Filed under: Daimler, Earnings/Financials
Chrysler increases expected Q3 loss by nearly $1 billion
The Chrysler Group is stepping in line with Ford today, which earlier announced more buyouts for Blue Oval workers, plant closings and that it won't see a profit in North America until 2009 at the earliest, to announce that it has increased the amount it expects to lose in the third quarter by almost $1 billion to a total of $1.5 billion. Citing a laundry list of reasons mirroring those that also caught Ford by surprise, including high fuel prices, lack of a competitive small vehicle lineup and high legacy costs, Chrysler states that it will take the hit this quarter but is "striving" to achieve a profit in Q4. The automaker will have eight new vehicles out by year's end to help achieve that aim, including the new Dodge Caliber, Jeep Patriot and Compass, and Chrysler Sebring. We wish 'em the best of luck.[Source: DaimlerChrysler]
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Reader Comments (Page 1 of 2)
PiCASSO 10:58AM (9/15/2006)
"lack of a competitive small vehicle lineup"
Well, duh! The Dodge Caliber (and its sister's Jeep Compass and Patriot) aren't exactly "small". The car is sized between a compact and a mid-size car, and looks like a mini-minivan. They need a small car, with 4-doors, not 5.
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Jason 11:01AM (9/15/2006)
Huh? The Caliber has been out for a few months now, and I thought it was selling as fast as they could make them.
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Ryan 11:13AM (9/15/2006)
Well, it's the German's problem now, good luck on that.
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rwdmtparkingonly 11:36AM (9/15/2006)
Vie hav vays of making you buy und Compass.
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Car chops and Discussion 11:38AM (9/15/2006)
Yeah caliber is quite small, I mean it isnt a mini hatch or anything, but it's a relatively small car..
http://www.carchops.com
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Lithous 11:46AM (9/15/2006)
"lack of a competitive small vehicle lineup"
That's not true, the Caliber replaced the Neon therefore the Caliber is a "small car" (just because DCX told us so. Wait, didn't they tell us it was a merger of equals at one point too? Hmm. Should we trust them?)
All the car "experts" who chime in on autoblog... Weren't they all telling us that GM needed to be more like Chrysler? LMAO. The game isn't over but it sure looks like following Chrysler's ways is not a gaurantee for success.
ooh, look at the Magnum. ooh, look at the 300M. ooh, look at the Charger. Whatever.
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awramale 11:52AM (9/15/2006)
The Big 3's problem is the free trade (NAFTA) and all foreign competition tax the vehicles heavy so their countries people can't afford American made products. Just look at all the jobs that left to foreign countries for cheaper labor and they don't have to worry about the EPA in those places. It's time to go back to the old slogan "BUY AMERICAN"
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atlkustoms 11:54AM (9/15/2006)
Looks to me like DC is sending a message to UAW!!!!!
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Ryan 12:05PM (9/15/2006)
"It's time to go back to the old slogan "BUY AMERICAN"
-Then don't purchase a DIAMLER-Chrysler, denial is the first step don't worry.
-But it's German dude, look we have Doctor Z telling us the virtues of a Dodge Ram with a HEMI now!!!
There is a poster on here under the name "Lithous" or something like that and he used a good example a while back that stuck with me.
It goes something like:
If Diamler Chrysler wanted the "Dodge group" or "Chrysler Group" to paint all of their cars purple next year, that is what they are going to have to do.
Even when I was on the phone with my mother last week, which cars are the last thing she thinks about. She said "ya know those Dr. Z commercials are a tough one to swallow, seems like the German's are dumping salt on an open wound" she said they would never purchase a Dodge and NOT because it was a Dodge but because of the hostile takeover that Dodge fell victim to.
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Ryan 12:09PM (9/15/2006)
I mean think about all you ANTI-UAW people:
Dodge is the WORSE thing you could do:
1.) Profits are sent oversees BUT you still support the UAW people. Seems like you would aviod this company like the plague.
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Michael Karesh 12:09PM (9/15/2006)
I was just on the phone with Chrysler Customer Care a couple weeks ago explaining to the guy why they keep losing market share i.e. because of how they handle problems like the one I was having with my wife's car.
His eventual line, and he said I could quote him on this: "It's not my job to use common sense. It's my job to follow company policy."
Chrysler's cars probably do have more problems than others. But the gap in absolute terms isn't huge. The real problem is in how they handle product issues. The strategy has long been to lose a customer (perhaps for life) whenever this will save them a couple hundred bucks.
They're not alone in this. Ford definitely has the same problem. One of my panel members recently told me that a Ford dealer made him pay for new trunk lid struts on a three-month-old Ford Five Hundred. Why? They're apparently a wear item. Risk losing a customer over $50? Sure, there are still a few more out there.
I live near Detroit, and part of me will always root for these guys. The other part of me knows they deserve pretty much everything that comes to them. In the end the two roughly balance out.
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Leo 12:26PM (9/15/2006)
looks to me like as I have pointed before that the interior of hte car is what will save FOR/GM/Chrystler
- they need to com up with better interior and GM by far has the better interior from them adn their new products coming out seem to be promising even more.
sure the 300C adn Magnum looked fresh on the outside, but once inside they are crap
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Lithous 1:31PM (9/15/2006)
"I live near Detroit, and part of me will always root for these guys. The other part of me knows they deserve pretty much everything that comes to them. In the end the two roughly balance out."
Come on Michael, you are having selective memory on this one about how people are treated at 4n car dealerships... Even if you don't feel that the contributions Ford and GM have given to the is country has to give them an edge up: You see how Honda snuffed the Candadians with the extended transmission warranty, right? I mean some woman bought an Odyssey or something in Clarksville, MD and it was destined for Canada so her extended warranty on the trans was not given to her. Honda makes 50% of their profit from the U.S. that is why they give U.S. extended warranties and not Canadians on their bad transmissions. That is something that GM and Ford used to be accused of: caring about the money and not the customer. All the import fanboys seem to come out about dealership treatment at Toyota and Honda so I don't buy that it is some easily defined thing like fix customer service or product changes.
It is like training Marines. Fill them with kill, kill, kill until they believe it. Americans are filled with buy foreign, buy foreign, buy foreign. Then if there is a break through some Terrell Owens is there to tell you why GM and Ford are still not good enough.
BTW, Ryan, for your own sake, don't mention me in a non-negative way on autoblog, your stock will go down. To save you a bit, I don't remember writing that (though I have written similar things).
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Aki 1:45PM (9/15/2006)
"It is like training Marines. Fill them with kill, kill, kill until they believe it. Americans are filled with buy foreign, buy foreign, buy foreign."
Uh no, Mr. Anachronism, Americans buy whatever they feel is the best deal. It's capitalism, not your antiquated nationalism verging on racism. On the contrary, it is your tireless and petty patrioitic insecurities that compel you to endlessly drone on about "buy American, buy American." Fortunately the average American consumer is a little smarter. If you don't like competition, I suggest embracing communism/facism and moving to a country with a non-free market economy.
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Michael Karesh 1:54PM (9/15/2006)
Lithouse,
You sure that wasn't the widespread practice of not honoring U.S. warranties in Canada, and vice-versa? Most automakers have tried to do this to prevent the gray market traffic encouraged by currency swings. Used to be that cars were much cheaper in Canada. Now it's the other way around.
If she'd bought the van in Canada, the transmission might have been covered.
Did a little digging. Are you sure this isn't the story?
http://www.my3cents.com/showReview.cgi?id=5768
If so, you've got the facts all backwards. They're refusing to honor the warranty on an Ody sold in Canada at a U.S. dealer. One solution: drive it back across the border for service.
Detroit's near the border. The fact that all the majors do this stuff with warranties is a major reason I didn't buy a Canadian car back when it would have saved me thousands of dollars.
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Ryan 1:54PM (9/15/2006)
"I suggest embracing communism/facism and moving to a country with a non-free market economy."
You mean, like the United States of America? Free market my ass.
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Lithous 2:32PM (9/15/2006)
Here is the difference. Say Ford and GM come out with a great/different product, something that sets them apart (Sky/Solstice, G6 Hardtop, Corvette, Envoy XUV (very Ridgeline like when roof open but w/o your spare tire underneath the washing machine you are moving when you get a flat), Quad Coupe, Plastic body panels, AFM on large SUVs, etc. the experts are there with shotgun in hand.
Now, Apple comes out with the iPod. OK, Japanese dominated consumer electronics industry, right. Here is my "I should bash domestic" review of the (hit selling btw because it is rarely destroyed as it could be when reviewed) ipod:
The mini was an obsolete piece of hardware before it even came out. The iPod photo had a price on it that rivaled the iPod video yet was bulky and didn't do video but the price never dropped much with the arrival of the video ipod. It came in one color (is this Henry Ford days of any color as long as it is black?) then two. Scratches show easily, this thing is meant to be portable and not stand and look pretty so how about some sort of scratch resistance? The case can't be user serviced to say replace the (not extremely long lasting) rechargeable batteries. There is no power off button per se. You are supposed to accept that it will just turn itself off (and there is never a software or hardware glitch, yeah right, so don't worry). It will lock up once in a while when playing. The earphones have the black felt-like covers which fall off (never to be found again) frequently if you move yours around enough. They sell a video cable for around $40 so you can play the video on TV but guess what? It is really a $5 or $10 cable mislabeled (on purpose i.e. yellow,red,white composite are the wrong colors) so you think you have to pay Apple for the cable. They are made in Communist China (hmm, Farago makes a deal about all the Chinese parts that GM and Ford use, wonder if he denounces the ipod since they all are Chinese made?). But it has some good software (itunes) that comes with it (though I'm not sure if it tracks your every move and reports it to Apple or not, we'll have to see).
See my point. If not just one, but even 50% of the reviews where like this (truthful one) would they own the market like they do? No way.
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Lithous 2:33PM (9/15/2006)
I believe that is the situation (the link you gave)...
I didn't mean it as a U.S. warranty not accepted in Canada if that is what you mean, not sure. The destination on the original sticker was Canada (i.e. a Canadian vehicle) and the woman bought it in America. Those two things I stated. Now, I believe I read on autoblog that the warranty wasn't given to the Canadians. Verify that part. Either way, the article sums up exactly my point. Lose an American customer (over 1 transmission) is not good when America is 50% of your profit. They were putting 1 transmission in the way of making the customer happy. So they get the law (if it is illegal) or whatever to track down who brought it here (again, if it is illegal or something) otherwise; why not just make your customer happy if she didn't do anything wrong?
But in this global world that only GM and Ford don't get that it is global, why does Honda care about U.S. or Canada or any border? These guys like borders as much as I do it seems (especially the one that encloses the 50% worldwide profits).
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Lithous 2:33PM (9/15/2006)
"Uh no, Mr. Anachronism, Americans buy whatever they feel is the best deal."
But if you start out tainted that the best deal is across the street then you are going to buy across the street more even when that is not the case (that it's the best deal). I know, we Americans have this "I deserve a break today" get the best deal or I am a failure brainwashing that only McDonalds and Comcast (using a bunch of kids to make Verizon even with it's start of the art FIOS look uncool to own) could bring you. Whatever.
With all the "best deals" we Americans go for it must be nice never getting a bad product. The point is if you are going to get a bad product with a nearly equally likely chance, why not support your own. The countries that are thriving now sure have nationalistic pride and so did America when it was thriving economically. Yes, we are so grown up and mature like Rome where they thought there was more important things than allegence to the state (at least that's what they thought just before they fell).
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Vik 3:06PM (9/15/2006)
"The automaker will have eight new vehicles out by year's end to help achieve that aim, including the new Dodge Caliber, Jeep Patriot and Compass, and Chrysler Sebring."
Wow, that's exactly the trio I and other American consumer will be drooling over for decades to come. Good luck Chrysler indeed.
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