DC has profitable vehicles in their US market more because of niche than
their ability to run a cost effective ship. Because the entire DC line marketed
to the US has always been in the upper to high-end price wise you have to be a
really lousy operation to fail to make money when you have such a cushion
between your actual costs and the selling price of your product.
Chrysler is not nor have they ever been in this niche, even back in the days
of the Imperial which I remember well from the 1940's and onward and various
unsuccessful stabs at trying to make it a competitor to Cadillac. Because
Chrysler had been doing so well at the time of the acquisition the whole deal was
sold on the basis of giving DC an established mass market, low (Plymouth)
thru middle (Dodge and Chrysler) priced product line plus Dodge truck. DC is big
in HD trucks in Europe and exports same to many parts of the world but Dodge
again, with no overlap to DC, was into pickups which of course (all pickups)
have been so popular in USA sales in the past dozen or so years.
According to the current Biz Wk article, the present DC management is on very
thin ice. The possibility of some mass firings is apparently very possible
and it all stems from the failure of Chrysler to be profitable. Last month,
Chrysler was passed by Toyota in USA sales figures pushing them from 3rd to 4th
place overall, that 3rd place having been Chrysler's for the past 54 years. I
remember in 1949 when Ford pushed Chrysler from 2d to 3rd. So now Detroit is
the "Big Two."
As long as the ability of the Asian auto manufacturers continues to so vastly
outstrip Detroit in the time, effort and expense it takes to design from
scratch, a new vehicle and to bring it to market, it's likely the Big Two + DC
will continue to see their share of market errode. European brands, by and
large, are all pegged in the luxury market where frequent model intros are much
less demanding. Critics say the biggest reason why it takes Detroit so much
longer than the Asians is our ole' boy network of management. Until Detroit
streamlines their system, from idea to final result, they will never catch up, let
alone lead. Here in California, with our 37+million population, we're the
biggest auto sales market in the 50 states, by far. The last figures I saw for
annual Calif car sales by make and model had only 2 Detroit nameplates in the
top 12, one being the Ford full size pickup. It's not a pretty picture, folks.
Paul Sahlin
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