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Is there still hope for Chrysler?

by Andrew R. (December 2000)

As a once strong follower of Chrysler, I can't believe what is happening anymore. I'm pretty much sick of all the news about Chrysler, its losses, fired employees, closed plants, etc.. After Kerkorian and the lawyers get done with the lawsuit, I'll see what I'm going to do with Chrysler. If they win and split the two up, I'll be very happy. If they lose, I'll probably lose all regard for Chrysler. It can die a miserable death if Daimler wants it to, I wouldn't really care.

The thing I'm so surprised about is the missing voice of the Mopar fan. I've been to two Monster Mopar weekends after the takeover, and I didn't see anything with regards to 1) saving Plymouth, 2) or outrage about Daimler's treatment of Chrysler. Nothing!!

There does not seem to be too much support on this side of the ocean. It sounds like some of the Germans are rallying behind Schrempp, and they believe he is doing things right for Chrysler.

I've been on Camaro/Firebird sites that have a long, long list of supporters to petition GM's decision to kill the F-body. I've heard at GM weekends that there were booths getting signatures to save the F-body. And now, since I made a comment on Detroit News, I'm part of a group trying to save Oldsmobile. They're going to have a petition drive and try to present the signatures to GM. Why am I saying this? Outside of some people's participation and work, there hasn't been too much noise coming out of the Mopar camp. Is it because we can't do anything or we really think Chrysler died in 1979? I don't know. I'm almost tired of fighting to get Chrysler back.

As for the future, I'm not too thrilled about Chrysler's product lineup. Nor am I too thrilled about the U.S. auto industry's chances of getting better. I'm almost at the point where I'll start cheering for the imports.

Toyota has done more great things than Chrysler has done in the last 20 years. Honda, Volkswagen, BMW all look like they will rule this country pretty soon. My belief that Chrysler and the U.S. auto industry would rebound from the 70s and 80s into stronger companies is shot. So what if the next Ram is going to be great? It is going to be good for people who like trucks and it will make Dieter Zetsche and Schrempp look smart. Otherwise, I could care less about the new Ram or anything else because I'm not going to buy it. I've already made a list in my head of vehicles that are better than Chrysler vehicles in their respective classes. Almost all of them are imports. I'll have no loyality toward these companies, but I guess it doesn't pay to have loyality anymore.

Chrysler still has some good engineers, designers, and middle managers, but it is the top management [that is the problem]. Maybe Daimler will fix the problems that have plagued Chrysler for so long. We know the American managers sure didn't, because they don't work there anymore and Chrysler has to be saved yet another time. I know Daimler had a large hand in the matter, but does John Q. Public?

What I'm trying to say is that I always believed Chrysler would become a better company after all of the hard work to save it from bankruptcy. Chrysler was doing well in the 90s, but it still could have gotten a lot better in my opinion. By the way, where did all that greatness of the 90s lead? Nowhere. Chrysler is owned by somebody else who has total control, and it still has to be saved again. All during this, Honda, Toyota, etc. are seeing their sales increase. They are actually growing while Chrysler is sinking. Great products or not, things were not done to keep Chrysler stable and growing for the future.

As for hope, I'm waiting on the Kerkorian lawsuit. If nothing good comes of that, I'm done with the future Chrysler. I'll look at old Challengers, etc. and visit this site, but that's it.


Bill Cawthon

I appreciate your point of view. Really. I literally grew up in the Chrysler Corporation. But just as with the F-Bodies and Oldsmobile, petition drives aren't going to help. The simple fact is that the sales aren't there, even with huge rebates and heavily-subsidized financing. The Mustang has been outselling the combined total of Camaro and Firebird by as much as three-to-one and Oldsmobile has been in the dumps for years. Oldsmobile is still selling cars that were last produced in 1999 and was never able to establish itself with a unique, compelling brand. Frankly, Oldsmobile was going away whether GM killed it or not.

In Chrysler's case, outside of the Ram pickup and Jeep Grand Cherokee, it's very seldom that a Chrysler product makes it into the top twenty brands in monthly sales. I hated to see Plymouth go, but it has been playing second fiddle to Dodge since 1977 and there was no real business reason for its continued existence.

One of the hopes that Chrysler had for the PT Cruiser was to generate showroom traffic that would boost sales of other car lines. Within the first few months of its introduction, Chrysler knew that wasn't happening. Lots of folks wanted a PT Cruiser and weren't interested in anything else that Chrysler had to offer. Whether the line is "old" or not, Chrysler has product problems.

Chrysler's advertising has also been poorly conceived and executed for the most part. They have had very little success in establishing the image and branding that would help them. True North-FCB did a good job with some of the Jeep ads and the original 300 ad (too bad the product didn't live up to its billing), but what happened to everything else? BBDO, which did Dodge, kept Edward Herrman going far longer than needed and spent too much time promoting rebates instead of products. The trucks got lots of coverage, but it seemed the only time the cars got much mention was when they were having a sale or rebate. So when Bud Leibler, VP of such nonsense, decided to consolidate all corporate advertising in one in-house agency, who did he select? BBDO, naturally. Somebody needed to kick his butt around the city limits of Auburn Hills.

In addition to Chrysler's unique problems, many Americans perceive the foreign products as being better-built, something brought out annually by J.D. Powers and the recalls. The best-selling car in the period 1990-1999 was the Honda Accord, followed by the Ford Taurus. For the past couple of years, the Toyota Camry has been the top-seller. Most of the Accords and Camrys sold in the U.S. are built in the U.S. The Mercedes ML320, ML430 and ML55 AMG SUVs are almost all built in Vance, Alabama; even those headed for Germany. And yet the Mercedes SUV outsells its American competitors from Lincoln and Cadillac. BMW builds their X5 SUV and Z3 sports car in Spartanburg, South Carolina. So it's not an issue of foreign workmanship. The BMW's flagship performance car, the Z8, is built in Germany but it was designed in California. Toyota also has a design center in California.

So if it isn't the American workers, and it isn't the American designers, we're left with the engineers and the management. I don't think the problem lies with the engineers. Former GM chairman Roger Smith once said, "We're not in business to make cars, we're in business to make money." It's a fact that GM management decided to build cars with gas tanks in a dangerous position because they estimated it would cost $2 per car to cover the lawsuits and $8 per car to move the gas tank. Children were literally burned to death because of this decision. This kind of thinking is why there are so many recalls of Ford, Chrysler and GM cars and so few of Hondas and Toyotas. And why the imports are having a banner year.

Chrysler's current financial problems come from a variety of sources, some of which have nothing whatsoever to do with either Dieter Zetsche or Juergen Schrempp. And they aren't going to be corrected quickly or by Kirk Kerkorian's lawsuit. Sales of domestic cars have been declining for a couple of months. Vehicle sales have been on a record pace since 1994 and most of the people who are going to buy a new car have already bought one or more. The growth had to slow sometime. Beyond that, American manufacturers have gotten consumers addicted to rebates, and they have gotten unprofitably competitive as companies have tried to drive more sales. Vehicles coming off lease aren't worth what was originally thought they would be, meaning another hit on the bottom line and the elimination of a channel that brought lots of sales.

Worst of all from a long-term point of view, there is increased foreign competition in the most profitable markets, meaning light trucks and SUVs. In 1999, American manufacturers made all their profits from light trucks, minivans and SUVs. As a group they lost $4 billion on passenger car sales. It may be that transfer payments to Mercedes-Benz have aggravated Chrysler's financial problems, but the core issues go much deeper than that.

Chrysler's long-term salvation may come more from German management that Kirk Kerkorian's suit. The reason for this is simple but important. German stockholders and directors, like the Japanese, take a longer-term approach to things. This is why Schrempp still has support from his board. Managers in the American auto industry, like managers in almost every American industry, are driven by the quarterly earnings report. American stockholders and directors seem to be totally focused on the short term and the bottom line. This causes problems in both product planning and product design. It also breeds a timidity when decisive action is required. Everybody on Wall Street is pleased with Rick Wagoner for axing the Olds brand. No one other than a lot of people who depended on Oldsmobile for their livelihood seems to care that it was the coward's way out.

Chrysler can survive and prosper. But it will take more than band-aid solutions and bean counters. Chrysler clearly can develop and build vehicles people want to buy without rebates. Chrysler engineering has historically been second to none. Until recently, Chrysler was profitable while being the favorite client of all its suppliers. It had a better credit rating than either Ford or GM. Chrysler is now part of a company whose engineering and quality have been regarded as world-class for years. There is no reason with all these assets that Chrysler should fail and die. But as much as I admire your spirit and fervor, it's going to take a lot more than petitions to convince Juergen Schrempp, Dieter Zetsche and Wolfgang Bernhard to make the right decisions instead of the quick fix.

Bill Crews

I too am a very strong Chryler fan. I have been involved with MOPAR products since the 60s. Chrysler has had its ups and downs as have all auto companies. I agree with the writer that we need to rally to save Chrysler. We should call or write to the board of directors or whomever in Detroit and Stuttgart. This is such a shame that a great American company is being raped by these businessmen out for nothing but themselves. Give us some phone numbers or addresses and let's show the fools that are ruining Chrysler that we won't stand for it. I can guarantee you that if it were GM or Ford that this was done to, the US government would not stand for it. They would be involved. Why not now?

I will continue to support Chrysler and continue to buy and drive its products as long as I can. Chrysler has been a part of my life for almost 50 years. Help us with your support and efforts to save a great American company. It worked once, and we can do it again. Thanks.

Curtis Redgap wrote:

While Mr. Bill Cawthon purports to appreciate the points Andrew sets down, I rail at the direction he says we must accept. Mr. Cawthon exclaims that petition drives won't help. But just how does Mr. Cawthon know this? Is there some insight that he has that the rest of us do not? How can people just accept what big business or government says as being the absolute end all to any problem or situation. How do you know that it won't arouse more stock holders who might light a fire under Daimler management?

This is the greatest country in the world. Somehow, Americans are lead to believe that we can't do anything without the blessing of government or big business. Yet, this country leads the world in development, self dependency, and free enterprise. Going from zero to the biggest power in the world in about 225 years. How long has China been around? Germany? England? Where are they without the people of the United States? Notice I said people. People in this country can do anything they want, up to and including changing government and big business. That any individual purports that one person, or group cannot do anything to change things, is wrong!

The allegation that Oldsmobile has been "down in the dumps" means what? How much sales is enough? 5 million cars a year? 10 million? or 100,000? The fact remains that Oldsmobile is the oldest automobile manufacturer in continuous production in this country. Without the slightest regard for the impact of the decision to "kill" the brand, it just goes away. Gone, like Plymouth. Not due to the cars themselves, but to half baked programs, poor advertising, corporate greed, and management maliase.

Since the mid 1950s, something has been going on in this country that bears much more scruntiny than the people are willing to commit to. Look at all the good automobiles that are gone. Most expired within a few years of General Motors via Buick deciding that it was going to move automobiles, no matter what. It continues. Are you going to tell me that there was no room for a Packard or a Hudson or DeSoto with a 17 million car sales per year market? And now there is no room for Plymouth and Oldsmobile?

When business becomes, as Mr Cawthon purports, a proposition to make money, rather than products, then we have the situation, as it exists in this country. That is how a money maker, like Daimler, could buy off an idiotic Chairman of Chrysler and turn it into whatever it has been attempting to do with Chrysler. As the saying goes "build it and they will come."

Motor vehicle Automotive design Automotive tire Vehicle door Classic car

Plymouth used to be known for a higher quality, better built product than either Ford or Chevrolet. That is why Chrysler was a big number 2 in Detroit up until the 1949 Ford hit the streets. Certainly people at Chrysler knew of the new models of Ford and Chevrolet. However, due to the internal largesse that existed, K.T. Keller choose to "stand pat." Keller was no Walter Chrysler, and Walter had effectively checked out of his own business in 1935. No one stood up for Plymouth consistently. Virgil Exner pulled Chrysler, via Plymouth, out of the doldrums, starting with the 1955 models. The 1957s, had they not been rushed, like the 1934 Airflow, would have made Chrysler a force of reckoning for years to come. What caused it all? Money. More consideration for the intake of money, rather than the product the money was meant to buy. Made GM a mess into the late 1970s, and Ford was nearly whipped in the same time period. Chrysler, as we know, almost went away.

I never saw Lee Iacocca as the great savior for Chrysler either. He failed to make products, and nearly bankrupted Chrysler again. Only by development of products that people want and get excited about, will a company go beyond survival or be more than a means of money intake. Chrysler was on the high road to that peak, when Eaton cut the company off at the knees. The fact remains that if you build a better mouse trap, the world will beat a path to your door. And if they have been building that mouse trap, and some idiot undercuts it, then the people need to raise 14 kinds of hell to get it back. People in force are unstoppable.

Yes, Chrysler has product problems. Chrysler has management problems. Chrysler has advertising problems. Chrysler has plain old problems. But, about 8 years ago, when the "LH" family was nearing introduction, people were excited. Problems are challenges to make you do better, not road blocks to stifle your efforts. If you do not see that way, then you are a problem!

I read with some consternation the results of the 2000 Michigan State Police vehicle comparison tests. Yes, there was a Dodge Intrepid test vehicle included this year. There was also a Durango. All around the Intrepid is a better vehicle, comparison wise, than the Ford Crown Victoria. It is quicker and faster. It doesn't stop as well. Brakes were always a Chrysler strong point. The same comment went for the Durango. Brakes. Unbelieveable! I can remember when as a Sheriff's Deputy, we used to rush to get assigned the Plymouth patrol cars because of the capability of the brakes as opposed to the Ford cars. The 4 speed automatic transmission that Chrysler developed has been a hassle. Why? Torqueflite was the best, bar none. What do money changers think when they see the absolute best product for the market? Does a good product cost that much money?

No, I don't want a quick fix. I hope that the Kirk Kerkorian lawsuit is successful. I predicted some months ago in this forum that such a thing would occur because it was not a merger of equals, but a fraud for an outright take over. However, it is not a time to stand by and just watch either. You got to get involved. Write, call, shout, participate in this forum, argue, complain, curse, scream, kick and scratch.

If you are not involved, then you are again, a problem. Just remember, those people who would give up a little freedom to have a little security, soon find that they have neither. So goes Plymouth. So goes Oldsmobile. What's next?

Rob Smith wrote:

As for hoping that the Germans will save Chrysler, let's do forget that. The ones at Daimler aren't smart enough to realize that if you run Chrysler like it were Daimler-Benz, Chrysler is dead in the water. Let's not forget that, for a while, at least, Chrysler was building cars as well as trucks that did not need to be sold with rebates off the bat. They could do it again if the Germans would get out of the way.

On the matter of rebates and resale values, the same problem plagues european manufacturers at home, at least on the British market. There, instead of rebates, there have been considerable price cuts, even on Mercedes Benz cars.

As for Chrysler's cars, there's little that's really that wrong with them. Myself, I wished that they'd develop a coupe off of the Sebring convertible platform, instead of using Mitsubishi for that, but I can't complain about the result much. I've dirien both the Dodge and Chrysler versions, and enjoyed both immensely. I'd buy one tomorrow if I felt I was financially ready to do so.

John Boyadjian

In response to the editorial, I feel it has a very wrong view.

I feel a little guilty that I am only 17 years old, and cannot get involved yet, the majority of the problem being that no one would take me seriously. However, being 17 and a Chrysler fan is a rare and realistically, an arbitrary thing. Nevertheless, I am proud of the company, and love its products.

When I was in the school library signing onto my account, the bulletin of Chrysler Corp. joining Daimler-Benz came up. The first feeling I had was a negative one; I knew deep down, no good could come from this merger, or acquisition. And my gut instinct was right. I've always had a liking to the German vehicles, and still sort of do, but when they get involved in American cars and the American market, that's like me, a 17 year old, trying to run for president. It can't be done, and only negativity could come from it.

I would seriously be devastated if Chrysler would vanish, but why can't we, the Americans, who know our own market, but Chrysler back home at a low price, and build it, back up. We did it in the 70s and 80s, we can do it again.

When I'm out on the road, it gives me great pride to see a Chrysler vehicle go by. They are, by far, the more attractive vehicles on the road today. They are crafted better than any other American car, and if the bigots out there can get around the tainted Chrysler name and actually look at the product, they will find out that Chrysler products could beat any of GM's or Fords, and possibly the overseas brands.

If Chrysler loses, if America loses Chrysler, then America in the car market will be tainted with nothing but a bad name. The only praise I give to the Germans is that they are standing by our Chrysler for the long haul, where an American management probably would not, but that might be speculation, who knows, we could resurrect Chrysler a second time, and I hope we do. Because if Chrysler dies by Blitzkrieg, then we would have lost an important part of American heritage. Chrysler has been the most innovative automotive company in the U.S. Never scared of trying new things like the Airflow, or the K car, or the PT Cruiser. That is part of the reason it has had funding peaks and valleys. However, in the end, Chrysler always prevails. We cannot lose a brand that was rated number 1 for quality by Consumer Reports. It would be an American outrage.

Bill Cawthon:

Corporate executives are not politicians. They have to please customers who pay for the products. They have to please boards of directors who can fire them for not making enough money or not reducing costs. They have to please stockholders and Wall Street investment analysts. They don't have to please people who just sign petitions. Why? Because people who sign petitions haven't put their money where their mouth is and that's what it's all about.

Like it or not, business is about making money. Sometimes you make money by making products, sometimes you make it by shipping products, or selling products. Or even picking products up after they've been discarded. But at the end of the day, it's all about making money. Yes, making a good product will often make you more money. But making money is why you make the product in the first place unless you are an artist or dilletante.

As far as influencing stockholders, Deutsche Bank owns twelve percent and is standing pat, a Kuwaiti investor holds seven percent and is standing pat. Last time I looked, the majority of DaimlerChrysler stock is owned by Germans, some of whom don't like Schrempp but aren't calling for a dissolution of the merger. The only stink so far in Germany is being raised by people who own small numbers of shares.

Kirk Kerkorian is suing over loss of stock value due to misleading statements by Juergen Schrempp, not because Schempp closed Plymouth or brought in Dieter Zetsche who might close plants or require layoffs. This is also the basis of other American lawsuits. Once again, it's about money. Maybe a little face, too. Schrempp really should have taken the time to talk to Kerkorian.

If you want your name on something they have to care about, buy stock. Stock ownership means you get to vote, get to show up at the shareholders' meeting, get an opportunity to be heard. The more shares you own (or control by proxy), the more votes you have. DaimlerChrysler stock is trading in the low 40s these days, so pick some up. GM's pretty cheap, too.

As far as Oldsmobile goes, what's enough? Obviously a sales level not seen since 1952 wasn't enough. Five million? At five million annual sales, Oldsmobile would be GM's Golden Child. Try under 300,000 units for the entire year. With five product lines and an ad budget of $330 million. And billions in product development. Frankly, Rick Wagoner and Ron Zarella are less likely to listen to a petition than Dieter Zetsche or Juergen Schrempp. Even the city of Lansing, which has a bigger stake in Oldsmobile than anyone, has figured that one out. The only signatures that could possibly save Oldsmobile right now would be large numbers of them on sales orders over the next three years. If people would consistently start buying Intrigues, Aleros, Auroras, Silhouettes and Bravadas in enough volume to pass Saturn or Buick, GM might re-think its decision. But right now, people like financier Carl Icahn are snapping at GM's heels, once again upset about stock value. Incidentally, Wall Street was delighted that GM axed Olds. Their only complaint was that GM took so long.

The same is true of Chrysler. With the exception of the Dodge Ram, Jeep Grand Cherokee, Caravan and PT Cruiser, Chrysler doesn't have a lot of success stories right now. There's lots of competition in the minivan market and Dodge Ram sales are down. Monthly sales numbers are posted, it's not a big deal to follow them. Yes, when the cab-forward cars were introduced, it was a shot in the arm. So was the Ram pickup. The PT Cruiser would be a home run if they could produce enough of them. But there are Neons, Sebrings, Avengers, Intrepids, Concordes and so forth. The Neon and Intrepid seem to be the only ones that can get any volume and they are wildly inconsistent month-to-month.

Juergen Schrempp has already publicly said he sees a 2-4 year rebuilding cycle after which he expects Chrysler to return to American management. This is why I said the German occupation of Auburn Hills might be a blessing. German management and German investors are willing to let their bets ride for that long, something that probably wouldn't happen under American ownership. As I said in my original statement, American managers and investors live from quarter to quarter.

As I also said, if Chrysler and Mercedes engineers and managers can get together and learn from each other, they can produce cars that would be the envy of the world. A car lineup from entry-level to ultimate luxury without a gap. Rock-solid quality should be no problem. Neither side currently has a lock on the total solution, so synergy is the way to go.

If they can't pull it off, look for Chrysler to become part of Honda or maybe just a part of history. Just like Packard, Hudson, Desoto, Studebaker, Knight, Maxwell, Stutz, Kaiser, Oakland and hundreds of others. Or for that matter, Horch, Triumph, Austin, Wolesley, DKW and Borgward. If they can't make money making and selling cars, they go out of business. The history of the auto industry is littered with almost-forgotten names, broken dreams, lost fortunes and bankruptcies. And it's not over yet. Look at what's happening at Daewoo or Hyundai. Mitsubishi is riddled with debt. Nissan is controlled by Renault and Mazda, Suzuki and Isuzu get their marching orders from Detroit. MG Rover may yet fail, leaving Morgan as the last British-owned car company. And not a petition in the world can save them.

If you want to make your voice heard, become a stockholder. If you want to be part of the solution, you're going to have to buy into the problem.

Incidentally, my Dad would agree with you about the 1957 cars. He was head of Dodge at the time.

Rich Hutchinson wrote:

Cheek Hairstyle Collar Chin Forehead
I think, tentatively, that there may be hope. Some product budget cut reversals are promising. We'll see come February. At this point anything that gets rid of Holden is a blessing...even German managers. I'm willing to give them a shot. But, as the NFL playoff commercial says, show me something. I would definitely support a writing campaign; indeed I have written. My opinion's in my email signature; and on my web site.

My problem with Kerkorian is he was instrumental in this whole mess to begin with. His own takeover bid chased Eaton into Schrempps waiting arms. Would a stronger CEO have aquiesced? Would Bob Lutz have? If we blame Eaton, we must also blame Iacocca, just as we blame Eaton for Holden. But I digress.

I'm concerned that Kerkorian is, again, simply after the money and whatever deal he can wrangle he will...and then go back in the shadows. This is not likely to do Chrysler any good.

There are those who insist that Daimler is going to sell off Chrysler, comparing it to Fokker. Thing is, the Fokker purchase (however much it was Juergen's baby) didn't create DaimlerFokker. I really don't see Chrysler being sold off; Daimler needs the cash - long term. In order to get the cash, they need a healthy Chrysler.

Which is far from the current state of affairs. Schrempp needs a Chrysler turnaround to save himself. It's not surprising he would choose those he intimately knows to head the operation. After all, the last time someone else picked the Chrysler head things didn't turn out too well. I'm hearing rumblings of an eventual return to American leadership for the Chrysler Group.

Am I hopeful? As far as a healthy Chrysler Group, yes. Optimistic? Not really. Not yet. We'll have to see on that front. As for an independent Chrysler again? Frankly, no. I don't see it happening. I do however, hope I'm wrong.

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