• Oct 4, 2009
2011 Jeep Grand Cherokee - Click above for high res image gallery

Chrysler and Daimler have been divorced for nearly three years, but the two automakers are still very much entwined when it comes to product. The Chrysler 300, Dodge Charger, and Dodge Challenger use a platform and several components sourced from Daimler. Chrysler's short-term product plans include more Daimler DNA in the the Mercedes-Benz M-Class architecture that forms the basis for the new Jeep Grand Cherokee and Dodge Durango underpinnings.

Unfortunately for the Pentastar, Daimler doesn't seem to want to play parts pimp for its former underling, as it is shorting the company of vital components required to continue operations. In August, Chrysler filed suit against Daimler because the German automaker was withholding parts like torque converters and steering columns. That suit has reportedly been settled, but now Chrysler alleges that the 2011 Jeep Grand Cherokee launch is now in jeopardy. As such, Chrysler has filed a second suit to force Daimler to provide rear axles and other components in a timely fashion, stating that the company needs the parts to build new Grand Cherokee models for testing in advance of the vehicle's May launch.

Daimler spokesman Han Tjan reportedly told The Detroit News that his company feels the situation could be handled outside the courts, but Chrysler doesn't seem inclined to agree. It appears Chrysler is trying to hedge its bets by filing suit, as company spokesman Michael Palese told the News that the company needs the parts in the next 20 days and the company wants Daimler to finalize the contract to supply the parts. Palese added, "Chrysler has too much at stake to take a chance. These are important vehicle programs at a critical point in their launch cycle. We can't afford any delays."

This parts battle is part of a larger war (so to speak) between Daimler and Chrysler over diesel engines. Daimler wants $80 million from Chrysler to cover expenses the former incurred when Chrysler didn't purchase as many diesel engines as expected from Daimler to service the overseas market. Daimler wants the $80 million as a make-good for the lost volume. Chrysler says its recent bankruptcy shields it in this particular conflict, saying that the process resolved any lingering contract disputes, and that its new master, Fiat, isn't on the hook for the money. Ultimately, it boils down to this: Auburn Hills wants the courts to rule that all past contracts are still in effect -- ensuring a parts supply flow from Daimler for the affected new vehicle programs -- and that the Detroit automaker doesn't owe the Germans any money. If things don't go Chrysler's way, it looks as if life could get really ugly for Fiat's new ward.



[Source: Detroit News]


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  • 56 Comments
      • 5 Years Ago
      FWIW, Daimler paid top dollar for Chrysler. Those kinds of stock evaluations wont be back for another decade or two. Daimler was foolish. It should have just waited and it could've picked up same Chrysler for a small fraction of what it paid. Instead they took a big loss and in the process let MB slide. BMW made a similar mistake with Rover. Companies dont learn...
      • 5 Years Ago
      I think it is important to note first-off that this was a very misleading article. It paints a picture of Chrysler as the victim and big-bad Daimler as the bully, when in reality Chrysler is trying to go around the law to get its way. Look up this topic in a reputable source and you will find that Daimler really has no legal requirement to give Chrysler the axle's if they aren't willing to pay for the diesels

      I also get very tired of people complaining about how Daimler destroyed Chrysler. No one really knows the extent of involvement for either company, but it is pretty clear that for every disastrous decision Daimler made Chrysler made one too. Also, shortly after the merger Chrysler had a handful of terrible losses largely because of the dissapointing redesigns of the Grand Caravan/Town & Country twins which were entirely the work of Chrysler. They would have had a tought time weathering that with only $9B in reserve (seriously that isn't much money for a large auto maker).

      Still, the merger never should have happened. Chrysler executives should have noticed that Schrempp was incompetent. Any man who was at the helm for the introduction of the simply awful ML320 and the introduction of Smart clearly wasn't someone you wanted to merge with. It was clear that he was already starting to mess up Mercedes-Benz so why would you want to get involved? This makes it obvious that Chrysler was going to pontoon itself anyway because its leadership was so incompetent. The Daimler merger sped up the process, but it also left the company with a few fantastic products it probably wouldn't have had otherwise.
        • 5 Years Ago
        Read: http://www.allpar.com/neon/engineering.html

        The story is about the Neon but the engineer has some very revealing things to say about what Daimler did. Chrysler had the best executive team in the auto business. But Iacocca picked the wrong man for the top spot, Bob Eaton (an ex-GM guy). He made 50 million for the merger and retired to Florida with it.

        The 9-10 billion was for product development, not general expenses. Chrysler didn't want to short product development when the next recession hit. Even if they had used it for general expenses it would have covered all the losses they had during their time with Daimler until Cerberus bought them.

        Lutz knew it was a bad idea (he was the only one on Chrysler's team who spoke German, and had been raided in Europe). He left shortly after. He and Tom Gale should have been the next CEO's of Chrysler.
        • 5 Years Ago
        I don't even know where to begin. What part of bankruptcy don't you understand? The New Chrysler has no obligation honor the diesel contract as that was left behind under the Old Chrysler. However, Daimler has every obligation to fulfill the axle contract since that was kept by the New Chrysler.

        And the I have no idea what failed Caravan and Town & Country you are talking about because every generation has been the best-selling minivans in America. The version that came out in 1995 was a hit within the minivan market. The next version came out in 2001, 4 years after the merger to form DaimlerChrysler and plenty of time for Daimler to affect the design. And in any case, that model was a successful model within the minivan market as well.

        The Chrysler products that came out in the latter half of the '90s were at least class competitive and they were taking design risks with vehicles like the Prowler and the PT Cruiser. Five years after the merger, Daimler started starving Chrysler of competitive new models for the better part of a decade. Meanwhile, Daimler had decided to use their new found wealth to build such hits as the Maybachs, smart Forfour, Chrysler Crossfire, and the Mercedes R-Class, GL-class, and SLR. Daimler also led a failed attempt to take over Mitsubishi, which burned even more cash. And then when Daimler had used up Chrysler, it spun it off without giving it sufficient funding to develop new models. All of these decisions were made by Daimler; all the Chrysler guys were gone not long after the merger.

        No, Daimler definitely f'd up Chrysler beyond repair.
      • 5 Years Ago
      Ok I know its not that easy to just up and make their own Axles and Steering stuff, but does Chrysler have a plan to make these parts themselves or someone else (say in the states) make them after these contracts expire?

      That and I assume Fiat doesnt have parts that could be used instead of Daimlers?
        • 5 Years Ago
        Fiat might be able to source the parts themselves, though that's doubtful, since Fiat doesn't offer any products even close to the likes of the Grand Cherokee. They're all FWD small cars and RWD sports exotics.

        Plus, the engineering on the GC was finished long ago. The tooling has been ordered. Were Chrysler to source different parts, it's cause the delays this story refers to. They'd have to re-engineer the vehicle and the production process, and that would take precious time.
      • 5 Years Ago
      Daimler took the risk and merged with Chrysler. Just because it did not work out for Daimler in the long run they can't hold Chrysler to ransom over the issue.

      The courts should just force Daimler to hand over the blueprints for key componets and let Chrysler build the parts under licence.
      • 5 Years Ago
      Screw the parts dispute, WTF did Chrysler do to the Jeep Grand Cherokee?

      I don't care what parts it uses or how good of an off-road vehicle it may or may not be...it looks so bad I'm having trouble comprehending how that design made it out of the drafting room.

      The only way I'd buy one of those is if it was cheaper than wood, cause I'd burn it for heat. It's painful to look at. I have to stop typing so I can browse away from this page and save myself any more grief.
        • 5 Years Ago
        Cmon, it looks better than the Crosstour...
        • 5 Years Ago
        I like this latest version of the Grand Cherokee. It looks more refined and less brash. The addition of air suspension will allow for common sense adjustments for street and off-road operation while retaining a lot of comfort on the highway (where they will be driven 85% of the time). Again, Chrysler is using a premium platform for an upscale model -- win, win on quality, refinement, and development costs.

        Chrysler has proven that they really know how to modify platforms to create vastly different looking vehicles for different brands. It will be interesting to see the new Durango and possibly a new Aspen. It would be an incredible loss for both sides if M-B and Chrysler can't get their acts together. They have been working together to develop the next-gen SUV lineup for both companies which include the ML, GL, and R-class vehicles. M-B would hugely benefit from a popular new Grand Cherokee and Durango.
        • 5 Years Ago
        Cmon, it looks better than any econobox...
      • 5 Years Ago
      RE the interior:
      The outside is no doubt beautiful but the interior is weak, just weak. Even the new dodge ram has a beefier interior. Are they forgetting this is a Jeep? So the interior isn't Jeep-like nor is it comfy/luxury, so I'm not sure what look they were going for. Maybe I'm just missing something.

      Daimler are blatantly the bad guys here but Chrysler aren't making themselves look any better by being hypocritical. I get where they're coming from, I just hope the courts decide in their favor

      • 5 Years Ago
      I don't know how Chrysler turned the Grand Cherokee into such a piece of junk. Back in the late 90's, it has the best interior, best four wheel drive system (quadra-trac or something like that), and one of the best engines (5.x L V8). Those cars worked great off road in stock form. The also handled almost perfect on the road. The Mercedes M class has nothing on those vehicles. However, I sat in a new model of the Grand Cherokee and it is complete junk. I can't believe they need Daimler parts to even make these vehicles.
        • 5 Years Ago
        Way back then (1990's-2000's), the Grand Cherokee was very upscale. And it remained that way b/c nobody really was doing anything like that. The GM full and mid-size SUVs weren't nearly as refined and the Explorer & Expedition was just as underwhelming. Those were times when consumers just wanted a big 4x4 or truck-thing in their driveway and didn't care about quality. The GC didn't have many competitors on that side of the market (plush interior and capable 4x4 system). Then the Land Cruiser, ML, etc were developed.....that took the affordable quality from the Grand Cherokee model trim lineup.
        • 5 Years Ago
        more like jeep bland cherokee, amirite?
        • 5 Years Ago
        Agreed. As an owner of a fully loaded 2000 GC, this is sad to see. They need to dial back the upscale wannabe on this thing and bring it back to what it is supposed to be. A Jeep.

        • 5 Years Ago
        Charles, couldn't agree more with your post. My step dad and I went and looked at one a few months ago. He is 5'8" and weighs 185 lbs. Probably built as average as average can be. He gets in it and I was shocked to see that he could barely fit. The floor was tapered towards the pedals, the seat was jammed on the side of the console. Very small area. He looked so cramped. I can't believe they passed this p.o.s. for production.

        The interior trim was flimsy, didn't fit right at all. Everything looked and felt cheap.
        Then when we got to the $45,000 sticker price, we laughed ourselves silly. I'd buy a Ford Flex Limited Ecoboost AWD before I would buy something like this.
        • 5 Years Ago
        The answer is: When you're owned by a company like Daimler and they busy transferring all the money out or Chrysler bank into their own and not reinvesting in Chrysler products because they were threatened by the competition, a Jeep with a downgraded interior is what you get.

        The story is online and has been posted on this site many times - Not sure why folks don't get it!
      • 5 Years Ago
      Daimler is doing more then just hurting the company of Chrysler by with holding parts from Chrysler, Daimler is messing with the American workers of Chrysler in doing what it is doing which will hurt the company of Chrysler imo . I know with the hate of the right red side of America it is now ok to mess with hard working Americans and bash americans if they dont see eye to eye , but in truth it is not and it is high time Americans stand up for other Americans and let the good old German boys of Daimler know that if you mess with our fellow Americans then we can just not buy ur products from Germany . I do agree though that Chrysler should take the jeep GC back to it's jeep roots and rid itself of the virus of Daimler
      • 5 Years Ago
      WTF? are you talking about.
      • 5 Years Ago
      As far as I'm concerned, Daimler can go pound sand. Screw 'em and screw 'em hard.

      It's because of them that Chrysler's current product line sucks so badly...and why it's going to be a nailbiter to see if Chrysler gets to 2011/12 when the new Fiat products come on-line.

      Chrysler only went bust because Daimler sucked them so absolutely dry. Daimler is absolutely to blame for the $80M diesel production shortfall. Had the Daimler-era vehicles those diesels were going into been worth a damn, they'd have sold more in Europe. It's Daimler's own damned fault.

      Daimler took Chrysler's $9-12B and absolutely squandered it. Axles are they least they can do to pay some of it back, IMO.
      • 5 Years Ago
      First off, everyone saying the interior is this car is crap, you guys are wrong.

      the color is what makes it look horrible. if you see the black on black, it truly looks like a luxury vehicle.

      Secondly, a Grand Cherokee isn't really supposed to compete with the Q7. It's priced tens of thousands lower. This interior is very nice. Leather Stitching everywhere and real wood in the overland models. You just haven't seen it in person.
      http://www.allpar.com/trucks/jeep/2011-cherokee.html

      go there and scroll almost halfway down and you'll see a real life photo and it looks beautiful.

      Thirdly, I thought the same about they want to MB to honor it's contracts but Chrysler doesn't want to honor theirs, but thanks for all the comments about bankruptcy law etc. so now I understand that's not the case.

      and for the person that said the caliber is the best car in their lineup. oh god. let me start, the engine is horrible, the transmission sucks, the outside is dated and needs to refreshed somehow, they refreshened the interior but that still doesn't help the engine problem. I can't stand being in one due to fact that the old 3 speed auto neon can spank it..even with the R/T caliber. c'mon! I can't wait till they replace it with a real 4 door sedan. chrysler needs products out fast.. I'm personally wanting an 2011 GC Overland.. they better come soon or else I just might go to Audi and get a Q5
      • 5 Years Ago
      The good old boys at Daimler sucked 9 billion in cash out of Chrysler when they made it their bitch (house Frau) in the 90's. Losing 80 million because their mutual marketing plan for European Chrysler sales fell short of goal is relatively small potatoes.
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