NINETY EIGHT REGENCY

Chrysler May Axe Four More Models and Is $1B Short on Revenue

42 posts in this topic

Friday, November 30, 2007

Chrysler May Axe Four More Models and Is $1B Short on Revenue

By Brendan Moore

11.30.2007

Business students in St. Mary’s University in Nova Scotia learned a bit about what Wall Street and the automotive press wants to know about Chrysler LLC from Steven Landry of Chrysler; that is, that the company may cut up to another four nameplates soon, and that they’re forecast to spend more than a billion dollars more than they will bring in this year.

Steven Landry, EVP of North American Sales for Chrysler, was at the school to donate $100,000 from Chrysler and spoke to the students as part of the event. Landry graduated from the school in 1982.

This is all according to the Daily News in Halifax, Nova Scotia.

The last time Chrysler said anything about its finances was in May of this year, so this is indeed news.

Regarding the financial data, Landry reportedly told the audience of students, "You have to come to the realization that in some instances, you've got to stop spending. You've got to right-size what you do to the revenue that comes into the company."

Regarding the model cuts, the Daily News reported that Landry said Chrysler plans to reduce its nameplate lineup from 28 to about 20.

Now, doing the math, that means four additional nameplates are going away soon since Chrysler just announced that the Chrysler PT Cruiser, the Dodge Magnum, Chrysler Pacifica and Chrysler Crossfire will cease production. That leaves four more on the bubble if Chrysler intends to get down to 20 from 28.

Chrysler LLC immediately cautioned against giving too much weight to Landry’s statements to the students, saying that he was speaking in general terms to a group of students in an informal setting.

Chrysler spokesman Mike Aberlich stated, "He's not saying we want to be at 20 tomorrow or next year. He's saying an ideal. When looking at three brands like this, it makes some sense to get to that point, and we are moving in that direction. I know he didn't specify a timeframe."

"I wouldn't be looking for another four announced tomorrow, or next week or next month."

Backpedaling by the company aside, I’m more inclined to believe that Mr. Landry was being candid in speaking to those students, and that there is a great deal of validity to this statement. In fact, I’m willing to bet that 20 nameplates is the exact number of models they’re aiming for, and Landry just let it slip, that’s all. As to the spokesman’s point that he didn’t mention any timeline, well, it’s worth noting that Chrysler LLC and Cerberus, their owner, have not hesitated in acting once a decision has been made regarding Chrysler’s turnaround efforts.

COPYRIGHT Autosavant.net – All Rights Reserved

source:

http://www.autosavant.net/2007/11/chrysler...models-and.html

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Hmmm...4 more. Patriot, Compass, Commander, and Aspen, perhaps.

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Hmmm...4 more. Patriot, Compass, Commander, and Aspen, perhaps.

I'm gonna guess you're right on Commander and Aspen. I'd hope you're right on Compass. I disagree on the Patriot, that should stay.

So, my list would be Commander, Aspen, Compass and Nitro. I'd also put one of the midsize cars and a minivan on watch. Chrysler believes they are too redundant and will be able to consolidate volume into single product lines...good luck with that.

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Hmmm...4 more. Patriot, Compass, Commander, and Aspen, perhaps.

That's a good list, ay. I support that totally-being back the Wagoneer instead, as a real full-size, when the times get better. At the very least, the next Grand Cherokeee needs to be significantly bigger and better than the current model, which suffers from a crummy interior (though not as bad as some other products, but still not that good-or comfortable) and limited passenger and cargo room.
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Hmmm...4 more. Patriot, Compass, Commander, and Aspen, perhaps.

Sounds about right, either that or the Nitro instead of the Commander, but the Commander has been on watch for some time now. Funny though, I see far more of them. I would almost lean towards Nitro because it is reduant in the lineup as it's similar to the new Liberty, whereas the Commander is not...it's a CG with 7 seats and different look.

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Here are my next picks for elimination:

* Sebring sedan: Competes with Avenger. Pulls down Chrysler's brand image.

* Aspen: Competes with Durango. Pulls down Chrysler's brand image.

* Compass: Competes with Caliber. Dilutes Jeep's brand image.

* Commander: Competes with Durango. Bad execution for a 3 row, 7 passenger SUV.

* Nitro: Competes with Liberty. Rapidly shrinking market segment that could be competently handled by Jeep alone.

I would keep the Sebring convertible and Patriot for now. The Sebring convertible doesn't directly compete against anything else at Chrysler LLC and is more attractive and brand appropriate than the sedan version. I would keep the Patriot because it is currently the only true compact crossover vehicle at Chrysler (the Caliber is more of a glorified hatchback and the Compass is simply beyond description).

I also think the Town & Country should go. It saddles Chrysler with a dowdy image and it competes with the Grand Caravan. The Grand Caravan could provide option packages to handle the T&C's absence in the market. The only drawback to this would be that with the Pacifica on its way out, the T&C is the only non-traditional SUV people carrier in the Chrysler brand's lineup (unless they eliminate the Aspen, then the T&C would be the only people carrier left in the lineup).

If the Dakota is performing as poorly as reports indicate, then maybe it should go. This will take Chrysler completely out of the sub-fullsize truck market: but if it isn't selling, then it might not be worth keeping it around. It would be sad to see Dodge/Chrysler completely leave this segment.

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Well, this is good news, anyway. A few more blocky, $h!-brick Post-DCX Chryslers are going to be sacrificed to make the new ones that really count actually competitive this time.

I just hope that Dodge doesn't give up a market segment and kill the Dakota. That wouldn't be a good idea.

Edited by YellowJacket894
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Well, this is good news, anyway. A few more blocky, $h!-brick Post-DCX Chryslers are going to be sacrificed to make the new ones that really count actually competitive this time.

I just hope that Dodge doesn't give up a market segment and kill the Dakota. That wouldn't be a good idea.

I hope they don't give up on the Dakota either, rather they should put that new small diesel they are working on in it and work on fuel efficiency. As gas prices continue to rise smaller cickups will look more appealing...because people will still want pickup utility.

I just hope we start seeing some of these new ones in testing soon.

Edited by Dodgefan
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Cerberus’s “Next 100 years” tagline might be plausible if the products Chrysler has were brilliant. But they aren’t. Chrysler has one really good engine (its 5.7l V8 Hemi), two good, but aging RWD sedans and a new minivan which, while reasonably good, hasn’t exactly received the stellar reviews needed to fend off the Odyssey and Sienna. Everything else in Chryslers current product portfolio is either now a clear also-ran (virtually every SUV and truck Chrysler makes) or, in some cases, very poor (Sebring, Caliber, Liberty, Nitro, Avenger, Commander, Compass and PT Cruiser).

The rather “old-boys network” choice of Robert Nardelli as the new CEO and Chairman of Chrysler makes for a strange combination of old-school GE six-sigma management philosophies, a private equity investment model and a company in need of major capital investments. Nardelli does know his stuff when it comes to building organizational structures from the ground up, as his impact at Home Depot illustrates despite his many detractors stating otherwise. When taken in context, however, it is seems obvious that Nardelli’s job is to get Chrysler’s fundamentals just sound enough to make them a good acquisition target.

Specifically, this means removing as much cost as possible from the core production operations (his background at GE Power), while providing the skeletal structure needed to make Chrysler a functional semiautonomous business that can be easily integrated into a company that acquires them. This explains Jim Press being brought on board to clean up their marketing and sales organizations. What this does not mean is major investments in engineering or product development talent, as it is very likely that the next product cycle won’t be based on their existing platforms or engineered in Auburn Hills. An asset that stays with the company when it is sold will be Jim Press, who will most likely run Chrysler in the same fashion that he ran Toyota’s North American operations.

The most plausible scenario is that in 12-18 months, Chrysler will be solid by Cerberus, at a substantial profit, to a company looking to broaden its reach in the US market. The most obvious fit would be the Renault-Nissan alliance, in that it would perfectly fit the divestiture model Cerberus generally likes (they maintain an equity position or receive equity in a combined organization as a second phase return) and would fulfill Carlos Goshen’s goal of building a global conglomerate. It is possible Chrysler will be paired with some other organization, but expect it to be a major automobile maker, not a smaller Chinese or other lesser known manufacturer, as they will not be able to provide the necessary engineering and capital assets needed to make Chrysler’s brands successful.

As for Chrysler returning to the glory days of 92-97 as an independent company, forget it, as it's notgonnahappen.com.

-Mak

08 CTS FE3 with 6 on the floor.

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Again, for the 100 millionth time, the first four models being dropped do NOT include the entire PT Cruiser line!!!!!! When will so called journalists stop reporting half truths?

It is JUST the convertible PT, darn it!

Edited by Chicagoland
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Again, for the 100 millionth time, the first four models being dropped do NOT include the entire PT Cruiser line!!!!!! When will so called journalists stop reporting half truths?

It is JUST the convertible PT, darn it!

All PT Cruiser production is done after the 2009 model year. Frankly, it couldn't happen soon enough as having just spent two months in a bright blue PT Cruiser rental, I have to say that to find a bigger piece of $h! you have to scrape the bottom of Hyundai's lineup or buy a used Cavalier. It is horrible in those special ways that only Chrysler seems able to make a car suck.

Enterprise gave me this PT Cruiser brand new (20 miles); how does a brand new car already have a transmission shudder? Why does the tire pressure light go on and off even though the tire pressure is fine? Why is there an alarming smell of gasoline every time the car comes to a stop? Why is the carpeting pulling away from the base of the center console? Why does the center stack jut into my leg space with a sharp edged shape that causes me actual pain because I hit it every time I move my leg around? Why are the gauges difficult to read during the day AND during the night? Why does the engine sound like it's chewing on itself? And WHY, dear God, WHY does everything feel about 100 bucks cheaper, from seats to switch gear, than anything else on the market?

The PT Cruiser is a nasty, cheap, poorly engineered pile of $h! and I really feel bad for anyone who buys one. Honestly, there is NOTHING from GM or Ford today that even remotely approaches the horrid nightmare that is the PT Cruiser.

-Mak

08 CTS FE3 with six on the floor.

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Cerberus’s “Next 100 years” tagline might be plausible if the products Chrysler has were brilliant. But they aren’t. Chrysler has one really good engine (its 5.7l V8 Hemi), two good, but aging RWD sedans and a new minivan which, while reasonably good, hasn’t exactly received the stellar reviews needed to fend off the Odyssey and Sienna. Everything else in Chryslers current product portfolio is either now a clear also-ran (virtually every SUV and truck Chrysler makes) or, in some cases, very poor (Sebring, Caliber, Liberty, Nitro, Avenger, Commander, Compass and PT Cruiser).

The rather “old-boys network” choice of Robert Nardelli as the new CEO and Chairman of Chrysler makes for a strange combination of old-school GE six-sigma management philosophies, a private equity investment model and a company in need of major capital investments. Nardelli does know his stuff when it comes to building organizational structures from the ground up, as his impact at Home Depot illustrates despite his many detractors stating otherwise. When taken in context, however, it is seems obvious that Nardelli’s job is to get Chrysler’s fundamentals just sound enough to make them a good acquisition target.

Specifically, this means removing as much cost as possible from the core production operations (his background at GE Power), while providing the skeletal structure needed to make Chrysler a functional semiautonomous business that can be easily integrated into a company that acquires them. This explains Jim Press being brought on board to clean up their marketing and sales organizations. What this does not mean is major investments in engineering or product development talent, as it is very likely that the next product cycle won’t be based on their existing platforms or engineered in Auburn Hills. An asset that stays with the company when it is sold will be Jim Press, who will most likely run Chrysler in the same fashion that he ran Toyota’s North American operations.

The most plausible scenario is that in 12-18 months, Chrysler will be solid by Cerberus, at a substantial profit, to a company looking to broaden its reach in the US market. The most obvious fit would be the Renault-Nissan alliance, in that it would perfectly fit the divestiture model Cerberus generally likes (they maintain an equity position or receive equity in a combined organization as a second phase return) and would fulfill Carlos Goshen’s goal of building a global conglomerate. It is possible Chrysler will be paired with some other organization, but expect it to be a major automobile maker, not a smaller Chinese or other lesser known manufacturer, as they will not be able to provide the necessary engineering and capital assets needed to make Chrysler’s brands successful.

As for Chrysler returning to the glory days of 92-97 as an independent company, forget it, as it's notgonnahappen.com.

-Mak

08 CTS FE3 with 6 on the floor.

SOunds about right, but I believe PSA may have an interest as well. The parts would be more complimentary than Nissan/Renault and history loves to repeat itself as the Company that swallowed AMC gets acquired by the French.
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That's a good list, ay. I support that totally-being back the Wagoneer instead, as a real full-size, when the times get better. At the very least, the next Grand Cherokeee needs to be significantly bigger and better than the current model, which suffers from a crummy interior (though not as bad as some other products, but still not that good-or comfortable) and limited passenger and cargo room.

Making the next GC bigger would be a BIG mistake, IMHO...the beauty of the GC is it's relatively small size..they have the Durango for people that need a huge SUV..

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Aspen, Commander, Compass, Dakota.

I thought everyone knew about this already.....

Nothing official has been announced, so it's all speculation at this point.. I doubt if they will whack the Dakota, but the other 3 seem plausible.

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Nothing official has been announced, so it's all speculation at this point.. I doubt if they will whack the Dakota, but the other 3 seem plausible.

I do.

All these plants are loacted in my general area...

You don't understand how many weeks off these poor people who build the Dakoka are getting...it's like every other week.

Even at deep discounts (cheap as a 100 bucks a month), there are plenty of 07s to choose from.....

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Nitro, Aspen, Compass, and Commander. Hopefully not Patriot or Dakota...

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The PT Cruiser is a nasty, cheap, poorly engineered pile of $h! and I really feel bad for anyone who buys one. Honestly, there is NOTHING from GM or Ford today that even remotely approaches the horrid nightmare that is the PT Cruiser.

Doesn't the PT cruiser still have Chrysler Corps. lowest warranty claim expenses!

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Doesn't the PT cruiser still have Chrysler Corps. lowest warranty claim expenses!

Yup.

I've driven many a PTCruiser, I'll say I have a feeling makfu is a wee bit of an exaggerater...

:AH-HA_wink:

It ain't a high performance touring luxury machine, but it's great at what it is aimed for- commuting.

Maybe HE assembled the one he drove, who knows...?

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I like the PT a lot but I could never own one without switching out the seats...they are so narrow and uncomfortable.

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The PT seems to have a cult following, judging by all the customized ones..

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The PT seems to have a cult following, judging by all the customized ones..

:yes:

I've seen quite a few just in the last week....

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I like the PT a lot but I could never own one without switching out the seats...they are so narrow and uncomfortable.

I drove the PT when it just came out, my biggest complaint was the placement of the rear window switches. Foot operated fun for kids in the back seat.........

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