Calculated cuts are Chrysler’s best hope
February 19th, 2008Del.icio.usFacebookDiggRedditNewsvineWhat s this? Chrysler executives have said they need to drop one-third to one-half of the vehicle models in their product lineup. That leaves no room for sentimentality, only cold calculation as Chrysler LLC’s leaders now decide which cars and trucks to eliminate as the company fights for survival.
The multiplicity of models Chrysler built when it sold 3 million cars a year is an extravagance the new, smaller company cannot afford, vice chairman Jim Press recently told the company’s dealers at a meeting. The model line is riddled with overlap and uncompetitive vehicles. Chrysler management has said it must shrink to 18 or 19 vehicles. Getting to that level will require a focused redefinition of the brands and a willingness to scuttle nameplates with grand histories and rabid fans.
The company must then add new vehicles to move into popular market niches it doesn’t compete in now. But there are only so many seats in the lifeboat being launched in Auburn Hills. Squeezing an extra body aboard isn’t an act of generosity; it’s folly that will swamp the boat and doom its crew.
The automaker currently builds 25 or 30 vehicles for its Chrysler, Dodge and Jeep brands, depending on whether you count things like the two- and four-door versions of the Jeep Wrangler as one model or two. “When you clear away the models that duplicate each other, it becomes obvious where the open spaces” for new models are, said Jim Hall, managing director of Birmingham consultants, 2953 Analytics.