Chrysler Suicide Watch 36: Ghosn Fishing

Michael Martineck
by Michael Martineck
chrysler suicide watch 36 ghosn fishing

The breakup of Chrysler has begun. It’s been done quietly, in the open, but under obnubilating nomenclature. That last phrase says it all. Why lie when you can make the truth so damn confusing? While Cerberus denies imminent sell-off, a cadre of automotive executives has Chrysler on a hook, passing around a felt tip pen. In fact, a pre-break up party is the only way of explaining some of the crazy-ass deals the three-headed dog has been fetching lately.

To wit: April 15. Chrysler and Nissan agree to build big vehicles for each other. Nissan will make a small, fuel-efficient car for Chrysler, shoring-up a hole they created by letting the once successful Neon whither and die. This makes sense, kind of, for the dog. Chrysler has no small car in a blooming small car market.

Nissan, on the other paw, generates a new competitor for itself. The Versa and Sentra are performing well in the new $4.25 a gallon US. But not as well as Honda’s Fit or Civic, or Toyota’s Corolla. So let’s see… if you are in third place, what’s the best thing to do? Take a lesson from the leaders and refine your product? Or, take a lesson from the guys running in the opposite direction and badge engineer your current cars into vapor?

And that’s just half the deal. Chrysler’s going to build a new full-size truck for Nissan. Who the what now? Chrysler’s truck business fell 48.1 percent in June. It’s off 30.4 percent for the year, and last year wasn’t that great. Nissan wants a piece of that? Doesn’t Nissan already have a full-size truck? Built in Canton, Mississippi? Yeah, let’s ditch that for a Ram knock-off from Saltillo, Mexico.

Again, let Toyota keep working their platform till they get it right. It’s foolish when you can just go buy a bunch of Dodges. That’s supposing that you need a full-size truck on your lots in the first place, which is debatable when you’ve made it from 1914 to 2004 without one.

Exactly how much of Renault – Nissan’s resurgence can be attributed to CEO Carlos Ghosn’s brilliance is always up for discussion. It’s tough to find someone who says he’s outright stupid, though. Most reports label him smart. Ghosn says the Chrysler deal will save millions in development costs and provide more efficient use of manufacturing capacity. It’s the kind of statement that seems to make sense– until you place it in context. The American market has contracted, the dollar is down against the everything and trucks are no one’s growth potential.

Ghosn also said he wants a third, preferably North American, leg for his stool. He played with GM two years ago, but that went the way of the Datsun. Nissan and Chrysler forged a transmission deal in 2004 and announced a Versa re-badge for South America back in January. He’s been trying to form a backroom mega manufacturer for years. Ghosn doesn’t want trucks. He wants inroads.

Nissan is not the only “strategic partnership” with a knife and fork, waiting until everyone is seated. Chrysler builds the Routan for Volkswagen (a match made in purgatory.) They buy hybrid systems from General Motors to disguise Durangos and Aspens as modern vehicles. Chrysler has some kind of deal with Chery Motors, though its importance outside of China is unclear. They’ve also had talks with Mahindra & Mahindra. (Although who hasn’t, really.)

Chrysler has lost billions of dollars for its canine overlords, none of who got into the car business to make cars. They want to make money. Exactly how long they are going to wait for a profit is an X in the equation. Anyone looking at current sales figures and all the new product Chrysler’s not preparing can tell you positive cash flow is years away. As opposed to slicing off branches, divisions and units, which can serve-up cash tomorrow.

It is easier to sell to people with whom you are already doing business. If your plant is tooled-up to build Nissan Titans, why not become a Nissan Titan plant? Getting a hold of 3,700 Chrysler dealers across the heartland of America is, conceivably, a good idea for someone who needs a U.S. presence. OK, maybe not all of the Chrysler, Dodge and Jeep shops. But about 1400 stores might look tasty.

VW wants to increase North American sales by a billion percent. In this economy, if you want to sell cars in the States, you better build them in the states. Yes, VeeDub’s looking to cut a deal down south. Meanwhile, anyone got a Sebring plant they’re not using?

Cerberus can tout all the synergistic original equipment manufacturing global positioning alliances it wants. The lines will have been drawn. Dotted lines. As in, cut here.

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  • Windswords Windswords on Jul 14, 2008

    jerry weber: "To windswords: Every car/truck/suv/ under developement that you mention at Chrysler, is a gas swizzler. Not one of these vehicles if they hit the showroooms tomorrow would sell in any quantity. The proof will be the new Dodge ram which is coming by fall. If people don’t want to put $4.00 gas in a four year old designed pickup, why would they want to put it in a newly engineered one?" First of all, even in this climate pickups sell hundreds of thousands of vehicles. You can't ingnore that market. Second, the new Ram will not only keep two plants busy running, but will get better mileage than it's peers, which will attract cutomers who need a pickup but still want to save as much money as possible on fuel (in other words, all of them). For Nissan, who sells less than 100k a year (not enough to keep a factory running efficently) it makes sense to use this as a basis for their truck.

  • Mirko Reinhardt Mirko Reinhardt on Jul 17, 2008

    @Ronin317 Yes, BMWs efforts are interesting, but to claim that it’s a better idea is absurd, considering it’s a decade off from being close to viable, if it ever is. Wait, BMW Efficient Dynamics is not a decade off being viable. I personally drive a 1-series BMW with eD, and while handling great, it returns 48-50 mpg at B-Roads and 33 mpg at 200 kph left-lane Autobahn driving. Efficient Dynamics is not an option, it's standard equipment. Basically it's marketing speak for a bunch of fuel economy improving technologies. (flaps behind the radiator grille to improve aerodynamics when less cooling is needed, alternator only engages when braking, engine start/stop system, variable coolant and oil pumps, electric steering, shift point display...) I bet unless you drive a lot in dense city traffic, which I don't and unless you hate well-handling cars, which I don't either, my car makes more economical sense (for the kind of driving I do) than a Prius.

  • MaintenanceCosts Shame about the DCT. If this had a manual it would be a great daily driver.
  • EngineerfromBaja_1990 These cars hit rock bottom in value by the mid 2010s when the DCT related lawsuits came in droves. Too bad because other than that poor transmission and limited legroom, these are very good handling and well equipped vehicles with decent build quality and materials.We can all be very positive it was the DCT fiasco what ruined this nameplate for North America rather than the shift from sedans and HB to CUVs.The only upside is manual transmission vehicles were also affected by the low resale value, which make them an excellent buy.
  • MaintenanceCosts And this is why I just bought myself a good 2011 manual car that I plan to keep for a good long time.
  • Lou_BC The Camaro always had to contend with the Corvette. Up until the mid-engine Corvette, bother were just muscle cars occupying the same niche. The demise of the Challenger and Camaro will be great news for Ford and the Mustang. Once again they are the last domestic Muscle car standing.
  • MaintenanceCosts I love these. They are really too loud for the street--you'd have to tiptoe around subdivisions and parking lots if you don't want people to get mad--but the noise is SO beautiful.But if I got this one the first thing I'd do would take a heat gun to the white stripes. The car is plenty shouty enough without them.