Chrysler and Plastech Reach Interim Agreement
Shutdown of all Chrysler Plants avoided - for now

Breaking news from the Automotive News website, Chrysler and supplier, PLastech have reached an interim agreement for Plastech to ship parts to Chrysler through February 15.

Today's Wall Street Journal included more information on the problem with supplier Plastech that shut down four Chrysler plants and threatened to shut down more. In fact, according to the WSJ, every Chrysler plant could ultimately be affected.

Apparently, Plastech has been on the verge of bankruptcy for some time. Last year it negotiated an assistance agreement with its customers that included a substantial cash payment to Plastech. That wasn't enough, so when Plastech went to Chrysler last week with hat in hand, begging for more assistance, Chrysler said enough is enough, and demanded that Plastech return the Chrysler-owned molds and tooling used by Plastech. Instead of returning the equipment, Plastech filed bankruptcy.

Until the interim deal was struck today, Chrysler was scheduled to go to bankruptcy court tomorrow to get the molds returned on an emergency basis. Presumably that court date is off the table. I would guess that neither Chrysler nor Plastech was as prepared as they would prefer to be for a court proceeding upon which the future of each company could depend.

So, 10 days from now we could be back where we are now, facing a big shutdown of all Chrysler facilities. Given Chrysler's already shakey foundation, and given Cerberus's limited desire and ability to sink new money into the company, it wouldn't take a long shut down to give Cerberus the cover to shut down operations and sell off the company piecemeal. Memo to Plastech: This ain't General Motors you're dealing with. Don't f*** with Cerberus.

The Logic of the Illogical: Your Credit Score

Only on the Bizzaro planet would you expect a system as strange as the FICO credit scoring model established by the Fair Issacs Corporation, the system used by almost all the consumer finance industry. Closing an unused account is simple prudence, right? No, not on the Bizzaro planet, and not with FICO. It makes sense to consolidate high interest rate debt into a single lower interest account, right? Nope - FICO Bizzaro again. Here's a link to an MSN Money article with more on the irrationalities of FICO.

Speaking of credit scores. Starting this year, Fair Issac will be offering a different model to establish your score. Under the new model, you will no longer be rewarded for "piggybacking" as an authorized user on an account of a person with A+ credit. ON the other hand, you will not be punished quite as much for a single major delinquency. You will be punished more for seeking credit, but rewarded for handling a diverse mix of credit. The FICO 08 model will be phased in as market demand allows. The truth be told, Fair Issac has always tailored its scoring systems to the demands of its customers, to the point where it would be largely inaccurate to say that anyone actually had a truly standardized credit score. For more information on FICO 08 see this link to MSN Money.

Thanks to PAD for the link.

Supplier Bankruptcy Shuts Down 4 Chrysler Plants

Multiple sources report that automoative supplier Plastech, Engineered Products Inc. has filed Chapter 11 bankruptcy, and has cut off supply to Chrysler Corporation. Supplies continue to Ford and General Motors. Plastech provides key interior bits for most of Chrysler's recent models. By strange coincidence, the cars affected the ones that I consider to be the worst in Chrysler's line up: the Sebring, Avenger, Nitro, Liberty, Caliber, Compass, Patriot, Durango and Aspen, collectively Chrysler's greatist [S]hits. (Actually, the Jeep Liberty is a big seller and big money-maker for the company -- why, I couldn't tell you.) Four factories producing these vehicles are currently shut down, including the Belvidere, Illinois plant that I like to call "Brocktoon". Other closed plants include Sterling Heights, Newark, and Toledo. No word yet on when the plants will reopen.

I'm wondering if Chrysler's contract with the UAW contains an escape clause for shut-downs caused by suppliers? In that case, it would be an act of brilliance to identify an expendible supplier that supplies only plants that you want to close, stop paying the supplier, and play victim when you have to shut down the plants that you wanted to shut down anyway.

See Detroit Free Press (freep.com)

Youtube Video Of the Day
Chrysler K-Car Pushme Pullyou

Is THIS the Face of Jesus?


I heard a radio commercial this morning that the play Jesus Christ Superstar is coming to Indianapolis, with actor Ted Neeley reprising the role of Jesus. I've got nothing against Jesus Christ Superstar. I've enjoyed it since I was 12, and I'm 46 now. I've got nothing against Ted Neeley, he was wonderful in the movie version of JCS. Here's the thing: Ted, you're 63 years old! Give it a rest, man. Part of the tragedy of Jesus was that he died before his natural time. The Passion of Christ loses its power if when he dies people say, "it's a shame, but he was bound to go soon anyway."

If you go to the play, here's a tip: buy tickets in the back, way back, and enjoy the show.

Photo credit: PBS.org

Buyout Time at Chrysler again
Almost all Michigan Workers to get $100,000 offers

Chrysler announced that it is offering $100,000 buyout to all of its Michigan assembly workers who have at least 1 year seniority. Chrysler will offer the buyout to about 14,000 wokers with a goal of cutting 10,000 unionized workers. Also, about 4,600 workers will be getting early retirement offers. Chrysler spins this as being the implementation of the buyout plan announced with the new UAW contract in November. Source: Reuters

Tesla Uncoiled

The press embargo has been lifted on driving reports on the Tesla Roadster electric sportscar. Most of the auto-websites have reports. Here's a link to the Autoweek coverage. The insert is the Autoblog Green coverage via youtube.com.




I've held back in commenting on the Tesla over the past year, not wanting to waste time on a car that could end up being vaporware. It's highly possible that the first owners may actually take delivery of their steeds in the (now) promised March/April time frame. The car even passed its crash test. It's a cool car, and I'll take one if they want to give me one.

Ford Cuts Quarterly Loss in Half
Also to Offer Buyouts to ALL UAW Workers
Product line could use an Ecoboost
Ford Motor Company announced that its 4th quarter loss for 2007 was $2.75 billion, much less than the $5.63 billion in 2006. Ford predicted continued losses in 2008 with a return to profitability in 2009.

Ford also announced that it was going to offer buyouts to its remaining 54,000 United Auto Workers employees. It is unknown (after previous buy-outs) how many of the workers would be likely to accept the buyouts. Many of the workers would be replaced by new, lower-paid workers under the two-tier contract that Ford negotiated with the UAW last fall.

Primary Source: Routers

One technology that Ford is counting on to help it with the turnaround is the new EcoBoost engine family. EcoBoost is a new family of twin-turbo-charged, direct-injection gasoline engines. The EcoBoost engine is set to debut on the Lincoln MKS sedan in 2009. The new engines are touted as being clean, efficient and powerful. Ford claims 275 horsepower for the2.0 liter version. This is 75 more than Volkswagen/Audi's current 2.0 liter turbo-di engine, one of Ward Automotive's 10 Best Engines. Ford plans to couple these transmissions with a computer-shifted manual transmission (similar to Volkswagen's DSG) for economy gains exceeding 20%. Ford is planning on installing the Ecoboost engine in 500,000 cars per year by 2012. (For background information on gasoline direct injection, click this link to the Wikipedia article on the subject.)

It will be interesting to see if Ford's new engines are docile enough, durable enough and reliable enough from the get go to make tech-phobic Ford-owners happy. Historically, many people have refused to buy turbocharged cars for fear that a turbo failure will ruin the entire engine. It should be noted that the ecoboost design relies not on one, but two turbos. Secondly, turbochargers tend to increase an engine's optimal octane requirement. That's a natural byproduct of the turbo's purpose of cramming more air into less space. The higher pressure causes engine knocking. Octane is an indirect measurement of a fuel's resistance to knocking. If Ford says the horsepower ratings that it has published are based upon regular fuel, then in theory, with higher octane fuel, or even e-85 or methanol, hotrodders should have a field-day with these engines, perhaps even doubling their output.

Here's a Youtube Video of Ford's technical presentation on the Ecoboost engine.

Fred Thompson Pulls Out of Race

Republican candidate Fred Thompson announced yesterday that he was pulling out of the race for the Republican presidential nomination. Now, all his hard work pursuing the nomination has all come to naught. There's 4 hours that he'll never see again.

GM to Offer Buyouts to Most Hourly WorkersAccording to the Detroit News, General Motors is putting together a plan to offer buyouts to most of its 72,000 hourly workers. Included in the plan is an early-retirement offer to 46,000 workers. Some of these workers would be replaced with new, lower-paid workers under the two-tier wage system that was installed under the new UAW contract last fall. Nevertheless, the final outcome could be a larger net loss than the 36,000 worker buyout that GM undertook in 2005.