2011 Jeep Grand Cherokee launch threatened by parts dispute?
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.
Gallery: 2011 Jeep Grand Cherokee
[Source: Detroit News]
Reader Comments (Page 1 of 4)
Greg 11:41AM (10/04/2009)
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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Charles 11:42AM (10/04/2009)
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.
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StPaulGuru 11:50AM (10/04/2009)
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.
Chazz 12:03PM (10/04/2009)
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!
homunculus 12:48PM (10/04/2009)
more like jeep bland cherokee, amirite?
WetheSheeple 3:08AM (10/05/2009)
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.
Jei 10:37AM (10/05/2009)
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.
rodrigodafico 11:54AM (10/04/2009)
a good example of the american way of doing things. sad.
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Mike 12:04PM (10/04/2009)
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.
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LoneWolf 12:06PM (10/04/2009)
Cmon, it looks better than any econobox...
Egon 7:54PM (10/04/2009)
Cmon, it looks better than the Crosstour...
Jei 10:55AM (10/05/2009)
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.
pmalik 12:05PM (10/04/2009)
Haha so Chrysler wants to have the old contracts that guarantee them parts supply, but not the old contracts that make them liable for breach of contract damages.
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oZ 1:23PM (10/04/2009)
Considering they were parts they were forced to use during the initial design, and that the company they're getting the parts from BLED THEM DRY, leading to their position today, yeah, I think Daimler should honor those bleeping contracts.
Jimbo 1:29PM (10/04/2009)
pmalik: Like it or not, it's all completely legal as part of Chrysler's bankruptcy. Daimler legally has to honor the contract.
pmalik 1:33PM (10/04/2009)
@Jimbo:
It's not all that simple, since the counter party that Daimler entered the contract with no longer exists (old Chrysler). That's why it's funny - Chrysler is trying to enforce contract beneficial to them and void the contracts that aren't.
Jimbo 1:43PM (10/04/2009)
pmalik: It actually is that simple. Under bankruptcy, the contracts that were vital to the success of the New Chrysler (like this axle contract) were kept and transferred to the new organization. The contracts that were not vital to the success of the New Chrysler (like the diesel contract) were kept with the Old Chrysler and essentially voided. The beef Daimler has with the diesel contract belongs to the Old Chrysler. That does not block them from fulfilling their legal obligations to the New Chrysler.
farmer0904 12:18PM (10/04/2009)
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
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adam@forge 12:14PM (10/04/2009)
So, Chrysler wants Daimler to honor the parts contract, but doesn't want to hold up it's end of the diesel contract. Sounds awfully weaselly.
What the big 3 need are MEN at the helm.
Men that make cars, not bean counters that make margin.
Men that make tough decisions. The union makes an unreasonable demand taking advantage of its stranglehold, a man would say goodbye, shut down for a month, train new grateful employees and open up healthier than ever.
The congress makes ridiculous mandates or disrespects the business, a man would take it to the streets, reminding people that politicians are servants not lords.
Men would give Americans a reason to buy their cars, and not make the cheap play on their patriotism while selling them inferior goods.
There is no reason American car companies cannot be the leaders in desirable, quality cars, we just need MEN making decisions for a change.
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Seminole 12:31PM (10/04/2009)
Right.... Since being an accountant somehow makes me less of a man.