No big sellers in sight to save troubled Chrysler

Discussion in 'OFF-Topic / Misc.' started by Lucky13, Nov 1, 2008.

  1. Lucky13

    Lucky13 Forum Mascot

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    DETROIT – In crises past, Chrysler has somehow managed to stamp out a blockbuster hit vehicle to pull itself away from the cliff's edge.

    But as it faces a possible sale to another automaker and what may be the most serious problems in its 83-year history, industry analysts say there's nothing in the current product portfolio that looks like a savior.

    Chrysler's U.S. sales are down 25 percent through September, the worst decline of any major automaker. Losses are mounting: well over $1 billion for the first half of the year. Things are so bad that Chrysler LLC wants to shed a quarter of its salaried work force, and its owner, Cerberus Capital Management LP, is talking with General Motors Corp. and others about a sale.

    Of Chrysler's 26 models on sale in both 2007 and 2008, only four have sold more this year than last, and three of those are small-volume niche vehicles such as the Dodge Viper. The company's market share has dwindled from 16.2 percent in 1996 to 11 percent this year, according to Ward's AutoInfoBank.

    Analysts say there are no cutting-edge designs or potential big sellers in sight to rescue the maker of the Chrysler, Dodge and Jeep brands.

    The smallest of Detroit's three automakers, once-brash Chrysler took risks and gained big rewards for vehicles like the 300 full-size sedan in 2005. The company invented the minivan when it introduced the Plymouth Voyager and Dodge Caravan in 1984. The Plymouth Reliant and Dodge Aries "K-car" sedans of 1982 helped earn the money to repay $1.5 billion in government-guaranteed loans that saved Chrysler from going under in 1980.

    "If Chrysler has another hit on the way, I am unaware of it," said David Lewis, professor emeritus at the University of Michigan, who followed the auto industry and taught business history for 43 years until retiring earlier this year. "Oh, for the days when the minivan was an instant homerun, and Chrysler owned that highly profitable market segment."

    With little in its product pipeline, a chilly economy and the worst U.S. auto sales slump in 15 years, analysts say Chrysler may not make it on its own, and that's why Cerberus is shopping the company to GM and others. Chrysler also has a lineup tilted toward trucks and sport utility vehicles when customers are buying mainly fuel-efficient cars.

    "In many ways this really looks like the end of the road for Chrysler in the way that we know it," said Aaron Bragman, an auto analyst with the consulting company IHS Global Insight. "They are going to face a change in ownership, that is a certainty. From what we hear, product development is on hold because of the uncertainty."

    Chrysler's lackluster products, said Bragman, can be traced to the nine years it was owned by Germany's Daimler, which approved chintzy interiors and cars with more noise and vibration than the competition.

    "The truth is Daimler did them no favors," said Jim Hall, managing director of 2953 Analytics of Birmingham, Mich. "They approved products that previous Chrysler management wouldn't have approved if they were completely drunk and beaten crazy."

    Under Cerberus, which bought 80.1 percent of Chrysler from Daimler AG in August of last year, the Auburn Hills-based automaker has tried to improve its products. Its latest vehicles have far nicer interiors, especially the new version of the Ram pickup.

    But quality concerns still haunt Chrysler. Nearly two-thirds of its model lineup were below average in Consumer Reports' annual vehicle reliability rankings this year. The Chrysler Sebring sedan was the worst-rated car.

    Through the first nine months of this year, Chrysler sold 1.18 million vehicles in the U.S. — 395,304 less than the same period last year.

    Chrysler's leaders say they have made cuts to stem negative cash flow and have slashed factory production so the company isn't producing more vehicles than it sells. Despite the large losses, they say Chrysler is meeting its internal goals.

    The company is banking on the new Ram to pull it out of sales doldrums, but its release this fall coincided with one of the worst pickup markets in years. Chrysler also says it is making big strides on quality and plans to bring out seven new products in 2010, including a subcompact made by Nissan Motor Co.

    In September, Chrysler surprised the industry by showing off three electric vehicle prototypes and promising to put one in showrooms by 2010.

    Hall says there are good products coming, and that in a normal auto sales market, Chrysler could survive on its own. But now, like GM and Ford Motor Co., it's all about having enough money to survive until the economy recovers and auto sales are revived, he said.

    Bragman, however, has less faith.

    "I do not believe that it is a healthy company and everything's on track and all they simply need to do is wait it out," he said. "Healthy companies that are on track don't slash one-quarter of their white-collar work force."
     
  2. DerAdlerIstGelandet

    DerAdlerIstGelandet Der Crew Chief
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    As long as they keep making my Jeep Grand Cherokee long eneogh that I can buy a new one when I get to Alaska...
     
  3. wilbur1

    wilbur1 Active Member

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    Thats probably the first ones to go Chris the jeep and dodge :cry:
     
  4. mkloby

    mkloby Active Member

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    I had thought that Jeep was a profitable brand of Chrysler's, but I could be wrong. You can't spit on a base without hitting a Wrangler, CJ, or YJ.
     
  5. Thorlifter

    Thorlifter Well-Known Member

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    And the wifey and I were just talking about a Chrysler 300 today.
     
  6. Negative Creep

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    Having seen some of the garbage they sell over here, to be honest I'm not surprised. Was in a Dodge Caliber they other day, a new car with an interior that would've been crap in 1980
     
  7. Lucky13

    Lucky13 Forum Mascot

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    What they need is a new Virgil Exner and find some of that bad boy attitude from the 60's....
     
  8. Vassili Zaitzev

    Vassili Zaitzev Well-Known Member

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    Well, some of the cars they sold weren't that bad. My dad had a Chrysler town and country minivan. It ran like a charm for 275,000 miles before the transmission blew.
     
  9. Thorlifter

    Thorlifter Well-Known Member

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    Almost 300k miles? I guess he got his money's worth out of that one.
     
  10. DerAdlerIstGelandet

    DerAdlerIstGelandet Der Crew Chief
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    That is what I think as well. Every 2nd vehicle on the airfield here is a Jeep Grand Cherokee, Wrangler or Liberty.
     
  11. Messy1

    Messy1 Well-Known Member

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    My uncles got 2 or three minvans with well over 150k on them. My girlfreinds brother in law has a 90 something Grand Cherokee with well over 200K on it. Chrysler does make good cars. Look at craigslist for used minivans. there are literally dozens and dozens in a 50 mile radius of me, most with high miles.

    Caliber is a cheap, entry level car made to compete with Kia's, Ford Focus, Chevy Aveo's and Cobalts. Depending on the interior options, but they are all cheap entry level cars over here in the US. I know in the Calibers, you can get leather and upgraded interior options. None of the cars in the same price range are too fancy, but that's by design though. I am a HUGE Mopar fan, have had several old Mopars from the 60's up to the 80's. Does make me sad that Chrysler is hurting this bad, and being traded around like a red headed step child no one likes. (no offense intended to any red headed step children on this forum of course!)
     
  12. DerAdlerIstGelandet

    DerAdlerIstGelandet Der Crew Chief
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    I drive a 1995 Grand Cherokee Limited and she has 278000 miles (447,397 km), and she is still going strong! I still can not wait to buy a new one though.
     
  13. Vassili Zaitzev

    Vassili Zaitzev Well-Known Member

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    Yup, we took that thing everywhere, going up to Maine, Vermont, Pennsylvania, and Ohio.
     
  14. drgondog

    drgondog Well-Known Member

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    Pelosi is meeting with Big 3 today to talk about $25B bailout (just for GM)
     
  15. evangilder

    evangilder "Shooter"
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    This is getting ridiculous. I'm sorry, but we are fastly becoming a socialist country. If the business is failing, the government is bailing them out? That is NOT capitalism, nor a free market economy. The reason these businesses are failing is because of poor quality and/or poor leadership. And somehow, that is now being rewarded. If the government is going to reward bad businesses by bailing them out, it won't take long before this country becomes a third world toilet.

    It is sad to see the big three fail, but how much more money is the government going give away? I sure would like to get a boost to my business, but I believe in doing it the old fashioned way, earning it with sound business decisions and quality product.
     
  16. The Basket

    The Basket Well-Known Member

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    I think that a government must do something if a large company employing thousands of people goes bust.

    My girlffriends father sells Jeeps and Dodges here in the UK.

    He had a Dodge Avenger as a company car for a few weeks. It wouldn't start twice. So he wasn't impressed.
     
  17. evangilder

    evangilder "Shooter"
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    They already do something, it's called unemployment. I have worked for companies that have gone bust. Yes, it sucks, but you get another job and move on. Bailing out failing companies, regardless of their size, bodes very badly for the US economy. There is a reason that the companies are failing. Handing them money to continue their bad business practices is the wrong thing to do. And I don't want MY money going into a losing proposition.

    There are already some serious problems with the AIG bailout and what those idiots are doing, including a very expensive trip for their top sales people. Rewarding your top sales people is fine, but spending well over $100,000 of the taxpayers money to reward your top sales people when the company is being bailed out by the federal government is bad business, plain and simple.

    If the government is bailing these companies out, they need to replace all top level management and toss the old ones out in the streets with no bonus. Would you reward a child for bad behavior?
     
  18. pbfoot

    pbfoot Active Member

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    I believe the quality issue is not an issue what is the difference between north American autos and Japanese is the cost of benefits. The largest expense in the GM<Ford and Chrysler is the pensions and such for the retirees . The big question is what happens to all the pensions for the workers if they go bust
     
  19. The Basket

    The Basket Well-Known Member

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    "What is good for General Motors is good for America."- Chairman and CEO, Charlie Wilson, 1955.
     
  20. evangilder

    evangilder "Shooter"
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    I don't agree about the costs of benefits. If that were true, then Toyota, Honda and others would not have opened manufacturing plants in the US.

    Charlie Wilson's quote was made 53 years ago. A lot has changed since then.
     
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