August 21st, 2008 by DaveAdmin
I ran across this guest editorial recently, from around 2000, I believe. It was one of the early indicators of Daimler’s way of working, and was written by an anonymous employee.
One of the more innovative things about the old Chrysler was that we were one of the first auto companies to have satellite hook-ups at every facility (thus video-conferencing). There was an employee “news” show on an internal network called CEN (Chrysler Employee Network). This was a great service because it kept everyone abreast on industry news, and it reported the good, bad, and ugly within the company, not just propaganda. With the coming of Daimler, CEN disappeared.
The replacement for CEN is called DCTV. It mostly runs video of old Mercedes cars competing in open-wheel race events. Other fare includes videos showing our glorious Truck, Bus, Train and Plane operations overseas. (They’re all money losers). We see news blips, but only if they’re positive. If four vice-presidents left DCX for Ford and GM within 3 months, I doubt if I’d be bragging about it either.
No more reviews of competitors vehicles, no more industry news, no feeds from other facilities showing improvements to be implemented elsewhere. That was CEN.
A few months ago we were subjected to a near constant video extolling the virtues of the “Smart” mini-car. This was to be the future of city transport. They have not mentioned that just yesterday production schedules were cut from 140,000 to 100,000 and finally to 80,000. At these sales numbers, one has to wonder what the “break-even” point was.
I had to learn this info from a trade magazine.
June 6th, 2007 by Dave
When the takeover of Chrylser Group by Cerberus was announced, with the various promises by Cerberus regarding the future of the company, the return of the Pentastar, and such, there was a general mood of elation across America and Canada, as the people realized that a great American icon was to return, freed of its abusive masters.
There were exceptions.
With the Mopar crowd there had, since 1998, appeared a number of Fauxpar freaks. The Fauxpar folk loved the German influence, believed that anything born in Germany must be better than what mere foolish Americans could do, and thought Mercedes could do no wrong. So Mercedes quality was lower than Chrysler? That was because Mercedes was spending all its money and attention on Chrysler. Horrible! what Chrysler was doing to poor Mercedes, giving them $10 billion and taking on all sorts of debts while providing huge economies of scale and royalties and… well, never mind. Let’s also not mention the fact that Mercedes’ quality ratings were already below Chrysler’s, on average, in 1998; the difference was not as stark then because the S Class was still doing so well.
(I need to separate out the Fauxpars from the optimists. The Fauxpar lovers didn’t care about Chrysler until Mercedes bought it. The optimists hoped Mercedes would help Chrysler.)
The Fauxpar people were happy to give credit for the Hemi to Germany. Americans could never squeeze 340 horsepower out of 5.7 liters; Germans could do it easily (indeed, German automakers DO tend to push more power out of a cube than Americans do; but then, it costs far more.) Never mind that Toyota eventually got 380 horsepower out of the same size. Toyota’s run by Japanese people, who are almost as superior as Germans.
It was hard to argue with the Fauxpar crowd. The suspension in the LX series really was far better than that of the LH in terms of performance and, as tuned in the Charger, in terms of feel, too; and its basic rear suspension design was obviously taken from the E-Class. Stability control was also credited to Mercedes, though Hyundai, Toyota, GM, Ford, and just about everyone else also uses it. Any quality gains were of course due to Mercedes’ kind intervention, even though they couldn’t get their own cars up to snuff.
Meanwhile, Chrysler was being demolished. Suppliers were abused and cost-cut into bankruptcy; while before they were allowed to share in any proceeds from cost savings, so that if the supplier could save $20 on building the car they were allowed to keep, say, $2 extra profit for themselves, that was considered too generous and inefficient by Mercedes, so it was kicked out. The result was most likely greater overall costs; parts costs went down but quality of parts sometimes followed, and overall design efficiencies were lost. That particular program had saved $20 billion for Chrysler by its height. The bad feelings will take time to heal, if they ever do. Dealer relations were also severely damaged by a hack sent in by Mercedes, who as his penalty for practically destroying dealer relations and hurting marketing was given a Mercedes dealer franchise. Factories were closed, costs slashed, engineers kicked out, Brian Nesbitt given walking papers along with anyone who dared speak up against Mercedes. Many retired because they just couldn’t take the slow, methodical, arrogant people from that other company.
Thus, when Chrysler was released, it made the day of a lot of people, even those who supported the deal to begin with. When the deal was announced, the press - mostly, the people who were telling us how much Chrysler needed Mercedes to survive, right until the day Cerberus and Daimler reached an agreement - immediately started talking about how awful the Daimler occupation had been. It was hypocracy of the first order, but nearly everyone was rejoicing to some degree. Except for that small crowd of Fauxpars, the people who hated Chrysler but bought one because of the German engineering.
The Fauxpars love to talk about the K-cars, forgetting that they were great little cars when they were first brought out - highly profitable small American cars that rode well, accelerated well-for-the-time, got decent mileage, and were pretty durable for the most part. They love to talk about how awful those LH cars were. Whenever they compare, it’s to the present day - the Reliant 2.2 that can’t get out of its own way, with its 0-60 of 14 seconds. Y’know, that wasn’t bad when it was made… and though the K series was neglected for far too long in the end, even in the last year they were making Shadows, they were competitive.
The Fauxpars are sad now that Mercedes is leaving. If Chrysler does well, they might be able to claim it was because of Mercedes’ influence, but it seems unlikely anyone will believe them. There’s been a clear death spiral at Chrysler Group since 2001, and it might even now be too late; there has been too much taken out of the company and too little put back in. Even the popular PT Cruiser is being cancelled for lack of a factory to build it in (or because the execs still can’t bear to think it was a success after they said it was a flash in the pan?). But the Fauxpars have been claiming that Chrysler needs Mercedes, and if Chrysler succeeds, well…
I for one won’t miss the Fauxpars. Yes, it was nice of them to respond favorably to the “German Engineering” ad campaigns; I guess someone had to. But I’ve been painted Mopar blue for too many years to want a bunch of newcomers hanging around and dissing the cars I grew up with, drove, and loved. As the Mopar fold hopefully grows and thrives with new and returning owners, the Fauxpars will fade away and only be heard now and than, sarcastically talking about how all Mopars are rubbish and pointing to decade-old head gasket failures as proof.
May 14th, 2007 by Dave
Cerberus took ownership of about 80% of Chrysler Group, including Chrysler Financial, in return for a guaranteed investment, assumption of liabilities as well as assets, and a token payment that appears to be less than the transaction and sale costs. The deal was incredible, considering that Chrysler + Chrysler Financial appeared to be running at a net profit for most of the recent past, and the terms appear to reflect leaked statements by DaimlerChrysler board members (and public statements from stockholders) to the effect that Chryler was less than worthless.
The details: Cerberus pays $7.4 billion, $5 billion of which goes to Chrysler Corporation LLC and $1.05 billion to Chrysler Financial Services; Daimler gets the remaining $1.35 billion, but loans back $400 million of it. Daimler retains all debt from Chrysler Group, costing Daimler a net $650 million plus prepayment compensation of $878 million and transaction costs. Chrysler’s pension fund is currently overfunded but the health care costs are a major issue. Closing of the deal is expected in the third quarter of 2007.
The five key reasons for choosing Cerberus were "a sustainable, successful future for Chrysler; minimal risks and liabilities for Daimler in the future; the certainty of the transaction; speed; and the value of the transaction." Other reasons suggested by Allpar readers include being able to keep a chunk to continue to profit from Chrysler; realization that Mercedes would never integrate money-saving Chrysler technologies, outside of certain assembly processes adopted early on; that Mercedes was unwilling to share any current technology, and that Mercedes-priced components and architectures made cars below the $30,000 level uneconomical; needing the cash; wanting to be free from the health-care liabilities; and realizing that Daimler was completely unable to run Chrysler, any more than BMW was able to run Rover.
Chrysler does owe Dieter Zetsche a debt of gratitude. It would have been easy for him to continue in the footsteps of Juergen Schrempp, and to keep squeezing and downsizing and perhaps acquiring new companies to squeeze and downsize and merge together. It may also have been easy for him to sell Chrysler for more cash - for example, to Kirk Kerkorian (not that we can say for sure whether that would have been bad, especially as Kirk was talking employee ownership and has Jerry York on his side). But we suspect that he actually protected Chrysler as much as he could, given his possibly tenuous status at DCX - with Juergen Schrempp & Co still very much active on the Board - and did try to create a soft landing.
What Daimler gets out of the deal
DaimlerChrysler can change its name to Daimler AG (what happened to Benz?) and run their bus, van, and car companies without distraction, while raking about 20% off of Chrysler’s profits. At the same time, Mercedes’ dependence on Chrysler for volume discounts and royalties on less than ideal parts can continue for the near term, at least; joint purchasing and drivetrain development will continue, and no doubt Chrysler will keep paying royalties for five-speed transmissions while Mercedes will get free access to next-generation V6 engines. A Joint Automotive Council of board members from each company will be established so both sides can decide on new and current projects.
The new company
An affiliate of Cerberus, Chrysler Holding LLC, will own 80.1% of Chrysler Holding LLC, while Daimler will own 19.9%. Chrysler Holding LLC includes Chrysler Corporation LLC and Chrysler Financial Services LLC. Tom LaSorda, Eric Ridenour and Tom Sidlik will leave the Daimler Board of Management, which will go down to six members.
Cerebrus gets a company with a history of profitability, next-generation technology waiting to be implemented, some of the world’s most advanced, flexible auto plants, a huge number of dedicated, experienced, intelligent employees, and the consistently-profitable former Chrysler Credit (which may actually have a surprise loss soon due to a number of less than ideal loans in the recent past), all for agreeing to put reasonable sums of money into their own businesses and for making a relatively small payment to Daimler.
Unfortunately, the downsizing plan is still in effect, cutting over 400,000 vehicles per year and closing at least one factory (as well as investing in others). This will increase the percentage of cash paid to retirees vs current employees; there will be fewer vehicles sold and fewer people working per retiree.
Some reasons we’re happy Daimler will be history
The problem with Chrysler since 1998 has been running the company for the benefit of Mercedes, not for the benefit of DaimlerChrysler as a whole. Getting out from Daimler is unquestionably a plus; Chrysler has been cut to a third of their prior size and have been constrained in what they can make. The question is never "what would make a good profit," it’s "what can Mercedes use and what can use Mercedes parts" (with a huge dose of “no, that might take away Mercedes sales.” Money was spent on a Crossfire replacement when we need a Neon replacement, and building the LX and JS to Mercedes architectures no doubt increased their weight and cost. The Mercedes five-speed automatic is more expensive and less reliable and lower performing than the ZF automatic, from what I’ve been told - not to mention Chrysler’s own five-speed truck automatic, which is eminently usable on cars (having been developed from the ancient TorqueFlite).
Though (as of May 16, 2007) we’re sure there are plenty of strings attached to this deal, Chrysler will be run by people who want to make money, not transfer profits to another division’s budget line and pretend they’re losing money, as it appears Daimler has been doing. Just as you wouldn’t want Toyota to make the Corolla a downsized Lexus LS, you don’t want the Sebring to be a downsized S-Class just to lower the component costs of the S-Class. That’s one of the things that killed GM - according to DeLorean anyway - was when they lowered Caddy and Olds costs by making Chevy and Pontiac accommodate them. Yes, it lowered the total number of parts in inventory, and yes, it made parts cheaper for Caddy and Olds, but it also made Chevys and Pontiacs too heavy and expensive to make!
Another good thing to come out of this is, hopefully, the removal of the German (and American!) "cost-cutting experts" who have made Chrysler’s cars less competitive. Maybe Chrysler can start to add back in all those things that made their vehicles special to their owners - things like comfortable seats and windshield wiper de-icers for minivans, not to mention four-cylinder engines that produce some torque at low rpm. One particular rapid cost-cutter is certain to remain in Stuttgart. And we’re probably not going to see any more "German engineering" ads!
Reason for hope
We have reason to hope. Perhaps Wolfgang Bernhard does know how to do something other than slash jobs, close factories that later turn out to be needed, and make specialty sports cars. Tom LaSorda might be a pretty good leader when his leash is taken off; he’s getting to be well liked, at least. We know that Chrysler still has many good, dedicated engineers, and we also suspect that many employees will work much harder for an independent, American Chrysler than for an amorphous, money-sucking, abusive DaimlerChrysler.
I think anyone with the cash to buy Chrysler would be nuts not to, and that they don’t need to strip the company to turn a quick profit - particularly if they plan to resell when the record profits return.
There’s not much left to cut, anyway. They could sell factories, but there’s only one plant that’s underused right now; the others are all very much needed. Even the under-used plant could be used to build the cars they need to be selling, the Corolla/Neon class that was abandoned in favor of the cute-ute Compass/Caliber/Patriot. The basic research departments were decimated by Daimler already. Anything they cut now would just eliminate their profits later, unless they plan to move everything to China, and that’s been turning out to be less than ideal lately - a short-sighted strategy if ever there was one (not unlike Daimler’s providing Hyundai with the one key technology, engines, they needed to become a real threat).
The Players
Cerberus has profited from its ties to key Republicans, and in one case, a timely $110,000 donation to suspect congressman Jerry Lewis was almost instantly rewarded with the renewal of a controversial $1 billion contract and the firing of US Attorney Carol Lam fired, who was investigating Lewis’ contributors (presumably including Cerebrus). Steven Feinberg himself is a "paper guy," who rose up through the ranks of the buy-and-sell Wall Street crowd.
Cerberus appears to have set itself up as a member of the “pay to play” politically-based contracts game; Dan Quayle is in charge of European operations, and the chair of the company itself is former Republican Treasury secretary John Snow. But that doesn’t mean they’ll hire some ex-Party hack to run Chrysler; we need not fear seeing Randy "Duke" Cunningham or Mark Foley in the President’s chair. The moral concerns we have about Cerebrus (and for that matter the "all that matters is short-term profit" reputation of some private equity firms) do not necessarily affect their ability to run Chrysler, and in any huge company, there can be some highly moral and some highly immoral divisions. A few bad apples doesn’t necessarily poison the entire farm, and it’s a huge farm.
There’s even a lighter side to the political machinations. They might be able to buy Chrysler some military contracts for Jeep and Dodge trucks; and they are putting serious money into the company. What’s more, they are getting Chrysler Financial in the deal, which should make Chrysler profitable without slashing.
Tom LaSorda is reportedly to remain CEO, but Wolfgang Bernhard, the slash-and-burn, flashy Mercedes man, will most likely be running the show from behind the scenes. On the lighter side, Bernhard is "a car guy," which might mean more enthusiasm for the company; on the darker side, there is no reason to believe he is steeped in Chrysler history or has any better ability to run a mass-market automaker than DCX did. Though Chrysler might see Firepowers and Tomahawks, it might not see the Reliants and Spirits that sold in huge numbers (or, in modern terms, Corollas and Camrys), and it can’t keep the factories running with exotics.
Also in Cerberus’ stable is David Thursfield, who ran Ford’s highly successful operations outside the Americas before joining Cerebrus in 2004.
Cerebrus does appear to have a record of turning companies around and being in the game for the long run; they’ve sometimes been contrasted to the standard slash-burn-flip private-equity firms. Cerebrus already owns 51% of GMAC Financial Services and is buying out Tower Automotive, a parts supplier; it also owns Guilford Mills, a large American auto-seat supplier in the U.S., and Peguform Group, a German auto-plastic maker.
If you know more about Cerebrus and the players, please post it here in the comments.
An alternative that might have pushed DCX to go faster
Even as Cerebrus was buying Chrysler, Kirk Kerkorian was apparently meeting with the plant workers in Toledo who wanted to take Chrysler over in an employee buyout. They would have raised investment funds using Kerkorian and the sale of stock to buy Chrysler from Daimler. The plan was moderately far advanced, but it appears that Daimler would never have agreed to sell to the employees, Kerkorian, or both, and the UAW and CAW provided no support for the plan, preferring to back the private equity firms (even Magna was working with a private equity firm, albeit one with a solid reputation).
Looking to the future
Chrysler is likely to do much better under Cerebrus than under Daimler. New products should be lighter and cheaper to build without the need to build to Mercedes specifications, and without the need (at least on future vehicles) to use Mercedes components even when they are sorely outclassed by cheaper ones. The horrific German Engineering ads which decimated sales will disappear, and Chrysler will not be publicly criticized and dragged into the dirt by their new owners. The anonymous leaks from Mercedes directors on how terrible Chrysler is (ignoring the fact that Mercedes gets lower quality rankings in just about every survey) will end, and the stigma of owning a Chrysler will fade. We hope, incidentally, that in addition to the destruction of the myriad of DaimlerChrysler signs, that by 2009 we will see the first new Plymouth rolling down the lines.
We are much more optimistic than we were before we started to investigate Cerberus; at that point, the chief issues that popped up were the sleazier aspects of the company. As we delved deeper, though, it seemed more and more that Cerberus succeeds not by strip-and-flip but by rebuilding companies that have been terribly managed. Chrysler has been terribly managed for most of its life.
We are disappointed Canada did not finally get its own auto company, but it’s good to have Chrysler back on American soil. Maybe with all the government connections Cerebrus has, Chrysler can even get a nice fat military contract and start building Army vehicles again. We just hope they never bring up any controversy - that they do what they did in the 1940s, not what Cerebrus did in the 21st Century.
Being an American company again means that if they DO go public again, their stock will be purchased by index funds again, and that’ll be good for an instant boost.
Only the future will tell us what will happen with Chrysler, and that future is still far off, in the third quarter - and we might not know what’s really in store until 2008. Let’s hope it’s good news and not bad news. I, for one, think it would be hard, though not impossible, for Cerebrus to be worse than Daimler.
Also read: DaimlerChrysler era editorials
May 16 update
According to a source at Chrysler Group, Tom LaSorda, Dieter Zetsche, and Cerberus managers (including CEO Steve Feinberg) met with senior management last night to clarify the future. The name of the company will be Chrysler Holdings; the Pentastar will be the corporate logo again, saving a considerable glazing fee for the Chrysler Technical Center. Tom LaSorda seemed very excited to be free from Daimler; Dieter on the other hand was bittersweet, saying that his years at Chrysler were the best years of his career and his life. He said he realized that the differences between Mercedes and Chrysler made real integration impossible, and that both had to do what they did best. The two companies will continue to share items like diesel engines, 4×4 components, hybrids and fuel cells, and electronics.
Steve Feinberg called his company a blue-collar capital investment firm that stresses long term growth, calling Chrysler a once in a lifetime opportunity and saying he wanted Cerberus to have the legacy of helping Chrysler to flourish. He did not provide a clear role for Wolfgang Bernhard, who was present, and said he would quickly trade in his Chevy pickup for a Ram. He did not see any vertical integration with Cerberus suppliers. He also noted that naming the company after the dog-guard of Hell was a huge mistake.
Questions we’ve been asked
What will this mean for Dodge Motorsports? Answer: we don’t know. I personally hope it means the NASCAR money goes into bringing back Plymouth or Viper racing or something else that isn’t professional wrestling.
Will they bring back Plymouth? Will the make the ‘Cuda and Imperial? Answer: I don’t even know if they know! Plymouth is certainly a long shot, even long-term. I don’t think they people there necessarily understand or care about Chrysler’s history and what has worked before.
Will they make the Dodge Challenger? Answer: yes, it’s too far advanced to be playing with now.
Will they sell Sprinters and Ram 4500s? Answer: I don’t see why not; after all, GM sold Toyotas for quite a while, and Chrysler sold Mitsubishis. Ford still sells modified Mazdas and Volvos.
May 8th, 2007 by Dave
DaimlerChrysler has shown that it’s not very good at managing auto companies. Though dominant in trucks, the company has been less than stellar in cars. Mercedes cars have been overpriced, underwhelming in reliability (to put it nicely, since they’ve done far worse than supposedly “poor” Chrysler in most surveys), and losing ground off-and-on to Lexus, with some huge rebates in recent times. Chrysler has been so grossly mismanaged by DCX it would take many blog entries to cover the ways.
What’s really needed is to split off both car groups. Let them merge together, and leave the huge German empire of commercial trucks and old-boy-networks to have fun with whatever it likes to do. If Daimler-Benz wants to go off and buy some more companies and bankrupt them, that’s fine; it won’t interfere with Mercedes-Chrysler.
Mercedes-Chrysler would be able to make both Chryslers and Mercedes much better and more cheaply without DCX. Being headquartered in the innovative United States, rather than German, because that’s where the bulk of the business is, M-C would be able to use all those great German technologies developed in the Mercedes R&D labs - but unlike Mercedes, they’d figure out ways to use them more cheaply, more effectively, and more attractively for the car buyer. Rather than have arrogant engineers in Stuttgart decide what drivers like, Chrysler would actually watch and think about what car buyers do, and tailor the technologies to them instead of the other way around. The senior Mercedes engineers could work with the Chrysler kids (and senior Chrylser engineers could work with Mercedes kids) to combine the key lessons of experience with the exuberance and energy of youth.
Mercedes cars would become much cheaper, because Chrysler knows how to build cars well at reasonable cost, and because they could draw on the Chrysler parts base. Chrysler cars would become better, because they would not have to buy parts just to reduce Mercedes’ prices or because the parts were made or designed in Greater Germany. Indeed, one can see Mercedes replacing Imperial - as the best that Chrysler could accomplish, with a little help from across the pond.
Mercedes-Chrysler is an idea whose time has come. Will it happen? Well, probably not. But it’s a pleasant thought - a reorganization that would actually realize the benefits of the takeover.
April 17th, 2007 by Dave
The conventional wisdom of journalists sometimes amazes me as much as the filth that comes out of talk-show hosts’ mouths (even when they don’t get caught and canned). In this case, I speak of the reality-is-no-barrier type of armchair theorizing that passes for news in some publications. The epitomy has been Business Week’s article where the writer posits that Chrysler is too small to go up against companies like PSA - which, in case you were wondering, is smaller than Chrysler, and by a good margin, too. Indeed, Chrysler Group alone is much larger than most auto companies in the world - once you take out Honda and Toyota, it simply dwarfs any automaker outside the United States. The slow international sales are also not a huge issue; it’s not like Honda has penetrated every world market successfully. If American sales suddenly ground to a halt, Honda and Toyota would be badly hurt, too.
Another oddity was the suggestion that Chrysler no longer had any loan capability since that was mixed in with Daimler. Somehow I doubt this will be a real problem, especially since at least one now-famous import automaker used GMAC for years. The “journalist” at Business Week apparently also forgot what the majority of the DaimlerChrysler Credit organization used to be - namely, Chrysler Credit. But DCX would be crazy to let that moneymaker go any time soon. They’d also be crazy not to demand that Chrysler continue to use it. One more goofy argument gone.
Chrysler is working hard on international sales, and they’ll get there eventually, if they make the right vehicles. So far, they haven’t done much to tailor vehicles to destinations, other than drop in diesels and offer steering wheels on the other side; but to be fair, there’s been profit in their slow growth. The type of car they’d need to really crack foreign mass markets is either luxury cars that look like luxury cars, or A and B segment (small) cars - like the ones they’re about to have Chery build for them. Lack of manual transmissions is also an issue, but that’s partly a result of the money crunch.
Frankly, selling Chrysler wouldn’t bother me that much, depending on who got it. Kerkorian I might be able to trust a little; he’s clearly in love with the idea of controlling an automaker, for whatever reason, and though MGM’s movie business suffered under him, the parts of the business he really wanted seem to have done well. Magna, too, I could live with quite easily. The sleazy, politically connected private equity firms I don’t trust to have the resources or long-term willpower to make up for years of Chrysler abuse by Daimler (Kerkorian claims to be willing to go five years without an eye on the bottom line), and the very fact that they are so well connected to a particular political party tells me not to trust them - and that would hold true if it was the other party, too.
Let’s face it, DCX has already done its share of damage to Chrysler. There’s the bad-mouthing, destroying SCORE, driving off talent throughout the organization, promotion by brown-nosing, forcing bad, overpriced parts on Chrysler so Mercedes can get discounts, dropping Plymouth, losing capacity that could have been used to keep a Neon replacement while making Calibers, the badly designed dealer incentives, the slashing of customer center costs, the driving out of huge numbers of engineers and testers so that there are flexible plants but not enough vehicles or options to run in them, and the incredible damage to public confidence caused by all those “off the record” comments and insinuations from board members, the sale itself, and the losses apparently caused by accounting tricks. Would even a private equity firm do any worse?
March 12th, 2007 by Rich
First off, there’s a great editorial here
http://www.allpar.com/ed/chryslertakeover.html that has inspired me to write. I remember chryslertakeover.com, and thank Mr. Vitale for his work. I remember feeling this was a ‘bad idea’ in 1998. There was a time, not long ago, when Chrysler was busy saving Mercedes’ bacon and Zetsche was the toast of Detroit, that I thought this whole DCX thing might work out long term.
I believe I was mistaken.
It’s clear now that if Chrysler stays within the clutches of Daimler, it will slowly but surely be completely absorbed with only Jeep and Dodge Trucks left. Every “turnaround” seeks, supposedly, to grow by contraction - a short term answer intended to impress those looking to make a quick buck on the stock rather than actually grow the company long term.
There’s another angle, the one that suspects this is all a ruse to soften up the UAW. It’s a mighty sophisticated ruse then, as this has all the earmarks of really being an effort to sell. I used to place more credence in this idea than I currently do, but given what we’ve seen with DCX so far I hesitate to completely rule it out.
It is also possible that they simply will not get their asking price, and will eventually take Chrysler back off the market. In my opinion that is the least likely scenario, as they have created many, many wounds that they would then have to heal, a difficult task when they already have a plate full of those.
Key elements in Daimler want Chrysler gone. That also has been made clear. This not only makes a retention of Chrysler by Daimler seemingly unlikely, it also makes it undesirable in the extreme. For, if you cannot sell that which you want to be rid of, you can always dismantle it, jettisoning that which you don’t want and only keeping the bits that you still value.
Chrysler - as a company - ceased to exist in 1998. If Daimler does not find a buyer (and of course, maybe even if they do), Chrysler could very well cease to exist as a brand as well.
