On one hand, the number should not surprise us.
When the bottom fell out of the auto industry late last year, we all knew that Chrysler was losing gobs of money. Heck, last December on Capitol Hill Chrysler CEO Bob Nardelli said that his company was burning through a billion dollars of capital a month. That said, when you see Chrysler lost $16.8 Billion last year, you have to stop and ponder the enormity of that loss.
Let's break it down to numbers that are equally as shocking:
* Full year $16.8 Billion
* Each month $1.4 Billion
* Each day $46 Million
* Each hour $1.9 Million
* Each minute $31,900
Those numbers are the reason many have been critical of the auto bailouts. They have said for months that the benefits of pumping billions into a company (companies when you factor in GM) is a waste of money. They've said for months that we'd have been better served if we had simply let Chrysler tumble into bankruptcy court last December. Back then I argued that letting the auto makers collapse would be running the risk of blowing a hole in the U.S. manufacturing base. The fear being that a couple of huge bankruptcies would cause auto suppliers and manufacturing firms to collapse.
Now, as we see Chrysler knee deep in a multi-billion dollar bankruptcy, I'm often asked by people if I still think letting the auto makers go into bankruptcy last fall would have been a mistake.
My answer hasn't changed.
Yes, it would have been a mistake. The current Chapter 11 filing is more of a "controlled skid" that should limit the impact of the bankruptcy on other companies. Last fall, Washington and Detroit were not prepared for a bankruptcy and a Chapter 11 back then would have been disastrous.
By the way, Chrysler is cutting the red ink, with the losses this year expected to total $4.7 Billion. In court documents, the company projects to ultimately turn a profit in 2013.
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