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On the Chrysler restructuring

by the webmaster of chryslertakeover [now defunct]

One year ago, the Chrysler "turn-around" plan was announced. The biggest headline-grabber was the news of 26,000 North-American job cuts, the result of closing several manufacturing plants and eliminating shifts at most of the remaining facilities.

Next, Chrysler informed its suppliers that they expected 5% price cuts within two months, and another 10% soon afterwards. (Of course, a few of these suppliers told Chrysler where they could stick their price cuts.)

Then the boys from Stuttgart revealed that Mitsubishi would soon be handling future small and mid-size vehicle development. Forty percent of problem-plagued, debt-ridden Mitsubishi was the latest Daimler purchase, and investors demanded that this square-peg be forced into the DaimlerChrysler empire in some manner, regardless of Mitsubishi's traditional lack of appeal in North America and their often worst-in-class vehicle quality.

In June, the Chrysler Group's established "value" brand, Plymouth, faded away. Any lost sales were to be picked-up by cheapened versions of Chrysler and Dodge brand vehicles [webmaster note: evidence indicates this did not happen]. Recently, DCX has allowed dealers to combine Chrysler and Dodge vehicles within one dealership, which will likely eliminate the need for Dodge passenger cars and allow dealers to use their old real estate to market competitive brands.

Several other vehicle models are either killed-off or placed on the endangered species list: Jeep Cherokee, Chrysler LHS, Chrysler Prowler, and Dodge vans. Chrysler's SUV-crossover entry is further delayed in an attempt to remove thousands of dollars from its expected retail price. The new LX sedans are delayed while engineers try to accommodate more Mercedes-Benz components. All of this adds up to no new products, until model year 2004.

In September of 2001, Chrysler's chief executive Dieter Zetsche, responding to Chrysler's ever-shrinking market share, declared, "I've said recently, again and again, I would like to get out of this lifeboat of the big three, because this is kind of a general characterization that overall is not very positive," and that "If Toyota becomes one of the big three, good luck and that's fine." While the company claims to have met its "turnaround" cost reduction goals, it admits that revenues have fallen short of targets.

Naturally, DCX lays blame on the September 11th terrorist attacks, without noting that the previous nine months have all shown similar downward sales and revenue trends. The bright spot amongst all this gloom is supposedly the announced production of Chrysler's Crossfire concept, an oddly styled 2-seater "image" coupe. While the company first hinted the vehicle would be produced at its Viper assembly plant in Detroit, MI, finalized plans call for the car to be built in Germany.

Chrysler marketing VP Jim Schroer told a captive audience in Auburn Hills that building the car in Germany, largely from Mercedes parts, would ensure its quality. Ironically, this was said during a sales and marketing presentation intended to boost employee "pride-in-product". In the opinion of many, the Crossfire is nothing more than an arrogant ego-booster, draining precious cash and resources from Chrysler's slow-selling mainstream products. Some Chrysler dealers, already tired of selling low-volume niche cars, don't even want the hassle associated with selling "a" Crossfire. In that same Jim Schroer pride-in-product meeting, we were told that the Chrysler Concorde was considered by less than 1% of large-car shoppers. The response has been a calculated, tacky "shock" ad campaign which resulting in the Concorde ad being pulled. Expect more of the same.

But at least they're trying. That's more than can be said for Chrysler's newest passenger-cars, the Sebring and Stratus twins, which have been off to a terrible sales start. One can only speculate that these very much-improved new sedans will be barely noticed by the buying public and allowed to become stale, while the real emphasis is placed on their Mitsubishi-based replacements. We'll likely see the same scenario for the small-car platform's Neon sedan.

I would ask, "Does any of this sound like a turnaround plan?" or is it simply ham-fisted cost cuts, which do not address a goal of increasing sales and revenue?

Chrysler has only recently begun to address its terrible advertising, and the new ads are still soft-sell gimmicks. In a previous era, Chrysler at least had the guts to compare its products one-on-one against whichever product was the current "gold standard." Hell, compare a Dodge Stratus to a Honda Accord, at least this way someone might know the Stratus existed!

In the past year, the Chrysler has not so much as re-styled a taillight in an effort to freshen its mainstream products. With a company that considers itself above special financing/rebates, doesn't care about market share, and does nothing to increase showroom traffic, is it any wonder that many Chrysler dealers resort to shady tactics just to earn a buck? Sad, but true! While the boards of directors at Ford and GM have recently given the boot to ineffective, incompetent management under shareholder pressure, DaimlerChrysler's slow moving board of management rewards failure and extends Jurgen Schrempp's contract! Germany's largest bank, along with the Kuwaiti oil sheiks that effectively own DCX, can sit pat and watch the whole thing fail. The only thing that will save Chrysler (and the jobs that go with it) will be actions from its employees.

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