Chrysler’s idea of a sensible hybrid
Chrysler LLC, looking to return to profitability by 2009, is considering branding changes that would further simplify its product portfolio while helping to cut as many as 1,000 dealers.
A plan now being discussed calls for Chrysler dealers to sell all of the auto maker’s passenger cars under the Chrysler name. Dodge dealers would exclusively offer pickup and commercial trucks, while Jeep dealers would sell Jeep and sport-utility vehicles, according to three dealers familiar with the discussions.
Chrysler, which is facing sluggish U.S. sales because of housing-market weakness and high fuel prices, this month announced an expansion of a restructuring plan unveiled in February, saying it would cut its North American hourly work force almost in half by 2010. The company has also made several high-profile executive appointments since Cerberus took over.
And, of course, you don’t need as many workers to produce cars which ain’t selling.
Oh for the love of FSM, why don’t they just DIE already.
It’s not like they actually make anything in the USA any more (or if they do, they won’t be a year or two from now). It’s just an empty shell of a once great company, going through a very protracted death rattle.
About time. And if Ford has any sense left, it will drop Mercury, and GM will drop several brands.
About time. American cars are junk, American autoworkers are whiny, overpaid welfare-cases who expect the government (i.e. taxpayers) to bail them out again and again, and it’s never too early for these bloated dinosaurs to go bankrupt.
However, that won’t happen. Corporate welfare, baby. It’s the American way!
GM currently has Chevrolet (including vans and light trucks), Pontiac, Saturn, Buick, and GMC (including vans and light trucks).
It should cut at least 3 of those brands.
Forgot to include Cadillac, sorry.
Regarding GM, you also forgot Hummer and Saab, not to mention Deawoo (they are still sold in Korea, right?), Vauxhaul, Opel, and I am sure I am forgetting some others.
What has come to my attention, after talking to a few Mechanics, and talking to customers of US cars…
In the last 10 years, these NICE fuel economy cars that GOT great millage. AFTEr about the first 50,000-100,000 miles or 3-5 years..SOMETHING changed in the engines.
Some part, that gave them DECENT millage…BROKE or QUIT working.
After doing 25-30 MPG, they went to 18-23mpg.
I wont get into the DEBATe about the 3 speed transmissions, that they FINALLY went to the 5 speed.
OR that innovation/alternatives HASNT been the front of development, AS they promised in the late 70’s.
I wont debate the STEEL over aluminum which was supposed to make cars LIGHTER.
slikone –
Only the Hummer H3 is actually produced by GM. The H1 (soon to be discontinued) and H2 are manufactured by AM General, but sold by GM. But definitely another brand added to the mushy mix.
Saab is basically just a rebadged Opel now, and even its factory in Trollhattan, Sweden will be closed down in favor of Opel’s factory in Germany. Opel (continental Europe), Vauxhall (British Isles) and Holden (Australia) are sold only in their respective regions, so I don’t think they are redundant with respect to the US brands, with the following exceptions:
– Cadillac Catera, = Opel Omega
– Chevrolet Ave is built by GM Daewoo,
– Pontiac GT = Holden Monaro.
There used to be a separate division for GM’s captive imports (from Izuzu, Suzuki and Daewoo), but the older models were cancelled and the division was absorbed into Chevrolet.
(sources – Wikipedia)
I’ve been a mechanic for a long time, and have worked on just about every model car out there. Sadly, now that it’s too late I’m seeing most cars these days are all fairly high quality mechanically. You rarely see major component failures like we used to in the 80s. Chrysler makes a solid minivan, Ford’s new Taurus is *very* high quality, and chevy still makes the best bang for your buck large pickup. Toyota has gone down in quality, especially after making the same mistake Ford initially did by using a Chinese made transmission (Camry and five hundred).
Corporate foolishness killed American car makers, and it’s sad to see them ruined over the all mighty shareholders whims.
Ummm… do you think that shareholders divest from losing corporations just for their own amusement, Aaron?
I have for years declared U.S. Automakers as dead-men walking. I’ve stated over and over that domestic cars are crap and I’ve been right. However, after attending the LA Auto Show recently, I can say that the domestics, primarily General Motors are on the road to recovery. The new GMC Acadia and the Chevy Malibu being major indicators that the US Automakers can build a quality product, from design to execution. I think Chrysler is making the right move here–all the domestics have too many dealers and too many brands. I’m not sure if focusing all of one automotive segment to one brand is wise–I think Dodge, for instance, appeals to a “sportier” group than Chrysler. Chrysler to me is more like Buick is to GM–a bit more luxury oriented. However, aside from GMC, I can’t think of another brand dedicated to trucks (Hummer is more lifestyle like Jeep), so it’s an interesting decision. I think Cerebus has put together quality management and it will be interesting to see what the only major, privately-owned automaker can pull off.
Dear Tommy LaSorda: Could you please make a new line of cars that are equipped with turbo-intercooled 4-cyl engines and tall gear ratio transmissions? That combination would approach hybrid mpg in a fun and affordable car to drive. I’ll buy one if you build it. Please do it before the Chinese beat you to the market.
I was a good customer of yours in the 1980’s – 1990’s but right now I’m driving Honda and GM until you resolve this. My Honda wasn’t as good as everybody had me believe it to be, so you certainly have another chance. Get on the stick! Thanks, I’ll be here waiting, but not forever.
Is it time to dust off Lee Iacocca?
This is chronic case of not delivering what the market wants, preferring instead to invest in the high returns of SUV’s. Once again, greed proves to be it’s own punishment.
#0 – “Chrysler’s idea of a sensible hybrid”
I agree with your insinuation – it is a bit too small.
Ummm… Li – how can you get high returns if you don’t give the market what it wants?
SUVs gave high returns because they were what the market wanted. For a while, at least.
Their cars are crap. Customers have voted with their feet.
RE#2
Mercury can stay so long as they keep that babe in their commercials
Um, Frank, you don’t understand even the basics of this business, do you? Let me enlighten you. There are two ways to make money at big ticket sales; sell a lot of what people want at low margin, or sell a few of something perhaps less desirable at high margin. It turns out that SUV’s are high margin vehicles; the cost to build one is not significantly higher than a small car, and yet they can be sold for two to three times more. Which was all gravy while they were popular, but rather than look ahead to a time when energy might not be so plentiful (though there were plenty of signs) the big three basically just covered their eyes and repeated their mantra; “SUV’s for-eva!”. They are only now recovering from this strategic blunder, and I don’t know if it will be in time to save them. It looks more and more like they are trying to bail out a ship that is already underwater.
Well, actually, there is a third way; financing the purchase of your big ticket item. GM and Ford managed somehow to mess that up too, even though car loans are practically a license to print money.
Li, you just refuted your own argument.
If an SUV can be easily sold for such a high margin, then there is clearly a demand for it. The problem is that demand changes over time. Failure to react to such changes in the market is not greed but short-sightedness.
When you build your business model around selling things at high margin, and then people fail to buy at that price and you have no backup plan, how is that not blowback from greed? After all, we are not arguing about the state of things in the 90’s, when people did buy despite the high margins, we are talking about now, when people are not buying them. It’s not the big three’s fault that the demand changed, but I didn’t say that, what I said was that greed blinded them to the fact that it would change. I would say that it is itself short sighted to not see the link between greed and short term thinking, especially in this case.
Chrysler got bailed out before, by the Feds, because it made tanks for the DoD (and bribed, er… lobbyed, enough Congressmen). Major defense contractors never are allowed to die. Only the brand names of their wares. Which is why Airline Companies can disappear, by big aircraft makers don’t. As long as Chrysler makes tanks, it will be kept around. As long as GM makes army Hummers and A-bombs, they’ll survive. And I’m sure that Ford makes something that the DoD can’t live without too.