Have I Been Too Harsh on Chrysler? - Autoline on Autoblog with John McElroy
Ever since Cerberus took Chrysler private they've only doled out dribs and drabs of information about the company. So analysts and reporters (including me!) rushed in to fill the vacuum, mostly with negative news. That woke the company up to the fact that it better start communicating with the outside world.
And that landed me an interview for Autoline with Tom LaSorda, the vice chairman of the company, who offered up a lot more information than I ever expected.
First off LaSorda quashed rumors they plan to break up the company and sell it off in pieces. He says Cerberus is committed to a long-term plan to revive the company, and besides, the industry is in the dumps, so now is not the time to sell.
He also complained that Chrysler is not getting credit for making major progress on a number of fronts. For example, the company is going to build the Routan minivan for Volkswagen and the next version of the Titan for Nissan. He says Chrysler will soon be building 150,000 vehicles a year for other car companies, which ain't a bad number.
LaSorda talked about how Chrysler is selling non-core assets, like the deal it cut with Gaz to make the last generation Sebring. Now we know it plans to sell off the Viper and all the assets that go with it. So far the company has earned half a billion dollars with moves like this, which shows it's getting pretty creative on how to pull more value out of existing assets instead of throwing them in the wastebasket.
Of course, the key to thriving in the future is by coming out with new products and Chrysler is working with a growing list of automakers to help it do just that. So far it has signed up with Nissan, Cherry, and Great Wall to provide it with small cars. It's in discussions with Tata and it's working on yet another deal with an un-named company in Russia. LaSorda said he hopes to have another announcement before the end of the year.
Not only will this slash the cost of developing new products for Chrysler, it will get the company into a lot more markets overseas where it currently has no presence. The plan is to scour the world looking for open manufacturing capacity, then do a deal where Chrysler contributes its intellectual property to build cars.
I asked him why Chrysler wouldn't just export vehicles from North America, taking advantage of a weak dollar and boosting its own capacity utilization. He said there are too many import tariffs in a lot of countries and that forces them to build there instead of exporting.
I also questioned how the company is going to come up with all the advanced technology it needs since it no longer has any major R&D operations in house. LaSorda pointed out that Chrysler owns Global Electric Motor Cars, or GEM, so it already makes neighborhood electric vehicles (NEV's) that it's selling in North and South America and in France. The plan is to greatly expand to other markets. Recently, Chrysler combined GEM with ENVI, its in-house operation to develop advanced electric and hybrid drive systems.
That's when LaSorda let drop that Chrysler would love to do an electric city car. And that got me wondering. Wouldn't Tata, combined with Chryco IP, be a great partner to do an inexpensive EV?
Anyway, the bottom line here is that even though Chrysler is still in a precarious position, it's not quite the basket case I thought it was just a couple of weeks ago.
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