Posted by: David Kiley on January 9, 2009
Is this the end of days for Chrysler…finally?
I don’t wish it so. But it has been coming on for some time. And it’s like watching a loved one who has had a disease that’s finally finally catching up.
The company has to show the U.S. government “financial viability” by March 31, and its has until mid February to gets its business plan done. I just don’t see how it will make its case. And I suspect that the car czar, whomever it might be, will come to that conclusion too.
For me, it hasn’t been love of Chrysler exactly. After all, I have never actually owned a Chrysler. The closest I came was the 1974 Dodge Duster my brother owned in college. But I have driven everything, sometimes as a press car and many times as rentals. You see, I often rent from Thrifty. And it’s tough not to wind up with a Chrysler when you go to Thrifty.
The company’s viable products are really down to minivans, 300 sedan and Jeep Wrangler/Grand Cherokee. Despite what many say about how the company has depleted Jeep brand equity, I still believe the brand is worth at least a few billion dollars to a company with the resources and desire to improve quality and design. Certainly $1 billion-$2 billion at mimimum.
But this money that the U.S. government has loaned Chrysler seems to me to be just a cork in the dike to keep the company from filing Chapter 11, and thus perhaps taking GM and Ford down with it. It’s not to prop the company up long term.
And so the company will likely be broken up this year in some fashion. GM still wants the minivan and Jeep business. Maybe it will get its wish. The Dodge truck business is of use to some automaker. After all, it is brand new and has a strong customer following that will keep at least one plant profitably cranking them out for the next five years. That truck would be a great way for an existing automaker like Nissan to buy into the truck category, or for one of the Chinese or Indian automakers to buy into the U.S. market.
The company this week at the North American International Auto Show will show the same electric vehicles we saw a few months ago—extended range electric versions of the minivan and Jeep Wrangler, and one all-electic sports car. It also has new designs of the Chrysler 300, Dodge Charger and Jeep Grand Cherokee in the wings, but we won’t see those until the Chicago and New York auto shows in the next few months. Perhaps the 300 and the factory that builds that and a Dodge sedan will be of interest to someone. But let’s face it. If the 300 disappeared now after a decent run, would we really miss it? I say let it go, and the Dodge, and decrease the surplus population of sedans.
In its most recent autos report, Consumer Reports couldn’t even find a single Chrysler, Dodge or Jeep vehicle to recommend in Chrysler’s lineup of nearly 30 products. “Many of Chrysler’s vehicles rank at the bottom,” CR said. “Chrysler falls short,” it said.
I don’t wish Chrysler’s death. The people I know who still work there, and who make normal salaries, deserved better than what they have gotten from Daimler and now Cerberus. But in my business, I get asked to recommend vehicles all the time. And if Consumer Reports and J.D. Power can’t recommend any of their new vehicles, how can I?