Chrysler's China Deal Dies
Posted by: Bruce Einhorn on December 9, 2008
Smart timing from Chrysler. Just as lawmakers in Washington are debating whether to throw a lifeline to Detroit’s Big Three, the company has announced it is backing away from a plan to sell Chinese-made cars in the Americas. Chrysler had agreed last year to cooperate with Chery, one of the top automakers in China, but now the companies have decided to go their separate ways.
The announcement shows Chrysler’s PR guys are finally starting to get their act together. Like GM and Ford, the company suffered a huge image blow when its CEO foolishly flew on a private jet to Washington last month to beg for a bailout from Congress. By announcing the scrapping of its Chery deal now, while negotiations are still underway between Congressional Democrats and the Bush White House, Chrysler wins a PR twofer. The company dispels some suspicion about outsourcing jobs away from the U.S., which might win it some more support on the Hill. At the same time, Chrysler is reminding people about Chinese companies like Chery that have ambitions to become global players. With or without partners in Detroit, the Chinese automakers are not going away. Only yesterday, the Chinese news agency Xinhua reported the Chinese government was giving Chery $1.5 billion to support the company’s global expansion. If Congress and the White House let the Big Three go under, Chinese companies like Chery might be the ones that pick up the pieces.
