Chrysler Suicide Watch 7: Be My Valentine… Or Else

Frank Williams
by Frank Williams

Valentine’s Day. The day that keeps jewelers, greeting card companies, florists and candy makers afloat from the one Christmas to the next. The day where millions of dollars are spent around the world in the hopes of an increased chance of getting laid. And this year, it’s the day when DaimlerChrysler will reveal their makeover plan aimed at diverting Chrysler Group from its seemingly self-destructive course. Will “Project X” prove to be a lovefest for all concerned, or is it another St. Valentine’s Day Massacre just waiting to happen?

European stockholders and more than a few Mercedes executives have made no bones about their desire to trim the deadwood. They think DCX should ditch the “C” and become Daimler-Benz once again. If they had their way, the Chrysler Group would be cut loose and left to drift aimlessly until it either managed to paddle its own boat or went under. Either way, they would no longer have to worry about any corporate cross-breeding that could contaminate their unsullied gene pool.

According to a report in The Detroit News, the “dump Chrysler” partisans are about to be disabused of that notion. On February fourteenth, CEO Dieter Zetsche, Chrysler Chief Executive Tom LaSorda and Mercedes-Benz Chief Operating Officer Rainer Schmückle will officially unveil their revitalization plan for the stricken American automaker

The new plan contains some ideas analysts have long expected: radical downsizing of Chrysler’s production capability, consolidating its far-flung operations and slashing over 10K blue collar jobs. But the new deal also contains a real shock, a decision that’s bound to raise more than a few eyebrows amongst Mercedes’ German stockholders. First, the details…

Under the new regime, Chrysler will do the GM thing– UAW buyouts and plant closures– to become a leaner, meaner automaker. As part of this revitalization program, Chrysler will also strengthen its ties with its Teutonic teammate. The two companies will share parts (though restricted to underbody components to avoid “cheapening” the Mercedes brand.)

The two automakers will also jointly create a shared architecture for the next-generation M-Class, Grand Cherokee and Durango. And they’ll co-develop new vehicle designs, including the next crop of small cars for American and European consumers.

In addition to the formal restructuring plan, there are other indications that the Berlin wall dividing these two “equals” is crumbling. According to today’s Automotive News, Chrysler is considering offering a diesel version of their newly redesigned minivan by model year 2010.

The diesel minivan would be the second Chrysler product equipped with a Mercedes oil burner, a 2.2-liter turbocharged four. (The Grand Cherokee will offer a 3.0-liter V6 diesel starting next month; the diesel Ram 1500 projected for model year 2010 will have a Cummins turbodiesel engine).

Chrysler is also consolidating minivan production to their plants in North America. They’ll end production at the Magna Steyr plant in Austria and move the European-market diesel and right-hand-drive Grand Voyagers back to a factory on Chrysler’s home turf. Once they replace the Italian-sourced diesel they currently use with EPA-certified Mercedes iron, there’s no reason not to offer them for sale in the US as well. And if that happens, could diesel passenger cars be far behind?

Chrysler’s restructuring plan sounds sound, but it flies in the face of the company’s well-established internecine conflict. As we’ve reported previously, the battle lines between the two behemoths have already been drawn. Lest we forget, DaimlerChrysler corporate development boss Ruediger Grube made a pre-Christmas declaration that "a Mercedes will remain a Mercedes and may not share a platform with anyone."

The tension between Germany’s “Mercedes first, last and always” loyalists and Chrysler’s American “You gotta help us out here” realists puts DCX on a tightrope. On a practical level, the Mercedes’ stockholders who share Ruediger’s reticence are not likely to back down simply because Mercedes has finally decided to do what they should have done in the first place. The backlash could be anything from demanding Zetsche’s head to wholesale stock dumping.

Just as dangerously, an anti-Chrysler cabal within the Mercedes organization could simply drag its feet on the implementation side of the deal. Just by not helping to make the agreement work, Mercedes’ management could make it fail. They’d simply wait for the plan to fall apart in the existing melee of clashing corporate cultures.

Zetsche, LaSorda and Schmückle have all spent a lot of hours and burned a lot of jet fuel to try and salvage the rocky relationship between the Chrysler Group and its German masters partners. But as any marriage counselor will tell you, both partners have to work to make a relationship a success.

Until and unless Mercedes’ best and brightest get with the program, the recriminations will fly. Hopefully this Valentine’s Day will mark the start of something beautiful, rather than the beginning of the end.

Frank Williams
Frank Williams

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  • Anonymous Anonymous on Feb 28, 2007

    A four cylinder Mercedes diesel is definite for 2010 or so.

  • Anonymous Anonymous on Feb 28, 2007

    PS> Interesting views on the DCX problems. Seems like the supervisory board is in two camps, the Schrempp Chrysler-haters and the Zetsche sympathizers. Lots of discussion...

  • 3-On-The-Tree I don’t think Toyotas going down.
  • ToolGuy Random thoughts (bulleted list because it should work on this page):• Carlos Tavares is a very smart individual.• I get the sense that the western hemisphere portion of Stellantis was even more messed up than he originally believed (I have no data), which is why the plan (old plan, original plan) has taken longer than expected (longer than I expected).• All the OEMs who have taken a serious look at what is happening with EVs in China have had to take a step back and reassess (oversimplification: they were thinking mostly business-as-usual with some tweaks here and there, and now realize they have bigger issues, much bigger, really big).• You (dear TTAC reader) aren't ready to hear this yet, but the EV thing is a tsunami (the thing has already done the thing, just hasn't reached you yet). I hesitate to even tell you, but it is the truth.
  • ToolGuy ¶ I have kicked around doing an engine rebuild at some point (I never have on an automobile); right now my interest level in that is pretty low, say 2/5.¶ It could be interesting to do an engine swap at some point (also haven't done that), call that 2/5 as well.¶ Building a kit car would be interesting but a big commitment, let's say 1/5 realistically.¶ Frame-up restoration, very little interest, 1/5.¶ I have repainted a vehicle (down to bare metal) and that was interesting/engaging (didn't have the right facilities, but made it work, sort of lol).¶ Taking a vehicle which I like where the ICE has given out and converting it to EV sounds engaging and appealing. Would not do it anytime soon, maybe 3 to 5 years out. Current interest level 4/5.¶ Building my own car (from scratch) would have some significant hurdles. Unless I started my own car company, which might involve other hurdles. 😉
  • Rover Sig "Value" is what people perceive as its worth. What is the worth or value of an EV somebody creates out of a used car? People value different things, but for a vehicle, people generally ascribe worth in terms of reliability, maintainability, safety, appearance and style, utility (payload, range, etc.), convenience, operating cost, projected life, support network, etc. "Value for money" means how much worth would people think it had compared to competing vehicles on the market, in other words, would it be a good deal to buy one, compared to other vehicles one could get? Consider what price you would have to ask for it, including the parts and labor you put into it, because that would affect the “for the money” part of the “value for money” calculation. An indicator of whether people think an EV-built-in-a-used-car would provide "value for money" is the current level of demand for used cars turned into EVs. Are there a lot of people looking for these on the market? Or would building one just be a hobby? Repairing an existing EV, bringing it back into spec, might create better value for the money. Although demand for EVs is reportedly down recently.
  • ToolGuy Those of you who aren't listening to the TTAC Podcast, you really don't know what you are missing.