankfully, now the tune has changed at the Big Three:"... look, this is right at the heart of what we need to do in our country. Are we serious about energy independence? We are at Chrysler, I think they are. Are you serious about improvement in greenhouse gases, CO2 reduction? We are. Are we serious about driving innovation and new technology that allows us to achieve the first two objectives, energy independence, environmental improvement. If you believe in that, and I think we do, holistically, we do at Chrysler, the government I think is investing-- kind of putting their money where their mouth is about-- about these initiatives." The company is making efficiency improvements of its own, Nardelli says:"We've taken about $2 billion of fixed cost out in the last seven, eight months. We've taken a million units of potential capacity out of Chrysler. We're driving vigorously to get quality, perception, reliability up. We've made literally 4-500 line item changes to enhance our vehicles, to improve our customer perception and acceptability. . .we're spending well over a billion dollars to make sure we're on a glide path to achieve the CAFE standards by 2015. So this would allow me to continue to stay on track, to make those investments as opposed to having to furlough hard-working men and women within the company. So this is not a bailout. This is investing in our future." Personally, I don't care whether it's a bailout or not -- I'd rather see my hard-earned tax dollars going into helping companies that actually make stuff, rather than dumping it into Wall Street's bottomless lap.

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