For most managers, it makes sense that if you're losing money on every product you sell, then perhaps you're in the wrong business. Try telling that to the execs working for the Detroit 3, which on average lost a substantial $1,073 on every vehicle sold in North America last year. While GM and Ford can rely on significant sales in more profitable global markets, struggling Chrysler is much more severely affected by trends back home.
So it's no surprise that Chrysler fared the worst of the three, losing $1,111 on each car it sold in North America. GM didn't do too badly, losing "only" $146 per vehicle last year. By contrast, Japan's main automakers, Toyota, Honda, and Nissan, all made roughly $1,593 on every vehicle they sold.
This is the biggest problem facing Chrysler at the moment. Top of the agenda for its new CEO Robert Nardelli will be to cut back on labor costs. In the longer term, managers will have to look at improving efficiency and reducing the number of platforms currently used. The changes better come quick because Chrysler may not be around for long the way it's going.
[Source: Detroit Free Press]