Can this marriage be saved? From Stuttgart comes word of a Valentine’s Day Massacre; the Autoblog has the details:
Project X has now officially been renamed the Recovery and Transformation plan by the Chrysler Group, which plans to reduce its workforce by 13,000 people between now and 2009. About 11,000 employees will be hourly workers, while 2,000 will be salaried employees. In addition, total production capacity for the Chrysler Group will be reduced by 400,000 units per year, aided by the immediate elimination of shifts at its Newark Assembly Plant and Warren Truck Plant, along with cancelling a shift at its St. Louis South Assembly Plant in 2008. In 2009, the Newark Assembly Plant will be completely idled. There’s also the standard restructuring moves you’d expect in the plan, like reducing the number of dealers, selling less to fleets, and offering retirement and attrition packages to current workers not affected by the layoffs.
The marriage between the high-end DaimlerBenz and the middle-brow Chrysler was rocky from the start; but lately there seems to be outright hostility between Stuttgart and Detroit, with a Berlin Wall standing between the two companies. The Mercedes loyalists will resist any restructuring plans to bail out the American problem child. Last December DaimlerChrysler’s Corporate Development boss Ruediger Gube vowed that Mercedes and Chrysler would never share the same platform. And so the American brand continues to decline, despite a few bright spots at Jeep. Indeed, Daimler shareholders were salivating today at the prospect of Daimler selling Chrysler and bid up the shares to the highest level since early 2000. A Chrysler blog called Allpar speculates on potential buyers, but Manager Magazin is reporting on rumors that DaimlerChrysler CEO Dieter Zetsche is reaching out to GM. On the other hand, industry insider Michelle Krebs writes on her blog that "a spin-off (of Chrysler) is off the table." Zetsche has staked his career of making the US investment work.
UPDATE: Recommended reading for Dr. Z.
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Better GM than Mercedes; unfortunately, it seems that no matter how much Mercedes benefits from Chrysler (royalties, consulting payments, Chrysler Credit, four wheel drive system designs, expertise in manufacturing – and that IS being applied, cheaper parts through larger orders, etc., etc.), the “leaders” will only demean and insult Chrysler and moan and cry about the money they’ve lost – money that was lost due to their own incompetence, interference, promotion of brown-nosers, and driving-away of anyone with the capability of saying “no.” They’ve been getting their way in the media for a long time, even though Chrysler’s profits are quite visible in graph form – massive and building up through to 1998, then not so good in 1999, then losses for every Daimler-led year.
I’d be happy with Chrysler under GM. Sure, it would be the death of the company, even more than it has been so far, but it would be a quicker, less painful death, and I doubt if GM would be constantly bad-mouthing any remaining vehicles or brands.
Unfortunately, I think this is just another media speculation gone mad.