What does Chrysler pursuing Chapter 11 bankruptcy really mean to America? Does it not seem like this question has not been asked in the right context?
Since the initial energy crisis in the 1970’s, Chrysler, as America’s third largest automaker has come close to the edge before, but this time, its demise looks quite possible. During the last four decades, Chrysler has introduced some fresh ideas into the auto industry, made some bold moves, but also been riddled with a series of failures which have never allowed the company to reestablish a strong foundation on which it could build an automaker of the future.
Plymouth was once the nation’s third best selling auto brand but fell to Pontiac in the mid 60’s. Nevertheless, with a brand lineup consisting of the sporty Barracuda, the midsized, Satellite, and the full-sized Fury, Chrysler’s first tier brand was a major force in the auto industry. Dodge was the second tier, in the same camp as Mercury and Pontiac. Originally, a granny mobile, the Dodge Dart became a sporty compact a little larger than the typical Ford Falcons and Chevy Nova’s and far more spacious than “pony” cars; however, the Dart could be styled up with all the interior trappings and interior options that made the equestrian compacts s popular. The Chrysler brand was for higher end cars, not quite at the level of Cadillac’s or Lincolns, but par with the highest end models of Oldsmobile, Buick, and Mercury. A Chrysler 300 was a giant car with tons of horsepower, lots of room, a sporty attitude, and lots of steel. A top the Chrysler line was their luxury entry, perhaps the most formal looking of them all, the Imperial. While Chrysler did not enjoy the huge explosion of the auto industry on the scale Ford and GM did, Chrysler was a stable company with a product line for slightly different tastes than their larger competitors.
Things started to fall quickly as the 1970’s began. Federal emissions and safety standards drove up costs. Some Chrysler restyling efforts did not catch on with the public, where GM and Ford were cranking out increasingly huge, bloated cars, but Chrysler took the “tank” to further extremes. Pound-for-pound, Chryslers were bigger and heavier than the competition which made them the most vulnerable when the first energy crisis created gas lines and higher costs in 1973. Chrysler’s fortunes fell dramatically, and by the end of the decade, they sought Federal assistance to stay afloat. The Federal Government provided more help buying huge quantities of Chrysler products for government vehicles including Dodge pickups for the military and National Park service.
Lee Iacocca, who became Chrysler’s chief exec after an accomplished tenure at Ford where he helped bring the Mustang to market, provided high-visibility, no nonsense leadership where he put his face out front of the company appearing in ads speaking of how Chrysler was reinventing itself to meet its challenges. His sales pitch, “If you can find a better car buy it.”
Chrysler brought forth some noteworthy innovations. As the Chevy Vega and Ford Pinto were becoming aged entries in the subcompact market with dreadful reputations for quality and design defects, Chrysler borrowed heavily from the technology and design introduced by Volkswagen with its first major product positioned to take over the “Beetle” market, its Rabbit. A four door, front wheel drive, four cylinder car with a fold-down rear seat and almost station wagon like rear access entry became a noteworthy success in 1978 marketed as the Plymouth Horizon and Dodge Omni. The car would continue in production until 1990.
Chrysler provided a popular mid-sized luxury coupe that was more luxurious than a Pontiac Grand Prix or Chevy Monte Carlo, but much lighter and more affordable while providing many of the same features of Ford’s Thunderbird and GM’s Oldsmobile Tornado and Buick Riviera. In the late 70’s, the Chrysler Cordoba was a popular and influential car while Ford turned its pony car Cougar into a mid sized luxury stud mobile built on the Montego/Torino body while the Thunderbird itself became a much lighter and more affordable car on the same frame.
As the 1980’s developed, Chrysler switched over to front wheel drive much more rapidly than GM and Ford, with GM having the only front wheel drive cars in production before the Horizon/Omni with the upscale luxury coupes, the Olds Tornado and Cadillac Eldorado. The “K” car with entries as Plymouths, Dodges and Chryslers, as small midsized cars, became their most stable conventional cars.
In 1984, Chrysler revolutionized the industry when the Plymouth Voyager and Dodge Caravan hit the showroom. The traditional family station wagon did not respond well to resizing. Full sized wagons were smaller in many key areas than their previous mid-sized counterparts. Midsized wagons no longer worked well as the suburban mommy-mobile that could accommodate the kids, the dog, the groceries, and the loot from the mall. Ford and General Motors were thinking in terms of their truck division. As they introduced smaller pickups, Ford Rangers and Chevy S-10’s, they took a similar approach to their cargo vans. Chrysler was ahead of the curve. They saw the market not in terms of a more economical entry into their truck market, they saw the potential for the family market. Almost overnight, the minivan replaced the station wagon as the ultimate mommy mobile, the standard for the soccer mom. Chrysler hit it right with features that moms loved like usable cup holders, a console with storage room, and could fit into normal sized parking spaces with ease unlike the full-sized wagon. Ford and GM would struggle for years to get the minivan concept right.
Generation X Americans and younger perhaps don’t remember when the domestic auto industry was almost the big four. American Motors became a complete car line and took on another bonus acquiring Jeep. The industry crisis of 1970’s was especially harsh to American Motors who first partnered with a European company (sound familiar) Renault to bail them out, but when that failed, American Motors appeared doomed apart from the segment Jeep fulfilled. Their only vehicle left was a small midsized, Eagle, which was the only domestic passenger car with all wheel drive. They produced the traditional Jeep which was branded, the Wrangler. American Motors had an asset that would lead to another product revolution in Detroit, the Jeep Cherokee, bigger, with more carlike features than a Ford Bronco which by then had become based on the “F” series pickup.
As Chrysler quickly satisfied its loans, it assumed a growth posture first partnering with Japanese automaker, Mitsubishi in 1983, looking for improved technology for more emphasis on smaller cars, but Chrysler’s big move came in 1987 when they acquired what was left of American Motors. Keeping some connection to the AMC passenger car line, Chrysler introduced a sporty mid-sized sedan as the new Eagle, but it had similar Dodge and Chrysler models.
Chrysler entered the 1990’s looking hopeful. Between innovative and ordinary products, the “wow” features and the practical, the #3 American automaker had a decent balance of products between the Dodge, Chrysler, and Jeep divisions. Plymouth had become an unnecessary duplication of Dodge products and the attempt to market Eagle automobiles with no real distinction apart from similar Dodge and Chrysler products required some reorganization first dropping the Eagle then trying to figure out what to do with Plymouth.
In 1995, Chrysler took bold steps to attempt to once again become a major player in the full-sized pickup market that had become the runaway success of the Ford “F” series with Chevrolet and GMC far behind. Dodge introduced a radically redesigned “Ram” pickup with bold styling and plenty of up-to-date features to attract much attention. While the Ford truck continued to dominate the market, Dodge hopped on the growth wave and once again became a major player in the pickup truck industry. The following year, they redesigned their smaller Dakota, the only small pickup to offer V-8 power.
Entering the new millennium auto companies were truly world operations. Ford and General Motors had robust operations around the world particularly in Europe and Australia for years. Japanese and European automakers were opening factories in the United States.
Chrysler did not have this world market. Meanwhile, Daimler, the parent company of Mercedes Benz and other highly elite products sought to expand its global presence and enter the big car market. In what was supposed to be a merger of equals, Daimler-Chrysler was formed in 1998. Changes were prompt and drastic. By 2001, the Plymouth brand was eliminated. Dodge became the entry level full line company with matches for Ford and Chevrolet on every level. Chrysler was the premium marquee. Jeep exploited the growing SUV market. Mercedes technology became integrated in American models most notably the Chrysler 300.
While Chrysler seemed to be doing well in the early 2000’s, it was not a happy marriage on the other side of the Atlantic. The German ownership group sought to dismantle or unload Chrysler. Cerberus, a private equity firm, purchased in excess of 80% of the company forming Chrysler LLC in May 2007. Immediately, the UAW went into attack mode attempting to bleed the new American owned company for every concession it could take while Ford was restructuring and GM’s struggles became more severe. In October, 2007, the UAW struck, but the strike lasted less than a day. From that point forward, Chrysler’s fate seemed to be sealed. Meanwhile, fuel prices were edging up then skyrocketed to where in early 2008, gasoline was over $4.00 a gallon in much of the United States. Chrysler’s market consisted of mini-vans, SUV’s, luxury and performance sedans, and sporty performance automobiles. Chrysler, namely the Dodge brand, was even worse off than Ford, king of the SUV and pickup truck and a bloated stumbling, fumbling GM. Against this backdrop, the excitement of a truly beautiful entry into the new pony car market, the reinvented and reintroduced Dodge Challenger could hardly generate the excitement to bring buyers into Dodge salesrooms. Initially, the Challenger was geared toward the high performance market not having some of the less powerful versions like what Ford always offered with the Mustang.
Thus the Chrysler death march began its tortured journey to bankruptcy. As the explosion of fuel costs helped hasten a severe recession, Chrysler and its ownership group was not prepared to respond.
Ford had seen the writing on the wall and met many of the hard issues head on before the fuel cost explosion and recession hit. While Ford is not profitable, they have at least provided for sufficient stability to remain independent and able to develop new products barring even worse unexpected chaos in the automotive market.
While General Motors fights for survival facing the same external pressures as Chrysler but having its own severe struggles threatening its survival, General Motors has some excellent products with hybrids even as large as a Cadillac Escalade on the market, General Motors must shed operations no longer successful focusing on Chevrolet, Buick, Cadillac, and GMC to carry the once mighty carmaker forward. While many of the same mistakes that took Oldsmobile from a highly popular brand to nonexistence have taken their toll at Pontiac and Buick, a streamlined corporate structure and proper concessions from labor could yield a hopeful future for what remains of GM. General Motors biggest enemy is the hostile attitude toward powerful corporation that permeates all aspects of Obama administration behavior.
Japanese automakers once lead the industry in quality. Now Ford and General Motors have equaled or exceeded the Japanese brands consistently on every vehicle category. Recent J.D. Power overall quality ratings tell the story which is unkind to Chrysler whose vehicles still lag behind the competition consistently scoring the lowest ratings in most classifications.
Given Chrysler is met with strong competition against virtually every one of its products where the no competitor scores lower on quality ratings, why should they continue? While we can nostalgically remember their beautiful machines of yesterday, a macho looking Dodge Ram pickup or pimped out Chrysler 300, these niche vehicles will not give Chrysler the spot in needs, the middle class family driveway.
Can anyone offer an argument against the obvious proposition that Chrysler has been fatally and irreversibly wounded that can only be sustained through massive life support efforts?
Fiats are junk. They are ugly little crappy cars with a horrible reputation for quality. Fiat tried to gain market when the demand for small, fuel efficient cars exploded in the mid-70’s, but as Toyota, Honda, and Nissan roared on the scene successfully, American buyers pushed Fiat in the ocean for the ugly, uninspired, miserable, constantly breaking down garbage they were. While they survive in Europe and in other world markets most notably Brazil, they generate no excitement looking more like East German Trabant’s for the new millennium than the kinds of cars Japan and Detroit market today. While Fiat’s reputation for making fuel efficient vehicles must sound good to the environmental extremist bias in the Obama administration’s philosophy, we need to look at the big picture. Fiats might be more fuel efficient than most cars on the market today but so are lawn mowers.
The challenge is how to operate more like Ford, Toyota, and Honda. That’s a battle Chrysler won’t win.
Since the initial energy crisis in the 1970’s, Chrysler, as America’s third largest automaker has come close to the edge before, but this time, its demise looks quite possible. During the last four decades, Chrysler has introduced some fresh ideas into the auto industry, made some bold moves, but also been riddled with a series of failures which have never allowed the company to reestablish a strong foundation on which it could build an automaker of the future.
Plymouth was once the nation’s third best selling auto brand but fell to Pontiac in the mid 60’s. Nevertheless, with a brand lineup consisting of the sporty Barracuda, the midsized, Satellite, and the full-sized Fury, Chrysler’s first tier brand was a major force in the auto industry. Dodge was the second tier, in the same camp as Mercury and Pontiac. Originally, a granny mobile, the Dodge Dart became a sporty compact a little larger than the typical Ford Falcons and Chevy Nova’s and far more spacious than “pony” cars; however, the Dart could be styled up with all the interior trappings and interior options that made the equestrian compacts s popular. The Chrysler brand was for higher end cars, not quite at the level of Cadillac’s or Lincolns, but par with the highest end models of Oldsmobile, Buick, and Mercury. A Chrysler 300 was a giant car with tons of horsepower, lots of room, a sporty attitude, and lots of steel. A top the Chrysler line was their luxury entry, perhaps the most formal looking of them all, the Imperial. While Chrysler did not enjoy the huge explosion of the auto industry on the scale Ford and GM did, Chrysler was a stable company with a product line for slightly different tastes than their larger competitors.
Things started to fall quickly as the 1970’s began. Federal emissions and safety standards drove up costs. Some Chrysler restyling efforts did not catch on with the public, where GM and Ford were cranking out increasingly huge, bloated cars, but Chrysler took the “tank” to further extremes. Pound-for-pound, Chryslers were bigger and heavier than the competition which made them the most vulnerable when the first energy crisis created gas lines and higher costs in 1973. Chrysler’s fortunes fell dramatically, and by the end of the decade, they sought Federal assistance to stay afloat. The Federal Government provided more help buying huge quantities of Chrysler products for government vehicles including Dodge pickups for the military and National Park service.
Lee Iacocca, who became Chrysler’s chief exec after an accomplished tenure at Ford where he helped bring the Mustang to market, provided high-visibility, no nonsense leadership where he put his face out front of the company appearing in ads speaking of how Chrysler was reinventing itself to meet its challenges. His sales pitch, “If you can find a better car buy it.”
Chrysler brought forth some noteworthy innovations. As the Chevy Vega and Ford Pinto were becoming aged entries in the subcompact market with dreadful reputations for quality and design defects, Chrysler borrowed heavily from the technology and design introduced by Volkswagen with its first major product positioned to take over the “Beetle” market, its Rabbit. A four door, front wheel drive, four cylinder car with a fold-down rear seat and almost station wagon like rear access entry became a noteworthy success in 1978 marketed as the Plymouth Horizon and Dodge Omni. The car would continue in production until 1990.
Chrysler provided a popular mid-sized luxury coupe that was more luxurious than a Pontiac Grand Prix or Chevy Monte Carlo, but much lighter and more affordable while providing many of the same features of Ford’s Thunderbird and GM’s Oldsmobile Tornado and Buick Riviera. In the late 70’s, the Chrysler Cordoba was a popular and influential car while Ford turned its pony car Cougar into a mid sized luxury stud mobile built on the Montego/Torino body while the Thunderbird itself became a much lighter and more affordable car on the same frame.
As the 1980’s developed, Chrysler switched over to front wheel drive much more rapidly than GM and Ford, with GM having the only front wheel drive cars in production before the Horizon/Omni with the upscale luxury coupes, the Olds Tornado and Cadillac Eldorado. The “K” car with entries as Plymouths, Dodges and Chryslers, as small midsized cars, became their most stable conventional cars.
In 1984, Chrysler revolutionized the industry when the Plymouth Voyager and Dodge Caravan hit the showroom. The traditional family station wagon did not respond well to resizing. Full sized wagons were smaller in many key areas than their previous mid-sized counterparts. Midsized wagons no longer worked well as the suburban mommy-mobile that could accommodate the kids, the dog, the groceries, and the loot from the mall. Ford and General Motors were thinking in terms of their truck division. As they introduced smaller pickups, Ford Rangers and Chevy S-10’s, they took a similar approach to their cargo vans. Chrysler was ahead of the curve. They saw the market not in terms of a more economical entry into their truck market, they saw the potential for the family market. Almost overnight, the minivan replaced the station wagon as the ultimate mommy mobile, the standard for the soccer mom. Chrysler hit it right with features that moms loved like usable cup holders, a console with storage room, and could fit into normal sized parking spaces with ease unlike the full-sized wagon. Ford and GM would struggle for years to get the minivan concept right.
Generation X Americans and younger perhaps don’t remember when the domestic auto industry was almost the big four. American Motors became a complete car line and took on another bonus acquiring Jeep. The industry crisis of 1970’s was especially harsh to American Motors who first partnered with a European company (sound familiar) Renault to bail them out, but when that failed, American Motors appeared doomed apart from the segment Jeep fulfilled. Their only vehicle left was a small midsized, Eagle, which was the only domestic passenger car with all wheel drive. They produced the traditional Jeep which was branded, the Wrangler. American Motors had an asset that would lead to another product revolution in Detroit, the Jeep Cherokee, bigger, with more carlike features than a Ford Bronco which by then had become based on the “F” series pickup.
As Chrysler quickly satisfied its loans, it assumed a growth posture first partnering with Japanese automaker, Mitsubishi in 1983, looking for improved technology for more emphasis on smaller cars, but Chrysler’s big move came in 1987 when they acquired what was left of American Motors. Keeping some connection to the AMC passenger car line, Chrysler introduced a sporty mid-sized sedan as the new Eagle, but it had similar Dodge and Chrysler models.
Chrysler entered the 1990’s looking hopeful. Between innovative and ordinary products, the “wow” features and the practical, the #3 American automaker had a decent balance of products between the Dodge, Chrysler, and Jeep divisions. Plymouth had become an unnecessary duplication of Dodge products and the attempt to market Eagle automobiles with no real distinction apart from similar Dodge and Chrysler products required some reorganization first dropping the Eagle then trying to figure out what to do with Plymouth.
In 1995, Chrysler took bold steps to attempt to once again become a major player in the full-sized pickup market that had become the runaway success of the Ford “F” series with Chevrolet and GMC far behind. Dodge introduced a radically redesigned “Ram” pickup with bold styling and plenty of up-to-date features to attract much attention. While the Ford truck continued to dominate the market, Dodge hopped on the growth wave and once again became a major player in the pickup truck industry. The following year, they redesigned their smaller Dakota, the only small pickup to offer V-8 power.
Entering the new millennium auto companies were truly world operations. Ford and General Motors had robust operations around the world particularly in Europe and Australia for years. Japanese and European automakers were opening factories in the United States.
Chrysler did not have this world market. Meanwhile, Daimler, the parent company of Mercedes Benz and other highly elite products sought to expand its global presence and enter the big car market. In what was supposed to be a merger of equals, Daimler-Chrysler was formed in 1998. Changes were prompt and drastic. By 2001, the Plymouth brand was eliminated. Dodge became the entry level full line company with matches for Ford and Chevrolet on every level. Chrysler was the premium marquee. Jeep exploited the growing SUV market. Mercedes technology became integrated in American models most notably the Chrysler 300.
While Chrysler seemed to be doing well in the early 2000’s, it was not a happy marriage on the other side of the Atlantic. The German ownership group sought to dismantle or unload Chrysler. Cerberus, a private equity firm, purchased in excess of 80% of the company forming Chrysler LLC in May 2007. Immediately, the UAW went into attack mode attempting to bleed the new American owned company for every concession it could take while Ford was restructuring and GM’s struggles became more severe. In October, 2007, the UAW struck, but the strike lasted less than a day. From that point forward, Chrysler’s fate seemed to be sealed. Meanwhile, fuel prices were edging up then skyrocketed to where in early 2008, gasoline was over $4.00 a gallon in much of the United States. Chrysler’s market consisted of mini-vans, SUV’s, luxury and performance sedans, and sporty performance automobiles. Chrysler, namely the Dodge brand, was even worse off than Ford, king of the SUV and pickup truck and a bloated stumbling, fumbling GM. Against this backdrop, the excitement of a truly beautiful entry into the new pony car market, the reinvented and reintroduced Dodge Challenger could hardly generate the excitement to bring buyers into Dodge salesrooms. Initially, the Challenger was geared toward the high performance market not having some of the less powerful versions like what Ford always offered with the Mustang.
Thus the Chrysler death march began its tortured journey to bankruptcy. As the explosion of fuel costs helped hasten a severe recession, Chrysler and its ownership group was not prepared to respond.
Ford had seen the writing on the wall and met many of the hard issues head on before the fuel cost explosion and recession hit. While Ford is not profitable, they have at least provided for sufficient stability to remain independent and able to develop new products barring even worse unexpected chaos in the automotive market.
While General Motors fights for survival facing the same external pressures as Chrysler but having its own severe struggles threatening its survival, General Motors has some excellent products with hybrids even as large as a Cadillac Escalade on the market, General Motors must shed operations no longer successful focusing on Chevrolet, Buick, Cadillac, and GMC to carry the once mighty carmaker forward. While many of the same mistakes that took Oldsmobile from a highly popular brand to nonexistence have taken their toll at Pontiac and Buick, a streamlined corporate structure and proper concessions from labor could yield a hopeful future for what remains of GM. General Motors biggest enemy is the hostile attitude toward powerful corporation that permeates all aspects of Obama administration behavior.
Japanese automakers once lead the industry in quality. Now Ford and General Motors have equaled or exceeded the Japanese brands consistently on every vehicle category. Recent J.D. Power overall quality ratings tell the story which is unkind to Chrysler whose vehicles still lag behind the competition consistently scoring the lowest ratings in most classifications.
Given Chrysler is met with strong competition against virtually every one of its products where the no competitor scores lower on quality ratings, why should they continue? While we can nostalgically remember their beautiful machines of yesterday, a macho looking Dodge Ram pickup or pimped out Chrysler 300, these niche vehicles will not give Chrysler the spot in needs, the middle class family driveway.
Can anyone offer an argument against the obvious proposition that Chrysler has been fatally and irreversibly wounded that can only be sustained through massive life support efforts?
Fiats are junk. They are ugly little crappy cars with a horrible reputation for quality. Fiat tried to gain market when the demand for small, fuel efficient cars exploded in the mid-70’s, but as Toyota, Honda, and Nissan roared on the scene successfully, American buyers pushed Fiat in the ocean for the ugly, uninspired, miserable, constantly breaking down garbage they were. While they survive in Europe and in other world markets most notably Brazil, they generate no excitement looking more like East German Trabant’s for the new millennium than the kinds of cars Japan and Detroit market today. While Fiat’s reputation for making fuel efficient vehicles must sound good to the environmental extremist bias in the Obama administration’s philosophy, we need to look at the big picture. Fiats might be more fuel efficient than most cars on the market today but so are lawn mowers.
The challenge is how to operate more like Ford, Toyota, and Honda. That’s a battle Chrysler won’t win.
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