Chrysler Suicide Watch 36: Ghosn Fishing

Michael Martineck
by Michael Martineck

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.

Michael Martineck
Michael Martineck

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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.

  • CFS I can’t believe these comments aren’t 100% in favor of CarPlay/Android Auto. They don’t add much for music and other audio that you don’t get with just a Bluetooth connection, but they make navigation so so much better. Why is it better? Because inputting the destination address is so much easier. And I don’t need to think about updating my car’s maps. Plus, I can switch between Google Maps, Waze, Apple Maps, or whatever else seems best suited for my trip. Hands-free calling features are OK, but not such a big deal for me.
  • TheEndlessEnigma I've owned a VW in the past and learned my lesson. Any kind of repair was absurdly expensive which I understand is typical of VW nowadays.
  • TheEndlessEnigma Interesting how Stellantis (and can we take a moment to acknowledge how piss-poor a company name this is - it invokes....what....MBA marketeers failing at their job) is pursuing cuts to reduce costs instead of, oh I don't know, designing-building-marketing vehicles people *WANT* to buy? What has Stella done with what was Chrysler? Suck off the cash flow generated by Chrysler brands, essentially kill the Chrysler brand by cancelling successful models, eliminate any market advantage Dodge had by killing successful models (G Caravan was the #1 minivan until it was killed, Charger & Challenger *were* profitable, etc,) and progressively and continually neuter Jeep all this while ignoring component and build quality. What's done in return? Push Fiat as the new and exciting brand then watch as it fails in North America (did you know ONLY 603 Fiats were sold in the US in 2023). All new Stellantis releases in North America are Euro designs......that then fail in North America because they are not design for our market. The Stellanis solution? Fire Fred, Hank, and Jim and replace them with Apu, Jose and Bernardo. Yup, that will work.
  • 3-On-The-Tree To say your people are total monsters is an unfair statement. You can judge the Japanese government but to say the citizens are culpable or responsible is wrong. That’s like saying every Caucasian person in the U.S is responsible for slavery or the civil rights era of violence and discrimination against African Americans and are benefiting from it. That’s 79 years ago, the average Japanese citizen born during WWII has nothing to do with what happened. Even my Japanese grandmother who was living in Yokohama whose home was firebombed was just trying to survive with 3 kids and a husband fighting in the war. Just like every war the citizens suffer, I saw it in Iraq. You can’t judge the people from the misdeeds of their government, my mom was born after the war, you really think she is responsible for what happened?
  • Irvingklaws Was a must have for my wife's new car. After years of windshield mounts, trying to keep the sun off the phone, wires running across the dash, etc...it's been a welcome upgrade. Don't have it in my current (old) car, just a stock stereo with the aforementioned windshield phone mount and wires...which is fine enough for me. But if I upgrade the radio with an aftermarket unit, the first thing I'm looking for, after separate volume and tuning KNOBS, is Carplay. Note, I've yet to find an aftermarket head unit meeting these basic qualifications. The infotainment in my '17 GTI had both of these and was near perfect, I'd be happy with that unit in any car.
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