California Autos Examiner

Thursday, July 31, 2008

Chrysler Looking At More Angles Than a Porn Website

The headline might be a joke, but Chrysler's situation is anything but. What can the Pentastar do to save itself in these harsh times with a lineup that isn't as well positioned as the competition?

I discussed one such cash cow in a previous post: the underutilized GEMA engine plant in Dundee, Michigan. Finding another manufacturer who would be interested in producing some four cylinder engines would be a real boost.

Another often discussed option is to leverage the Jeep brand. In a final breakup, certainly this would be the crown jewel. However, Chrysler isn't quite to that point yet, so finding folks who might be willing to market and/or build Jeeps in other markets would be a nice way to generate some cash. Chrysler has been rumored to be speaking with Tata about selling the Wrangler in India.

Finding partners who want to launch themselves into the U.S. market could also offer great potential. One such partnership would be with Fiat, which is looking to find a North American base for manufacturing Alfas. Certainly some Chinese manufacturers may be interested as well.

Continuing to refine future product strategy can also shave some costs. With four cylinders all the rage, does Chrysler need such a wide range of V6 Phoenix engines?

Chrysler will no longer offer leasing through Chrysler Financial starting August 1. Management is also cutting out the deadwood in the lineup and getting rid of badge engineered vehicles that suck up developmental and marketing dollars. Nissan is already shacking up with Chrysler, by manufacturing a variant of the Versa (rumored to be based on the Dodge Hornet concept) and getting a full sized truck from Dodge in return.

I believe that Chrysler management has to be like sniper, picking off opportunities wherever they might be without getting entangled in arrangements like GM had with Fiat. If they can enact all the changes above and turn the product lineup around then Cerberus may be able to walk away someday with a profit and still leave Chrysler intact. Of course, all it would take is a "magic bullet" product that defies all categories and takes the market by storm, but I know of nothing in Chrysler's hopper that would come close to being called a "segment buster."

source: wsj
photo source: chrysler media

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