Chrysler stands to lose $1b in 2007?
Steven Landry, Chrysler veep of North American sales, was speaking to a group of business students at St. Mary's University when he said that Chrysler will be taking in $64 billion in revenue this year and would spend $65 billion. It doesn't take an MBA to figure out that those quoted figures put Chrysler $1 billion in the red for 2007. Andrea MacDonald for The Daily News was at the ceremony and filed the report, but when Automotive News tried to contact Chrysler's PR people, they declined to comment. It's unclear if this was a serious miscommunication or a statement of fact, but considering the state of affairs over at Chrysler, it's of little surprise.[Source: Automotive News – Sub. Req.]
Reader Comments (Page 1 of 2)
sw 5:39PM (11/30/2007)
They must be bracing for something big. Lately I've seen commercials offering 0% financing on 2008 Chrysler/Jeep/Dodge models and you don't normally see that for quite a while for newer models like the new liberty or dodge caravan
Reply
MemphisNET 5:45PM (11/30/2007)
It's a shame that bad interiors sends a wave of negative signals across the sea of buyers. 'Cheap plastics' translates into sh!t product as a whole in every American article I read.
www.canadiandriver.com and www.driving.ca - check out their reviews of Chrysler products, including such stalwarts as Sebring and Caliber, and they have very positive things to say, regardless of plastic.
Hopefully Journey, RAM and Challenger will change that.
Reply
psarhjinian 5:57PM (11/30/2007)
Canadiandriver is a decent site in that it has nice pictures and excellent features, but they're all Automobile Journalists Association of Canada members and, as such, are pretty addicted to the press junket. The reviews tend to be pretty puffy and, if they do call a car onto the carpet, it's either because it's egregiously bad (which hasn't happened in a long time) or it has a flaw that's safe to pick on (Subaru's styling, Saab's lack of cupholders, seats that don't fit that particular reviewer--you get the idea).
If CanadianDriver finds a fault, you can be it's serious because their otherwise pretty sycophantic. They have to be--they're all independent journalists whose livelyhood would take a serious turn for the worse if, after a few bad reviews, the wellspring of products dries up.
Brent 5:54PM (11/30/2007)
Top management seem to be demanding interior changes. They can't come soon enough! I predict Chrysler making a comeback within 4 years.
Reply
Xcountryflyer 6:07PM (11/30/2007)
Chrysler needs to right the ship or its gonna capsize sooner than GM or Ford. It's products are certainly in far worse shape.
Reply
MemphisNET 6:18PM (11/30/2007)
I disagree, I would say Ford is worse off. At least Chrysler seems to have some styling/marketing direction. Not that Ford makes a bad product, but come on, look at the Focus, the Taraus. Edge and Fusion is great, and I can understand the Milan/Sable clone - Lincoln lineup is a joke.
And to psarhjinian : I guess what I'm getting at is, they at least get across the fact that you should look at these products, regardless if it's sincere or writters fluff. The big three automags (C&D, MotorTrend and R&T) make these products sound like absolute crap if they're not handling like a sport sedan, 300HP and handle like a go-cart. I understand they're predominately enthusiast mags, but every normal, obtainable car to Joe Schmoe is basically torn apart.
I'd love a BMW 3Series, Caddy CTS, Corvette or Mustang GT. But reality dictates that I, along with a major portion of the market, is in the Sebring/Malibu/Fusion category.
Court 6:18PM (11/30/2007)
I was so excited for Chrysler after they launched the 300, that car so much praise. But then produced that horrible Sebring...I just can't forgive them for that. Who is going to buy that thing?
Reply
Drewboy 9:01AM (12/01/2007)
Who is going to buy that thing? My grandma, lol.
Tricky dicky 6:26PM (11/30/2007)
Per normal in job reduction situations, I'm not sure how many at home Sally Struthers business courses a guy needs to take to realize BUYOUTS are not cheap.
Reply
MemphisNET 6:29PM (11/30/2007)
Good point. They're probably still bleeding the the leech Mercedes
MemphisNET 6:29PM (11/30/2007)
*from the leech,
Reply
JerryB 8:54PM (11/30/2007)
I think Mercedes is the one who "bled". They paid several billion $ to acquire Chrylser and sold it for less than one. That's not the way it's supposed to work. They lost a boatload of money on that venture, and simply owning Chrysler lowered the status of their brand and tarnished their most valuable and marketable asset; the perception of impeccable quality.
Reply
MemphisNET 12:10AM (12/01/2007)
Mercedes Quality is far lower than any of the American brand.
Chrysler was in the black when Mercedes became a partner of equal. What a joke. Money was sucked out of Chrysler devs and into Mercedes. Cars that were bread and butter, cutting edge and just awesome were down played, F'ed up and cancelled. ME 4-12 was killed because it beat the crap out of SLR.... the only thing good that came out of that merger was the LX platform and the Pacifica, but that is being killed because of poor marketing and no spending in updates/refreshing.
Chrysler is screwed today BECAUSE of Mercedes, and not the other way around.
iOrange 1:48PM (12/01/2007)
Memphisnet
He is exactly right.. look at where Chrysler product was prior to the "merger" and where they are now... Chrysler supported MB for a long time..
MB's quality is horrible, my mom has an 04 c320 that has had more repairs made to it than all the Chrysler vehicles we have EVER owned. It is really something when the warranty runs out and they tell you the cars PCM has to be replaced for the 6th time at a cost of around a grand.. unbelievable.. while we have a PT Cruiser the entire time with three times the miles and has never even hiccuped..
JerryB 9:11PM (12/01/2007)
If you think Chrysler makes better cars than Mercedes, you are both morons. Neither brand is as good as anything from Asia, but to assert that Chryler quality is better than Mercedes is pure ignorance.
psarhjinian 9:55AM (12/03/2007)
Chrysler's quality is better than Mercedes.
Sorry, I know it's hard to believe, but Mercedes is very good at making a car with an excellent driving experience and awful reliability. So does VW and, to a lesser degree, BMW. European--especially German--automakers exist in a hypercompetitive market and have to stay ahead of each other in what they can produce. This gets the big German three into a perennial engineering cockfighting match. Where this goes wrong is that all the effort that should go into making a reliable machine goes into making an amazing one.
This is why Mercedes is generally six to eighteen months ahead of Lexus in raw product ability: Toyota's QA system (yes, say what you will, they're still the top dog) imposes much tighter restrictions on the end produc than does Mercedes.
JerryB 11:33PM (12/03/2007)
I can agree that Toyota and lexus are better than Mercedes, and I agree with you that Mercedes reliability isn't what it's cracked up to be either. It's just that, as disappointing as Mercedes reliability can be, Chrysler is even worse.
JerryB 3:15AM (12/01/2007)
Memphis. Mercedes poor build quality, is a legacy of its merger with Chrysler. When Mercedes bought Chrysler, it was revered as a builder of top quality vehicles. Chrylser was seen as a builder of low quality, nicely designed but poorly manufactured vehilces; a brand that survived on its marketing not its manufacturing.
The merger gave Chrylser better platforms to underpin its designs: the Pacifica you mentioned, but you forgot the Crosssfire which is based on the same chassis as the C-Class.
In the ensusing years, Mercedes has lost its reputation as a builder and purveyor of finely crafted products. I'm sure having Dieter Zetsche hawking Dodge trucks didn't help them any.
Just because they were in the black when Mercedes bought it, doesn't mean their downfall is all the fault of the Daimler managers. In the ensuing years, all the domestic brands have suffered losses in market share because of rising fuel prices and dropping demand for big, gas guzzling trucks and suv's. Look at chryler's product offereing. They have not one competitive product in the bread and butter sedan and compact car markets, nor in the crossover or small SUV segments.
They got greedy and tried to go upmarket with Chrysler, pricing the Pacifica and Crossfire in the mid-30's and upward and offered the Sebring and Avenger to compete with Accord, Camry, and Altima.
I've said this before and I'll say it again. Chrysler is in the shape it's in because it cannot compete with the Asian brands in quality and value in the segments where most of the volume is. Instead, they try to aim for segments where the competition is thin or nonexistent (Viper, Prowler, Magnum, 300C) because they know if they have to go head to head with Honda, Toyota, Nissan, or even Hyundai, they generally lose.
That strategy worked for a while, but banking on niche markets will ultimately turn you into a second tier builder of niche vehicles. And, with the recent purchase by a private equity group and the subsequent announcements of several product cancellations, that's exactly what we're seeing.
Reply
Raydude 4:26PM (12/01/2007)
Chrysler is losing money because they don't have any must have cars. With Damlier there styling went to crap.
As for the quality issue, that is old wives tale. Chrysler products have been just as good as any other manufacturer.
They just have a bad rap, ususally from people that haven't owned or driven a Chrysler product in many years. Chrysler needs to get away from its suv styling, if they would have designed the Caliber as a car. it would have done better, same with the front end of Magnum.
For the average Jo Blow their interiors are no big deal.
People buy Camrys and Accords only for their quality reputation. Volkswagen and Audi interiors may look good but after 3 years they fall apart. European cars have the very worst quality that is why the offer free maintentance
on their new cars and why people lease and not buy their cars. But Chrysler does have a sad group of dealers.
Reply
Ian 4:53PM (12/01/2007)
I for one see the loss of $1 billion for 2007 as good news. Given that Chrysler lost $1.5 billions just in the 1st quarter alone ( see Daimler Investor Relations website for specifics) that means that the company actually made money in the other 3 to the tune of $500 millions. The turnaround plan seams to be working to some degree.
Reply