490 More On Chrysler
Chrysler is the soap opera of the car business. It's my favorite drama. Those of us in the busness press have been writing its obituary since 1925, the year it was founded, the year Buick executive Walter Chrysler decided there was a market for a new car not built by GM or Ford. The automotive press has been writing this company's obituary for more than 70 years. Maybe they've turned up right this time.
The company's owner, Cerberus Capital surely bit off more than it can chew when it bought 80% of Daimler's 100% interest. Now, the Cerbies want their cake and to eat it, too. they want the government to give it money in return for making a bunch of mediocre cars that no one wants to buy. Thousands of jobs are at stake. So are two venerable brands, Dodge and Chrysler. You know you love the Chrysler 300 -- not the current model, but the one from the 1950s. You know you want the Plymouth Duster and the New Yorker and the Imperial. Or the mini van. Or the Sebring. Or the Viper.
Earlier this week came word that the company would halt all US production for a month. Stopping some or all of the lines at this time of year is fairly common in the car biz. Usually it's a week or ten days. A month is rare if not unique. At the same time, Ford announced a shutdown, and GM stopped construction on a new factory for the Chevy Volt, a car that -- if they ever really make it -- could put them into the black in less than a year. And (leak, leak,) talks may have resumed with Chrysler on a merger or partial merger of some kind.
Used to be Chrysler could pull a rabbit out of a hat. A new model that left car freaks tongues hanging out. But the previous majority owner (and current minority owner,) Daimler cut off that avenue. Development money? Foggettaboudit.
When a financial outfit like Ceberus takes over a company in an industry of which it has limited knowledge and experience, the first thing they tend to do is lard up the executive suite with marquee name officials who face steep learning curves with widely varying abilities to steer. Enter Bob Nardelli, who made a good name for himself at General Electric and then erased a good part of it as he went to and then golden-parachuted from The Home Depot. What, there were no car guys at Chrysler who knew how to build a set of wheels people wanted to buy?
Today's Chrysler is living in the world of "practically irrelevant." And it wasn't the UAW that put it there. Or the potential buyers of cars and trucks.
--Portions of today's blog were sponsored by Madoff Financial Services. Reminding you that we've Mad(e) Off with your finances. Each office independently owned and operated and for an office near you, call 1800- MY PONZI.
--Note: the above 800 number does not actually work from either the 814 or 516 area codes. But who knows? It may work from where you are.
I'm Wes Richards. My opinions are my own, but you're welcome to them.(sm)