04/03/08

Chrysler Cuts Computer Staff

To restore Chrysler to profitability, owner Cerberus must increase revenue, while cutting costs and expanding its global footprint.

Walk onto a Dodge/Jeep/Chrysler lot and look for the leading edge products.

Yeah, I love the manly look and classic outdoor ruggedness of the old Jeeps.

But where is Chrysler's answer to the hot-selling 2008 Chevrolet Malibu?

Squaresville, while the pickup/SUV market tanks.

While the overall light vehicle market shrank 12 percent in March, with 2 less selling days than March 2007, Mopar sales dropped almost 20%.

Chrysler remains focused in the competitive pickup truck category, using "cattle drive" imagery to launch yet another Hemi-powered frame-rail Ram pickup.

Hey, I love old cowboy movies about the 1870's too, but where have Chrysler executives been since then?

Or how 'bout Chrysler's 425-horsepower, $50K Dodge Challenger HEMI-powered SRT8?

Yeah, I grew up worshiping asphalt rippers from the 1960's, but how is this saving Chrysler, which simply cannot build future cars profitably?

Cylinder deactivation will not save the rear drive V8 - where are Chrysler's engineering efforts focused?

I know industry brass will say these initiatives are customer driven, that everybody says they want smaller cars but buys these hogs anyway.

But when the house is being repossessed, Americans rush to abandon their SUV's and pickups. Look at your city's Craigslist used cars page for 2005-up deals: nothing modern lasts long, but the same pickup and SUV ads repeat day after day unsold.

There are plenty of quick cars that get decent gas mileage, but Chrysler is years away from matching the Chevy Corvette, Acura TL, BMW Three-Series, Audi A4, or Lexus IS 350.

And which product will lead Chryslers into the global market, where American-macho is in growing disfavor?

So it's slash costs or die for Cerberus Capital Management, owners of the Mopar brand.

The latest in a series of cost-cutting moves has the company outsourcing around 400 computer technology jobs, many to recent Land-Rover/Jaguar buyer, Tata of India.

These cuts are claimed to free up money "to invest more in advanced technology."

I won't be holding my breath.

Chrysler's 3 year Recovery and Transformation Plan projects a total of 25,000 job cuts. With computer guys going, automotive engineers, IMHO the true core of any automotive business, could be next.

When the financial and marketing hatchet men are done, there might be a short term balance sheet recovery, an exit window for Cerberus investors.

But without product modernization, I see no long term future for Chrysler.

If the Rover/Jag deal is successful, maybe Tata will outsource Jeep production.

Been around Detroit lately? The Mayor has a corruption scandal, and the streets are right out of a Bruce Springsteen ballad: "mainstreet's whitewashed windows and vacant stores."

Chrysler, in my seldom-humble but often-voiced opinion, is leading America's charge to third-world nationhood.

We need to change our energy consumption patterns, not so much to "green" up, but to save our economy from $6 gas.

Where's the smart money? Honda, and Rodger Penske's sold-out Mercedes Smart ForTwo minicar.

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