An interesting article appeared in "The Exchange." It talks about the financial problems that Chrysler is having. Here are some excerpts: With five brands, Chrysler may suffer from bloat as well. GM had eight brands before declaring bankruptcy, and has now shrunk to four, which may still be too many. Toyota (TM) has three brands, including its Lexus luxury division, which is successful, and its entry-level Scion brand, which is not. Ford, Honda (HCM), and Nissan (NSANY) each have just two brands, and all three automakers are bigger than Chrysler. Since many vehicles from the Dodge and Chrysler divisions are structurally similar — such as the Dodge Charger and Chrysler 300 — it’s possible one of those divisions could end up folded into the other. Dodge may be the most endangered, since the name of the Chrysler division is also the name of the overall U.S. automaker. Its 9-year marriage to Daimler-Benz ended in 2007, when Daimler sold the division to Cerberus Capital Management, a private-equity firm that basically bled Chrysler of cash as it tried to manage the disastrous auto-industry downturn. Cerberus exited Chrysler as part of the 2009 bailout, with Fiat stepping in. In a way, Chrysler has returned the favor to Fiat, since U.S. auto sales have rebounded while car sales in Europe remain depressed. That has allowed Chrysler to generate cash that’s helping the parent company weather the deep downturn across the pond. Marchionne has promised much bigger profits for Chrysler in 2013 and 2014, and a hoped-for public offering of some of the shares owned by the automakers’ trust could generate billions in cash if the lawsuit over the value of those shares is resolved this year. Yet Marchionne acknowledges the troubles Chrysler faces. “Until we catch up with the deficiency that we inherited, I think it’s going to be painful,” he said during the latest earnings call. “This is not going to be a walk in the park.” For Chrysler, that seems to be the road usually traveled. The One U.S. Automaker Still Stuck in Neutral | The Exchange - Yahoo! Finance
For all thee troubles Dodge/Chrysler have had and to still be around and relevent means the public still believes in them.
I just wish they were never sold off to fiat. I know its saved them, just not a huge fan of their own cars. Thanks my only pet peeve with the sale.
Fiat's business plan puzzles me. They pulled the Dodge brand out of Nascar ,then spent millions developing a Trans Am series Viper. I think here in the US, there are 50 Nascar fans for every Trans Am fan. According to what I read this past week,the Dodge Ram pickup is their best seller and they're talking about killing off Dodge.
The following appeared in the Associated Press on July 9: Fiat Wants a Big Chunk of Chrysler Fiat, which already owns 58.5% of Chrysler, wants to buy the remaining 41.5% that is owned by a trust that pays medical bills for retired United Auto Workers union members. Its goal is to fully merge Fiat and Chrysler to generate more cost savings from joint research, management, and purchasing. Morgan Stanley estimated that this would cost Fiat $2-5 billion! Fiat now has exercised options to buy 9.9% more Chrysler stock. It has options to buy 3.3% every 6 months until it gets another 16.6%. The options were part of the deal in which Fiat and CEO Sergio Marchionne were appointed to manage Chrysler in 2009 by the U.S. government which bailed out Chrysler. Once it gains control of the whole company, Fiat is considering a plan to hold an initial public stock offering which would raise much-needed money for research on new vehicles at both companies and would help Fiat weather the economic downturn in Europe.
