This comes in the wake of a $1.5B 3rd-quarter loss for Chrysler and a dealer revolt spurred by the glut of 2006 product sitting on dealer lots all over the place. These were the factors that forced Eberhardt to the exit, and LaSorda's mission is to fix the problem by dramatically and quickly reducing the excess inventory, cutting per-vehicle costs by $1,000, and reconciling with a dealer network that had lost faith in the corporate leadership.
Last week, we reported on word that Chrysler could extend its annual holiday shutdown by two to four weeks to help keep 2007 model inventory under control. Heavy incentives are being leveraged to get rid of lingering '06 models as quickly as possible. Once they're gone and the focus is put squarely back on the new 2007s, we can expect to see Chrysler dial back the incentives. Going forward, the automaker will shift to a system where they only build vehicles that dealers specifically order rather than overbuilding, which is what landed them in this mess to begin with.
The pressure's squarely on LaSorda and his deputies to get the ship righted, and with rumors swirling about Dr. Z's thoughts of bringing Wolfgang Bernhard back into the fold at Chrysler, there's very little room for error.
[Source: Detroit News]