DCX could end up sharing more platforms going forward
Oh, how time flies when you're paying attention to the domestic auto industry. About a year and a half ago the Chrysler 300 was selling like crazy, the Charger was off to a fast start, and analysts were saying nice things about the company from Auburn Hills. Well the 300 and Charger are still a resounding success, and life for Chrysler has taken a turn for the worse anyway. A $1.2 Billion loss in the 3rd quarter put the scare into the folks over in Stuttgart and now management and share holders are looking for more cost cutting and less payroll.
It looks like 1,000 white collar and 10,000 blue collar jobs are now on the block as a large part of the effort to remain competitive. Buyouts will likely surface soon after the announcement plans are announced, and the cost associated with the move will result in more tough quarterly financials for Chrysler. There will be tough times again in Auburn Hills, but some good news may come out of all this for customers and Chrysler employees alike.
Continue reading Chrysler working on secret rebuilding plan
[Source: Detroit News]
As part of the effort to boost the Chrysler group's bottom line, DCX is now exploring the sharing of a lot more components between Mercedes and the Chrysler group. The 300 and Charger share chassis components with the previous E Class and it's by far Chrysler's best product. The Crossfire was also a platform-sharing vehicle, but it was a sales failure because it was expensive and many didn't like the styling. Of course the Sebring was designed after the Crossfire and there aren't a whole lot of automotive journalists out there talking about how good it looks either.
The C Class platform could one day underpin a Chrysler product
With the price premium of Mercedes, it makes a lot of sense for the lower-volume luxury unit to soak up some of Chrysler's costs. Chrysler in turn can use its volume to lower component costs for the Mercedes brand, making it a win-win situation. This move may also help DCX to get a better handle on quality with more common parts, like steering columns, while keeping the all-important powertrains separate. Some executives at DCX feel component sharing will hurt the cache of the Mercedes brand, but it has already been done successfully without harm to either party.
Like-size vehicles like the M Class, Grand Cherokee, and Durango could also share a basic chassis, since the vast majority of customers care more about exterior, interior, and powertrains than they do shared architectures. DCX is also looking into doing a small car also. Collaboration could happen in the future on everything from a Liberty/Nitro platform and a Europe-based Mercedes SUV or a C Class platform underpinning a smaller Mustang fighter. The possibilities are endless due to the fact that even though Mercedes is a luxury unit, it's basically a full-line manufacturer that sells small through large sedans, sports cars, convertibles, and several different SUVs. The Ram and Town and Country won't see much from platform sharing, but they sell at far larger volume than anything else in the Chrysler family so there isn't the pressing need. These vehicles can, however, leverage diesel and transmission technology that DCX has, so increased sharing works there too.
Right now DCX is in a position that a lot of other companies are looking into. The main problem companies are having with alliances and mergers is that one company can ultimately lose control. Between Mercedes and Chrysler, that battle has already been won. The other issue is that commonization takes years to help the bottom line, but executives in Germany already have sharing underway with the 3.0L diesel and the 300 platform. At this point selling off the Chrysler unit would be far more financially damning than it would be for GM or Ford to buy out thousands of dealers. Since they have little choice but to work together, they might as well go all-out.