Chrysler News From January through June 2001

• We invite you to use our news and rumors board!
• We are not part of DaimlerChrysler, owner of the Mopar trademark.
• Click for current news | Click for 1999 news | Click for 2000 news

June 19

Clarification - when we say the Neon and Sebring/Stratus sedans will be end-of-lifed or discontinued around 2004-05, we mean the Chrysler cars that currently go by those names will be ended, as most credible sources have reported. However, it is likely that the names will live on, moving to Mitsubishi-platformed vehicles. Whether these Mitsubishi/Chryslers have equal engineering input from both companies' engineers is an open question - as is the extent to which Chrysler engineers will be able to modify the Mitsubishi platforms.

The investment cut reported by Reuters (based on a Financial Times article), as we expected, was somewhat overstated. Daimler-Benz said that they may re-examine their investment in Chrysler but had no definite changes at this time. Continued losses at Freightliner, Mitsubishi, and Smart may be draining the conglomerate's cash supply.

Even as GM promises to increase fuel economy by 25 percent, it has taken a stand against fuel economy regulations. Meanwhile, Dick Cheney said that George Bush would not change 25 year old fuel economy standards, favoring instead increased drilling and cuts in air and water protection, along with a massive number of new coal, gas, and nuclear power plants.

Congressional investigators said that Ford's replacement tires may be failing more often than the Firestones which the company blamed for Ford Explorer tire failures.

June 18

Important note. Though Reuters reported an investment cut, Reuters has proven to be less than choosy about their reports in the past, and they may simply be passing along hearsay. Likewise, while more credible reports tell us that the Neon and Sebring sedan are going away, only Daimler-Benz knows what is in Chrysler's future. It is easy to speculate, and when we do, we sure come up with bad things in the future. On the other hand, it could be that Chrysler is trying to throw off the competition with a surprise comeback. (Given that suppliers are an integral part of the design process, it would be a real surprise if they could keep it secret that long).

According to Reuters, Daimler-Benz said that it may cut investments in Chrysler Group by 40 percent over five years. This is not unlikely given the fact that the company's cars are being phased out, with the small and mid-size vehicles (including convertible) being cancelled, the Jeep Grand Cherokee moved over to Mercedes, and the LH series becoming a Mercedes/Chrysler hybrid. Yesterday, we also noted that Chrysler may sell some of its parts units (big surprise there) to raise cash for Daimler-Benz's quest for global domination in the commercial truck market.

GM has delayed the launch of new "tall wagons" (car-based SUVs) and moved their branding from GMC, which is a truck-only brand, to the more appropriate Saturn and Buick. The new vehicles are now due in 2005.

June 17

Chrysler may sell some of its parts units to cut costs, according to Chief Operating Officer Wolfgang Bernhard.

Chrysler Group head Dieter Zetsche has been on the speaking trail lately, telling everyone that Chrysler is on track and performing well, despite terrible sales figures, the impending loss of two existing carlines (at a time when Korean automakers are adding lines), and the loss of a full marque. He said Chrysler was lucky to be able to rely on the resources of Daimler-Benz instead of having to run to the bank - conveniently forgetting the multi-billion dollar war chest, or the massive drain of cash from having to support Daimler-Benz's bloated operations and constant demands. A Car Connection article said that Chrysler quickly ate through their cash reserves, though in truth those reserves were spent by Daimler on stakes in Mitsubishi, Hyundai, and others - not to mention losses at Freightliner and Smart. Zetsche also said supplier relations were very good. [begin editorial] We are still waiting for concrete positive actions from Zetsche, rather than just job and car cuts. So far, Zetsche has, in his actions rather than his words, continued to evince a total lack of respect for Chrysler's past and present, an attitude which cannot help its future. So, unless he's got a lot of secret actions up his sleeve - which we doubt - the future of Chrysler remains as a re-badger of Mitsubishis and a supplier of Jeeps and trucks.

Boris wrote about our note on production of the Mitsubishi Galant at the Sterling Heights Chrysler plant, pointing out that having the coupe and sedan on the same platform would reduce confusion. He also noted that the next generation convertible would most likely also move to the Galant platform (which supports the Eclipse Spyder), since it would be the sole remaining Chrysler-designed mid-size car. The Sebring Convertible is currently the most popular convertible in the United States, but since Chrysler is planning to discontinue its most popular car (the Neon), this move would not be out of place.

Mitsubishi will be selling a new crossover vehicle, the Airtrek, starting on June 20 in Japan. The Aitrek is a car-based SUV with five seats and four wheel drive.

The Lincoln Blackwood will set a new standard for luxury SUV styling by maintaining a Lincoln look in both front and rear. Whether the world needs yet another luxury SUV is another question.

June 15

Toyota plans to boost output of hybrid-electric vehicles from 19,000 to 300,000 per year by 2005. The Estima minivan, just introduced, is one way they will increase hybrid production. The Estima, like the Dodge Contractor Special concept, will supply 1,500 watts of standard AC electricity via standard sockets so people can use ordinary appliances (such as laptops) in the car.

Ford news: a quarter of Canadian Ford dealers are reportedly losing money; a representative of the Congressional committee investigating Ford Explorer tire incidents said the automaker has not yet produced needed (and requested) documents.

June 14

DCX stockholders are reportedly upset by a DCX plan (upheld in a court case) which would provide stock options to 6,000 managers worldwide, ony about one third of which are part of Chrysler.

DCX is expanding its Smart minicar plant in France at a cost of $85 million. Smart has yet to make money. As DCX cuts jobs at Freightliner, in addition, the company is planning a new commercial truck joint venture with a Taiwan company.

"Mr. Source" reports that the Mexico-only Ramcharger full-size SUV, based on the Dodge 1500, sold poorly, due to a small market (most buyers go for the Suburban) and quality problems.

Detroit News today had articles on Pontiac's redecoration of the Aztec, Ford's quiet settlement of crashing-Explorer cases, Ford's 10 percent production cut, and GM's investment in fuel cells. (The Aztek will lose some plastic ribs and change its paint scheme, as well as gain larger wheels). Pontiac, which has seen a precipitous drop in sales of its heavily-plastic-clad cars, will launch a new small, all wheel drive sportwagon (think Impreza).

June 12

Chrysler will add side airbags to its options list for all 2002 sport-utility vehicles and full-size pickups, except the removable-door Wrangler. As previously reported, tire pressure monitors will also be optional, on the 2002 Grand Cherokee, minivans, 300M, and Concorde Limited. In the minivans, low pressure will activate a warning light; in other vehicles, there will be an actual tire pressure readout on the instrument panel, one-upping GM, which has tire pressure monitors on many vehicles already (often as standard equipment). The monitors will be mandatory by 2004.

Layoffs are expected at money-losing DCX subsidiary (via acquisition) Freightliner, while DCX continues to extend its commercial truck empire with a reported joint venture in China.

Daewoo is still on track to be acquired by GM.

Toyota will be selling a new hybrid-electric car using an existing car and 3.0 liter engine. Toyota created the first mass-produced hybrid-electric car, the Prius, which is larger than a Corolla but gets better gas mileage - about 40 mpg in mixed use, about 55 mpg in city traffic. 60,000 Priuses have been sold, leading Toyota to create the first hybrid minivan (the Estia) - which overcomes one major obstacle to minivan sales outside North America, namely high gasoline prices. The new hybrid will not be sold in the US, but we'd expect the Prius to be updated within two years with some of the new powertrain's innovations.

June 7

Chrysler has confirmed the release of a flame package for the PT Cruiser. It will be a "ghost" kit, with the flames actually a similar color as the paint. Made of vinyl, the flames will be covered by the warranty, but the cost is $495 (thanks, Leon Shultz).

Probably due to the Ford Explorer tire issues, the federal government passed a law last year requiring these systems on all new cars sold in the US by 2003. GM has for some time offered tire pressure monitors on many vehicles. Chrysler will start using tire pressure monitors on 2002 models, using sensors built into the wheels to alert the driver if the pressure is too low or too high. The Prowler already used such a system.

Bill Cawthon wrote:

Confirmed: Mr. Source's report that Chrysler will start offering roof-mounted side impact air bags on its full-size trucks and most SUVs except the Jeep Wrangler. Tire pressure monitoring systems will also be offered on some SUVs and passenger cars. The Jeep Grand Cherokee, Chrysler and Dodge minivans, Chrysler 300 and Concorde Limited were specifically mentioned.

DaimlerChrysler will probably not axe quite as many Jeep workers as originally announced. The number is likely to be closer to 1,700 than 2,000 as reported earlier. About 600 are contract jobs and another 650 employees will be offered early retirement. Toledo's mayor is still bent because the remaining employment rolls will be far less than the 4,900 jobs DCAG promised when the city gave them one of the nation's fattest corporate bribe packages a few years back. While he can't do anything about the free land, he is threatening to pull some of the tax breaks that were in the package. [Note that some of these jobs are being lost as Cherokee production is eliminated, and others as Wrangler volume is cut back.]

On the questionable options front, Chrysler will begin offering a vinyl flame package for the PT Cruiser. Four color schemes are available and they will be installed after the car exits the paint shop in Toluca, Mexico. One supposes that as they peel off, they could be used to develop masks for a real flame paint job. Chrysler will also offer a dealer-installed DVD system for their minivans. The system will also allow gaming systems to be connected to the screen. (I know everyone thinks this is "reeeelly cooool" but, as far as I am concerned, it's one more damn thing for the kids to fight over).

Good-bye Cadillac Eldorado and Lincoln Continental. The brands that adorned such beauties as the 1956 Continental Mark II and such excesses as the land-barge Eldos of the 1970s are being put out to pasture. Next year will be the last for both models. The slow-selling Eldorado I can understand, but the Continental actually didn't do that badly. In May, 1,781 Continentals were sold, compared to 614 Eldorados.

Rumors of Jac Nasser's impending demise continue to flourish despite the usual canned denials. There are lots of questions about whether firing Nasser would do anything for Ford's current financial and product problems and there is no question that Nasser is a survivor who could teach those wannabee wimps in the Outback a thing or two. If Edsel and Billy do give Jac his walking papers, rumors say to look for him to re-surface at a German-based competitor.

They forgot the beer and brats: At their annual meeting, VW shareholders gave the board a good scolding about stock price and performance and some institutional shareholders demaded the company restructure itself. However VW shareholders (including the powerful state of Lower Saxony) acted like their counterparts at DCAG and voted overwhelmingly to let the company keep on doing what it has been doing all along. VW is make a nice profit on their operations and has rebuilt itself into the most popular European brand in America with the best sales in over two decades.

Two sources now say that there will be a flame option for the PT Cruiser. (If Chrysler was Ford, we'd think that meant a fuel leak!) And, as long as we're reporting rumors, "D" wrote that the next Neon will be more Mitsubishi-influenced [it is based on the Lancer] while the midsize sedans [based on the Galant] will be much more Chrysler."

June 6

GM is even closer to buying Daewoo.

June 5

Josh pointed out some issues with our rant, so we've removed it. Okay, the noise from the blowers and mowers was getting to us, and we didn't think it through. On the other hand...we'd still LOVE to see those power mowers, weedwackers, blowers, etc. quieted down and made more efficient. We wonder why emissions and noise controls only seem to be applied to the auto industry...

Later this week, we will be updating our "up and coming" models section to reflect recent changes.

News.

Ford is rumored to be restructuring its management team, which so far has generally been very good at generating sales and profits. Exceptionally-successful Ford Europe head Nick Scheele is being recalled to Dearborn. In other Ford news, Continental will be supplying replacement tires for Firestone-equipped Explorers. We're looking forward to seeing whether their tires also self-destruct - or whether Ford has changed the recommended tire pressure to avoid the problem from recurring.

Chrysler has enhanced its supplier communication system with a new feature called FastCar which will help it to inform suppliers more quickly of changes in needs - and to learn more quickly of problems in fulfilling those needs.

Those who consider the takeover to be a rational business decision may be unsettled to learn that, according to insiders, the crack Chrysler IT group is being taken over by the larger, seemingly far less efficient and innovative Mercedes team, with the job losses at Chrysler that one would expect - though Chrysler's team built one of the most advanced communication, design, and production systems in the industry with far less resources than Mercedes.

June 4

Detroit News reported that Chrysler has pushed back the CS until 2003, when it will be a true latecomer to the tall wagon segment. Other product introductions will also be slowed. A major redesign on the PT Cruiser is being delayed, most likely until 2006 - possibly a good thing. Ford is likely to be the leader now in delaying revisions, with a projected Wrangler competitor possibly cancelled, and many renovations - including the Explorer, Ranger, and Super Duty F-series - delayed by a matter of years. Editorial note - we find it amazing that these companies believe they can save their way to success, given the fact that Toyota, Honda, Nissan, and Kia show no signs of letting up. The CS/Citadel, in particular, is just about ready to go, and delaying its introduction only makes it seem less likely to succeed.

Tests of large pickups resulted in a big win for the Toyota Tacoma, whose dummy-driver had the least injuries of the Big Four pickups. The Chevrolet Silverado also did well in the tests - better than the Dodge Ram. The Ford F-150 dummy-driver had the most serious injuries.

"Voyager_Express" noted that Motor Trend wrote about production of the Mitsubishi Galant, which will be made at the Sterling Heights Chrysler plant starting in 2005 or 2006. The Galant will also spawn Dodge and Chrysler versions which will replace the current Stratus and Sebring sedans. At least it will be less confusing, since the coupe and sedan will actually share some parts. This presumably also spells the death of the Sebring convertible in 2005 or so, since it will be on a no-longer-used platform.

Giving Chrysler competition for their base minivans, where they still dominate, will be the Kia Sedona, which comes standard with a 195 horsepower V6 and pretty much all the options of the Town and Country EX - for under $20,000 - with a ten year warranty.

Sales figures...(courtesy Bill Cawthon)

The numbers are in. As genciu noted, Chrysler's numbers were up. And the smaller inventory is really good news.

When all is said and done, it was a very good May for most imports, okay for Chrysler and GM, not so good news for Ford.

Overall, Dodge Ram and Caravan were the best Chrysler performers, coming in at #9 and #12. Jeep's Grand Cherokee took a tumble in the the ranks, dropping out of the top 20 to #23, right behind the Ford Expedition. Dodge car sales were up a bit, but the Volkswagen Jetta outsold every DaimlerChrysler passenger car as did the Nissan Altima. The Dodge Neon had the best showing, followed by the Intrepid. Sibling Mercedes also had a good month, coming in third in the luxury segment behind Lexus and BMW. Only 556 sales separated the top three and Lexus beat the Bimmers by just 50 sales.

[Editorial comment - if Chrysler can't beat the Altima, something is very wrong in Auburn Hills!]

In total sales, with all the major players and 1,622,670 sales counted, Chrysler came up with a 12.79 percent market share. GM's share has declined to 27.46 percent, Ford is at 21.83 percent. Toyota was the leading import with 10.30 percent of the market.

Import passenger cars did indeed outsell domestic brands, this month by a wider margin than last month with a 51.69 percent share.

Not a boost for Chrysler, but it looks like more people are discovering the new Chevrolet and GMC pickups are as good as everyone has been saying. Ford's F-150 is still the overall best-selling vehicle, but the Silverado only 5,628 trucks behind, thanks to a major jump in sales. That's the narrowest gap I've seen in the three years I've been tracking these sales.

Dodge Dakota was just behind the full-size Chevy Suburban. Durango was right behind the PT Cruiser. Here are Chrysler's best-sellers (all broke the 10,000 unit sales mark in May):

Dodge Ram pickup 28,256 (#9) Dodge Caravan 25,275 (#12) Jeep Grand Cherokee 15,503 (#23) Dodge Dakota 14,584 (#28) Dodge Neon 13,002 (#33) Chrysler Town & Country 12,822 (#35) Dodge Intrepid 12,712 (#36) Chrysler PT Cruiser 10,323 (#47) Dodge Durango 10,250 (#48)

Incidentally, the Chrysler Voyager came in at #99 with 4,232 sales. There were no Plymouth Voyager sales.

...More:

High gasoline prices apparently haven't slowed the American appetite for truck-based land barges. Four of the top 20 vehicles in May sales were full-size pickups or SUVs and the Ford Expedition came in at #22. At the other end of the economy spectrum, sales of the Toyota Prius and Honda Insight hybrids have become almost noticeable. If you add them together, they just beat the Cadillac Seville.

GM's sales were up about one percent while Chrysler's recovered a bit from a disastrous April. Over 50,000 orders have been received for the new Jeep Liberty and Chrysler's unsold inventory is actually smaller than it was last May when they were going gangbusters. Ford, on the other hand, dropped more than ten percent. Over in Import-Land, most everyone was happy as a clam. Toyota reported the best month they have ever had in 44 years in the American market. Honda set a new May sales record, as did their luxury division, Acura. May records were also set by Mitsubishi, Hyundai, Volvo and others.

The imports now have about a 51.7 percent share of the total passenger car market.... Hot on Chrysler's heels is Toyota with 10.3 percent. Toyota's full-size trucks and GM-like range of SUVs are making a major difference. (I drop the commercial vehicles out of the GM and Ford tallies. Nobody else is adding cutaways, commercial chassis and medium trucks to their numbers and I want to keep the playing field even.)

When I re-grouped the sales by brand ownership instead of foreign or domestic (American Ford owns Jaguar, Land Rover and Volvo; American GM owns Saab; German DaimlerChrysler owns Chrysler, etc.), I discovered something very interesting. Even though Ford and GM are the only truly American-owned companies and derive the majority of their own sales from trucks, they controlled a bare majority of all passenger car sales in May. Incidentally, this doesn't include partial controls, like GM and Suzuki, Ford and Mazda or DaimlerChrysler and Mitsubishi. Just ownership.

Chrysler's bright spot was the minivan market where they maintained their sales lead. The Dodge Ram pickup and Caravan were the only DaimlerChrysler products to make the top 20 in May. Neon and Intrepid were the top performers on the car side. Jeep's Grand Cherokee took a major hit and dropped out of the top 20 altogether.

It's still true that more cars are sold than light trucks (including SUVs and minivans). The margin is slim, just over 51.35 percent, but it's worth noting that this is entirely due to the imports. Chrysler, Ford and GM get the majority of their sales from trucks.

Ted D. commented in the news forum: "The Neon is [Chrysler's] fifth best selling vehicle, their best selling passenger car, yet they are planning on killing it's six-year old brand and look, to be replaced with an inferior."

June 2

[Modified 6/6 to fix errors] MTS wrote that the new 5.7 liter Hemi engine will be out in late fall [most believe this engine will be sold first in the 2003 Ram 2500, due in 2002]. The engine, revolutionary in some of its retro design elements, reportedly had "a few block problems and compression leaks." Other sources suggested that getting the new engine's emissions down was a major hurdle. That engine was needed to bring Chrysler's truck powerplant line to date.

June 1

Genciu wrote: Sales are up 7% from April, but compared to May of last year, they are down 8%. Dealers have orders for more than 50,000 Liberty models. Town & Country is up 149% from last year [when it competed with Grand Voyager]. Sebring coupe is up 56%, convertible +21%, Intrepid +1%, Caravan +13%. Minivans as a group are up 20%...finally seem to be catching on. PT Cruiser sold 10,323 and the Liberty sold 1,602. Viper was also up, Ram wagon was up and the Stratus Coupe outsold the Avenger. Unfortunately, everything else was down....but this is better than a few months ago when everything was down.

Bill Cawthon provided the following news:

Chrysler is going to fix door latches on about 136,000 minivans after the side doors opened and slid back during crash testing. The models affected are those without the keyless entry system. Chrysler minivans did reasonably well, garnering 4- and 5-star ratings in all tests, but both the Ford Windstar and Honda Odyssey scored five stars in all tests. In the Reuters report on the recall was the following statement:

"Chrysler officials have said they may have misjudged how important the crash tests have become and should have designed the minivans to garner five stars."

(An interesting concept. Chrysler might want to work on that while they're deciding if build quality might be important, too. In the same paragraph, Reuters noted that Chrysler engineers claimed conflicting U.S. and European crash standards caused design problems. As far as I know, the doors are supposed to stay closed in both sets of tests. I guess one of the first groups let go at Chrysler were those people who wouldn't make stupid statemen ts to reporters.)

In other Chrysler news, a judge has decided the Jeep vs. Hummer grille lawsuit will be heard in Indiana, not far from the AM General plant where the Hummer is built. GM filed their lawsuit in Indiana twelve minutes before Chrysler filed their suit in Ohio. (Of course, it is extemely important to spend wads of money on attorneys over whether a grille has seven slots when your company is losing money and market share.)

May 30

Mitsubishi will call the next-generation Mirage a Lancer in the United States. The name has been used globally, but in the US, it conflicted with the Dodge Lancer, a name used on-and-off by Chrysler. The next generation will only be sold as a sedan, and will have a "Dodge version." It will be larger than the current version, and even in base trim will come with standard air, power locks, mirrors, and windows, 100 watt CD stereo, tilt steering, tachometer, and other features. The price range is expected to start at $14,000, rather high for the segment.

The Lancer's 1.5 liter engine will be upgraded to 2 liters for the US market, with a four-speed automatic instead of the continuously variable transmission used in Japan (because the extra power [120 hp] would likely result in reliability issues for the variable transmission). In addition, a rear stabilizer bar will be used to increase handling. However, the Evolution III will not be exported, because of the cost of modifying and testing it for American emissions and safety standards. (The Evo is seen as a niche vehicle with too small a market to justify this cost. We'd point out that BMW originally felt that way about the M3, but that would counter the cost-cutting-at-all-costs strategy of Daimler-Benz.)

May 29

2000 and 2001 Neons are being recalled to replace a brake booster hose which can weaken over time. While no accidents or injuries have occured, Chrysler discovered the problem through a routine analysis of returned parts. The problem apparently does not result in complete loss of brakes, but it can lead to loss of power brakes (i.e. the power boost would not be present so much more effort would be required to stop the car).

May 25

Ford moved the blame game up one level, blaming Firestone for Ford's latest poor showing in the J.D. Power quality ratings. Not only did Ford itself fall, with the worst showing of seven major automakers, but company-owned Mazda dropped from 19th to 35th place. Only Jaguar, which improved substantially, had a better showing, among all Ford companies.

Numerous recalls, including five so far on the Ford Escape, have presumably made an impact on the company where blaming Firestone is Job One.

In other news, the head of Freightliner stepped down, presumably due to severe losses in a commercial truck market slump. Not surprisingly, Daimler-Benz is expected to appoint a German to head the company and to announce layoffs and sales of Freightliner assets. (Bill Cawthon added: "Rainer Schmueckle will replace James Hebe as CEO and Roger Nielsen will become Chief Operating Officer. Officially, Hebe resigned. Or fell on his sword. Or something."

May 24

Chrysler union employees, holding a protest in front of Chrysler headquarters, said that laid-off workers had been replaced by contractors and other non-union personnel, a violation of the contract.

GM will make its oil replacement indicator standard across its lines. The system, already used in many GM vehicles, can help to extend the life of engine oil from 3,000 miles (where many people change it) to 10,000 or even 15,000 miles, by analyzing conditions and indicating to the customer when it needs to be changed in a somewhat more scientific method than "every 3,000 miles." The company also announced that it will build new four and five cylinder engines, based on the rather impressive new in-line six, at new engine plants in New York and Flint, Michigan. The in-line six is used in the new Trailblazer, and features the power of an eight.

May 23

NHTSA is looking into a number of accidental airbag inflations on Lincoln Continentals made in 1999 and 2000. Ford said the airbags may accidentally deploy with minor "undercarriage impacts" (e.g. from driving down a gravel road). The company changed the sensor mounting and setup in mid-2000 but did not recall already-sold vehicles. There have been 23 incidents reported to NHTSA so far. (What, no 60 Minutes story on how unsafe Lincolns are?)

May 22

We now have more in-depth information on the Jeep Liberty - see our main index page at www.allpar.com.

Word is that the Neon's replacement is now (as we believed months ago) a "done deal." The replacement will be Mitsubishi's new-for-2002 Lancer (a name only used outside the US and Canada to avoid conflicts with the Dodge Lancer). While the current schedule has the Neon being dropped in 2004, it could be replaced in the 2003 model year if sales do not improve. Without a serious performance version, decent ad campaign, decent gas mileage, etc., we suspect the Neon may be retired early.

May 21

Ford is recalling its first run of the new Explorer because - get this - the vehicle is too wide for the production line's conveyor belt, leading to tire damage! Doesn't anyone inspect these things before they sell them?

May 18

J.D. Power results

Take these results with a huge grain of salt, as they only measure defects which appear within the first 90 days of ownership. They can easily be influenced by a good manufacturer/dealer pre-sales inspection!

J.D. Power's latest results show foreign automakers continuing to dominate the high-quality arena, with the best showing by Toyota-owned Lexus - and the best "ordinary" carline being Toyota, followed closely by, of all makes, Buick. Mercedes trailed Toyota and Cadillac (among others), coming in before the vaunted Honda. Chrysler actually was extremely close to Honda in reliability, with 137 problems per 100 vehicles (Honda had 135, Mercedes 129, and leader Lexus only 85). The industry average was 147 problems per vehicle.

Plymouth, as usual, beat Dodge by a good margin. Plymouth also beat Chevrolet (but by only 145 problems to 146 for Chevrolet, per 100 cars), and both beat the industry average - and, we might add, Nissan, Lincoln, Volvo, Olds, VW, Ford, Pontiac, Mitsubishi, Subaru, and Mazda, all of which were below average. Dodge made a fairly poor showing of 170 problems per 100 vehicles, due most likely to Ram truck and Dakota issues.

Jeep also did poorly when compared to cars, with 155 problems per 100 cars. However, when compared to Land Rover, the fourth worst brand, Jeep did quite well. (Land Rover owners reported 207 problems per 100 cars).

New squad car rumor. A reliable source claims that a new Chrysler or Dodge squad car will be fielded at the next Michigan State Police tests. Based on the LH platform, with a V-8 and five-speed automatic transmission, this would be a full AHB package rather than the stock Intrepids used by many forces. Past reports have also supported Chrysler's re-entry into the police car arena, where the rear wheel drive LH replacement could easily best Ford's Interceptor and GM's Impala.

May 10

Several sources now report that Mercedes will probably bring the money-losing Smart car to the United States around 2003. The assumption seems to be that, by then, gasoline prices will be high enough to make it attractive.

May 8

The Financial Times reported that Mercedes-Benz warranty costs have tripled in the past two years, due mainly to problems with the A (subcompact, not sold in the US) and M (SUV) class vehicles. A Mercedes spokesman said that costs per car were stable, but they had broadened warranty services. (This does not explain why the A and M are so strongly affected). The next-generation M class, as reported earlier, will be substantially different, and based heavily on the Jeep Grand Cherokee.

Bill Cawthon pointed out that the A and M class might have higher warranty costs than other Mercedes models because they are a major departure from past Mercedes - lower price and different design. He also said the A class would come to the US in 2003 or 2004, and that the Vaneo minivan would probably accompany them.

May 3

Bill Cawthon wrote:

Jeffrey Bell, from Ford, will be the new Chrysler vice president for marketing communications. This is a new position intended to assure consistency in messages across product lines as well as develop new marketing programs.

Another new hire from Ford is Julie Roehm, the new director of marketing communications. While at Ford, she led the launch of the Ford Focus.

Frank Sklarsky is actually coming back to Chrysler after two years with Dell. He started with Chrysler Corp. as an analyst in 1983 and rose to the position of vice president for financial activities before leaving in 1999. Now he will be vice president for finance and assistant controller for product quality cost management and procurement (hope they got him some oversized business cards). When he left Chrysler, he was v-p for corporate financial activities.

May 2

Bill Cawthon provided this report:

It finally happened: With all the major players reporting, foreign-badged passenger cars outsold American brands in April. No Chrysler passenger car broke the 10,000 mark in April as Chrysler dealers punished the automaker for the new compensation program. The Dodge Intrepid was Chrysler's best-seller at 9,825.

11,630 people bought PT Cruisers in April.

When total light vehicle sales, cars, pickups, vans and SUVs, are considered, the American companies still command the market with a combined 62.24%. GM's market share is 26.05%, Ford's is 22.36% and Chrysler Group's is 13.83%. My numbers vary from others you may see because I subtract the heavy and strictly commercial vehicle sales from Ford and GM. They don't appear in the other's numbers and I don't think it's fair to add medium trucks, cutaways and chassis-cabs to just two of the automakers.

May 1

Genciu wrote: "Sales from a year ago are down 18% for the month of April. Some sunshine though, minivans are finally up, 6%. Sebring coupe is up 17%; PT Cruiser is up 40% (11,630); Town & Country is up 76% (11,589); Caravan is up 3% and Ram Wagon is up 16%. Also, Stratus coupe outsold the Avenger by quite a margin." [Note-the sales decline is explained, to a degree, below]

The Liberty entered production yesterday.

Chrysler's current strategy seems to be lumping Chrysler and Jeep together, using Jeep both to replace Plymouth and to enhance the status of Chrysler, and keeping Dodge as a nameplate in the US for both cars and trucks. This provides both divisions with SUVs and cars, and defines the brands a little more in terms of status and cost.

April 30

The CS/Citadel is a go, according to the Car Connection. The minivan-based SUV/tall wagon will be powered by the 3.5 liter V-6, and possibly the 4.7 liter V-8 as an option. It is expected to hit dealerships in mid-2002, after a six month delay caused by Mercedes reviews. As previously reported, it will be built alongside minivans in the Ontario plant, which should assure fairly high quality (the Windsor plant has long been reputed to built the better minivan).

4-26

About 11,000 Chrysler and Dodge minivans made between March 22 and April 21 are being recalled by Chrysler. (The date of assembly is printed on the edge of the driver's door sticker. Customers can also find out if their vehicle is being recalled by calling 800 853 1403 - they need to know the vehicle ID number [VIN] when they call). A bolt on the lower control arm could break. Six complaints have been received by Chrysler, with no accidents so far. If your vehicle is affected, Chrysler requests that you not drive it until it is fixed. Dealers will tow the minivan for you, and provide a loaner at their cost. The problem appears to be a batch of defective bolts from a supplier, and a fix is already set up.

Oldsmobile will be phased out through 2005, when agreements with Olds dealers expire. Individual cars will be ended one at a time, starting with the Intrigue in 2003. (Thanks, Bill Cawthon).

April 25

Also from Bill Cawthon: "The Chrysler PT Cruiser was named "Car of the Year for 2001" at the Leipzig Auto Show. The Cruiser received over 175,000 votes from Europeans who liked the design and called it the most attactive new product of the year." ... and:

The mayor of Toledo, Ohio is very upset with DaimlerChrysler. After receiving $275 million in construction aid from the city and state four years ago, the company announced will trim its workforce there to well below the number promised to government officials in a contract signed on November 12, 1998.

DaimlerChrysler says it will trim about 2,035 jobs from its Jeep plants in Toledo, some through retirement and attrition, some through layoffs.

Mayor Carlton Finkbeiner is additionally upset because it was he who defended Chrysler when consumer advocate Ralph Nader sued over the generous corporate welfare package.

Finkbeiner feels that DC's announced $300 million investment in Toluca, coming on the same day as the bad news for his town is a slap in the face.

Chrysler spokesperson Jodi Tinson said the company does not feel it is violating either the terms or spirit of the contract, citing the change in the market and company's economic condition. Tinson said the layoff announcements were old news, but as recently as February 26, company officials indicated the Toledo plants faced only a line speed reduction and the jobs that will be cut when Cherokee production ends.

Bill Cawthon wrote:

"According to Reuters, GM is denying a Bloomberg report that it will close the Spring Hill Saturn plant. Bloomberg's story said if the new Vue SUV did not meet sales expectations, a new model to replace the S-Series would not be built in Tennessee. Bloomberg also reported that Saturn lost almost $850 million last year, but GM declined to comment on that.

Sales of the L-Series, which is based on the Opel Vectra platform, have been very disappointing and sales of the S-Series fell 14.7 percent last year. Total divison sales were 271, 389 units (more people bought Jeep Grand Cherokees). GM expects the Vue to produce 50,000 sales a year in a very crowded market.

April 24

Bryan Nesbitt, designer of the PT Cruiser, is going to General Motors to head up Chevy's styling. In order to give a much-needed boost to the bowtie's (and other divisions') bland styling, GM has hired 100 new designers over the past year. (Thanks, Bill Cawthon).

For those who missed it, PT Cruiser production will finally be increased at the end of next year, with additions to the existing Toluca plant.

DCX and Hyundai announced a commercial truck joint venture in South Korea.

John Daigle pointed out that the Chrysler web site still lists Plymouth Neons with Chrysler Voyagers and Chrysler Prowlers, making it possible that the Chrysler Neon reported in the US is either a "gray market" car, a test case, or the first of its kind appearing in advance of a Web site update.

April 23

PT Cruiser production will finally be increased, according to CNNfn. The company is spending $300 million to raise worldwide capacity by 35 percent, or to 310,000 units per year. The company decided to boost production at the Toluca plant by 80,000 vehicles per year, starting next year.

Drew wrote: "Late last year, I talked to a friend of mine who works in the Belvidere Neon plant. He said that he'd heard that Neons would be badged as Chryslers starting sometime in '01 so that Chrysler-(former) Plymouth dealers could still have a Neon to sell after the Plymouth brand was completely discontinued...I just called a friend of mine at our local Chrysler dealer and he says that there is a Chrysler-badged Neon on their lot right now (with leather!). He also said that he's not sure how much longer they will even have Neons; it might become a Dodge-only model in the next year or two... " -- an interesting thought. Chrysler Neons are made for all but the American market (with leather) so it would not require much, other than some blatant foolhardiness, to make Chrysler Neons for the US. And Chrysler has enough foolhardiness to do that...if there was a Chrysler K-Car, a Chrysler Neon is not a stretch. On the other hand, it could be a misunderstanding by the dealer (possibly receiving an export Neon) coupled with a plant rumor.

Bill Cawthon noted that nothing surprising happened at the hideously expensive DCX stockholder meeting: "Once all the shouting and hoopla was over at the DaimlerChrysler stockholder's meeting, it was business as usual. The Board of Management, including Juergen Schrempp, was approved by those holding 94.03 percent of the company's stock/ The Board of Supervisors received approval of 88.34 percent. Based on these results, I'll bet beer becomes a standard (even essential) part of future stockholder meetings."

The Chrysler LHS will reportedly be phased out next year, instead of being dropped at the end of the current generation of LH. The car has never been especially popular, but its sales seem to have slumped with the current generation.

Key auto suppliers are posting losses for the first quarter, reflecting lower sales combined with lower margins.

The head of Cadillac, which is trying to reinvent itself, left GM to take over the Ford advertising account at J. Walter Thompson. Meanwhile, Toyota is reportedly seeking to build a factory in Mexico, Borg Warner is increasing its turbocharger production capacity, and Ford unveiled its new plant in Turkey. GM itself is recalling 550,000 minivans made from 1997 through 2001 to fix sliding doors which may unexpectedly open. No injuries or accidents have been reported.

April 19

Mike Gemmill pointed out that engines were not mentioned in the press release on the LH series using Mercedes parts. We at Allpar accidentally read that into the story, since it had been strongly rumored.

AutoExtremist.com, pointing to a report that Chrysler's ad folks are considering an ad campaign around the theme of "We're not dead yet," suggested that DCX officially kill off Chrysler, which might increase sales a la Oldsmobile - then bring the company back "by popular demand." (We suggested bringing Plymouth back that way when Plymouth swept the J.D. Power awards).

Ford's profits for the first quarter were about half of last year's first quarter - a better showing than GM or Chrysler.

April 18

Bill Cawhton wrote: DaimlerChrysler Products won 3 of the eighteen categories of the Automobile Magazine Readers Choice All-Star Awards, coming in third overall. GM won the most awards with five (four of them for different versions of the same basic truck chassis), followed by BMW with four. Ford, Mazda, Porsche and Volkswagen won a single award apiece.

• Best Small Car: Chrysler PT Cruiser
• Best Minivan: Chrysler Town & Country and Dodge Caravan
• Best Luxury Car over $40,000: Mercedes-Benz S-Class

A number of Chrysler products topped the Canadan Auto Association's survey of dream cars. When asked "what is the vehicle of your dreams?", the most common choices of Canadian respondents included (#1) the Jeep Grand Cherokee as well as (in the top ten) the Dodge Durango, Chrysler PT Cruiser, Dodge Caravan, and Dodge Ram.

DCX officially said that the next-generation LH series would use Mercedes transmissions, axles, and steering gear - which we reported months ago. The 2004 model year rear-drive LH vehicles [possibly reclassified as LX], including an Intrepid, 300N, and Concorde, will be released in late 2003. Dieter Zetsche said the reason was to cut costs and increase quality, though the LH series has had high quality components in each of these areas except transmissions - and we can't believe Mercedes parts will cost less. (Thanks, Bill Cawthon)

Jeep may have abandoned its high-end Overland suspension on the forthcoming Jeep Grand Cherokee.

Mitsubishi will decide by June whether to keep the Adelaide, Australia plant.

DCX denied reports (based on statements by Mitsubishi's chief operating officer) that DCX will abandon a commercial truck alliance with Hyundai.

While still profitable, GM reported much lower profits - $225 million for the first quarter, down 87 percent from last year.

Some news was accidentally wiped out - we apologize for that!

April 13

Rollover risk ratings for another 17 vehicles were released Friday by the US governmenet. The Chrysler Sebring/Dodge Stratus sedans got the highest five-star rating, while the Ford Ranger/Mazda B-series pickup and Toyota Tacoma pickup (in 4x4/extended cab trim) and Toyota 4Runner 4x2 were given two stars. The Neon received four stars, and the Durango (two wheel drive) and Ram extended cab got three stars. The ratings are based on a formula which uses center of gravity and vehicle width. That formula is being criticized and NHTSA may start testing cars under laboratory conditions next year.

GM is on the warpath, putting extensive resources behind the Cadillac brand with a variety of new and revised models - including a new Catera. Cadillac has been slipping every year in sales, and is now in fifth place. The new Catera will compete directly against a new Jaguar based on the Ford Mondeo. A brand new platform, the Sigma, will introduce the first completely new Cadillac rear wheel drive model since the 1980s.

Several sources are reporting that DCX is not going to increase its investment in Hyundai. Instead, the recently-created empire will attempt to manage what it already owns.

April 12

We fixed the photos of the convertible PT Cruiser at PTCruizer.com.

As expected, Juergen Schrempp was lambasted at the stockholders meeting for his relentless but unproductive empire-building, but no real action was taken to change the way DCX is run. The meeting reportedly cost $10 million, including free beer and brats - a rather insensitive indulgence considering that 20 percent of Chrysler's hourly employees, and abut 10 percent of Mitsubishi's, will be losing their jobs soon.

While the PT Cruiser Convertible made waves among many Chrysler fans, the main media focus was on the new "baby Jag," essentially a Ford Mondeo with well-tuned engine and Jaguar styling, coupled with all wheel drive. Selling for about $30,000 in base form, the new Jaguar X series is bound to be a hit. Ford scored with a new Lincoln concept, as well - coming on the heels of an attractive Thunderbird slated for production.

Dodge will reportedly be advertising its new Viper as 500-500-500, which is (abut) the horsepower, torque, and engine size in cubic inches. (Horsepower is actually slightly higher). Its success in its first round of LeMans races will be challenged by the new Saleen, which seems to be faster than the current factory-sponsored Corvettes (as was the Viper). The Viper's first year of racing should be interesting.

April 11

"Normal" news

Detroit News reviewed minivans and found the Grand Caravan to be tops for passengers, the Odyssey to be better for cargo.

DCX said its first quarter loss would come to about $890 million due largely to Mitsubishi and Chrysler losses. Schrempp, as expected, defended himself against charges of mismanagement, placing the blame for losses on Chrysler and taking credit for implementing a recovery plan which he says is going well. (All that new product in the pipeline was apparently irrelevant compared with simply announcing layoffs of 20% of the company).

More details tomorrow - we hope.

New York Auto Show Special Report

Click here for the PT Cruiser Convertible concept car!

At 10 am today, Chrysler design chief Trevor Creed unveiled the PT Cruiser convertible. While it is only a design study for now - he said it took only eight days to design - it is fully functional, and not simply a Cruiser with the roof torn off. To accomodate the Chrysler Sebring's convertible top (which he opened and closed several times), the windshield had to be lowered by about an inch. In addition, the entire vehicle was lowered by one and a half inches, converted from four doors to two - the doors are longer than usual - and nineteen inch tires were fitted. A cue-ball shifter knob is on the concept's automatic transmission shifter, one change which may make it into production (along with a tether strap for the gas cap, someday). Trevor Creed said that they would probably start to build PT Cruiser variants around 2003 or 2004, depending on when supply starts to equal demand. Other concept cars on display include the Crossfire and Powerbox, both on rotating pedestals. A 2003 Viper sits on a tall platform, and a 2002 Ram is set up behind steel bars (click for picture/info). The Viper looks good and impressive, but does not exude power as much as the first generation. The Ram cannot honestly be called an improvement in looks on the outside, but the inside gains an elegant instrument panel reminiscent of the Chrysler 300M, with whiteface gauges ringed by chrome and shiny woodgrain trim. (We don't know if that is part of an option package, or the standard appearance). The Jeep Liberty is on display, and anyone can get in and out. On the inside, it looks and feels more like a new Stratus sedan than a Jeep, which is not necessarily a bad thing for most people. It seems a little smaller inside than the Cherokee, but more comfortable. The Powerbox looks much better in person than in photos. We caught it from a different angle and it's not so bad - take a look. Also introduced at this event was GEM electric car, a four-seater with flexible doors (also available as a two-seat utility vehicle) designed for neighborhood cruising. This low-cost vehicle is expected to be sold through Chrysler dealers in states where it's legal. The Crossfire and Super 8 (the latter did not seem to be on display) appear to be regrettable cases of Chrysler chasing the retro trend a little too far. However, a large variety of uniformly ugly General Motors concepts made them look positively attractive by comparison. Lincoln stole the day with its MK 9, which has lines similar to the new Thunderbird.

More photos from the Auto Show:

April 10

Chris White said it looked as though construction at the Pillette Road plant is continuing, though the plant is supposed to stop construction of vans in two years, and no other models are publicly slated for it. Possible implications are (a) they need to finish up construction for safety reasons, (b) they want to sell the plant when they are done with it, (c) they really will be building something new there and are just trying to fool competitors, (d) they will add PT Cruiser capacity there alongside full size vans, and (e) it will eventually be used by Mitsubishi, Freightliner, or another DCX concern.

The Alaskan wilderness area has been opened to oil drilling by President George Bush. /rant on/ Based on past experience, we expect this will mean that taxpayers will build roads for the oil industry. We expect logging to follow shortly after. Meanwhile, government subsidies for ultra-high-mileage vehicles are likely to be sharply cut back soon, as are other energy conservation projects and much research into alternative energy sources - despite the success of programs such as Energy Star, hybrid vehicles, and the pressing need for energy conservation in the face of blackouts and global warming. The motivation seems to be political. /rant off/

Tomorrow is the DCX stockholder meeting.

Ford is recalling 2002 Explorers because the rear glass may shatter.

April 9

Chrysler Controller James Donlon, one of the few high-ranking executives to work on the merger, reported that Chrysler's financial situation is not as bad as in the crises of 1980 and 1990. The company still has some $18 billion of credit available. Donlon said that Chrysler is staying away from money-losing leases and incentives. - Thanks, Bill Cawthon

Michael A. Cole wrote that "dropping Plymouth has had an interesting side affect. In Canada the Dodge Caravan has taken over top spot as the best selling vehicle of any kind. I'm sure this had been true in the past for combined Dodge/Plymouth sales. The problem is that it's a clearer statement to make against a single vehicle. A fact which hasn't been lost in the advertising."

Ford will reportedly cut Taurus production in half, ending their flooding of that segment. They will instead build a new sport wagon and a Mazda/Volvo/Ford shared vehicle.

Congress is set to end CAFE, a program which dramatically raised the gas mileage of cars and trucks, but which, through different standards for cars and light trucks, helped to push the growth in light trucks. The program survived two Republican presidencies, and was unchanged throughout the Clinton administration. Many have said the main problem with CAFE is not the existence of the program but the way the standards were set.

Monday's Automotive News is reporting that Pillette assembly will remain open until July 2003 building full-size vans. This is quite a reversal. [The vans are not expected to be updated, though. AutoNews says the reason is because the full-size Ram-based SUV, which was to use that factory, will not be produced.] - Thanks, genciu

April 6

Chrysler will display a topless (convertible) two-door version of the PT Cruiser at the New York Auto Show. We will have coverage starting April 11.

Mazda, which is partly owned by Ford, announced higher losses than anticipated, with over $1 billion in losses for the year ending March 31.

Based on a win in court, Ford may not have to pay out damages to those injured in Ford Explorer rollovers.

General Motors recalled all its new mid-sized SUVs (Chevy TrailBlazers, GMC Envoys, and Oldsmobile Bravadas) for a dangerous suspension failure. The company will provide loaners to owners, but asked that people have them towed, not drive them to dealers. A defective lower control arm on the front suspension could break.

April 5

Details on vehicle sales, thanks to Bill Cawthon:

I created a new workbook in Excel for monthly sales tracking. That's good because I can now get the results more quickly. It's bad because Excel allows you to bore your audience to tears (or tossing tomatoes) with endless variations on meaningless statistics. So for a quick review. In March, with 224 models reporting, the best-sellers were (top 3 in each category):

• Best-Seller Overall: Ford F-Series, Chevrolet Silverado, Honda Accord
• Passenger Car: Honda Accord, Toyota Camry, Ford Taurus
• Full-Size Van: Ford Econoline/Club Wagon, Chevrolet Express/Sportvan, Dodge Ram Van/Wagon
• Minivan: Dodge Caravan, Ford Windstar, Chrysler Town & Country
• SUV: Ford Explorer, Jeep Grand Cherokee, Chevrolet S/T Blazer
• Full-Size Truck: Ford F-Series, Chevrolet Silverado, Dodge Ram
• Luxury: Lexus, Mercedes-Benz, BMW

Of particlar note to Allpar readers:

• Dodge Ram pickup was #6 in overall sales (cars & light trucks). Dodge Caravan was #9. Jeep Grand Cherokee was #12.
• The Dodge Stratus Sedan was Chrysler's top passenger car coming in at #14 on the top 20 passenger cars. The Dodge Intrepid and Neon came in #21 and #22, respectively.
• The Dodge Caravan, Chrysler Town & Country and PT Cruiser all outsold the Honda Odyssey, Chevrolet Venture and Toyota Sienna.
• Jeep Grand Cherokee finished #2 out of a field of 52 SUVs, Dodge Durango was #7, Jeep Cherokee was #9, Jeep Wrangler was #21.

April 4

Although Chrysler's sales bounced back somewhat, market share is still declining, and is down about 10 percent in March. GM and Ford have also been losing market share - particularly Ford, whose loss is about the same as Chrysler's - while Hyundai, Kia, and Daewoo have had strong increases in market share (on the territory once owned by Plymouth, long ago). Ford-owned Mazda has been posting healthy gains, and GM-owned Saab has greatly increased its rather small market share as well.

Despite a cash crunch which supposedly is stopping the new CS from being launched on time, DCX will actually spend cash to buy Volvo's stake in money-losing, scandal-ridden Mitsubishi, according to several news outlets.

April 3

Chrysler sales rebounded somewhat for March, with overall sales down ten percent from last year's record month but up dramatically from January. The Chrysler Town & Country minivan shot up 32 percent from the same time last year (though this year it does not have competition from the Plymouth Grand Voyager), and the Cherokee and Grand Cherokee both increased slightly in sales. Minivan and mid-size sedans are creeping back up in sales (thanks, genciu).

April 2

Bob Sheaves wrote:

Seimens Automotive has announced in Automtive Engineering International magazine that, beginning with the 2002 model year, a "European small car platform" will introduce the Integrated Starter/Generator (ISG) to the world.

This system replaces the engine's starter, alternator, and flywheel/flexplate and provides additional functions as:

1. A regenerative braking circuit, charging batteries while it acts as a "brake"
2. A performance "boost" adding as much as 20hp for short term power demands

This innovation also heralds the industry's most feared "advance" by consumers...that is the 42VDC electrical system. With today's increasing electrical demands (electrically assisted power steering, among others) the older 14VDC system simply cannot perform to needed levels. The ISG is capable of producing 8KW (equivelent to 10hp) at an effeciency of 80 percent across the entire vehicle engine operating speed range. To compare directly, a conventional system puts out 1.5KW (2HP) with a maximum effeciency of 70 percent, dropping to 30 percent at higher engine speeds.

Chrysler is planning to market its vehicles in convenience, grocery, and fast food stores, according to Just-Auto, with links to at least one soft drink company.

March 30

Mitsubishi Australia, which used to be Chrysler Australia, will be allowed to live on. More details to follow.

Mercedes is developing its own minivan based on the A-class.

An Automotive News Europe article notes that (as reported here earlier) the new Smart four door/four seater model will be based on a new Mitsubishi minicar. More important, perhaps, is a note that Chrysler and Mercedes will benefit from Mitsubishi's direct-injection gasoline engine technology, which would be welcome in Chrysler's 2.0 and 2.4 liter engines (and the export-only 1.8). (Thanks, Bob Sheaves).

March 29

All production of Galant-based vehicles will be moved to the United States Diamond-Star plant by 2003. This includes the Mitsubishi Galant and Eclipse and the Dodge Stratus/Chrysler Sebring coupes. The current Galant plant in Japan will make the Mitsubishi Z-car (with engines up to 1.5 liters), reportedly to be sold as a Dodge and possibly a Hyundai as well as a Mitsubishi. (Thanks, Dan Minick).

Delphi, the world's largest auto parts supplier, will cut 11,500 jobs.

Detroit News reported that the 2002 Jeep Liberty (its replacement for the Cherokee - except in Europe, where the Liberty will be called the Cherokee - and in China where we understand the Cherokee will live on - confused yet?) will sell for $17,620, more than $2,000 less than the Jeep Cherokee. Jeep sales have been falling as competition has heated up, and the Cherokee has increasingly been seen as outdated by car reviewers (for good reason - it is probably the oldest SUV of its kind on the market).

Chrysler is cutting 200 jobs in U.S. sales offices, according to Reuters. The sales offices will be reorganized into five regional centers which will set incentives and tune marketing for their regions. The current system of 25 zone offices will continue, with fewer staff. Currnetly, there are about 1,000 employees in field sales, making this a 20 percent cut, reflecting Chrysler's overall cuts and leading one to believe they came up with a reduction number first and then worked on a plan to figure out which one in five employees would have to leave.

Ford is laying off 300 workers from its Ontario Windstar plant, due to heavy competition from the Odyssey and Caravan/Voyager. In January and February, Ford Windstar sales plummeted over 25% from the same months last year. (Thanks, Bill Cawthon).

Ghia is being downsized from 48 employees to five. The studio has long been a source of popular and excellent designs, including a large number of Chrysler vehicles in the 1950s (Plymouth XX-500, Chrysler SS, Dodge Firewarrow, DeSoto Adventurer, Norseman, Plymouth XNR). Even after the Chrysler program was discontinued, Ghia produced its own designs with Chrysler components. The Volkswagen Karmann-Ghia was based on an early Ghia design turned down by Chrysler (!). Ford bought the company in 1973 to develop show cars and sport versions (such as the Ghia Focus and StreetKa). One reason for the reduction is a switch to computer-generated designs, which will be translated into models and prototypes at Ford design studios in England and Germany. (Thanks, Bill Cawthon).

March 23

Troy passed along some good news - the new Dodge Stratus/Chrysler Sebring sedan moved from the worst IIHS crashworthiness category to the best with the new redesign (from poor to good).

Bill Cawthon wrote: Ford says it faces more than $10 billion in claims in lawsuits relating to safety issues, including rollovers in the Explorer. Besides the lawsuits filed by accident victims or their families, Ford also is being sued by stockholders who claim Ford defrauded them by improperly handling the entire Explorer-Firestone problem and failing to inform stockholders of the liabilities involved...Other lawsuits center around the Bronco, asbestos, and defective seat belts....and the EPA may force Ford to pay to clean up hazardous waste sites. A civil enforcement action has already been filed by the Federal government over a site in Texas. The EPA may also force Ford to recall about 6 million 1997-1998 vehicles because the vapor leak systems installed were inadequate.

March 22

A Detroit News article describes where $5 billion of Chrysler money went - mainly into marketing costs, plant modernization, and lost profits, all because of reduced sales (particularly on trucks, though 300M sales also fell). DCX accountant James Donlon denied that cash was diverted into Mercedes, despite reports that Chrysler was paying hefty consulting fees to Mercedes. One major problem was James Holden's decision to make 2000 minivans at the same time as 2001 models (a decision hailed by analysts at the time!) which resulted in rebates up to $4,000 per van. At the same time, DCX spent $2 billion on Mitsubishi, $470 million on Hyundai, $423 million on Detroit Diesel, and $450 million on Western Star Holdings. The end result was moving from $11 billion in cash to $1 billion a year later for DCX as a whole, or moving from $7.5 billion to $2.5 billion for Chrysler alone.

March 21

Some good news from Auburn Hills (courtesy Bill Cawthon) - Chrysler's new marketing chief, James Schroer, is shaking up the company's legendary bad advertising. Not-quite-tough actor Edward Herman will be joining "Dodge Different" in the dustbin, and both Dodge and Chrysler will get new ad campaigns which will actually try to send a message - like the highly successful Jeep campaigns. Launch ads for Dodge Rams will focus on the capabilities of the heavy-duty vehicles. Together with Dieter Zetsche's focus on pricing cars appropriately rather than relying on incentives, and building brands to allow for higher prices without discounts, these moves bode well.

March 20

Chrysler is about to become embroiled in another scandal - reselling lemons. We must point out that most lemons are the fault of bad dealers rather than bad cars, at least in our experience. (It's a four strikes - you're out issue). The real question to us is whether customers were informed tht they were buying cars that were bought back as lemons. According to the attorneys behind the press releases, the answer is "no." However, as we understand it, when the company voluntarily offers to buy back a car that a customer thinks is a lemon, they do not have to label it as such - that is their main benefit from settling rather than forcing customers to sue. Given what we've seen of local judicial systems, it's good for automakers to have incentives to settle! -- hopefully more information will be forthcoming, so we can judge whether Chrysler is being fairly or unfairly maligned in the press. In the past, the press has sometimes been rather ignorant in its criticism of Chrysler (the minivan door latch issue comes to mind).

Hondas and Toyotas continue to be favorites of auto thieves, according to Detroit News, with various years of Accord and Camry topping the stolen car lists, followed by domestic pickups and SUVs. To be fair, the Accord, Camry, and domestic pickups are also the best selling vehicles. For reasons we cannot imagine, the 1995 Neon is on the list (#22). Why not the 1998-99 model with updated parts?

The former CEO of very-troubled Daewoo is reportedly hiding out in Europe and contemplating suicide. Meanwhile, GM seems unwilling to buy the company they helped to start, and Hyundai rpeortedly is not willing to run it, either.

General Motors recalled three quarters of a million cars due to electrical fires, while NHTSA is investigating 164 complaints of non-deploying airbags on Chrysler minivans.

March 19

In response to our note about "Pentastar Service Equipment" on paper floor mats, we received this posting: "Pentasar Service Equipment is Daimlerchrysler's dealership equipment supplier (ie: hoists, shop compressors, A/C recycling machines ). They also suppy dealerships with items such as the paper floormats, steering wheel covers ect. The items are produced by other companies, but because DC has a dealer body of almost 3000 dealerships they are usually able to offer these items at a reduced price-and make some money too. Hope this clears up the confusion MOPAR is still our parts brand. "

3/18 - news analysis

While Chrysler's quality has been steadily improving, particularly since it became the primary goal of product development - leading to duller but more reliable Neons and conservative refreshing of Grand Cherokees and other vehicles, aimed mainly at cutting breakdowns and noises - the hiring of a new quality manager from Toyota cannot hurt. Donald Dees, the Toyota quality man hired last August, brought in three other managers from the worldwide reliability leader.

In the meantime, sexier cars couldn't hurt. We really, really, honestly think that the Neon would sell better with its original nose and better gearing (so it would be quieter and more economical at highway speeds), and that a PT Cruiser-like minivan would be an astoundingn success. Actually producing enough PT Cruisers to meet demand would be nice, too, and there's a factory in Brazil and one in Canada just looking for something to build.

As we see it, the real test for Chrysler is whether the company invests any money in the steps we see as obvious and relatively inexpensive - or whether it continues to believe it can save its way to leadership. A little investment would, we think, provide a major payoff - and possibly prevent Chrysler from being nothing more than a nameplate attached to restyled Mitsubishis and Mercedes.

---

A reply from Paul:

One point that I thought of, as a result of that analysis: a fair number of the current-gen Chrysler and Dodge cars could be interpreted as boring, compared to the first-gen. (See: Neon, Stratus coupe, Stratus sedan, Caravan, next Ram, etc.!) The problem is that people had come to think of Chrysler not necessarily as high-quality, but as high-style.

That's not a BAD thing, mind you, but now it appears as if they're going for a 180 and going high-quality (which only time will tell), at the sacrifice of style. Know what? I think it's gonna backfire. If people want boring cars that are reliable, they'll go Toyota or Honda. Chrysler has a huge stigma to overcome, and only consistently well-built cars will remedy that. They ARE improved, but have a ways to go.

That said, I think the PT hits the sweet spot. It's got style and substance, and feels very much on par, quality-wise, with the LHS and 300M; it rides and drives as if it cost thousands more. Now if they could just build MORE of 'em....

March 16

With its market share in minivans shrinking fast, Chrysler has decided not to produce a 3.5 liter minivan this year. The 250 horsepower engine would have been a clear class leader, at a time when most reviewers say the Honda Odyssey has drawn pretty close to the Grand Caravan. Eric Berger, who sent us this information, noted: "I guess DCX thinks that they can shrink to greatness." Michael Cole speculated that, with the demise of the Sebring/Stratus sedans and Chrysler-powered LH cars, perhaps only the minivans would be using the 3.5 - no cars seem likely to use the 2.7 or 3.2 in the future, except the Liberty - which would make it uneconomic to produce the 3.5. We hope it is more of a short-term cost-cutting measure, and that the 2.7 and 3.2 will make their way into Mitsubishis to be sold as Chryslers.

Chrysler has turned over a large number of documents which expose shoddy handling of lemon law vehicles. According to safetyforum.com attorneys, these records show that Chrysler has generally re-sold "lemons" for most of their buyback cost, but that many customers may not have known they were buying "lemons." This is a mixed finding, since many lemons are due simply to incompetent dealers not handling a simple repair, but it will not be good news for Chrysler's already poor reputation for quality. Additionally, failure to turn over the papers when ordered by a judge has resulted in $325,000 in fines - enough to keep a few employees at work for one more year. Chrysler is, according to safetyforum.com, still paying $20,000 a day in fines for not turning over additional files. (Thanks, Bill Cawthon, for forwarding this story).

As always, we would like to report some good news, but the people in Stuttgart have been preventing that from some time. Rumors of delayed production on the CS (minivan-based SUV) appear to have some truth, as Schrempp seems to be relying on simple, destructive cost-cutting.

March 15

Bill Cawthon wrote:

Reuters reported DaimlerChrysler is considering joint vehicle marketing with Mitsubishi. An announcment of limited marketing cooperation could come as early as the end of March. Full joint marketing will only happen if DCX takes complete control of Mitsubishi and that can't happen until 2003, when DaimlerChrysler can exercise its option to the other 66 percent of Mitsubishi. A DaimlerChrysler spokesbeing confirmed the executive automotive committee was looking into integrated marketing operations. These discussions include Mercedes, Chrysler, Mitsubishi and Hyundai.

DCX has said that the decision to buy the rest of Mitsubishi will depend upon the success of its new restructuring program. The debt-laden Japanese automaker is trying to overcome not only a mountain of debt, but a major scandal involving its handling of warranty and recall problems. (The restructuring program is being led by a Mercedes executive appointed to the top Mitsubishi Motors post).

An additional 500 blue collar jobs will be cut at Chrysler.

Mitsubishi will base its next Montero Sport on the Galant platform (basis of the Eclipse, Chrysler Sebring Coupe, and soon the Chrysler Sebring Sedan and Dodge Stratus Sedan as well), rather than the L200 truck chassis. The Montero Sport, Mitsubishi's second most popular vehicle in the US, will be built in the United States in the former Diamond Star facility that builds the Galant and Eclipse.

March 14

Cars.com (quoted by savechrysler.com) confirmed that the Chrysler Sebring, though fairly highly rated by reviewers and brand new in design, will be moved to the Mitsubishi Galant platform along with the Neon. This means that Chrysler will make three cars - the LH series, the Prowler, and the Viper - only one of which is mass produced. The end result will be, as some have predicted, that Mercedes will build premium cars; Chrysler will build trucks; and Mitsubishi will build mass-produced cars, albeit often under the Chrysler name.

Ford has closed a plant near Cleveland due to an outbreak of Legionnaire's Disease.

March 13

Chrysler is set to lay off about 2,700 management and professional staff at the end of the month, on the assumption that the best road to growth and profitability is firing people and shutting plants. Our opinion: we distrust any downsizing where a percentage is announced first, and they figure out who to cut second. Chrysler is reportedly using performance appraisals and analyses of needs to decide who will be layed off.

Drew pointed out that Motor Trend has compared the Sebring and Toyota Solara convertibles, and rated the Sebring as being superior - with better structural integrity, comfort, and top raising/lowering.

Bill Cawthon pointed out (with regard to our note about Reuters' Freightliner article) that the entire commercial truck industry is having hard times at the moment, thanks partly to higher quality trucks which make replacement less necessary, and partly to a truck operator shortage.

March 9

With DCX's annual shareholder meeting a month away, two groups of German stockholders are planning to oppose the management-supported slate. One group is the largest organization of individual German shareholders. (Source: Detroit News)

DCX will reportedly buy another three percent of troubled, debt-ridden Mitsubishi, taking Volvo's share. (Note: When we refer to Mitsubishi, we mean Mitsubishi Motors, which is not the same as the Mitsubishi companies that make chips, consumer goods, and heavy industrial equipment.)

A mandatory seat belt law saved 76 lives in Michigan, according to state officials.

March 8

GM is rewarding its chief financial officer with a bonus of $1.5 million with an identical or larger bonus guaranteed in 2001, according to SEC documents. This is happening at the same time that GM is laying off employees, showing the level to which they care about plant workers and customers. (Bill Cawthon provided the news).

Volvo will reportedly sell its 3 percent stake in Mitsubishi to DCX, a blow to Volvo's plans for better Asian market penetration. Volvo builds commercial trucks - the Volvo car business was sold to Ford. DCX owns over one third of Mitsubishi with a three year option to buy the rest.

Mercedes, like Chrysler, will soon have an idle plant in Brazil. Gee, if they had merged with Chrysler, they could build PT Cruisers there. Instead, they are likely to build a version of the Mitsubishi/Smart Z car.

March 6

Chrysler's state of the art facility in Brazil is due to stop producing Dakotas in April. We suspect PT Cruisers may replace them, though we wonder if Chrysler has the sense to feel the same way. They might be replaced by a Mercedes or Hyundai product.

The rumor mill continue with regard to Honda visits to Chrysler facilities. To be fair, Toyota also visited Chrysler plants, to figure out the best way to make the new Sienna minivan, and Chrysler and Mercedes have both been to Toyota plants - but no joint ventures there. Chrysler was known for lean, flexible manufacturing until the Daimler-Benz PR machine cranked up to denounce it for its "fat." Honda is currently in partnerships with General Motors and Isuzu, and seems content to continue as an independent. The inane leadership of Juergen Schrempp must be convincing them that their course is correct.

Bill Cawthon pointed out that DCX does control Mitsubishi, and can therefore probably force the sharing of the direct injection system. DCX has not purchased Mitsubishi outright for several reasons, including Mitsubishi's crushing debt and recall problems. He also pointed out that rebadging can work, pointing to the Ford Escort (Mazda Protege) and Mazda light trucks (Ford Ranger). Bill believes DCX is moving towards complete integration, with Mitsubishi at the lower end, Chrysler with large non-luxury cars and trucks (with heavy-duty Dodge trucks supporting Freightliner), Mercedes' Sprinter van and Unimog industrial vehicle joining Freightliner, etc.

Bill also wrote:

• Canadian parts giant Magna has completed their integration of Steyr-Daimler-Puch. The new subsidiary is called MagnaSteyr and will provide a number of services, including complete assembly, to automakers. Steyr Fahrzeugtechnik (SFT) now assembles Jeep Cherokees, Mercedes-Benz Gelaendewagens and other vehicles.

  Graz, Austria-based SFT is also a partner in Eurostar Automobilwerk, a joint venture with Chrysler, which produces the Chrysler Voyager and will also be building the PT Cruiser for the European market, allowing all production from Mexico to be dedicated to the North American market. This may be why Dieter Zetsche is dragging his heels on assigning PT Cruiser production to other Chrysler plants.

March 5 (late)

The LX will use Mercedes electronics systems, and will be designed for maximum compability with Mercedes E-series components. The E-series is, like the LX, due in 2004 or 2005 (the LX seems to be under a substantial delay while it waits for Mercedes refitting). The common underlying electronics architecture will let them use the same engines and transmissions - which they will [definitely transmissions, probably engines] - not to mention supplier-designed products such as traction controls, antilock brakes, and navigation systems. It will allow Chrysler and Mercedes to save money through quantity discounts, and will give Chrysler access to electronic stability systems (which are used, not made, by Mercedes).

Reengineering Chrysler products to use Mercedes components may add to their costs, as well as to the time it takes to design them [our notes]. The article points out the cost issue, but we have noticed that the introduction of new Chrysler models seems to be taking longer than originally planned in many cases - that is, cases where Mercedes is involved.

We would like to see Chrysler gaining access to technologies which would be more useful to the entire line, such as Mitsubishi's direct injection system, but so far there has been no word on this - possibly because Mitsubishi is not wholly owned by DCX, possibly because products that would benefit from it will simply be replaced by Mitsubishi equivalents with the Chrysler name glued on.

March 5

About 2,700 salaried employees at Chrysler will be laid off, since only about 2,300 have accepted buyout offers. This is part of Chrysler's plan to grow by shrinking. Meanwhile, no expansion of the PT Cruiser line seems imminent, leading us to question how Chrysler can return to profitability with increasingly shrinking revenues, especially after all the "economy of scale" hype fed to us during the takeover.

Chrysler is planning to discontinue the Dodge Dakota production in Brazil, where a new state-of-the-art plant is running at only about one tenth of capacity. May we suggest building PT Cruisers there? (Answer: yes, but will anyone listen?)

Bill Cawthon provided several news bulletins:

• One of my sources in the auto industry reported on Honda interest in Chrysler back before Christmas. He said at the time Honda was looking at both Chrysler Group and Saturn. There were apparently meetings on the subject. If the Honda sightings are accurate, perhaps the process is farther along than thought. ...It is difficult to imagine DCAG selling the PT Cruiser to anyone. It would make far more sense for Honda to be interested in either Dodge for the light trucks, or Jeep for mass-market SUVs...buying an established brand would allow them to leapfrog over Toyota's Tundra and larger SUVs.
• It is interesting to note that while overall market share at Chrysler, Ford and GM declined in February, their share of the passenger car market increased over CY2000. At the end of 2000, American-badged cars accounted for 51.01 percent of the passenger car market...This means that foreign competition is making a bigger dent in the profitable light truck/minivan/SUV market....
• Ford now owns 90 percent of Hertz, and will create a special merger between Ford FSG, Inc. and Hertz so the car rental agency will become an indirect, wholly-owned subsidiary of Ford. Should do wonders for fleet sales of the Taurus and Focus. Maybe even do something for those lousy Navigator sales figures.
• Both the Mercedes A-Class and the new minivan based on it will be sent to the United States in 2004, after a major A-class refresh in 2003. Priced around the mid to high $20K range, the A class will be thousands less than the C class. It was originally intended to be sold in the US, but several factors delayed it, including a lack of power (since corrected with the A-190, which boasts 8-second 0-60 speeds-just like the 1995 Neon.) The A-class is one of the top selling vehicles in Europe. (This information came from the German version of DCX's web site and was independently confirmed).

March 2

Money-losing Mitsubishi is planning to completely enter the Canadian market, selling their Japanese-made products (rather than only selling American-made Diamond Star vehicles).

Chrysler sales were up in February (over January), but behind last year's record February sales. Minivan sales are down 31%, possibly because Chrysler flooded the market last quarter, and more likely because of competition from the Honda Odyssey and small SUVs. The Sebring/Stratus coupes are doing well compared to the Avenger/Sebring last year, and the Sebring convertible is up 12% over last year. The sad news is that Chrysler market share is down about ten percent since last year, and over thirteen percent so far this year. GM and Ford market share has also declined by about ten percent each, with foreign automakers such as Honda taking up the slack. Hyundai posted the greatest gain in market share (where are you, Plymouth?) followed by BMW, Porsche, and Kia (looking at this February compared wtih last February). Ford's luxury brands also dropped - Volvo and Jaguar both lost market share despite new models.

Ford may need to recall nearly one million Contour/Mystique/Cougars due to dashboard overheating, which have resulted in 93 reports of fire and over 700 reports that the defroster was knocked out. At this point, NHTSA is simply investigating the problem. We have observed that Ford seems to be resistant to recalls, and also tends to have a lot of fire related issues.

A new Mercedes minivan, based on the A-class platform (not sold in the US), will be sold in Europe. It is smaller than the Voyager.

Bill Cawthon reported that FedEx will buy and use in the US 1,900 Mercedes Sprinter vans, which are already used in Europe by FedEx and UPS. The new vans will be built in Soouth Carolina by Freightliner, whose name will be used instead of Mercedes. The Sprinter is replacing the Dodge B-series van, which was scheduled for cancellation before the takeover.

Two members of DCX's supervisory board - one from AT&T and one from BP Amoco - want to leave before their contracts end in 2004. They will most likely be replaced by Earl Graves of Black Enterprises magazine and economics professor Victor Halberstatdt (of Holland).

Truly troubled Daewoo reported a dramatic drop in sales, as GM considers buying the company they helped to create.

March 1

BridgeNews reported that Chrysler has stopped all product development beyond 2003, based on supplier sources. We have no verification of this story, which contradicts statements by Chrysler lead Dieter Zetsche (which were admittedly made before Juergen Schrempp took direct charge of the DCX auto groups). The article claims that the full-size LX series (LH replacement) will be delayed by one year, as well. Our take: some suppliers are probably being phased out, hence their being told to expect no product development in the future, and the LX will be delayed while it is refitted for Mercedes engines.

According to just-auto.com, versions of the next-generation Dodge pickups may be sold in the commercial market against the Ford-450 and the like - but under the Sterling name. They also noted that American LaFrance is now selling a refitted Dodge Durango for fire chief use.

While the Smart division of DCX is still losing money, no layoffs or cost cutting measures are planned. Breakeven is forecast for 2004, two years after Chrysler's breakeven (Chrysler has been profitable every year since DCX was created, including in 2000, but has forecast losses for 2001). While current Smarts are two-seaters, a four-seater is being designed in conjunction with Mitsubishi for sale in 2004.

February 28

The new Chevy Niva, to be built in Russia and sold for about $8,000, looks remarkably like a Jeep, complete with trademark Jeep grille. Based on the Lada Niva, it incorporates new GM technology. It will not be sold in the US.

The United States Supreme Court upheld automotive clean air rules in Michigan. By a 7-0 vote, they concluded that the costs of environmental legislation (in this case, the Clean Air Act) could not be counted against the health benefits.

People are reporting a large Honda presence at Chrysler sites. Rumors are spinning around a Honda buyout of the PT Cruiser, which we find highly unlikely. Mitsubishi employees were also reported to be measuring the dimensions of the Neon plant and studying it very closely (not surprising since when the Neon ceases production its replacement will be designed by Mitsubishi).

Reports conflict as to whether Chrysler's Sebring will prevail over Mitsubishi's Galant when platforms are shared. We believe the Galant has a better chance.

February 26

Detroit News noted that Chrysler will "jointly develop" its Stratus and Sebring with Mitsubishi. We read that to mean that the Stratus/Sebring will be phased out and replaced with the Mitsubishi Galant, presumably with some facelifts. The article confirmed what we already knew regarding the phase-out of the Neon. Mitsubishi will give up its luxury Prodia/Dignity, and we'd expect the Diamonte to also end, though no mention has been made of it.

Dan Minick read in AutoExpress (UK) that AMG, Mercedes' high-performance tuning shop, will produce a hot version of the PT Cruiser, possibly replacing the projected GT Cruiser.

Doug Miske pointed us to an article in the National Post notes that the DCX restructuring is as ambitious as the takeover that caused the problems, and also points out that no North Americans seem to be on the new DCX automotive governing committee, which is made up almost entirely of Schrempp cronies. The article goes on to note that Chrysler will lose many engines (which will be purchased from Mitsubishi and Mercedes instead of made by Chrysler), and will no longer design small cars (Mitsubishi). The article argues that the combination will both kill morale and end the company's ability to detect local trends and come up with winners like the PT Cruiser. At the same time, it points out that by next year, Chrysler will be too integrated into Mitsubishi and Mercedes to be successfully split off.

Chrysler employees' profit sharing comes to about $375 per union employee. Nonunion employees are also eligible for profit sharing. This highlights the fact, missed in most of the press reporting, that Chrysler actually was profitable for the year 2000 overall.

February 25

DCX is selling DaimlerChrysler Aviation to raise cash, though the main purpose of creating the private airline was to save money. We suspect this is one of those short-term deals that will, in the long run, not be such a good idea. DCX also recently obtained permission to sell more bonds, though a prior bond issuance was undersubscribed.

Feburary 23

Rich Hutchinson pointed us to a Forbes article which heavily criticizes the closure of Plymouth, noting that the brand could easily have been revived, that closing a division rarely gains anything, and that due to the slowdown, Chrysler must cheapen its own vehicles rather than using Plymouth to best advantage.

Reuters reported that Mitsubishi Motors Corp (MMC) will close a single plant and cut its payroll by 10 percent. Though MMC is in far worse shape than Chrysler, with scandals following long coverups of defects, it seems to be undergoing much less of a cutback - but, then, it's a smaller company. Closing a single plant (in Nagoya) eliminates one fifth of its domestic production. Mitsubishi will also cut the number of passenger cars from 24 to about 12, shifting to mainly small and medium sized cars while leaving the large car segments to Chrysler and Mercedes. Like Chrysler, Mitsubishi is currently run by a Mercedes executive. No word is expected this week on the fate of the Australian facilities, which were purchased from Chrysler around twenty years ago.

Dan Minick reported: "The first leak of the restructuring plan: Mitsubishi will end production of its luxo big cars, the Proudia and Dignity (front wheel drive V8 or V6 4 door and extended wheelbase. versions). Not sure how this affects its sister cars the Hyundai Dynasty and Equus. Also, the statement just read, stop manufacturing... am I assuming too much by thinking that it might mean marketing of it would still go on, but manufacturing would be done by someone else (with excess capacity?)"

General Motors will bring out four-wheel steering trucks next year. Four wheel steering was once the wave of the future, appearing on the Honda Prelude and other cars, but never became a major selling point. It should be very useful to truck owners, since it cuts the turning radius quite a bit. In other news, GM cut back production at 14 plants and is trying to get partner Isuzu to cut costs the beancounter way. No word on where Chrysler will produce more PT Cruisers, still!

February 21

DCX will form a special committee to oversee automotive operations. Juergen Schrempp will head this committee, which will essentially be in charge of Mercedes (whose chief will be second in command of the committee), Chrysler, and Mitsubishi. Schrempp will be more directly involved in day to day operations at Chrysler. Analysts believe there will be more consolidation of Mitsubishi and Chrysler at the small car level. Other reports indicate that Mercedes engines may be used in some Chrysler cars in the future to enhance their snob appeal. The next generation of the LH series is already scheduled to use Mercedes differentials and transmissions.

A Forbes article claims that some of Chrysler's problems are due to Juergen Schrempp's desire to increase short-term profits. The article reports that James Holden, then Chrysler president, had warned DCX that the company would only deliver $2.5 billion in profits because it was gearing up for new models, and because the economy was expected to slow. Schrempp reportedly ordered Chrysler to save the second quarter's profits "at all costs," with the company building many more vehicles than the dealers could sell. Keeping incentives low helped profitability, but only in the second quarter. The article also noted that Mitsubishi and Freightliner are both struggling, putting Chrysler into more perspective.

Ford's global marketing manager, Jim Schroer, was hired by DCX. Schroer did an excellent job at Ford, and will probably be a welcome change from Chrysler's often-ineffectual marketers. Bill Cawthon also noted:

DaimlerChrysler also forced two more executives into early retirement. One of them was Arthur "Bud" Liebler, head of global brand marketing and the guy who cut True North, the agency that produced the good Chrysler and Jeep ads. He installed Omnicom/BBDO into Chrysler Group's captive ad agency, thereby ensuring Edward Herrman's job security. Liebler will be replaced by George Murphy, formerly general marketing manager at Ford, who will hopefully kick some creative butt.

Gary Dilts will replace M. John MacDonald as Chrysler's senior veep of sales and field services. MacDonald also "accepted" early retirement.

Getrag will manage production of Ford manual transmissions in Europe.

Mitsubishi will cut 15 percent of their workforce and is considering closing one plant and trimming their model lineup.

February 20

Correction from "rivman" - AM General is still independent, but sold the rights to the Hummer name to GM along with Hummer marketing rights.

Discounts appear to be raising Chrysler sales back to normal levels.

Used car superstore chain CarMax has made an operating profit after losing money for some time.

GM laid off one quarter of the workers at its Orion plant and may close the facility in 2004.

DCX is buying another 1 percent of Hyundai despite severe cash flow problems. DCX stock rose somewhat on the news that the Emirate of Kuwait, one of DCX's largest stockholders, had bought stock from Kirk Kerkorian.

While the former Daewoo CEO evades police and union members, 34 former Daewoo execs have been indicted for accounting fraud. Daewoo was started as a joint venture by General Motors and a local industrial firm. GM and Ford both recently declined to buy Daewoo, but GM and Fiat are still interested if the price falls. Fiat, an independent company with strong sales in Europe, is already partnering with General Motors. Daewoo workers have held a sitdown strike to protest large job cuts, leading to 76 arrests by police.

February 19

We apologize for the new advertisements. The bottom basically fell out of the Web ad market. In order to pay for our fast server and, more to the point, our time away from "real jobs," we need to bring in some income. Our sponsors developed this new ad format to provide much needed revenue despite plummeting ad rates. They worked hard to make it relatively nonintrusive, and I think they did pretty well. I hope you will understand our need to work with them on this as well.

We've heard more rumors that the Cummins diesel will indeed be in the 2003 Rams, with a quieter setup and Allison transmission that should provide needed durability.

The New York Times Autos section featured the Chrysler Sebring, noting its history and expressing disappointment that it was not the killer the original Neon, Intrepid, and Ram were. The article did not really say much about the cars except to criticize some of the plastic bits inside - we noticed that Toyota is exempt to that sort of nonsense - and briefly go over some specs. Overall, a very uninformative piece which, like everything written about Chrysler these days, noted how badly the company is doing. The writer did correctly point out that Chrysler cannot afford dull cars - though the Corolla and Camry are fairly dull, Toyota's reputation for quality is high enough that they can get away with it.

By now you've all read about NASCAR and the Earnhardt tragedy. Dodge did not do badly, considering the major pileup in the middle of the race, but neither did Dodge win. The season is still young.

February 16

Mitsubishi, a company which seems much more troubled than Chrysler, recalled a large number of cars this week, including Sebring/Avenger models sold under the Chrysler and Dodge names. Mitsubishi has recently admitted to systematically hiding driver complaints and covering up safety issues.

Jeep has objected to the Hummer H2 grille, which strongly resembles the trademark Jeep grille. GM has, however, won a trademark (not contested by Chrysler) for the Hummer grille, leaving the outcome of Chrysler's challenge in doubt. Jeep argues, and we agree, that the Hummer grille is designed to confuse customers and give them the impression that the H2 is related to Jeep - which, actually, it is, sort of, since AMC split off AM General just before it came out with the new Jeep known as the Hummer - AM General sold the rights to the Hummer name to General Motors. The H2 is actually a modified Chevrolet SUV.

Another age discrimination lawsuit has been filed against Ford.

February 14

Mike Bergin pointed out that the retirement package is not being offered at all plants.

Ford has been hit with an age discrimination lawsuit based on a new evaluation policy formanagers and executives. Ford president Jacques Nasser said he wants a younger management team. The new policy essentially grades employees on a curve, with 10 percent getting an A, 80 percent getting a B, and 10 percent (now 5 percent) getting a C. Getting a C means no bonus or raise, and two consecutive Cs means a demotion or termination. Nine employees have filed suit, saying that Ford is using the system to weed out older workers. The legal question is whether the assignment of grades is based on age or performance.

We have separate sections on the new Hemi truck engine and the new Ram pickup.

The last Reliant three-wheeled car was produced yesterday. The English company which has produced Reliants since 1935 will not import French microcars instead.

President Bush put all of President Clinton's last 60 days' of executive orders on hold indefinitely, including new diesel fuel regulations which would have a substantial impact on air quality while making diesel engines in cars more practical. The industry has asked for the rules to take effect in 2010 rather than 2007, while environmental and health groups have agreed that the rules should be phased in earlier. Treatment of this rule is seen as a litmus test of Bush's loyalties - to his campaign promises to support clean air, and to his friends and relatives in the oil industry.

The Mercedes plant in Alabama is being expanded.

Mitsubishi Australia presented a new business plan to Mitsubishi's German leaders, suggesting that increasing production and sales - including possibly Chrysler models, not made in Australia since Chrysler Australia was sold to Mitsubishi! - was the best way to make profits in Australia. The new assembly facility can produce more than one model on the same line at the same time.

February 13

According to Automotive News, nearly three quarters of Chrysler's suppliers have refused to cut their prices by 5 percent, and Bob Eaton said that he really did envision DCX as a merger of equals but would not comment on later developments.

---

GM is pulling the Saturn brand out of Japan.

---

"MTS" wrote that based on people he has been in touch with, the 2003 Ram pickups will feature a 5.8 liter, 354 cid Hemi engine at 280 hp / 375 lb-ft of torque, replacing ye olde 360. A 383 cid (6.4 liter) Magnum is also predicted, with over 300 hp and over 400 lb-ft of torque. The V-10 is generally assumed to be staying, but with larger displacement to match the Viper V-10 - MTS suggested 504 cid, 350 hp, 500 lb-ft of torque.

---

Chrysler will show a profit by the end of 2002, according to a DCX business plan. We are hardly surprised by this, since nearly all of Chrysler's lineup will be new by then, the costs of layoff off one fifth of the workforce will be largely written off, and the company was insantely profitable in 1999 and most of 2000.

The restructuring plan will include greater integration with Mitsubishi, and will have a number of milestones so investors can track progress.

As Chrysler employees are losing their jobs, Mercedes employees are getting record profit-sharing checks. Though DCX says Mercedes should not suffer due to Chrysler's problems, we'd point out that at least some of Mercedes' prosperity is due to the funnelling of funds away from Chrysler.

Chrysler has increased incentives, including cash-back deals and low-interest loans, as customers have lost some faith in the company's ability to survive. We suspect the increasing publicity around Chrysler's German owners will also hurt Ram sales, as pickup owners historically have tended to buy American.

In other news, Ford has devoted an engineering team solely to Mercury, and has promised a new Mercury Marauder (based on the Crown Victoria) to boost the lagging fortunes of the division.

February 11

We have moved all 2002-2003 Dodge Ram information to this page.

February 8

Dieter Zetsche said that Chrysler would not delay any new products, and indeed would rely on new products to get the company out of its slump. That does not include the full-size SUV, which has definitely been canned. He said he likes 80 percent of what he sees in the pipeline, and that the remainder can be "fixed." Most engineering and product development jobs will be spared from the cuts, though 610 people will be lost. Zetsche also said he would soon make a decision on how to produce more PT Cruisers.

---

Bill Cawthon contributed a piece which describes our thoughts:

Apparently tired of reporting that Toyota is not buying DaimlerChrysler, the media is now reporting that GM is not buying Jeep. This is not really surprising since DaimlerChrysler has not announced any intention of selling one of its most popular brands and GM has just sunk billions into developing its new TrailBlazer, Envoy, Yukon and Escalade models. To save time in the future, it should also be noted that GM is also not buying Ford, Toyota, Volkswagen, BMW or Honda and is still hesitant about buying Daewoo.

The source of these news stories seem to be financial analysts' desperate desire for a one-time shot in the arm to make the bottom line look better in the short term. The fact that selling off bits and pieces is counter-productive and could damage Chrysler's long-term survivablity does not seem to have occurred to them at this time.

February 7

(Moved to this page)

February 6

Mitsubishi and Chrysler will work together to develop an engine for their new "world car," a subcompact. This seems to indicate that the 1.4/1.6 liter engine developed by Chrysler and Rover will be used only in the Mini Cooper, which was developed by Rover but was kept by BMW when BMW gave Rover away. Hyundai is also developing a world car separately from MMC and Chrysler.

Chrysler's 5 percent price cut, imposed on suppliers just after the Mercedes executive takeover, has met with a great deal of resistance. Some suppliers actually stopped delivery, and many have been able to negotiate smaller cuts.

A Detroit News article on Chrysler's new #2 man, Wolfgang Bernhard (imported from Mercedes, of course) said that Chrysler execs (presumably the Mercedes contingent) seriously considered eliminating the Jeep Wrangler so they could shut down the plant it is made in; that the choice of plant closings had nothing to do with union contracts; and that Bernhard himself likes the Sebring/Stratus and Durango. He had been the CEO of Mercedes-AMG, a high performance tuning company, for two years. AMG employes 470 employees, a bit fewer than Chrysler's 128,000.

As Chrysler shuts down factories, Toyota is building a new V8 engine plant in Alabama to supply the Tundra pickup. Meanwhile, Mazda's board is cutting their own pay to show solidarity with their employees.

February 5

Several sources have said that the next generation of Dodge Ram trucks will be introduced at the Chicago Auto Show in February.

It appears as though DCX's investment banks, at least, are discussing a spinoff of Chrysler. We suspect they would keep Jeep, especially since the next-generation Mercedes SUV seems to be largely a rebadged Grand Cherokee.

Bill Cawthon wrote:

According to Juergen Hibbert, head of passenger cars for the Mercedes side of the family, the little A-Class will come to the U.S. in 2004. According to a report buried in the German language side of the German Mecedes-Benz website, Hibbert made the statement to a German newspaper while at the North American International Auto Show in Detroit. (Odd that he apparently didn't say anything to the American press, who supposedly also attended the show.)

The A-Class was originally intended to be sold in the United States. Back in the pre-merger days, the plan was for the baby Benz to hit the American market in late 1998. However, the merger through those plans out when DaimlerChrysler managers decided it would either leech sales from Chrysler or dilute the prestige of the Mercedes brand.

Early in 2000, the plan to bring the A-Class to North America was back on. Especially since Mercedes was building a brand new plant in Minas Gerais, Brazil specifically to build the A-Class (all current production is in Rastatt, Germany). But in July, 2000, DaimlerChrysler's supervisory board voted to kill the A-Class altogether, saying it wasn't profitable enough.

Now, after selling 500,000 of the little car and discovering that 35 percent of A-Class buyers are women (not Mercedes' strongest market), somebody has gotte the idea that killing off this successful car might be a bad idea. One might even say stupid. So now the A-Class has gotten a facelift, two new diesel engines, an improved A/C system and side air bags. A full makeover is back on schedule for either 2002 or 2003. A small cargo van and a minivan are also being developed off the A-Class platform and Autoweek reports the minivan version will also come to the U.S.

The A-Class will join the Unimog, Gelaendewagen and Sprinter in the growing list of Mercedes products that are making their way across the Atlantic. About the only ones that are still Europe-only are the Spanish-built V-Class minivan and the Smart City Car.

In other news: American luxury car brands fell to fifth and sixth overall in January. Cadillac actually held onto fifth while Lincoln dropped to sixth. Lexus came out on top, thanks again to the RX300 SUV, followed by Mercedes, BMW and Acura.

February 2

Sales for Mercedes vehicles dropped ten percent in January. Toyota sales fell, while Lexus dropped. Most automakers, in fact, posted sales drops, with the notable exception of Honda, Mitsubishi, and Hyundai. In all, it appears that the highest and lowest priced autos are selling best, while the midrange is taking a hit. We note that, had Plymouth remained true to its origins - in which case it would be competing with Hyundai - Chrysler would probably be weathering the storm a bit more easily.

A broke DaimlerChrysler may start selling off non-automotive asset, such as its aeronautical engine unit (MTU Aero Engines Munich). It has already sold Adtranz and DASA.

After an initial denial, DCX confirmed that it is consulting with investment banks about takeover defenses. We appreciate their trust in investment bankers, given their wonderful track record so far in pairing Chrysler and Lambourghini, Chrysler and Maserati, and Daimler-Benz and Chrysler.

Bill Cawthon reported:

• I guess "we is." Deutsche Bank confirmed Thursday that it had been hired by DaimlerChrysler to advise on hostile takeover defenses [not that anyone other than ex-Chrysler people are looking to take over DCX].
• Chrysler maintained its leadership in the minivan market with the Dodge Caravan being the top-selling model, but minivan sales tanked pretty much across the board. Total minivan sales for DaimlerChrysler, Ford and GM came to 55,425, a number DaimlerChrysler came close to hitting by itself last January. The Ford Windstar, which took second place behind the Caravan, was the only other minivan to break the 10,000 mark in monthly sales.
• The Dodge Ram pickup moved past the Ford Explorer, thanks mostly to the steep drop in Explorer sales. Barring any real surprises, the Ram is #4, behind the Ford F-Series, Chevy Silverado and Honda Accord.
• Not a single Chrysler-badged car [PT Cruiser is officially a truck] broke the 10,000 sales mark in January. The Dodge Neon was the best-selling model, followed by the Intrepid.
• Chrysler's bright spot continues to be the PT Cruiser. Over 13,000 were sold in January. Now if they had only planned to make a few more...
• Special note: Of all of GM's domestic divisions, only two reported sales increases - Saturn and Oldsmobile. Oldsmobile sales were up 8.7 percent over January, 2000.

Genciu added: "Chrysler sales are down 16% for the month of January (from last January). GM was down 5.1% and Ford was down 11%. The only good news was PT Cruiser sold 13, 475 and a few models were up from a year ago including Plymouth Neon +9% [!], Chrysler Voyager +14%, Town & Country +20% and Dodge Neon was up 29%...everything else was down. "

We note that Chrysler minivan sales fell 39 percent in January, according to Reuters.

Oldsmobile is pulling out all the stops to sell their remaining cars as the brand is phased out, with a 5 year 60,000 mile warranty, heavy advertising across the Internet - including ads on ptcruizer.com and probably on allpar - and new concept cars.

Rich Hutchinson noted: "Current losses stem largely from Chrysler introducing many new models, and the ill-advised and ill-timed spurt in 2000 minivan production immediately before the new 2001 models were released. The safety net built up by Chrysler to stave off hardship during a downturn was milked away by Daimler." We'd add that costs related to the takeover were also a factor, as people flew back and forth, Chrysler paid for Mercedes "consulting time," vehicles had to be redesigned to handle Mercedes components, etc.

February 1

Chrysler's new minivans may soon be "re-introduced" due to disappointing sales.

Though DCX stock rose on rumors of a takeover bid by Toyota, the successful Japanese automaker denied any interest in DCX or Chrysler.

Bogota had its second "car-free" day, banning the use of cars.

Bill Cawthon contributed the following items:

• Despite rumors saying the CS crossover vehicle was being moved up to make a debut in 2001, sources close to Chrysler report it is actually being pushed back to a possible 2003 introduction. The reason cited is the cost of launching the new vehicle. While working on reducing costs of current production models, Chrysler Group engineers are said to be looking at some of the parts that would go into the CS to see where any costs could be shaved.
• Is we or isn't we? While Dieter Zetsche was telling CNBC that DaimlerChrysler was considering hostile takeover defenses, German DCAG spokesman Christoph Walther was telling Bloomberg News that no such strategy was in the works. (I think I may have discovered one of the big problems at DaimlerChrysler!)
• Hyundai will not be part of the new world car being developed by DCAG's Micro Car subsidiary and Mitsubishi. The 4-seat roller skate with doors will be sold under the Smart and Mitsubishi names beginning next year. DCAG-Mitsubishi and Hyundai will develop their own cars but may do some parts sharing in the future.
• Internet auto broker Greenlight.com has been bought by CarsDirect.com and will be shut down by the end of this month. Greenlight's remaining employees will be let go. Greenlight was the auto broker that was partially owned by Amazon.com. CarsDirect will take over the link at the Internet bookseller's web site. Someday, these dotcom guys are going to figure out that most people don't buy cars over the phone or out of brochures and until they figure out a way to replace the showroom and test drive, they aren't going to be a big factor in the auto industry.

January 30

About three quarters of Chrysler's layoffs will take place in 2001. The main reason for eliminating third shifts rather than closing plants seems to be anti-closure agreementes in the union contract, though this method will also help to keep Chrysler's options open over the long term and save the cost of moving tooling from one factory to another.

---

The Detroit News indicated that Chrysler is still seeking to increase PT Cruiser production, beyond the already-stated measure of devoting Toluca entirely to the popular vehicles.

---

The UAW's president said that the union would hold DCX to its contracts, which includes protections against layoffs and factory closings.

---

Hourly workers at Chrysler will still get profit sharing checks, according to the Detroit News, which also noted that Chrysler's build costs have again risen to be the highest of the Big Three.

---

More details have come out on the Chrysler/Mitsubishi platform sharing partnership. Dan Minick has heard that:

Mitsubishi will develop the next generation Mirage/Colt/Lancer/Neon. Skin and trims will be diferrent for different versions.

Chrysler will develop the next generation Stratus/Galant/Sebring. Again, skin and trim will be different.

Mitsubishi will possibly lose development of Pajero/Montero and Challenger (Montero Sport) to Jeep.

It sounds like the platform team idea is still alive, just spread across national boundaries. I would assume that 'small car platform' team people may still be located in Auburn Hills, but work together with their counterparts in Japan. Likewise, the opposite for mid-size platform team.

We believe that Chrysler will also adopt a Hyundai model to fill in the sub-Neon entry-level role.

---

Because of the controversial nature of Chrysler's recent slash-and-burn leadership, we have posted a forum for your feedback here.

January 29

Reuters announced that a credible German magazine will soon report that Chrysler and Mitsubishi will divide up their platforms, with some vehicles at each company based on the other's platforms. Likely casualties at Chrysler are the Neon and possibly the brand-new Stratus, while Mitsubishi's loss is harder to discern - possibly a truck or SUV, possibly the Galant.

---

While cutting one fifth of Chrysler's workforce, Juergen Schrempp said he would not rush Chrysler's turnaround.

---

The shoe has dropped, one month ahead of schedule. About 20 percent of Chrysler's workforce is to be laid off. Most of the damage will be done to third-shift and South American employees (19,000 of them), though 6,800 white collar workers are also affected. These layoffs and closings will take place over two to three years.

The product development budget has been cut by 10 percent, and 2000 executive bonuses will not be paid until 2002.

---

Here is a summary of layoffs (many employees are eligible for retirement, so not all will be officially laid off):

• One shift at Jefferson North - Jeep Grand Cherokee plant
• All Mound Road engine plant employees, with work to be moved to Mack Avenue
• One shift at Pillette Road (Windsor) large van plant
• Toluca engine and transmission plant employees
• Argentine employees in Cordoba
• Lago Alberto (Mexico City) plant employees
• Campo Largo (Brazil) plant workers to be idled, possibly eliminated
• One or shifts at:
  the LH plant in Bramalea, Ontario
  • the Neon plant in Belvedere, MI
  • the Jeep plant in Toledo, OH
  • the Durango plant in Newark, DE

Plant changes include:

• Lago Alberto eliminated, production moved to Saltillo
• Campo Largo to be idled, with analysis about its future
• Cordoba plant eliminated
• Mound Road plant eliminated
• Pillette Road plant expansion to be stopped
• Toluca engine and transmission plants to be closed
• Newark line speed to be cut
• Windsor line speed to be cut (Windsor builds minivans and tended to have higher quality than the other minivan plant)

---

Chrysler also acted to cut dealer incentives, removing a $50 advertising fee and fuel tank filling fee for each vehicle and reducing profit margins on accessories. Dealers will no longer have a 15 day grace period before paying for delivered vehicles, but will be eligible for sales bonuses of up to $500 per vehicle. (No word on whether customer satisfaction plays any role there).

January 27

We have posted an in-depth look at Chrysler's current NASCAR foray, including their efforts in truck racing. Click here to read it.

January 26 (afternoon update)

Chrysler will soon offer a discounted "EX" version of their Town & Country and Grand Caravan, with the 3.8 liter engine, power rear liftgate, and other features, at a price of about $27,000. Similarly equipped vehicles would have cost over $30,000 before, but the Honda Odyssey's relatively low price has forced Chrysler to cut their own retail. This model smacks of Dieter Zetsche's rational dislike of incentives, since rather than selling an expensive minivan with a heavy cash back offer, Chrysler can sell a reasonably priced minivan without incentives. Dealer interest in the EX version has already been strong, with over 5,000 orders placed. By selling a standardized option package, Chrysler can cut their own production costs. (This is a very common practice for Japanese and German vehicles).

---

Chrysler showed a telematically enhanced vehicle today, according to the Associated Press (quoted in Car and Driver). It includes a voice-activated computer in the dashboard and two touchscreen controlled consoles for the rear passengers, who can play games or use the Internet. Chrysler's concept vehicle was designed to show what could be done, but Chrysler itself has no plans to use extensive consumer computer gadgets in a production car at this time - except for TVs in minivans.

---

Jorge Espinosa wrote that, this month, the Stratus R/T and Cirrus four-door sedans will be introduced in Mexico, complete with a turbocharged 2.4 liter engine rated at 215 horsepower (more than the V6 sold in the US). The Cirrus is similar to the Chrysler Sebring sedan.

---

DCX has increased its investment in Hyundai, which increasingly seems to be taking on Plymouth's old role. Hyundai has been very successful in capturing market share in the United States, less so in making profits. While DCX seems more interested in commercial truck ventures with Hyundai, rumors that Hyundai may "lease" Chrysler assembly lines abound. That would allow Hyundai to save its capital, and allow Chrysler to avoid losing factories it may need in the future - not to mention saving jobs.

---

About 360 Chrysler Financial customer service workers have overwhelmingly (252 to 75) voted to join the United AUto WOrkers.

---

Former GM parts subsidiary Delphi will build a new electronic steering system, designed for lighter weight (fuel economy), in Saginaw by 2003.

---

GM has already been forced to idle its Pontiac Aztec production line, while German autoworkers have protested plans to cut 5,000 jobs in that country, home of Opel - GM's European subsidiary.

January 23

Chrysler may, according to just-auto.com, be moving export minivan production back to North America to make room for extra PT Cruisers. Their Graz, Austria plant, which makes European and right-hand-drive minivans - complete with manual transmissions and diesel engines - could then be dedicated to making more Cruisers, raising production of the smaller cars from 15,000 per year to 45,000 per year. This would allow more Mexican Crusiers to be sold in the US.

Kirk Kerkorian, DCX's third-largest shareholder and plaintiff in a suit against the corporation (for defrauding stockholders by claiming it was a merger when in fact it was a takeover), sold ten million of his DCX shares, reducing his holding from over 3 percent to 2.3 percent of the company. Kerkorian's other business do not seem to be doing too well, and he may have needed the cash - or been forewarned of things to come. The share price has gone up since Kerkorian sold, earlier this month. (Based on reports in the Wall Street Journal and Detroit News).

January 22

Chrysler has cancelled plans to close (temporarily) its Jeep Cherokee and Windsor minivan plants, due to unexpectedly high demand. The Cherokee will soon be discontinued, which may account for some of the demand, while the Windsor plant builds (at least based on historical data) the most reliable Chrysler minivans.

A government study quoted by Detroit News found that adding electronic gadgetry to cars - a focus of both Ford and Microsoft and, to a lesser degree, GM - may greatly increase the probability of accidents. This "duh" conclusion has now been scientifically tested.

Chrysler is soon to launch its rumored 3.5 liter, 230 hp Town and Country Limited. The current Limited has a 210 horsepower 3.8 engine.

January 19

Ford settled with blueovalnews.com's webmaster, Robert Lane, in a dispute over secrets published on the web site - including the fact that Mustangs had been sold with less than their rated power. While a judge initially issued an injunction against blueovalnews.com on the grounds that web sites were not given the same protections as print media, that judge's decision was quickly overturned. The settlement involved Robert Lane agreeing not to post entire internal documents, solicit secrets from employees, or violate copyrights owned by Ford (presumably this means not using Ford's logo). We at allpar naturally followed this trial with great interest, though we have never had access to internal Chrysler documents and never used any Chrysler logos.

January 18

Chrysler VP of Design Trevor Creed told journalists that the Hemi 300C Convertible "stands a very good chance" of making it into production, but is "on hold" until the business plan is rewritten (with a deadline of February 26).

---

Car and Driver has posted a comparison of the Chrysler minivans with all comers in the "standard size" (not long-wheelbase) category. As we would have done, they gave the Chrysler minivans their top rating, followed by the Toyota Sienna. Visit their site to read their comments and to see how the Mazda MPV, Chevy Venture, Nissan Quest, and Mazda MPV scored.

---

Oddly, the new Toyota Matrix hybrid (car/minivan/tall wagon) also looks like the Chrysler Citadel from a side/rear view.

---

OPEC is planning to cut oil production by five percent on February 1. This move will stabilize the price of oil, given the dropoff in demand as people reduce their use of heating oil.

---

EPA head nominee Christie Whitman said she planned to review President Clinton's revised diesel fuel rules, which have been opposed by oil refiners. Whitman has supported clean air as long as it does not involve any restrictions on business, and has helped New Jersey to acquire "open spaces" through bond issues (which appear to have been very profitable to her friends and family).

January 17

The new Lexus IS all-wheel-drive model looks almost exactly like the Chrysler Citadel concept car/minivan hybrid.

January 16

Reuters reported that Dieter Zetsche will soon decide whether to produce more PT Cruisers. Zetsche appears to be leaning in favor of adding production capacity.

January 15

Ford has been showing a concept vehicle based on the Focus which looks exactly like a PT Cruiser sporting a Dodge Caravan tail. Chances seem high it will make it into production, especially if Chrysler continues to ignore demand for the real thing.

Not surprisingly, DCX has denied the report of the Sunday Times mentioned on January 14.

January 14

England's Sunday Times reported that DaimlerChrysler may be split, and that GM and Ford are both interested in Mercedes and "parts of" Chrysler. The article suggested that major investors have given Schrempp six months to turn things around. (Thanks, Alex Kefford, for pointing to the article). The situation at Chrysler is likely to turn around somewhat within six months because of new product coming down the pike and a lessening of the current glut - especially if Dieter Zetsche turns Chrysler advertising away from the current "fire sale" focus.

January 13

DCX told analysts that cash flow has gotten even worse, with very limited liquidity thanks to large investments in Mitsubishi and Hyundai. GM and Ford are also having financial problems, though not as severe.

The first Chrysler Prowler will be introduced January 16. Don't ask why it isn't a Dodge.

January 12

An article in Fortune notes that Chrysler has actually saved a great deal of money through shared knowledge with Mercedes. They pointed to some examples, including learning how to build sedans and convertibles on the same line, not needing to develop a new rear wheel drive transmission, and adopting some Mercedes manufacturing methods. Likewise, Mercedes engineers have been learning from Chrysler and will be able to update their lines more quickly, prepare car doors for painting in a better way, and more.

The article also mentions how far Chrysler and Mercedes have come since the 1990s, with Dennis Pawley pushing for higher quality through continuous improvement and the "Chrysler Operating System" - and with Mercedes streamlining plants to be more efficient. (The article notes that Toyota sent teams to study how Chrysler built minivans when it was preparing to produce the Sienna). Mercedes also borrowed from Toyota - including hiring a former Toyota exec to develop its own operating system. The Chrysler and Mercedes systems are similar in many ways.

The article claims that mid-level managers in both companies are now sharing information readily, despite early reluctance, and that the documentation for best practices are shared as well. Parts and methods books are combining specifications and practices for both companies in the same publications, making it easier to work together. The information sharing also allows Chrysler (and Mercedes) to get lower costs when they have different negotiated prices.

The article describes in greater detail than previously given why Chrysler is using Mercedes transmissions (or, rather, why they will be using them). Chrysler's truck transmission goes back to the 1970s, while the Mercedes RWD transmission was designed in the mid-1990s and is used on most Mercedes vehicles, as well as some Porsches and Jaguars. The transmission is relatively small, light, and simple (fewer parts), and the assembly process includes a number of checks to assure quality.

---

Bob Lutz, former president of Chrysler and logical choice to succeed Lee Iaccoca (once upon a time), unveiled Cunningham Motor Company's new Cunningham GT, a car build entirely by automotive suppliers. The $250,000 luxury car, represented at the Detroit Auto Show by a mockup model, will be powered by a 600 hp V-12 engine, and should be produced in 2004. The goal of Cunningham is to produce 500 of these vehicles. Lutz and Briggs Cunningham III, son of a 1950s specialty car builder, jointly own Cunningham Motor Company, while Bob Lutz himself is president of battery company Exide.

January 11

Detroit News reported that DaimlerChrysler's cash cushion, most of it from Chrysler Corporation, has been spent on acquiring stakes in Mitsubishi and Hyundai.

January 10

According to auto.com, the Viper GTS/R, which "could represent the next-generation Viper," goes from 0 to 60 in 3.75 seconds, and from 0 to 100 (presumably and back to 0) in 13.2 seconds, both improvements over the current model. The chassis is two inches lower, and the vehicle height is four inches lower. After reviewing Motor Trend's comparison of high-end sports cars, we hope they are also improving the Viper's excellent-but-not-the-best brakes as well.

January 9

The NHTSA has announced its first rollover ratings, covering about 35 2001 models (80 are expected soon). The Chevrolet Silverado (GMC Sierra) ExCab 4x4 actually received four stars, as did the PT Cruiser and Honda Odyssey (no other minivans were tested except the Mazda MPV). The worst ratings were for the Chevy Blazer / GMC Jimmy/Envoy (one star). Most SUVs, including the Grand Cherokee, managed only two or three stars, while every single passenger car tested got four or five stars. The Ford Expedition, Explorer, Navigator, and Mountaineer all got two stars. Light trucks all received three or four stars (no Dodge trucks or SUVs were tested).

Weick.com has posted a number of photos of new Chrysler concepts, including the Hemi8 and Jeep Willys. visit our news forum for URLs.

January 8

The 2003 Viper was shown today (not a concept but the real thing). It is "lighter, faster, and more powerful," developing over 500 horsepower and 500 lb-ft of torque with a 505 cid engine. The new V-10 is 8.3 liters, rather than 8.0. It remains rear wheel drive, with a six-speed manual and a racing-style chassis with fully independent four-wheel suspension. A new version of the four-wheel antilock brake system, first used in the 2001 model, is being used for 2003. The speedometer is now center-mounted, and the starter is a simple pushbutton. The new Viper has a convertible version, featuring a bi-fold clam shell top with single center latch. The new V-10 seems to be a revised version of the original, based on the old LA series (273/318/360/etc) V-8. The new Viper will be available in late spring, 2002.

---

Chrysler cut first quarter production by one quarter (26 percent to be precise) to avoid reliance on incentives. GM and Ford have already taken similar, though not as extreme, moves. Cuts include minivans (still the best sellers in their class), Grand Cherokee, and Durango.

Dieter Zetsche told reporters that Chrysler needed to be smaller, and said that the problems with Chrysler were structural in nature (despite the incredible success of Chrysler through the mid-to-late 1990s). He pointed to the reliance on incentives and blunt discounting sales techniques as one major problem, while saying "We have good products." First quarter production plans have already been slashed by a quarter. Zetsche's emphasis on spending cash on advertising rather than incentives may help the Stratus and Sebring sedans to find their place in customers' driveways, though.

---

The PT Cruiser was named Car of the Year at the Detroit Auto Show.

---

Some suppliers are telling Chrysler they will not agree to a five percent across-the-board price cut.

---

The Pontiac Aztec has been terribly received by customers due largely to its horrendous styling, which has been the butt of many jokes. It will be restyled somewhat for its second year, an unusual but intelligent step. Meanwhile, GM will cut the number of models it produces by through reducing the amount of brand engineering (similar cars sold under different marques with different sheet metal and suspension/engine tuning) and ending Oldsmobile.

January 7

CBS This Morning had a feature on the takeover of Chrysler today. Though superficial, it did cover the basics, while not mentioning such important details as James Holden's incompetence, sneaking the deal behind Bob Lutz's back, enthusiast opposition, Chrysler's strides in quality just before the takeover, etc.

60 Minutes also asked why the Mercedes SUV has active stability control while Chrysler minivans do not. They did not consider the price differences or the fact that minivans rarely flip over.

January 6

Motor Trend drove the Jeep Liberty (sold as the Cherokee outside the US) and found it to be more civilized than the Cherokee, yet better off-road.

If you missed our details on the Dodge PowerBox concept truck, which is presumably the shape of the next-generation Durango, click here.

January 5

General Motors followed Chrysler's factory closings with some of its own, idling 12 plants (25,600 workers) in the coming month. Chrysler is shutting eight plants over the next month.

Though Chrysler sales have languished, the group is still selling more vehicles in the US than Honda, Toyota, or, for that matter, anyone other than GM and Ford. GM sold over 336,000 vehicles in December, Ford sold over 275,000, and Chrysler sold over 167,000. The next best showing was Toyota, which has the best selling car (Toyota Camry), with about 134,000 vehicles. Honda, whose Accord was displaced as the best seller by the Camry, sold 88,000 vehicles for the month. Daewoo and Kia were the smallest mass-market sellers.

January 4 (10 pm EST)

Click here for a description of the Dodge Powerbox concept truck - 25 mpg, 0-60 in seven seconds, larger inside than the current Durango, and probably the basis for the next-generation Durango.

Chryselr has announced that production of the Jeep Cherokee will end later this year, and that the Cherokee will be replaced by the Liberty.

Chrysler's sales figures show a 15% decline in December sales from last December. The Chrysler Town & Country was the only vehicle to beat last year's sales, most likely on the strength of returning Voyager customers. More temporary factory closings were announced. The news from GM and Ford is expected to be similar. (Thanks, genciu).

RUMOR - "MTS" said a Dodge tech had told him about the new Ram trucks. He said there would be a new powertrain lineup including the 4.7 V8, two Hemi engines (5.1 and 6.0 [315 cid] liters), and a new 6.4 liter (383 cid) Magnum motor as well as a 500 cubic inch V-10. This remains hearsay at the moment.

Bill Cawthon reported that the Mercedes Sprinter would be built in the South Caroline Freightliner plant, and will be sold as a Freightliner in the US. The popular Sprinter van would be a natural replacement for the Dodge full size vans, but Bill notes that Mercedes seems to be following a theme of selling commercial vehicles via Freightliner, and keeping Chrysler and Dodge for passenger vehicles, and Mercedes for luxury. He also said Mercedes seems to have decided against brining any non-luxury Mercedes-badged vehicles into the US, for fear of diluting the brand image.

We mistook some of Bill Cawthon's information. The Mercedes Unimog will be imported from Germany, not produced in Chrysler's van plant. He also commented on our story regarding Chevy Impalas in the New York City Police Department:

NYPD was one of the largest purchasers of Lumina squads as well. The fact that Chevy is ending Lumina production has probably spurred a number of Impala purchases as well. Lower prices and operating costs, small size and maneuverability are more important than speed in most parts of NYC (especially Manhattan). Even back in the old days, NYPD used six-bangers on the theory you couldn't outrun the 2-way radio.

Bill's original reports were:

The New Unimog U400 will be distributed wearing a Freightliner badge. A special fire truck version will be sold through Freightliner subsidiary American LaFrance.

The Mercedes Sprinter van will be built in the U.S. following a redesign in 2002. The U.S. version will carry the Freightliner name and be built in South Carolina.

January 3

The Dodge full-size van, once the most popular van in the nation, is to be eliminated in 2002.

DCX will build commercial trucks and buses for Asia with Hyundai in a 50/50 joint venture, according to a German magazine quoted by the Associated Press.

The EPA has ordered cuts in the sulfur content of diesel fuel. This may make diesel car engines more popular. Diesels are more expensive than gasoline engines, but tend to last much longer and be considerably more efficient. In Europe, diesel engines are popular due to the price of gasoline and their efficiency. The cuts will be fully implemented in 2006, paving the way for tighter commercial vehicle pollution controls in 2007. (These rules will probably be overturned by the Bush administration, which has strong ties to the oil industry).

January 2

Juergen Schrempp announced that he intends to restore American management at Chrysler within four or five years, after an "overhaul" of what the Associated Press repeatedly calls "the stricken unit." He said he was surprised at Americans' reactions to Mercedes officials managing Chrysler. Schrempp also ruled out selling Chrysler, calling it an integral part of the DCX's global strategy.

Deutsche Bank said it would unload DCX shares, along with other industrial stocks, but not at current prices.

Earlier, we suggested you write to DaimlerChrysler if you wanted your opinion to be acted on. Some issues can be sent to Chrysler via http://www.dcanswers.com, while others should be sent to the address on our resources page.

A Detroit News article alluded to suggestions that Dieter Zetsche may be considering closing up to five plants and laying off up to 15 percent of Chrysler's workforce.

January 1, 2001

New York City appears to have switched to Chevrolet Impalas as the standard police car, opening the way for front wheel drive Intrepids in future years. The NYPD had been loyal to Chrysler until 1989, when the Diplomat/Gran Fury ended production.

---

---