SUVs saved Chrysler (But Fiat will ultimately kill Chrysler)

This story illustrates that Chrysler will not survive selling rolling coffins badged as Fiat-500's because the buying public in the US and Canada do not want micro cars.
And it's too bad that Chrysler has only trucks and SUV's to offer, and not any decent sedans. My 11.5 year old Chrysler 300m is doing fine, still on it's original factory battery no less, but I'd like to buy a new car.
I'd like to buy the 300N, an LH-based concept car that Chrysler showed during the '2000 auto show circuit, a car that Daimler made sure would never see the light of day as they raped Chrysler nearly to death for 7 years and practically destroyed it (Daimler did nothing to import and sell Chrysler-made vehicles into Europe, for example).
========================
formatting link
Last Updated: May 24. 2011 1:02AM Henry Payne/ The Michigan View.com
Chrysler and the White House will celebrate the Detroit icon's $5.9 billion repayment of government loans Tuesday in a ceremony that will be hailed by both sides for the same reason: The government bailout had become a liability for both entities.
In fact, government-free Chrysler is hardly off the debt hook, but is simply refinancing its debt with private rather than public debt-holders. For its part, the U.S. government will still have a 6.6 percent equity stake in Chrysler (and the Canadian federal and Ontario provincial gov't will still have something like 2 percent - a detail omitted by Henry Payne, the author of this story) - but by removing itself as the company's loan shark, the White House can boast of the unpopular bailout's success in returning taxpayer loans 6 years ahead of schedule. That's an important sound-bite in an election year.
But there is one inconvenient truth you won't hear at the Sterling Heights, Mich. ceremony: Chrysler wouldn't be here had it not defied its green White House masters. Chrysler's return to profitability is a direct result of the fabulous success of its SUVs.
The White House hand-picked Fiat to shepherd (if not out-right own) Chrysler out of bankruptcy in June, 2009 because of Barack Obama's obsession with remaking Detroit's automakers in the image of their European peers. Convinced that Americans craved small cars to fight the warming scourge, the president demanded Fiat bring its best-selling 500 Eurobox to the States as part of the acquisition deal. Obama was convinced that Fiat could reform the immoral, gas-swigging, SUV-dependent Chrysler (but Fiat will more than likely destroy Chrysler in the process, which will no doubt end with the sale of RAM and Jeep to someone else).
The exact opposite occurred.
Two years later, the little 500 is about to go on sale in dealer "boutiques" - but it is the resurgence of America's appetite for trucks that has brought Chrysler back from the dead. Chrysler Group reported sales were up 17 percent to 1.1 million vehicles in 2010 on the strength of its wildly popular, redesigned Jeep Grand Cherokee and Dodge Durango SUVs. For CEO Marchionne, the SUVs success in the U.S. market has been a revelation and he is planning to expand the SUV lineup into Europe with Alfa Romeo and Maserati-badged trucks. Marchionne is no starry-eyed green - he has realized that trucks like the Cherokee typically rake in twice the per-vehicle profit of cars (thus the beleaguered company's speedy repayment of U.S. loans).
Chrysler's truck sales - largely ignored by Obama's green media parrots - has also been good to UAW workers as Chrysler's Detroit assembly plant is now at full, three-shift capacity.
But there is one more inconvenient truth: Chrysler has been here before.
After it repaid its 1980s loans under the legendary hand of Lee Iacocca, Chrysler was unable to diversify into smaller vehicles. Today, as the truck boom fades before the specter of $4-a-gallon gas, Chrysler is still heavily dependent on truck sales.
Chrysler is back. But is it just 1980s déjà vu all over again?
Reply to
MoPar Man
My family and I have always had Chrysler products(DeSoto excluded). I have now, a 1941 Windsor, 1991 New Yorker 5th Avenue, and 2010 Avenger. My wife's Avenger is a great car. I love my NY'er, gets 30+ mpg on the highway, bench seat, lots of room. Chrysler sedans are great cars, I just wish that they would come with a bench seat option. If I had the money, and in this "Obamacession" it is unlikely, I would buy a Charger with the V-6. My 41 with FluidDrive Vacamatic is all original, 23K miles, and drives like new. My other favorite Chrysler cars were our: 2 64 Darts, 67 Plymouth Fury, 87 Fifth Avenue, 86 Lancer, 87 and 88 LeBarons. My Grandfather first drove a 51 Dodge because he didn't like to shift! He also owned a 55 Dodge Royal, both great cars. We also had a 61 Dodge Pioneer, great car, a little weird looking, though.
Reply to
sctvguy1
DAS used improper usenet message composition style by top-poasting and full-quoting:
==========
formatting link
Another major cause (of the failure of the merger) was the lack of integration of manufacturing practices due in part to brand incompatibility. Daimler?s brand was perceived to be fancier and more elite, while Chrysler?s was considered to be inferior. Daimler dealers in Europe even refused to sell Chrysler cars. Employees on both sides refused to buy in. as such, there was no serious attempt made to integrate manufacturing processes to produce the reduction in costs that Daimler was looking for. Indeed, the culture clash seemed to be as much between the products as between the employees of the two companies. Due to the lack of integration, Daimler ended up with all of the disadvantages of the merger with none of the advantages.
=========
?Chrysler?s merger with Daimler-Benz (in 1999) was a disaster from the start. [...] Chrysler was the lowest-cost producer and the most profitable car company in the world. [...] it took Daimler less than a decade to drive Chrysler off a cliff.?
[Lee Iacocca: "Daimler Screwed Chrysler", BusinessWeek]
============
formatting link
,1518,445583,00.html An American Tragedy Will Daimler Shed itself of Chrysler? 10/31/2006
Chrysler is powerless to eliminate the causes of the current crisis in the foreseeable future. These causes include the company's disproportionately high dependence on the North American market, where it sells just under 90 percent of its cars, and Chrysler's sales of light commercial vehicles, which include SUVs, pickups and vans. And to this day, Chrysler remains an almost purely US brand, just as it was in 1998, when Zetsche's predecessor, Jürgen Schrempp, praised the merger as a "match made in heaven." Chrysler occupies only a marginal position in the European and Asian automobile markets.
===========
formatting link
Analysis
The DaimlerBenz Group set out to grow by acquisition rather than organically in the 1990s. This was a mistake.
Daimler's Juergen Schremp saw Chrysler as a point of entry into the American market. He did not want ever to make top class sedans in any place but Germany, but he needed a service operation and a sales and marketing organization with American market knowhow to back up his idea of a massive marketing campaign for the Mercedes brand.
Chrysler fit the bill. It had a reputation as an engineering company, and sales of its own vehicles would make it financially self supporting. It would become, in time and with German knowhow, a North American marketing arm for Daimler's vehicles, and would supply the lower end of the market, the employees and servants of Mercede's buyers with cars and trucks not branded as Mercedes.
From the beginning of the anschluss (takeover) Daimler began acting the opposite of the story they had told to get the deal done.
No existing dealers were allowed to carry Mercedes and Chrysler products in the same store.
No harmonizing of parts and service was undertaken between Chrysler and Daimler.
Even production of Chrysler models in Europe itself was eventually farmed out to jobbers like Austria's Steyr, which ultimately merged with interior trim supplier, Magna, a Canadian firm, to form Magna-Steyr, which now operates a factory in Graz, Austria, turning out branded Jeep models that compete directly with Mercedes M-class "Jeep-type" SUVs, but at a much lower price.
Daimler did not share economies of scale with Steyr to use harmonized parts. Daimler wanted no one to confuse Jeeps with the M-class SUV.
Now, suddenly it seems, but actually long overdue, there is some joint engineering taking place between Chrysler and Daimler.
It is risible that there are only, literally, a handful of dealers in the USA that carry Mercedes and Chrysler branded cars on the same floor.
If the rumors that Daimler wishes to sell the poorly performing Chrysler Group are true it is vivid testimony to the fact that after Chrysler began selling cars designed under the supervision of Daimler it began to fail.
It will be ironic if Chrysler survives under someone else's ownership other than Daimler. The superiority of Daimler engineering and management has been badly tarnished. Perhaps the underlying metal wasn't precious at all.
================
formatting link
Originally, the plan was for Chrysler to use Daimler parts, components and even vehicle architecture to sharply reduce the cost to produce future vehicles. But problems surfaced when Daimler's Mercedes-Benz luxury division, whose components Chrysler would use, was averse to contribute to Chrysler. Eventually, all Chrysler got were some steering and suspension components, a transmission and a diesel engine and few packages.
In return, Daimler had hoped that Chrysler would radically raise its standing in the North American auto market. But due to tough competition from Asian automakers, Chrysler fell short. Billed as a "merger of equals," the $36 billion deal turned out to be anything but, analysts said. Shortly, control of the combined company fell to Daimler Chairman Schrempp.
"Eaton panicked," Lee Iacocca, said. "We were making $1 billion a quarter and had $12 billion in cash, and while he said it was a merger of equals, he sold Chrysler to Daimler-Benz, when we should have bought them." And Daimler was an all-too-willing, if uninformed, partner, analysts said. The company underrated the competitive forces that would invade the North American car market and take market share from the domestic carmakers.
Reply to
MoPar Man
"DAS used improper usenet message composition style by top-poasting "
How many chips do you have on your shoulder? And I trust you appreciated your spelling error...
I would, however, agree, that the Daimler Benz's aquisition of Chrysler was a really stupid move. My personal view (drived from opinion pieces with which I agree) that the acquisition (not a merger) was driven by the megalomania of the top managers, fuelled by the greed for vast American salaries (untenable in a German company) which could be 'justified' by a listing on an American stock exchange. That required a 'merger' with a US company to make it quick and simple.
That said, this was not the first of the top executives' daft and expensive actions. Little known outside Germany are the disastrous take-overs of AEG (a white-goods company, i.e. one making refrigerators, cookers and other such consumer goods) and a move into aerospace. The company withdrew from both, with vast losses. In the former case the car division managers were incandescent because of the diversion of focus away from cars and in the latter there was a huge display of hyprocrisy. Having first lambasted certain companies for going to the (German) govt cap in hand for subsidies they then bleated they needed handouts to keep the aerospace division alive.
How's that for a rant?
(Not the first time I have said this here.)
I must add that some of the comments in the articles you cited have a slant on them borne out of ignorance. For example, the reference to the Austrian company Steyr. This is one of several contract manufacturers in Europe, making vehicles and components for various car brands.
Another is Karmann:
formatting link
My 2001 Mercedes CLK Cabriolet was largely built at the Karmann works in Osnabrück in northern Germany. I even visited their plant and saw the early Crossfires in the yard there. At its height it was building 100 000 cars a year (but nothing under their own name), tiny by NA standards but not bad for a European contract manyfacturer.
Karmann were/are one of the few specialists in soft-top mechanisms, which explains why VW is funding its revival with a convertible.
BTW, on one trip to the US I hired a Sebring convertible, Chrysler's nearest thing to my CLK Cab. In my opinion the Sebring was of a lower quality, though probably worth the US price in comparison with the German price I paid for the CLK (I bought in Germany and imported into the UK to save some money -- prices have probabl;y become more aligned now). I would not have minded being able to buy a Sebring in Europe at US prices... then it would have been an interesting alternative... but its landed price was not that different, given some of the mechanical mods it had to undergo.
DAS
Reply to
DAS
Steyr is the manufacturer of the best automotive diesel engines in the world, which are not available in any automobile in the US.
Chrysler has been selling VM engines world wide for years, except in the US (except one offering several years ago). The VM engines are also world class. All we get for diesel here are the overweight Cummins in the too-big pickups.
I'd very much like to have a RWD sedan with either engine.
As for Daimler Benz, hey, it's not their fault we didn't put a luxury goods tariff on expensive foreign cars a long time ago.
It's not their fault Chrysler refuses to make a vehicle which anyone one outside the US wants.
It's not their fault Chrysler has taken the easy way out in product development the last few years. Well, the last couple of decades. .
Reply to
frendofrenz
Yes, the 300:1 ratio of CEO pay to average salary found at many US companies is enough to make otherwise rational people "fuck-nutty" as they used to say.
Still, Chrysler was the victim here.
Had it been the other way around the German gov't would have cut Chrysler's balls off.
Fiat is buying a dealer network and US production facilities.
Chrysler execs here should ask Fiat for access to the Alfa, Lancia and Ferrari parts bins as a show of good faith, replacing the piece of shit V10 in the Viper with the 65 degree V12 would be a good step.
Reply to
frendofrenz
Diesel engines suck the big wang.
It's bad enough those loud marble-grinders are in the trucks that we all have to put up with on our urban roads, belching black smoke every time they change gears.
You couldn't pay me to own or drive a car with a diesel engine.
No - that's not it.
Daimler put in a half-hearted effort to sell Chrysler vehicles in Europe.
That, and Europe's tarrifs on imported cars is why you don't (didn't) see Chrysler cars in Europe. Unlike GM and Ford, Chrysler did not have any assembly plants of their own in Europe.
The Chrysler 300-N concept car shown at the Detroit Auto show in January 2000 was one classy looking car. It was a V-8 RWD convertable, based on the LH chassis, and was going to be the next version of the 300 line. But Daimler made damn sure that Chrysler would never build it - they swept it under the rug and instead had Chrysler build that but-ugly abortion on wheels - the 300C based on the over-weight LX platform, stuffed full of trouble-prone (and expensive) previous generation Mercedes suspension and drivetrain parts.
formatting link
formatting link
----------------
DaimlerChrysler today unveiled the Chrysler 300 Hemi(R) C, a four-passenger V-8 rear-wheel drive convertible, at the 2000 North American International Auto Show in Detroit.
The quintessential Chrysler, this concept combines contemporary design,elegance, luxury and legendary Hemi-power.
'This vehicle explores a direction we might take if we were to return to an all-American V-8, rear-wheel drive luxury performance car such as the famed '57 Chrysler 300 C convertible,' said Tom Gale, Executive Vice President -Product Development and Design.
'The epitome of motoring elegance and affordable luxury, the Chrysler 300 Hemi C concept adds the heritage only this company can offer: a powerful V-8 Hemi engine.'
The prototype all-aluminum 353 cubic inch (5.7-liter) pushrod V-8 engine features hemispherical combustion chambers and two spark plugs per cylinder. Its estimated power of 353 horsepower and 353 lb.-ft. of torque is delivered to the rear wheels via a robust four-speed automatic transmission.
The powerful V-8 Hemi engine has improved fuel efficiency and emissions through seamless automatic deactivation of four of the eight cylinders during highway driving and deceleration.
A hydraulically shifted lost-motion feature deactivates the valves while the motor management system interrupts ignition and fuel supply to those cylinders. The system maintains full engine performance for acceleration and overtaking.
The concept's independent suspension has modified MacPherson struts in front and an aluminum five-link coil-over-shock rear set-up.
For increased body stiffness and crisp ride and handling characteristics, a unique structural door latch design is being developed for the Hemi C concept.
Fourteen-inch ventilated front and rear disc brakes with four-piston calipers, 19-inch front wheels and tires and 20-inch rear wheels and tires amply live up to the Chrysler 300 Hemi C's estimated performance.
Reflecting its Hemi heritage, the vehicle will sprint to 60 mph in 5.9 seconds and clock a top speed of 160 mph.
In a thoroughly modern way, the Chrysler 300 Hemi C design pays homage to the legendary '57 300 C. Terrific proportions, a monocoque profile with pronounced wheel flares and a seemingly endless hood are some of its design characteristics.
Said Joe Dehner, Senior Design Manager and responsible for the exterior design: 'It is as if we stretched the body around the V-8 Hemi engine. The concept's rear-wheel drive set-up allowed for a minimal front overhang, while the front fender air exhaust ports and the centrally placed chrome twin exhaust pipes signal its performance. And similar to the world's best-selling convertible, the Chrysler Sebring, this concept is a true four-seat convertible.'
Elegance and affordable luxury are reflected by the concept's clean, sleek and athletic lines. The sculpted hood focuses attention on the high-placed Chrysler winged badge and enlarged 300M-style chrome grille.
A center peakline runs from the front to the rear and works with the raked chrome bodyside moldings to give the Chrysler 300 Hemi C its chiseled appearance.
Dehner's loving attention to detail is shown in the front and rear light units that provide a visual link to the 300M, the sculpted chrome door handles and the center high-mounted stop light (CHMSL) wrapped around the Chrysler winged badge.
The Chrysler 300 Hemi C interior is in harmony with its refined exterior. Mimicking the chrome bodyside molding, a wedged California walnut molding links the instrument panel to the hard-cover tonneau with integrated automatic roll-over bar.
An understated monochromatic taupe-based color palette and purposeful use of chrome enhances the elegant atmosphere in the concept car. Adjustable pedals guarantee a comfortable seating position for short and tall drivers.
'The design and execution of this interior emphasize craftsmanship,' said Lance Wagner, Senior Design Manager and responsible for the Chrysler 300 Hemi C interior.
'That is apparent in the California walnut application on the steering wheel, the chrome details, the leather-tailored seats, the one-touch power top and tonneau cover and the location and fabrication of the Chrysler winged badges, the ignition in the instrument panel and the gated gear shift.'
The concept comes equipped with a driver 'Infotronic' system. This unique feature includes a global positioning system, a trunk-mounted 'plug-and-play' laptop computer, Internet access for real-time weather and traffic information and e-mail.
A fingerprint scanner hooked up to a tiny camera provides added security, important in any vehicle and especially in a soft top convertible. The vehicle will not function if the driver's fingerprint and picture don't match the system's information.
The Infotronic system is directed by voice commands or through its liquid crystal display in the instrument panel. Voice commands also control the vehicle's audio, climate control, diagnostics, phone and security systems and the driver's home security system.
'The straight-line power of the '50s and '60s has been replaced by a balance of crisp handling and sophisticated performance,' said Gale. 'Yet the Chrysler 300 Hemi C still reflects the same philosophy and pedigree of those early letter series cars.'
The Chrysler 300 Hemi C concept is custom painted with a Frosted Mocha Pearlcoat finish and rolls on custom Goodyear tires.
2000 Chrysler 300 Hemi C Year 2000 Make Chrysler Model 300 Hemi C Engine Location Front Drive Type Rear Wheel Production Years for Series 1999 - 2004 Combined MPG 0.00 Introduced At 2000 Detroit, MI
Performance 0-60 mph 5.9 seconds. Top Speed 160 mph | 257.4 km/h Similar top speeds
Engine Engine Configuration V Cylinders 8 Engine Hemi Aspiration/Induction Normal Displacement 5.70 L | 347.8 cu in. | 5700.4 cc. Horsepower 350.00 HP (257.6 KW) Torque 353.00 Ft-Lbs (478.7 NM) HP / Liter 61.4 BHP / Liter
Transmission Information Gears 4 Transmission Automatic
Reply to
MoPar Man
What a lot of North Americans fail to see is that 'American' cars don't sell well in Euroope because of unsuitable handling.
DAS
Reply to
DAS
That is not as true today and shouldn't be true at all. Many American cars are today the equal of Mercedes Benz and BMW in handling. Some aren't which is unfortunate.
If it were not so I'd drive a BMW.
One reason I don't is resentment that the Europeans get a far better car than we do in the North American versions because of emissions and "safety" laws. But handling isn't much if at all different.
Reply to
frendofrenz
DAS used improper usenet message composition style by top-poasting:
What a load of horse shit.
DAS is suffering from this romantic notion that European roads are these idyllic, twisty-curvy high-speed low-traffic speedways through open plains and deep forests, along mountain passes and meadows.
The stuff of TV commercials.
Get real.
Your roads are just like ours in north america. Overcrowed, slow and in need of repair.
You're also suffering from the delusion that the global automotive parts supply chain doesn't exist, and that a melding of suspension design and construction and performance hasn't happened across auto companies for the past decade.
Here in north america, we no longer drive 2-ton cars on bias-ply tires, cushioned by torsion-bar front suspension with solid rear axles on leaf-springs. You might want to dig your head out of your ass and realize that.
Reply to
MoPar Man
The current generation of American V-8s-the Ford modular, the Chrysler hemi and the GM LS-1 based engines-will give BSFC figures over a wide range of horsepower that equal any gasoline engine sold in Europe.
The europeans DO have a lot of diesels. The diesels have superior BSFC. They are a big advantage we don't have because we have idiotic emissions laws.
The Europeans think that the more complicated an engine is, the better. They have nothing that will beat the all aluminum Chevy Gen IV V-8 in power to weight over any continuous power setting worth talking about. Why do you think Volvo Penta uses American V-8s in their marine stern drives? Why do you think Scandinavian marine users buy container loads of 454 Chevy engines on the used market?
Reply to
frendofrenz
Most Europeans don't have V8s in their cars. We pay a lot more for fuel and so have to be a tad more cost-conscious. Even a 2-litre 4-cyl engine reaches 100 mph easily, and that's illegal in most places, even in the USA.
DAS
Reply to
DAS

MotorsForum website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.