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Chrysler LLC hosted a multi-hour business plan meeting last week where the reborn automaker detailed its strategy for the next few years. Enabled by its new partner Fiat, Chrysler will consolidate platforms, expand product offerings, and aim to boost sales volume and profit. All while significantly increasing product quality. Sounds good so far. The basic breakdown begins with reducing the number of unique platforms. Aside from pickup trucks, Chrysler, Dodge, and Jeep count 11 platforms today. For 2014, the aim is to use just six, and that includes expanding into the A/B subcompact/compact-car segments thanks to Fiat. The trick is to move C and D segment vehicles, including small and midsized crossovers and sedans, onto a single, versatile platform. The Jeep Wrangler will have the distinction of having its own platform. (There’s only one, as they say.) The large sedans, minivans, and larger SUVs will each ride on three distinct platforms. There are several tangible benefits to this strategy. Chrysler lost its engineering partner with Daimler divested its interests. While Chrysler continues to use variations of Mercedes platforms, access to such resources is finite going forward. New...
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It's the week ending November 6, and we've browsed our favorite automotive blogs all week long to gather the highlights from each.
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It's the week ending August 28, and we've browsed our favorite automotive blogs all week long to gather a collection of what we feel is the highlight from each. Once again, the biggest news involves the end of the Car Allowance Rebate System (CARS) program AKA "Cash for Clunker" rebates, culminating in 690,114 transactions valued at $2.88 billion, with stories galore on its " wildly successful " outcome. LeftLaneNews reports on some of the downfalls of the program, saying the clunkers' Web site crashed several times, resulting in a bottleneck of applications. Moreover, only about a third of dealers have received their first clunkers check, leaving many dealerships with cash flow problems. Consumer Reports shares the environmental impact, saying the average new car bought with the rebates got 9.2 mpg more than the average clunker traded in, for an annual average fuel savings per driver of 277 gallons of fuel or about $720. Pizza magnate Papa John Schnatter has finally been reunited with his Camaro. In celebration, he gave away nearly 36,000 free pizzas . Click here to read the detailed story of how Jalopnik helped make it happen -- and if you want, you...
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Reversing a decision made earlier this year to kill the PT Cruiser after 2009, Chrysler Group LLC announced this weekend plans to continue production of their retro-style wagon at its Mexico assembly plant. Chrysler has sold over 1.3 million PT Cruisers in 60 countries since its 2000 debut as a 2001 model. Even though sales have significantly softened during the first half of 2009 - and it has yet to receive a substantial redesign since its launch - the very distinct PT Cruiser has continued to earn awards, model year after model year. In June, the PT cruiser tied with Honda's CR-V for first place in J.D. Power's Initial Quality Survey IIQS) in the compact truck/multi-activity vehicle category. While changes - if any - for the 2010 PT Cruiser model have yet to be disclosed, Fiat's alliance with Chrysler appears to reveal a partnership that recognizes the PT Cruiser's popularity around the world. -Deborah Neal, Editorial Director
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Just hours after the U.S. Supreme Court approved the split of Chrysler into an old company and new company, Chrysler Group LLC proudly emerged under new ownership. Under the terms approved by the U.S. Bankruptcy Court in New York, the key assets from old Chrysler LLC, without certain debts and liabilities, were sold to the new company. The Chrysler , Dodge , Jeep , and Mopar brands, along with new partner Fiat , hit the ground running, rapidly remolding the company and preparing to face the formidable challenges that lay ahead. As part of the alliance, Fiat will share its technology, platforms, and powertrains for small- and medium-sized cars, allowing the new company to offer a full product portfolio—a critical weakness with old Chrysler that contributed to its downfall. Chrysler will also benefit from Fiat's management expertise in business turnaround and access to Fiat's international distribution network with particular focus on Latin America and Russia. "This is a very significant day, not only for Chrysler and its dedicated employees, who have persevered through a great deal of uncertainty during the past year, but for the global automotive industry as a whole,"...
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Just was General Motors entered Chapter 11 bankruptcy , Chrysler exited from its filing as Chrysler Group LLC. Two months after it entered bankruptcy protection, Chrysler Group emerged from its chrysalis with a firm alliance with Fiat. A key condition for government-assisted Chapter 11, versus liquidation through Chapter 7, was the teaming with Fiat . The Italian automaker will work with Chrysler to offer the award-winning Fiat 500 subcompact in the United States, as well as develop future models, both those retuned from Europe and those specifically engineered for this market. Fiat brings to the table vast global resources, with a product and technology portfolio that dovetails with Chrysler’s thirsty, truck-heavy line-up. With the federal government significantly raising fuel economy standards for 2016, the ready access to small car platforms and high-tech, small-displacement engines will prove essential. Without Fiat, the government felt Chrysler would simply not be able to return to profitability even with appealing models in the pipeline such as the very impressive 2011 Jeep Grand Cherokee and 2011 Chrysler 300. The reality is, Chrysler simply did not have a good, small or midsized...
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Chrysler filed a motion with the U.S. Bankruptcy Court today to essentially cull 789 dealerships from its herd. On a conference call today, Chrysler LLC executives explained that they sought to cancel franchise agreements with the least successful dealerships, thereby strengthening the remaining 2,392 dealers will be a part of the " new company " being developed. It is expected that the targeted dealers, which account for just 14 percent of the corporation’s sales volume, will be closed by June 9th. Chrysler says that about 80 percent of the remaining dealerships will carry all three brands. Down the road, any of the dealers may be tapped to add Fiat or Alfa Romeo. (Read " Fiat 500: On Its Way .") Due to bankruptcy laws, Chrysler LLC is not required to purchase parts, tools, or vehicles from the shuttered dealerships. Those dealers have a combined inventory of 44,000 vehicles, which Chrysler LLC will facilitate selling to retained dealers. The move will impact hundreds of communities, though Chrysler execs say by targeting small, less successful dealers, they have lessened the impact from the franchise reduction. Since many dealers also sell products from other brands...
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The deadline for Chrysler to deliver a more promising viability plan came due, and with it came dramatic moves that will forever reshape the automaker. Chrysler filed Chapter 11 bankruptcy today, enabling a controlled restructuring that can reduce debt and allow for a rapid rebuilding. The process expected to take just 30 to 60 days. During this time, Chrysler will idle its factories as it puzzles through its near-term strategy and reduces standing inventory, just as General Motors is doing . When the reborn company comes to life, Chrysler Chairman and CEO Bob Nardelli is expected to step aside, taking an advisor role with Cerberus. A strategic alliance with Fiat was a government condition for continued support, and Chrysler is effectively merging with the Italian automaker, though it has publicly avoided characterizing the partnership as such. Fiat will initially be a 20-percent shareholder, with the potential to take on a larger interest up to 35 percent. The larger piece of the corporate pie will be available only when Chrysler repays its federal loans, ensuring no U.S. taxpayer money is funneled overseas. Through the merger, uh, partnership, Chrysler will gain access to Fiat technology...
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That’s right, the dreaded “B” word. The Treasury Department has requested Chrysler prepare for a Chapter 11 bankruptcy filing as early as next week, according to a report by The New York Times . President Obama had given tough love to Chrysler , stating their last proposal was not convincing and giving the company 30 days to try again, with its chance for success hinged upon a partnership with Fiat. (General Motors was given a 60 day extension.) Meanwhile, the government would provide continued assistance to the troubled American automakers . With the deadline looming, Chrysler continues to face challenges, including a once-promising Fiat partnership that now looks less certain. In fact, Fiat has been quoted saying the chance for a deal is 50/50 and dependent on labor reductions from the UAW and the CAW, in Canada. A letter from Chrysler CEO Bob Nardelli received a harsh reaction from the CAW, with the Canadian union leaders setting it on fire. Ultimately, the inability for Chrysler to manage its corporation and partners may be bankruptcy. In reaction to The New York Times report, Chrysler released a statement: "As we move forward in this process, we believe it’s important to keep...
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Tensions mount as Chrysler and General Motors race to meet the imminent deadlines for satisfying government overseers that these troubled corporations can reverse their fortunes. Chrysler has seen significant tensions the past few days, as CEO Bob Nardelli said the automaker would concede control of its board if it completes the alliance with potential Italian partner Fiat . The U.S. government, along with Fiat, would appoint a new board of directors, according to reports from Reuters and others . Stumbling blocks remain to the alliance. Notably, the United Auto Workers and Canadian Auto Workers must agree quickly to further reduce labor costs. As it stands, Fiat officials have been saying that the chances for the deal are only 50-50. Not good odds. Painful as concessions may be, we hope the unions and others involved can reach an agreement to see the deal move forward. To do otherwise would have repercussions well beyond Auburn Hills. Shame, as Chrysler has good things in the pipeline, from its significant quality improvement effort now underway to its promising 2011 Jeep Grand Cherokee . Our fingers are crossed… Read " Government Action to Aid Chrysler, GM " and " Obama...
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Chrysler, General Motors, and indeed the entire automotive industry anxiously awaited today’s announcement from President Obama, expecting further aid and assistance. However, in a memorable speech Obama said neither automaker met the requirements to prove viability. Gulp. The administration has given Chrysler 30 days to further restructure and secure its partnership with Fiat , a move seen by Obama as essential. GM has 60 days to aggressively reshape its business. Both corporations will be provided with enough additional working capital to keep the lights open during that time. Obama said, “We cannot, and must not, and we will not let our auto industry simply vanish. This industry is like no other -- it's an emblem of the American spirit; a once and future symbol of America’s success.” The analysis by the auto task force paints grim picture, stating that the Chrysler product portfolio is not competitive, with weakness in quality and fuel efficiency. Further, the automaker lacks the scale to engineer and build vehicles at a profitible volume, with limited overseas sales limiting its global reach. The task force reported that GM is currently burdened with underperforming brands,...
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With all the crazy talk of California leading an initiative to elevate emissions standards, and thereby increase fuel economy requirements to Prius-like levels, Chrysler would seem to be particularly vulnerable. After all, the automaker has a dearth of small, fuel-efficient models, and a slew of thirsty, heavy, V-8 vehicles. If Chrysler can stretch out its federal aid package long enough, the company may be rich in thrifty desirable models in 1-2 years. From its new 35-percent shareholder and BFF, Chrysler will gain access to several, sleek Fiat models. Reports indicate the award-winning Fiat 500 three-door is U.S. bound (shown here), as well as a next-generation five-door Panda. There is talk of a slightly larger model to join the Alfa Romeo MiTo. Continuing up the range, Chrysler is expected to manufacturer is own Caliber replacement spun off a Fiat platform, with a larger version being used for the Sebring and Dodge Avenger replacements. In addition, Chrysler has continued to nurture its relationship with Nissan. This arrangement will provide Chrysler with a rebadged Versa. In return, Chrysler will build the next-generation Nissan Titan off the Dodge Ram platform. As a bonus, Nissan...
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Fiat swooped in and effectively saved Chrysler with the announcement of a global alliance that will see the automakers share platforms, powertrains, and vehicles. In the cash-less arrangement, Fiat will gain a 35-percent stake in struggling Chrysler. In return, Chrysler will gain access to the types of products and technology its line-up sorely needs to adjust to the changing economic realities. Together, the companies now have the potential to be a powerful international competitor. (Read " Fiat 500: On Its Way .") Bob Nardelli, Chairman and CEO of Chrysler LLC, said, "This transaction will enable Chrysler to offer a broader competitive line-up of vehicles for our dealers and customers that meet emissions and fuel efficiency standards, while adhering to conditions of the Government Loan. The partnership would also provide a return on investment for the American taxpayer by securing the long- term viability of Chrysler brands in the marketplace , sustaining future product and technology development for our country and building renewed consumer confidence, while preserving American jobs." That’s right, Chrysler still seeks the $4 billion federal loan, however the...
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