Chrysler Suicide Watch 5: Necessity is the Mother of Intervention

Frank Williams
by Frank Williams
chrysler suicide watch 5 necessity is the mother of intervention

In the late ‘70’s, Chrysler and Mark Knopfler had a lot in common. The automaker and the guitarist were both in dire straits. Unlike the British rock group, Chrysler’s sales were stuck at rock bottom. Most of the automaker’s offerings were badge engineered clones. Overproduction and their so-called “sales bank” had pushed inventory to an all-time high, dragging profits to an all-time low. Enter Lee Iacocca. Lee took draconian measures: cutting models, restructuring, trimming fat and introducing radical new models. Within a few years, Iacocca’s intervention had transformed a company on the brink of disaster into a profitable enterprise. Twenty years later, Chrysler’s come full circle. And once again, it’s time for intervention.

First, someone’s got to get Chrysler out of denial. The company must face the cold hard truth that they’ll never be General Motors, Toyota or (God forbid) Ford. By attempting to be a “full-line automaker,” Chrysler’s diluted their model lineup to the point where it’s become an incoherent farrago of fragmented failure. As part of this realization, Chrysler must also dump the GM mentality. They must stop looking at the next new model as The Next Big Thing: the car/truck/minivan that will save the company. Instead, Chrysler should take a holistic approach to their mental illness.

Chrysler should step back, take a deep cleansing breath, and reassess the role of each of their divisions. At least they have a good place to start. With just three divisions under their corporate umbrella, Chrysler’s ready to realign each division to target specific market segments (unlike the two other domestic automakers with eight divisions apiece,). A logical realignment: Dodge builds family transportation, Chrysler creates premium vehicles and Jeep handles all the truck/utility vehicles.

With those demarcs clearly set and understood, Chrysler can finally set about killing overlapping, duplicative and extraneous models. Say goodbye to the Aspen, Crossfire, Stratus, Pacifica, Magnum (rolled into Charger), Town & Country, Nitro, Patriot, Compass, Viper, Sprinter (returned to Mercedes) and Commander. And while we’re at it, abort the Challenger.

Once that’s done, Chrysler can realign their remaining models within the new corporate structure. Dodge’s lineup would consist of an economy car (manufactured under their new agreement with China’s Chery but designed entirely on this side of the Pacific), a compact hatchback (Caliber), a family sedan and wagon (Charger/former Magnum) and a van (Caravan). To underline its commitment to value-for-money, every Dodge model should offer a BlueTec diesel engine option.

Chrysler Division would offer a premium compact (next generation PT Cruiser with a better name), a premium midsize sedan and convertible (redesign of the redesigned Sebring), a premium sedan (300) and a luxury sedan and convertible (based on the E-class platform but totally American in design and execution). Every engine offered should be based on the Hemi— already about to be offered “free."

Jeep should keep their current lineup sans the faux Jeep models axed above and add a line of pickup trucks. Rather than try to out-mega GM, Ford and Toyota, Jeep should concentrate on the long-neglected compact truck market with a Wrangler-based midsize model (replacing the Dakota). Jeep should also offer a diesel option across the board and every 4WD model should be “trail rated.”

Once this realignment is complete, Chrysler has to address their dealer network. Since the new regime would eliminate brand overlap, all three brands could be offered at every dealership. That said, culling is a big part of the program. Chrysler needs to make sure there aren’t too many dealerships in any one area; their dealerships should compete against other brands, not against each other. If this means closing or consolidating dealerships in metro areas, then do it.

Along with “right-sizing” their dealer network, Chrysler should step-up and become the first major manufacturer to provide a totally “dealer-less” alternative for customers who desire it. If a buyer wants to shop, negotiate, arrange financing and close the deal on the internet, let them. Instead of haggling with a specific dealership, the customer would work through a centralized national or regional sales office. Once the transaction was complete, the customer would select where they wanted to take delivery, then go to the dealership to sign on the dotted line and pick up their vehicle. Consumers have no problems buying books, clothing, and even groceries over the internet. Why should car shopping be any different?

If DCX is serious about keeping Chrysler Group alive, they’ll have to take some drastic measures. A band-aid here and a Prozac there may keep it limping along, but in the long term the underlying problems will keep resurfacing, driving Chrysler closer and closer to its demise. Recovery will require long term, intensive and painful therapy. Last time, Dr. Lee had the right prescription. This time, let’s hope Dr. Z can make the right decisions, and give Chrysler a chance to return to full mental acuity and maybe even a hit or two.

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  • Nick Nick on Jan 26, 2007

    I don't want to wander too far off topic, but I sometimes think that Stephen King's 'Christine' actually existed, and that she cursed Chrysler forever more. Maybe not, but since them, Chrysler seems to have always been very uneven when it came to styling, so much so they do seem to be suffering from some kind of curse. Case in point 1959 - cars looked pretty good for the day, especially compared to some of their contemporaries, then along comes 1960 (awful), 1961 (horrendous), 1962 (comical and ugly), followed by three years of bland. From 66 to 70, they kind of held their own, and then along came the 70s. No one in Detroit distinquished themselves in the 70s, but I'd be happy to peg Chrysler as the worst offenders, especially if you include AMC under their banner. And they've been through that cycle again recently. The drop fendered pickup made for a nice change, and the 300 was/is nice. But then....Charger, Nitro, Caliber, Compass...varying between disappointing to awful. If they could even out their styling so that they are at least decent year after year, I think it would help them alot.

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  • Jeff S I don't believe gm will die but that it will continue to shrink in product and market share and it will probably be acquired by a foreign manufacturer. I doubt gm lacks funds as it did in 2008 and that they have more than enough cash at hand but gm will not expand as it did in the past and the emphasis is more on profitability and cutting costs to the bone. Making gm a more attractive takeover target and cut costs at the expense of more desirable and reliable products. At the time of Farago's article I was in favor of the Government bailout more to save jobs and suppliers but today I would not be in favor of the bailout. My opinions on gm have changed since 2008 and 2009 and now I really don't care if gm survives or not.
  • Kwik_Shift I was a GM fan boy until it ended in 2013 when I traded in my Avalanche to go over to Nissan.
  • Stuart de Baker I didn't bother to read this article. I'll wait until a definitive headline comes out, and I'll be surprised if Tesla actually produces the Cybertruck. It certainly looks impractical for both snowy and hot sunny weather.
  • Stuart de Baker This is very interesting information. I was in no danger of buying a Tesla. I love my '08 Civic (stick), and it feels just as responsive as when I bought it 11 years ago with 35k on the clock (now 151k), and barring mishaps, I plan to keep it for the next 25 years or so, which would put me into my mid-90s, assuming I live that long. On your information, I will avoid renting Teslas.
  • RHD The only people who would buy this would be those convinced by a website that they are great, and order one sight-unseen. They would have to have be completely out of touch with every form of media for the last year. There might actually be a few of these people, but not very many. They would also have to be completely ignorant of the Hyundai Excel. (Vinfast seems to make the original Excel look like a Camry in comparison.)