Chrysler LLC desperately needs help on the product side and in emerging markets if it’s ever going to survive, according to one old auto-industry hand with years of experience in the car business.
Jerry York, a former Chrysler and IBM executive who served as Kirk Kerkorian's automotive adviser and was on General Motors' board of directors, says it is abundantly clear Chrysler needs help on the product side.
"They’re practically dead last in J.D. Power survey, and frankly their styling is just way off base. Their products are just not attractive," said York, who is looked upon as one of the industry's sages.
"Look at the Jeep brand stuff. You've only got two real Jeeps, the Grand Cherokee and the Wrangler and the rest of them should have never been designed, developed, engineered and produced," said York, who is now a director of Dana Corp., a major automotive supplier that left bankruptcy earlier this month.
"They're not Jeeps," York said. "Go into showroom and look at. Jeep has a very, very strong brand image and as they moved from true SUV-type vehicles with transfer cases and hard-connected four-wheel drive to these crossover vehicles, they are, in my view, adversely affecting the brand.”
York did have some compliments for Chrysler’s current management. "I think Cerberus is doing the right thing,” he said. "Step A is to fix it as much as you can and Step B is merge it with a foreign producer that ideally has very strong position in some of these developing markets."
York gave his opinions after a panel discussion on the auto industry sponsored by the consulting firm of Stout Risius Ross Inc.
"Chrysler as a stand-alone company is not viable," York said.
Chrysler got 90 percent of its sales from North America when he served as Chrysler's CFO in the early 1990s and that figure hasn’t changed in two decades, York said. “That's a travesty that was not substantially improved under Daimler's ownership,'' he said.
Counter to York’s remarks, Chrysler officials reiterated over the weekend how they’re working to change the company. But reports that Chrysler would cut dealers and products were not confirmed by Vice Chairman and President Jim Press, who threw a little cold water on the notion that Chrysler would cut from its present 30 models to 15 or 20, as has been reported elsewhere.
"The media numbers are all hypothetical and none of them are actual, and they're all guesses," Press said in a question-and-answer session following a speech to the J.D. Power and Associates Automotive Roundtable in San Francisco. "We don't know how many models we're going to have. Nobody knows that.”
Last November, Chrysler doubled its planned job cuts to as many as 25,100 and said it would scrap four vehicle models.
Press said Chrysler was not preparing any additional cuts in personnel, echoing comments last month by Chrysler chief executive officer Robert Nardelli. As a privately held company, Cerberus doesn't provide detailed financial information, but Chrysler's losses in 2007 probably totaled $1.6 billion, according to comments from the company's own executives. In 2006, Chrysler had lost $680 million.
Nardelli says Chrysler has met its financial objectives and has adequate financing to complete a turnaround.--Joseph Szczesny
What do you think about Chrysler's styling--or the expansion of the Jeep brand? Tell us in a comment below.