Back to the drawing board: DCX working on more rebuilding, more sharing
DCX could end up sharing more platforms going forward
Oh, how time flies when you're paying attention to the domestic auto industry. About a year and a half ago the Chrysler 300 was selling like crazy, the Charger was off to a fast start, and analysts were saying nice things about the company from Auburn Hills. Well the 300 and Charger are still a resounding success, and life for Chrysler has taken a turn for the worse anyway. A $1.2 Billion loss in the 3rd quarter put the scare into the folks over in Stuttgart and now management and share holders are looking for more cost cutting and less payroll.
It looks like 1,000 white collar and 10,000 blue collar jobs are now on the block as a large part of the effort to remain competitive. Buyouts will likely surface soon after the announcement plans are announced, and the cost associated with the move will result in more tough quarterly financials for Chrysler. There will be tough times again in Auburn Hills, but some good news may come out of all this for customers and Chrysler employees alike.
Continue reading Chrysler working on secret rebuilding plan
[Source: Detroit News]
As part of the effort to boost the Chrysler group's bottom line, DCX is now exploring the sharing of a lot more components between Mercedes and the Chrysler group. The 300 and Charger share chassis components with the previous E Class and it's by far Chrysler's best product. The Crossfire was also a platform-sharing vehicle, but it was a sales failure because it was expensive and many didn't like the styling. Of course the Sebring was designed after the Crossfire and there aren't a whole lot of automotive journalists out there talking about how good it looks either.
The C Class platform could one day underpin a Chrysler product
With the price premium of Mercedes, it makes a lot of sense for the lower-volume luxury unit to soak up some of Chrysler's costs. Chrysler in turn can use its volume to lower component costs for the Mercedes brand, making it a win-win situation. This move may also help DCX to get a better handle on quality with more common parts, like steering columns, while keeping the all-important powertrains separate. Some executives at DCX feel component sharing will hurt the cache of the Mercedes brand, but it has already been done successfully without harm to either party.
The M Class could share more compenents with a Dodge Durango
Like-size vehicles like the M Class, Grand Cherokee, and Durango could also share a basic chassis, since the vast majority of customers care more about exterior, interior, and powertrains than they do shared architectures. DCX is also looking into doing a small car also. Collaboration could happen in the future on everything from a Liberty/Nitro platform and a Europe-based Mercedes SUV or a C Class platform underpinning a smaller Mustang fighter. The possibilities are endless due to the fact that even though Mercedes is a luxury unit, it's basically a full-line manufacturer that sells small through large sedans, sports cars, convertibles, and several different SUVs. The Ram and Town and Country won't see much from platform sharing, but they sell at far larger volume than anything else in the Chrysler family so there isn't the pressing need. These vehicles can, however, leverage diesel and transmission technology that DCX has, so increased sharing works there too.
Right now DCX is in a position that a lot of other companies are looking into. The main problem companies are having with alliances and mergers is that one company can ultimately lose control. Between Mercedes and Chrysler, that battle has already been won. The other issue is that commonization takes years to help the bottom line, but executives in Germany already have sharing underway with the 3.0L diesel and the 300 platform. At this point selling off the Chrysler unit would be far more financially damning than it would be for GM or Ford to buy out thousands of dealers. Since they have little choice but to work together, they might as well go all-out.
Reader Comments (Page 1 of 2)
Jim 11:02AM (2/12/2007)
Platform sharing makes sense, but they do have things to worry about other than diluting Mercedes. For example, it probably wouldn't be a very good idea to put a Jeep Grand Cherokee on what amounts to a minivan chassis like the R-Class.
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rrr 11:21AM (2/12/2007)
Why not just give Chrysler everything Benz has, but does not use, like platforms from last model, like engines (that are replaced by better engines in Benz cars) , interior parts, transmitions......stuff like that.
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ers2332 7:25PM (2/12/2007)
This saddens me. As a Mercedes-Benz enthusiast and owner it disappoints me to hear even more sharing will occur in the future. The past two E classes I've owned have had more cheap plastic in it than my previous Mercedes vehicles I have had. Mercedes always has represented the opposite of cost cutting, hence the outrageous prices. It is a shame that now a fine German automaker has associated them self with a lowly brand such as Chrysler. I hope this partnership dissolves soon!
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mj 12:04PM (2/12/2007)
It should be clear to everyone now that one good year or quarter isn't enough to save the big 3 and VW. Last year's good DCX results were driven by a cheat, i.e., shipping too many vehicles to dealerships, and now they are rightfully paying the price for that deception - and the negative effects will be realized all year long. The Chrysler side of the business is in big trouble still.
They should just cut down now: chrysler for American cars, Dodge for trucks and Jeeps for SUVs and forget everything else. It will all die together if they don't amputate now. It will take time to recover, but then they can discuss better strategic moves/mergers/partnerships. And it's obvious that low priced cars are the easiest market to leave and re-enter: Scion, Hyundai, Kia. So just axe the dodge cars for now (re-designed Caliber would be a new PT Cruiser), and re-enter with a new brand IF you're still in business in a few years. Move the minivans over to Chrysler.
Platform sharing won't save their #1 issue: public perception. Mercedes can make and sell gas guzzlers as a luxury brand, Jeep and Dodge can't. There are few alternatives to Mercedes due to cachet. But Chrsyler groups SUVs and Cars are in the most brutally competitive market in the world, and they are going into that gunfight with a knife (their brand reputation). Emphasizing "Bold styling" isn't enough, esp. when you sell to rental agencies and government fleets. Time to re-build, because re-loading isn't working for anyone.
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thesawzall 1:21PM (2/12/2007)
Chrysler concepts just have to be developed more in the open. While MB can pretty much count on the Benz faithful to make any car profitable, Chrysler's have to attract a crowd.
With mis-steps like the Crossfire, they need to test them in the market more, during development.
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Bob 5:38PM (2/12/2007)
Chrysler is the joke of the American auto industry. Their latest efforts, the Caliber, the Sebring, the Nitro are all cheap, poorly designed, ill-handling, and 5 years behind any other cars in their respective classes, and that's being nice. It's no coincidence that the only models out of Chrysler that people care about are based off of Mercedes platforms.
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RamSport47 12:11PM (2/12/2007)
#3, mj, you should apply to be an auto exec...you seem to have all the answers
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Michael Karesh 12:12PM (2/12/2007)
So many of the Chrysler Groups recent products have been far off the mark that their product planning and development process is clearly very broken. The four-door Wrangler is the only definite hit since the 2005 LXs.
Among the Detroit 3, only GM seems to have a viable product strategy lately.
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Accordsforall 12:24PM (2/12/2007)
Hmmm
The most interesting part...
The E class / Charga / 300, Magnum was selling well. But its quickly aging. Their uplevel attempt (Imperial) is a joke of huge proportions. Their minivan whos entry is important to DCX.. is not at all what I had thought to be the next sliced bread.
The SLK frame for the Crossfire.. is a good frame.. for a car 1/4 the size of the Crossfire. Not to mention the poor marketing and design. Now its left to wither on the vine.
This is on top of.. time and time again.. the promised they wouldnt BE SHARING PLATFORMS. With M-B having quality control.. and SEVERE OVERLAP (to "compete" with BMW) whats the point most of this?
The workers in DE get laid off cause their company makes cars for people who dont want them? They put 5 and 10g in rebates on their SUVS.. cause no one wants them?
Their DR.Z commercials.. say nothing about their vehicles, how they are used and the actual message in the commercial itself. Then there is the Compass / Patriot and Commander.. each is the answer to a question NO ONE ASKED FOR.
On top of all this.. the DURANGO.. just got demon spawned into the ASPEN! Its not wanted, not needed and doesnt at all fit into anything in the lineup. Especially when the dealerships are condensing into a DODGE / JEEP / CHrysler shop. Makes no damn sense.
And on top of that.. Chrysler cant get the Sebring to sell.. despite the 1g it put on the hood to lessees of the Accord / Camry and Fusion and or Sonata to drive that nasty POS! Nothing puts being desperate like offering BRAND NEW CAR for 1g for a competitor's car.
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tikirob 12:30PM (2/12/2007)
I wish they could improve the interiors. My wife and I went to see the caliber, we liked the car but the interior were really poor. We looked at what else they had to offer and were disappointed in the other cars as well (The high end cars were not so bad).
Rob
http://www.autoshortlist.com
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serv 12:53PM (2/12/2007)
over the last few years i've watched this company very closely(dcx...chrysler..)and it seems to me that they got it al wrong except for their design studio.the were just bringing out the "HEMI" when gas prices were going towards all time highs no wonder it lasted so long for them.the magic word for chrysler is fuel economy (not only for them)which for them means diesel they have it and so they should use it and you all know what i mean.smaller more efficient engines that's what it takes to move cars there days and oh yeah 6 speed manual trannies......
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RamSport47 1:04PM (2/12/2007)
"Chrysler cant get the Sebring to sell
Posted at 12:24PM on Feb 12th 2007 by Accordsforall"
What rock are you hiding under...they're selling about 12,000 of them a month
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ryan 1:26PM (2/12/2007)
"9. "Chrysler cant get the Sebring to sell
Posted at 12:24PM on Feb 12th 2007 by Accordsforall"
What rock are you hiding under...they're selling about 12,000 of them a month"
12,000 a month you say? Of course they are! Thats pathetic compared to the Camry @ over what? 35,000 units a month. Get serious or get out.
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ryan 1:29PM (2/12/2007)
In other words,
When they made the Sebring did they go in with the mentality of "lets make the best damn car and try to unseat the Camry at the same time" -OR- "lets 1/2 ass it and roll it out with incentives and we can mooch sales off of the camry, as if we are bottom feeder fish"
Have you seen the commercial for the Sebring, it's horrible they essentially "blow off" the sheetmetal to show everything under the car, they CANT even show the car!
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Jason 4:27PM (2/12/2007)
The Sebring is not selling well at all. I have only seen two here in L.A. since debut and both were from Enterprise.
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BOB 4:04PM (2/12/2007)
YOU GUYS!
Sorry to repeat my prior comments that Chrysler just plain cannot afford (or is not presently able) to make the same quality at the same price as the Japanese who build here.
Who said the Calibre was meant for a discerning couple, interested in quality? It is a young person's car, all style and grit.
Sebring is not bad looking, and replaces a fairly awful car that never sold well (except the convertible) -- Selling 30% of Camry rate does not suck, assuming it was geared for that volume.
DCX cant get SUVs right -- except for a couple of Jeep Models, but I am not noticing very many of Mercedes new gen M, R, and G cars, although I live where Mercedes is more common than Chevys.
Now there are overlapping concept car looks between Mercedes and Chrysler -- can't be good.
MANAGEMENT HAS MADE SOME GREAT STROKES, BUT HAS A LONG WAY TO GO.
THE UAW OFFICERS MADE SOME GREAT KNIFE STROKES TO ITS OWN THROAT, CATERING TO THE RETIREES, WHILE THREATENING TO PUT THE WORKERS WHO ARE STILL EMPLOYED OUT OF JOBS, DUE TO COSTS THEY IMPOSE.
DAIMLER MESSED UP BY NOT FINDING A WAY TO GET CHRYSLER BANKRUPT BEFORE THEY BOUGHT IT, SO THEY COULD GET RID OF EXECUTIVES AND START OVER WITH THE UNIONS -- OR MAYBE IT WAS IMPOSSIBLE.
BUT THEN, GERMANS ARE NEVER WRONG.......
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Carter 7:01PM (2/12/2007)
I haven't read one good review about the Sebring since it was introduced. Bad styling, poor handling, hard cheap plastic interiors... Whatever happen to the nice upscale interiors in the LH cars a few years ago?
It's always suspect when you see a car commerical and you know the styling is weak when they don't show you rear shots of the car.
I've always wondered if they are ashamed to show the car in the commercials, why did they approve the design in the first place. I think the designers should be held accountable as much as the execs.
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ryan 4:24PM (2/12/2007)
"Selling 30% of Camry rate does not suck, assuming it was geared for that volume."
Note: This is assuming as in an assumption, it in no way means 30% of Camry sales rate does not suck.
__________________
"Sebring is not bad looking"
-Well we will have to disagree on that. Personally, the black plastic filler peice on the "c" pilar is lazy design.
_______________________
"Who said the Calibre was meant for a discerning couple"
-Yeah who did say that, becuase that would be a joke!
-Quick question then: What is it meant for? Sounds like someone who cant afford one (ie: college kid, high school kid) and if parents will buy it, then they will most likely care about quality.
___________
"Sorry to repeat my prior comments that Chrysler just plain cannot afford (or is not presently able) to make the same quality at the same price as the Japanese who build here."
-They can't afford it or they simply don't know how to?
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Jit 4:27PM (2/12/2007)
Why doesn't DC realise that platform sharing doesn't have to be done with cars from the same sector. Why can't a C-class share a platform with Charger/300C.
I suggest they platform share on
C-Class >>>>>>>> Challenger,300C,Charger,Magnum
M/GL Class >>>>> Commander,GrandCherokee,Aspen,
Durango
E-class/CLS>> Chrysler Imperial
SL >>>>>>>>>>>>> Viper (limited production)
Mercedes should kill anything below a C-class sedan (meaning sport coupe, A-class and B-class)
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RamSport47 4:49PM (2/12/2007)
"15. The Sebring is not selling well at all. I have only seen two here in L.A. since debut and both were from Enterprise.
Posted at 4:27PM on Feb 12th 2007 by Jason"
You might want to get out more...in my area, they don't stay on the lots very long. Also, 12,000 a month for something y'all say is ugly (even though it's not) isn't half bad
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