“LOOK AT THAT CADILLAC!”: GM TRIES A GEOGRAPHICAL CURE AT CADDY

9/24/14

General Motors announced yesterday that Cadillac will move its headquarters to New York, part of a larger move to establish Caddy as a separate business unit.   Part of the rationale for abandoning the city whose founder gave Cadillac its name is, as new Caddy boss Johan de Nysschen, put it

“There is no city in the world where the inhabitants are more immersed in a premium lifestyle than New York.”

Mr. de Nysschen thus outlines about as good a reason as any not to live in New York, but I digress.

Will this move to New York work?  Caddy has to do something.  Year to date through the end of August, its sales were down 5% in a strong car market.   Making the story even worse, Caddy’s SUVs, the SRX and especially the behemoth Escalade, are selling quite well.  Sales of Cadillac cars, however, were down 15% as of 8/31/14.  Dealer lots are teeming with CTSs and ATSs that simply won’t sell.

So is moving to New York going to change Caddy’s fortunes?   Employing a little uncommon common sense, one suspects not.  But the move to the Big Apple is at least consonant with Caddy’s pricing strategy; i.e., Caddy vehicles definitely are listed at New York prices.  Therein, one suspects, lies the problem; Cadillacs are simply too expensive.  

The ATS starts in the low $30s, which yours truly thinks is a lot of money but apparently no one else does.  But try finding an ATS at that price point; walk around a dealer lot and you will notice that most of the stickers on this cramped car sport a $40 handle, and many are priced in the high $40s.  The CTS starts in the mid $40s, which gives yours truly apoplexy, and can easily reach the high $50s and low $60s.

C’mon!   These aren’t Mercedes or BMWs; they are Cadillacs, for Pete’s sake.  Yes, the current Caddy products are, in many aspects, as good as the European fare to which they aspire.  The handling of the ATS, which is at least as good, in many knowledgeable people’s opinions, as that of the BMW 3 Series comes immediately to mind.  And it is possible to argue with a straight face that the Cadillac cars are as good as or better in totality than their German competitors.  But that misses the point.

People who spend these brobdingnagian amounts on cars are buying, as much as they will never admit it, an image, not a car.  And while Caddy may be as good as BMW, Mercedes, Audi, Lexus, Infiniti, or what have you, it doesn’t have the image of those “luxury”(whatever that means) marques.  And therefore Caddy can’t charge BMW, Mercedes, Audi, Lexus, and Infiniti prices; those who buy such cars will not stand for it.   And old time Cadillac buyers are not used to paying such prices.  But Caddy doesn’t seem to care much for the traditional Cadillac buyer; in fact, Caddy seems to treat its traditional buyers like something it would like to scrape off the bottom of its shoe.  That also is a big part of the problem.  Older, largely self-made, people have money and are willing to spend it on expensive products that deliver value.  Caddy used to know that, but now seems to be tossing such customers over the side while fixating on capturing the attention of the insecure types who fancy themselves the nouveau riche and seek to prove it, perhaps to themselves, by the accumulation of showy and glittery yet ultimately useless gimcracks and trinkets.

So Caddy can tell its hometown to screw itself.  But as long as it charges prices commensurate with those that prevail in its new HQ town, and tells its traditional buyer base to also do the aforementioned anatomically impossible, it will have problems that far transcend geography.

RAHM VS. THE LILLIPUTIANS

9/23/14

Fran Spielman, the City Hall reporter for the Chicago Sun-Times, write a story published today (“Long shot could force runoff,” page 11) arguing that while Alderman Bob Fioretti cannot possibly win a mayoral race against Rahm Emanuel, the presence of both Mr. Fioretti and Chicago Teachers’ Union President Karen Lewis on the primary ballot could make a runoff more likely.   (See ALDERMAN BOB FIORETTI THROWS HIS HAT IN THE RING:  OH, HEART BE STILL, 9/13/14 for more illumination on Mr. Fioretti and his minuscule chances for winning the big office on the 5^th Floor.)

A brief primer on the mayoral election process in Chicago is in order here.  Chicago mayoral elections are no longer officially partisan; instead, there is a nonpartisan primary in February.  If a candidate gets more than 50% of the vote, s/he becomes mayor.  If no candidate wins 50% of the vote, a runoff is held in April.  Since this officially nonpartisan process was initiated in 1999, there has been no runoff election.

Ms. Spielman, like any political junky reporter, loves a good story.  She even trotted out old school independent strategist Don Rose in support of her thesis, or at least in pursuit of her story.  But Ms. Spielman is, in this case, clearly delusional.  

As I have said before (e.g., TONI PRECKWINKLE RULES OUT A RUNFOR MAYOR OF CHICAGO…MY READERSYAWN, 7/15/14), no one is going to beat Rahm Emanuel in February and there will be no April election.   Mr. Emanuel has the money, the organization, the cowering pols, the obsequious “business community,” the private sector unions, and certainly the fawning press, national and local, behind him.   Politics everywhere, but especially in Chicago, is about money and the people who make money, or can potentially make money, from politics in this city on the make are either behind Mr. Emanuel or will be wooed by promises of money, or by threats, to get behind Mr. Emanuel.  Whether Mr. Emanuel runs against one, two, or a million opponents, that will be the case.

Mr. Emanuel’s inevitability would be, if anything, enhanced by the presence of both Ms. Lewis and Mr. Fioretti on the primary ballot.  Yes, there are differences between them…professional background and race come immediately to mind.  But, fully mindful that ideology is overrated in the governance of cities, it is useful to point out that these two are ideological clones.  Their philosophies are identical…vilify and tax the wealthy in order to pander to the poor.  In a mindless jihad that could only be conceived by those with complete ignorance of economics, both Ms. Lewis and Mr. Fioretti would increase the tax and regulatory burden to make the city sort of dystopia for the productive in a gormless appeal to the baser instincts of the masses.  Hello Detroit.

If we were to join the fantasizing about the possibility of unseating the Wise and Mighty Rahm, we would do well to heed Greg Goldner, Mr. Emanuel’s campaign manager in his 2002 run for Congress, as quoted in the Spielman article, who said

“They’re (Ms. Lewis and Mr. Fioretti) almost splitting the progressive community.  That’s not the right starting point to go to the white ethnic base on the Northwest and Southwest sides that might be dissatisfied with the mayor but don’t share those leftist political views.”

If we had either Mr. Fioretti or Ms. Lewis in the race, but not both, and a candidate who could appeal to the justifiably angry voters on the Southwest and Northwest sides whom Mr. Emanuel regards as an endless parade of Mikes and Mollies, then we might have something of a race…but ultimately, at best, a race to see who gets slaughtered in the April run-off.  That other candidate, however, has not surfaced and will not surface and, as Mr. Goldner points out, those teed off people from my old neighborhood and their kindred spirits from the geographical fringes of the city are not going to back Karen Lewis or, once they’ve read more than a few paragraphs on the man, Bob Fioretti.  They’d rather hold their noses and vote for Mr. Emanuel.  So Mr. Fioretti and Ms. Lewis, if they both wind up in the race, will be battling each other for that fraction of the black and/or progressive vote that hasn’t been bought off or similarly mollified into voting for Mr. Emanuel…like two dogs fighting over a picked over bone.

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics. 

DETROIT BANKRUPTCY: “IT’S NOT TINSEL TOWN; IT’S NOT CHI-TOWN…” HMM….

12/3/13

U.S. Bankruptcy Court Judge Steven Rhodes ruled today that Detroit could indeed file for protection under Chapter 9 of the bankruptcy code.    Since I advised bankruptcy for the state of Illinois in yesterday’s post (SOLVING ILLINOIS’ PENSION MALADY:  WHY, ONE CAN ALWAYS COUNT ON THE WORD OF OUR LEGISLATURE!, 12/2/13), it probably behooves me to make a few comments on the Detroit situation, even though the decision was immediately appealed and may, though probably won’t, be overturned.

First, while the lawyers will have to sort this out, and doubtless arguments will be made to the contrary, it looks like all unsecured creditors, be they bondholders, employee pension funds, contractors, or anybody else, have the same priority in bankruptcy.   Regardless of the law, however, it would seem that some sort of special accommodation has to be made for employee pension claims.   Since the pensioners have no access to social security, their pensions are their only means of livelihood; to deprive them of their pensions would be to throw them out in the street.  We can’t do that.  Judge Rhodes knows that. Everyone knows that.

So while Judge Rhodes said that the court could cut future pension payments, he is not saying, as some people would have you believe, that the courts should, or even could, eliminate those payments.  Some, perhaps all, pensioners will see their payments cut; one suspects none will see them eliminated.  Some clever formula will have to be derived under which the most highly paid pensioners take some cuts, perhaps some big cuts, but those at the bottom take few, if any, cuts.   Even under the plan working its way through the Illinois legislature as I write this, a plan that was, of course, formulated away from the bankruptcy court, the people at the bottom of the pension ladder will be taken care of, as they should be.

Second, an argument is being made, and doubtless will be continued, that any substantial hair cut for bondholders will send a chill throughout the municipal bond market, that all municipal bond issuers will pay higher rates if Detroit bondholders are made to suffer.

I don’t know whether such damage will be done to the muni bond markets if the supposedly big boys who hold Detroit bonds are made to feel some pain.  But I do know whether such damage should be done…of course it shouldn’t!   If a potential investor cannot distinguish between the credit of Detroit and, say, Dallas, s/he has no business owning municipal bonds, plain and simple.  Having to suffer for buying bonds of a lousy credit is part of the normal workings of the market place.  Those who take such risks cannot cry innocence when their big, risky bets don’t work out.   You pays your money, you takes your chances…Capitalism without failure is like Christianity without hell…or any other trite expressions come immediately to mind.   Bondholders took the risk and thought they would be paid to do so.  They were wrong.   They should feel the pain.  That’s capitalism.  And that’s life.

Third, Judge Rhodes determined that Detroit was insolvent before its bankruptcy filing in the summer; that was the major reason that he allowed the bankruptcy to proceed.  By those standards, it looks like neither Illinois nor Chicago is an obvious candidate for bankruptcy because one could argue that neither is insolvent.   Or maybe not.   Contractors who do business with the state are waiting a long, long time to be paid.  Both state and city pension plans are severely underfunded.   And both the city and the state are effectively borrowing to pay operating expenses.  One could conceivably make the argument that both Chicago and Illinois are insolvent, but it would be a stretch.   It will only be a matter of time, however, before the practical, if not legal, bankruptcy of both becomes obvious.  By then, of course, the hole will be much deeper and the pain more intense, but what do the politicians care?

I prescribed bankruptcy for Illinois yesterday.  Last week (“OKLAHOMA VS. ILLINOIS”:  COMMENTS FROM SOMEONE WHO KNOWS SOMETHING ABOUT ILLINOIS POLITICS), I made the case that, contrary to the self-assured but fact denying chest thumpers in these parts, Chicago is Detroit in many ways.   Don’t think that I’m the only one thinking about Chicago and Illinois in the context of bankruptcy and Detroit.   Investors, taxpayers, state officials (in their more candid, perhaps very private, moments), and people who make decisions regarding where to locate businesses do not think a municipal bankruptcy in the Land of Lincoln is such a laughable proposition.

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics. 

“OKLAHOMA VS. ILLINOIS”: COMMENTS FROM SOMEONE WHO KNOWS SOMETHING ABOUT ILLINOIS POLITICS

11/26/13

A good friend forwarded a message to me that seems to be making its way around the internet.  The message, entitled “Illinois vs. Oklahoma,” by a Harlan Twible blames the Democrats for Illinois’ financial problems and draws an unfavorable comparison to Oklahoma, but the author’s comments on the latter center around illegal immigration rather than finances.

The piece contained one of my favorite quotes, which the author quoted but did not attribute to its source, which reportedly was Henry Ford…

"Any man who thinks he can be happy and prosperous by letting the Government take care of him; better take a closer look at the American Indian."

Yes, Ford was both an industrial genius and a political kook.   But this is one of those instances when his political/social views were absolutely correct, if it is indeed his quote.   Including this quote was not the only area in which Mr. Twible made convincing points.  Nonetheless, those points need refinement.

I was asked by my buddy to comment on the author’s observations on Illinois’ political/financial situation.   I thought my readers might be interested in my observations.  I limited those comments to Illinois; I didn’t touch the author’s views on Oklahoma’s approach to illegal immigration:

Illinois is a mess; for all intents and purposes it is bankrupt, and if we followed the same GAAP conventions for pensions that corporations do, that would be even more obvious.  Chicago's situation is at least as perilous.  Our situation is yet another case of pols buying people's votes with other people's money; ironically, often with the people's own money, which is what Tocqueville warned us about nearly 200 years ago now.

The Detroit analogy is more on target than most people think.  We continually play a game of denial in Chicago.  We thump our chests and say, while giggling at those who make the Motown analogy, "Chicago isn't Detroit" and then go on to cite our more diversified economy while avoiding the obvious political analogy of reckless spending by pols who remain reassured by the assumption that we will always find a way to pay for their excesses...somewhere down the road.   And in the post-industrial age, the raison d' etres for places like Detroit and Chicago are similarly slim, so the diversified economy argument will weaken, and do so quickly.   Mayor Emanuel and his obsequiants in the media and in favored quarters of the “business community” seem to think that businesses are lining up to live here because they want to bask in the glow of the Mayor’s greatness.  Such is the through process of those who believe that government is everything.

Chicago is a great place.  Illinois is a great place.  I love them both.  But they are not as great as those of us who love them seem to think they are.   There are plenty of objectively nice(r) places to live and to do business in this country.   We are soon approaching a point at which people will not put up with the shenanigans of the pols just to be able to live here.

I'd take issue with just a couple things regarding Illinois in the Twible piece....

First, his chain of command in Illinois is wrong.  The real chain of command would have Mike Madigan at the top and Rahm Emanuel near the top.   The governor has nowhere near the power his office would indicate; this has been the case for a long time in Illinois.   In fact, the governor of this state, whomever he may be, only has power to the extent he can work with, and accommodate, the Democratic power base, which is located in Chicago and manifests itself in control of the legislature and the huge concentration of statewide votes in and around Chicago.  

This leads to my next point.   We have a strange breed of GOPer here in Illinois who, since s/he craves power above all else like all pols, plays a game of get-along, go-along.  (Come to think of it, perhaps our GOPers are not all that strange; most Republicans everywhere crave power above all else and hence continually play a game of get-along, go-along, but I digress.)  This has been the case since at least the '50s, when Governor Stratton played footsie with the first and real Mayor Daley.  So the Republicans in this state are far from blameless for our pension mess.  In fact, the mess had at least some  roots in the Thompson and Edgar administrations, who went along with juicy pension deals with the teachers and other public employee unions so that Messrs. Thompson and Edgar could bask in the glow of teachers' unions endorsements, or at least pats on the head.

But Twible’s major point is certainly correct; the Democratic establishment has controlled things in this state forever.  Mike Madigan has been Speaker of the House for the last thirty or so years, with a brief (I think four year) interregnum in the '90s.   Clearly, the Dems wear the jacket.  But to assume that things would get, or be, much better if the GOP took power is delusional and naive.  Even if they had the guts to attack this problem, rather than attempt to curry the favor of the public employees' unions in order to secure their newfound positions of power, we are probably too far gone to fix this mess.

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics. 

THE SEATTLE FIRE: A CHINK IN TESLA’S ARMOR?

10/3/13

News of a Tesla Model S’s catching fire near Seattle after being struck by roadside debris, and the inevitable accompanying YouTube video thereof, has helped send Tesla shares (TSLA) down more than $20 from their all time high close of $193.00 on September 30.  The company is looking into the incident (I’ll bet it is!) and, so far, has emphasized that the fire was caused by road debris, not spontaneous combustion, and that no one was hurt.  The design of the car, the company further points out, prevented the fire from spreading as quickly as it otherwise would, helping to protect the driver of the vehicle.  

This fire may be much ado about very little.   Cars burn up all the time.  And every conventional car contains a fuel tank filled with, in most cases, gasoline, which is about as flammable a substance as one can imagine.  But the Tesla fire has caught people’s attention for several reasons.  First, this is new technology.  People are leery of new technology and new technology, almost be definition, holds more unknowns than older, more conventional technology.  Second, there are plenty of people gunning for Tesla for whatever reason…they are scoffers at the new technology and/or they are short Tesla stock.   Third, and more disconcerting, is that firefighters reported that they needed several attempts to extinguish the blaze because the car kept reigniting.   Marry this to the fear of technology, and one can see why people, or at least investors, are jittery.

Regular readers know that I am no big fan of Tesla, or, more properly, of TSLA stock.  See

IF YOU WANT TO GET PEOPLE CHARGED UP, WRITE ABOUT TESLA (TSLA)

5/30/13

and

TESLA (TSLA):  THE GREENIES ARE CHARGED UP, BUT…

5/23/13

Despite my antipathy toward the stock, I am not at all gloating, as doubtless some are, about the fire.  This is serious business and people could have been hurt.  Further, the technology behind Tesla is both intriguing and promising; it is good obviously for the company and its shareholders but also for the entire car industry and for the nation as a whole.  I am thus pulling for Elon Musk and his cohorts, as we all should be.

From a purely financial standpoint, having been burned by betting against Tesla stock (I owned, and watched expire, puts on TSLA at $85, more than $100 below its peak price.  Sheer genius.  Fortunately, I wasn’t betting serious money on this proposition!), I am no longer short the stock or long puts on TSLA.  It’s too risky to take such positions, the financial equivalent, so far, of standing in front of an oncoming freight train.

However, the fire has reminded me of something I wrote back in that 5/23 piece…

Maybe a GM, Ford, Toyota, Nissan, Honda, or VW can make better use of the TSLA’s technology than can TSLA, but does anybody really think TSLA knows something these guys don’t?

It’s fashionable to bash Detroit, and maybe its Japanese and German equivalents, as a bunch of old line metal benders hopelessly out of touch with the newest trends in technology, luddites mired in the miasma of another age of belching dinosaurs and antiquated ideas.   The contrast, in this view, with the forward, modern, next century thinking of the likes of Elon Musk could not be more stark.   Such thinking, however, is flat out wrong.  There are a lot of very smart people working in Detroit specifically and in the global auto industry in general.  It is therefore very difficult to believe that Mr. Musk, as bright as he is, has figured out something that his competitors haven’t. 

Simply put, the technology behind the Model S and its upcoming corporate brethren cannot be as flawless and perfect as its most ardent adherents believe it to be or the guys in Detroit, Hiroshima, Munich, Wolfsburg, and Toyota City would have come up with it, and put it on the market, by now.  There has to be a reason that Detroit and its competitors have not embraced this technology, and it isn’t obtuseness on their part.

Maybe the fire will lead us to that fly in the ointment.  Or maybe it’s something as simple as the Tesla’s being, for the foreseeable future, a car for the relative handful of people who can afford to spend $70,000 on a third car; hence the enthusiasm for it on Wall Street and in Silicon Valley.  Or maybe everything people say about the car is true; it is the modern day equivalent of the perpetual motion, or perhaps the time, machine.  But the fire outside Seattle has people thinking…and looking for possible chinks in Tesla’s armor.

At any rate, even if the car is what its most ardent acolytes believe it to be, TSLA stock is still expensive.  However, betting against it has been a chastening experience for those of us who have tried it.   So I can’t be accused of talking my position…at least not at this juncture.  If I can find an attractive entry point, I might place a prudent bet against TSLA again, if such a thing becomes possible.

TSLA:              $170.64

THE CAR SALES BUBBLE: “JUST TELL ME WHAT YOU WANT AND THEN SIGN THAT LINE AND I’LL HAVE IT BROUGHT DOWN TO YOU IN A HOUR’S TIME”

5/23/13

I’ve said it before (CAR LOANS:   TAKE MY MONEY…PLEASE!,  5/6/13 and  IMPORTED FROM DETROIT:   MARCHIONNE BETTER BE AS FAST AS A CHRYSLER 300 SRT8, 4/25/13), this car market scares me, even as we approach a 15 mm unit year for U.S. light vehicle sales.

What I have long referred to as Ben Bernanke’s War on the Elderly, but what most people call QE III or “unconventional” monetary loosening, has created plenty of bubbles, and not all of those bubbles are in financial assets like treasuries, corporate bonds, and dividend paying stocks.   One of the most dangerous, though not quite as salient, bubbles is car sales; nothing moves cars like cheap financing.   With the economy still just dragging along, and the prices of cars continuing to go up, especially as incentives are being reduced, affordability is only being sustained, and enhanced, through cheap credit.  It is this artificial affordability that is driving car sales.  All this talk of pent-up demand has some justification; the fleet is indeed old.   But, as I said in my aforementioned 4/25/13 post, just about all of that pent-up demand would stay pent-up if money weren’t so cheap; cars last, and run like new, a long, long time nowadays; yours truly knows this from personal experience.  And while all the latest geegaws are nifty, impressive, and nearly awe-inspiring (See my already seminal 5/20/13 piece, I TEST DROVE A KIA TODAY…), people can, and would, do without them if cheap money didn’t make them even more tantalizing.

With the “domestic” car companies ramping up production by canceling the longstanding Detroit tradition of summer shut-downs, it’s hard to be sanguine about the car business.  At some point, credit has to get more expensive and/or less available.  Even without Fed action, long rates are up; the ten year treasury is up 35 basis points (“bps”) since the end of last month and the five year, a more relevant benchmark for car loans, is up 22 bps.  Without all this cheap credit floating around, what look like tight inventories might suddenly become fulsome as people decide that what was a necessity at one monthly payment is a luxury at an even slightly higher payment.

This post concerns the state of an industry more than the relative cheapness or richness of the “domestic” car company stocks; I don’t follow the car company stocks like I used to, though I am considering starting to do so again quickly.   That having been said, most of the experts are telling us that Ford (F) and General Motors (GM), despite their rather stunning increases of the last few months, are still very cheap with forward price/earnings ratios (“P/E”s) of about 10 times while prospects in the black hole of Europe improve, Chinese sales remain strong, and there is so much upside in the United States.   While 10 times forward earnings certainly look attractive, especially relative to an S&P 500 P/E roughly 50% higher, I might want to challenge at least two, and probably all, of the assumptions behind the earnings projections that form the denominator of that P/E.  

As long as Ben Bernanke’s punch bowl, composed largely of the sweat and the blood of those (especially the elderly) who’ve been prudent, or, in the Bernanke bizarro world, foolish, enough to save, remains full, car sales in the United States should remain strong, or at least respectable.   But as soon as Obsequious Ben takes away the punch bowl, or the markets get wise to him, car sales have nowhere to go but down.

While I’ll leave, for now, ruminations on the attractiveness of GM and F to the self-proclaimed experts, I’m not enthusiastic about investing in an industry that is flying high on the economic and financial equivalent of crack cocaine.  You can see how this argument could easily be extended to the entire stock market, but, again, calling markets is, as I have said so many times in the past, nearly impossible.  

GM                  $32.84

F                      $14.86

S&P 500:         1,652

Dow:                15,308

CHRYSLER’S QUARTER: HOW DO YOU SAY “POOR MOUTH” IN ITALIAN?

5/1/13

Chrysler announced on Monday that its first quarter profits dropped 65% on a year over year basis.   Chrysler, and Fiat, CEO Sergio Marchionne attributed the quarter’s troubles to the extensive down time and retooling costs necessary to revitalize the Chrysler product line.   (See my 1/31/13 post, CHRYSLER’S PROBLEM:  IT’S (MOST OF) THE PRODUCT, STUPID!)

More instructive for those of us who have been following Fiat’s desire to buy the 41.5% of Chrysler it doesn’t already own from the UAW Retiree Health Care Trust (“Trust”) (See my 4/25/13 post,  IMPORTED FROM DETROIT:   MARCHIONNE BETTER BE AS FAST AS A CHRYSLER 300 SRT8) is the spin Mr. Marchionne put on the quarter and on the heavy burden that upgrading Chrysler’s not ready for prime time product line has placed on the company.  Note some of his comments on the quarter:

--“not so glorious”

--“It wasn’t painless.   It should not have caused the disruption that it did, but it has.”

--“We need to get everything right between now and (year end, if Chrysler is to hit its full year profit target of $2.2 billion.)  There is not a guy in this house that thinks this is going to be a walk in the park.”

--“The amount of investment we’ve made in some of this industrial infrastructure is unusual for any car maker.   We’re redoing body shops and paint shops all over the place.”

This could simply be a case of Mr. Marchionne displaying some of his characteristic  candor.   However, given that he is trying to buy from the Trust the 41.5% of Chrysler that Fiat doesn’t own, and that he would like to do so, naturally, as cheaply as possible (Again, see my very instructive, nearly instantly seminal 4/25 piece.), it sounds like Mr. Marchionne is talking his position; i.e., short 41.5% of Chrysler.

On another, only ancillarily related note, I recently requested and received the brochure for the Chrysler 300, the car that yours truly has long lusted after but will probably never own due to its lack of a manual transmission.   The brochure is possibly the coolest car brochure I have ever seen and, believe me, I have seen plenty of such brochures over the years.   The faint, unlabelled map of Detroit on one cover and New York on the other, the great shots of the cities of Detroit and New York inside, and the car itself made reading the piece a genuine treat.   You might want to check it out.  

This brochure goes hand in hand with Chrysler’s, for the most part, terrific advertising and marketing campaigns for most of its products; see my 2/7/11 post on the Insightful Pontificator entitled “THIS ISN’T NEW YORK CITY, OR THE SECOND CITY, OR SIN CITY, AND WE’RE CERTAINLY NO ONE’S EMERALD CITY”.   Further, if every Chrysler product were as competitive (terrific, really) as the Chrysler 300, Mr. Marchionne’s only problem would be the astronomical price he would have to pay the Trust for the piece of the Chrysler action Fiat doesn’t already own.