Bill is essentially correct with his facts but the one thing not addressed which
underlies all of the recent problems at DCX is the vast cultural differences
between the American and German styles of conducting business causing problems
as a direct result of the acquisition. Many previously loyal employees feel that
they were duped and decisions implemented since the "merger" have proved their
fears to be true. Changes were made in internal policies re benefits as well as
engineering protocol which only fueled dissension in Auburn Hills.
Since almost all of the top managers that made Chrysler a success in the 90s are
now gone, many people remaining are looking for ways out either through
retirement or moves to other companies. That being said concerning the current
state of affairs, now consider what would have happened if Chrysler had
continued on its own.
Yes, Plymouth would have been dropped - that decision had long been in the plans
because the division wasn't generating profits. Prowler helped generate showroom
traffic but wasn't bringing in any money. Breeze was an attempt to bolster
revenues but wasn't enough.
Eaton is a brilliant manager with a fine record from GM and his history from
leading Chrysler during his tenure. Even though Lee chose Eaton as CEO he looked
to Lutz as the sparkplug and power to get new products going much as Lee did at
Ford and later at Chrysler when they most needed new products with no money to
develop them - hence the K cars and minivans. I agree that Lee was overly
confident with his ability to call "styling" shots and the stretched and overly
decorated K derivatives demonstrated that.
But it was Lee who engineered the deal that made Auburn Hills CTC and the LH
cars a reality. None of that would ever have happened without him and had
Chrysler stayed in Highland Park's outdated facilities it surely would have
brought them to demise during the 90s instead of making them the industry
leader.
Kerkorian is a money man and he sure is interested in his investments generating
profits. I don't think he would have enlisted Iacocca to join him in buying
Chrysler only to butcher it up. Remember it was Lee who promoted Gale, Stallkamp
and others in the winning team to remake Chrysler into a design leader and the
low cost producer in the industry.
Nothing was said about manufacturing decisions regarding Plymouth branding or PT
production capacity. However, those business decisions were made based on facts
and had nothing to do with the Germans as you correctly stated. But for
Chrysler to have invested hundreds of millions of their reserves into additional
capacity for the PT before it was shown to be a success would have been foolish
at the time. (remember these product decisions must be made years and months
prior to new vehicles being made available to the public). This was a radical
car and although it drew raves from the press & car shows there was no guarantee
it would be the sales success that it is.
Part of the financial problems at Chrysler today are - in fact the result of
decisions made in Stuttgart. Schrempp invested millions of Chrysler's reserve
money into Bombardier's transportation business resulting in huge losses to DCX
instead of continuing new product programs in Auburn Hills. We all have heard
about Chrysler's new hemi being placed on hold as well as other new vehicle
programs. Schrempp also bought 34% ownership of Mitsubishi (riddled with debt, a
$700 million loss for the first half of fiscal 2001 and facing charges of hiding
vehicle problems since 1971 which could cost DCX additional millions). In his
spending spree Schrempp also bought Canadian Western Star trucks, Detroit Diesel
and a 10% interest in Hyundai.
Is it any wonder there is little money left to help Chrysler through the current
industry downturn?
Now that new DCX CEO Dieter Zetsche has arrived - and promptly fired three of
the last remaining execs of the 90s team (Ted Cunningham EVP, Tony Cervone VP
and Kathy Oswald SVP - the highest ranking women in the auto industry) we shall
see what the new all German regime will do for a turn around in the next few
weeks. Stay tuned!
Bill Watson wrote:
> We seem to be forgetting that Lido chose Eaton over Lutz as his successor.
> Lutz departed in May, 1998, after Eaton declined to place him on
> DaimlerChrysler's supervisory board, six months before the merger, and not
> because of the "Germans". Tom Stallkamp departed DaimlerChrysler after a
> disagreement with Eaton (he was all but outright fired), and Eaton chose
> Holden as Stalkamp's replacement as president of the American auto division.
>
> If you love Chrysler, and want it to survive, pray that Kerkorian and
> Iacocca do NOT gain control of Chrysler. The great things that happened at
> Chrysler in this past decade were post-Iacocca. Mr. Iacocca is a great man,
> but his tastes and perceptions are a little out of tune with today's market.
> And it took the LH cars to prove that. Kerkorian is only interested in what
> he can get out of it - and if that means selling things off piecemeal to the
> highest bidder, so be it.
>
> The problems that lie at Chrysler's doorstep today in North America were
> created by Chrysler in North America, and not in Europe. The decision to
> restrict production of the PT Cruiser was made in Auburn Hills, not
> Stuttgart. The decision to kill the Plymouth was made at least six years
> ago in Highland Park and not in Stuttgart last year. And take the
> anti-German hype of the media with a grain of salt.
>
> One web writer announced that dealers were upset because the "Germans" were
> not going to advertise the new Sebring line as heavily as the PT Cruiser as
> they did not want to strain production, as happened with the PT Cruiser.
> Within 24 hours of reading this garbage, I read two magazines that had ads
> for the new Sebring, and every night after that while watching television,
> there have been ads for the Sebring. The Chrysler Sebring is pushed every
> night on A&E, for one. So much for honesty in reporting!
>
> When you compare sales of the Chrysler Cirrus/Sebring with last year's
> Plymouth Breeze/Chrysler Cirrus/Sebring, and the Chrysler Voyager with the
> Plymouth Voyager of last year, you can see how and why Chrysler is
> suffering. The decision to axe Plymouth is turning out to be akin to
> slitting your throat.
>
> Bill
> Vancouver, BC
>
> > Larry Jett wrote:
> >
> > > NO NO NO, not LIdo....it's Lutz we want. Lido turned out to be a bit of
> a
> > > villan himself.
> >
> > Don't think of Lee as a villain - he and Kerkorkian wanted to buy Chrysler
> and
> > just think of where they would be now if that had happened! Lutz would
> still
> > be there so would Gale, et all. Not only that they probably wouldn't be
> in
> > financial trouble as they are now. Don't sell Iacocca short! He may be
> > arrogant but he knows cars!
> >
> > Even if this whole thing dumps, Lutz has another job now anyway...
> >
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