A major part of the "older" (read: broken) business model is unions.

 

I think chrysler's biggest problem is in the way they produce their vehicles. Instead of having the dealerships order cars and trucks from the factories, chrysler just keeps producing vehicles whether the dealers are ordering them or not, so what you end up with is a stock pile of cars losing value.

 

exactly... As beneficial as the unions are to the work force, they have become as harmful to the corporation in open competition.

 

And newer more innovative business models have become very profitable (southwest). Everyone heard of JetBlue? Jetblue would have made a huge dent in the market (bigger than now) if the larger carriers weren't aided by the government.

You're forgetting some major points here. SW gambled big time via hedge fuel contracts. They won this time which has saved them from the catastrophic fuel charges the legacy carriers are currently experiencing. As for JetBlue? Have you checked their fundamentals lately? I bet you'd be floored if you did.
Paste this below and check out their chart. Anyhting but great.
BigCharts - QuickCharts

Also the legacy carriers travel overseas where the monies are now. SW does NOT. And SW has MAJOR labor unrest issues that will become MORE evident to their bottom line in the near future. SW's business model you referred to ONLY worked because the CEO gambled on fuel hedges as I stated. That's the ONLY reason why they make the financial news. It is NOT because of their so called business model. They do NOT fly overseas and this will come back to haunt them. It's already started sir.

 

Not to bring this thread off topic so bad as not to return to chrysler... but I was only refering to Jetblue's approach to its passenger service in-plane. As I recall, I think they were the only airline to have a good profit during post 9/11 days. They are plagued by rising fuel costs like all the other carriers, except for southwest's gamble (as you stated).

From what I understand, the legacy carriers, as you called them, made their best profits on cargo carrying domestically, using the wheel and spoke model. They were only able to break even on passenger service, perhaps hence the airfare wars pre 9/11? I'm kinda speculating here without a lot of research. Jetblue made a profit from passenger service. I think that is the important distinction here. Its a different approach to the industry.

Back to Chrysler... i don't know if there is anything out there that could possibly rise to fill a market void where chrysler was. Can anyone speculate on this? If there is, is it really fair for an unprofitable company be bailed out by the us gov't to repeat the same cycle every 20-30 years? Didn't chrysler go through this in the 70's? the chrysler corporation loan guarantee act or something? All I'm saying is imagine if that never happened. Perhaps the asian invaison would've spurred quality advances in domestic auto makers a lot sooner then it seems to have played out. Perhaps investors would've lost confidence in all us auto makers and they all went under. Argument kinda goes both ways.

 

+1 I agree totally. A good company that treats it's employees fair, needs no union.

Toyota will not even buy from a union supplier because they won't risk not receiving needed parts from a supplier that is on strike.

 

Does the include the UAW plant that builds the Toyota Corolla Matrix?

 

It is called the Matrix, not Corolla Matrix. That is a joint venture with GM though.

 

Don't count Chrysler out yet. Chrysler says it earned $1.1 billion in first half of 2008

 

I don't see how when they are selling there trucks at dealerships for 50% off MSRP.

 

Thats how much they made without taking into account all the debts they need to pay off though is it not?

 

Because of huge cutbacks and restructuring chrysler has been doing. I believe they actually did/going to do a complete shutdown for a week to help with restructuring. Plus, it really doesn't cost all that much to make these vehicles, I'd wouldn't be surprised if they charged almost triple would it costs to make them

 

Doesn't really matter what their dealers sell them for. They are all independent dealers.

What matters is how many vehicles they sell to their dealers and other direct customers (rental agencies, etc)

 

That's why Toyota builds the best vehicles and is the most profitable of any auto maker. Unions need to go for the US auto industry to succeed.

 

"That's why Toyota builds the best vehicles " ......in your opinion....