2/25/2007

Chrysler Will Go Out of Business

In ten years we will be lucky to have GM and Ford still making cars.  I really hate to say this but Chrysler will go out of business. Ford might go out of business too, but Chrysler will be first. The US auto industry has been sleepwalking for 30 years.  Chrysler should have been allowed to die in 1980 rather then brought back to life with a federal bailout.  American Motors, the redheaded stepchild of the auto industry, effectively died in 1987 when it's best products were sold to Chrysler. Oldsmobile and Plymouth have died.

Toyota and Honda have grown stronger every year. Nissan has also grown but not as much. Other Asian car makers like Mitsubishi, Isuzu, and Hyundai continue to sell cars. The only US automotive success story from the past twenty years is Saturn. And that success is marginal. Saturn is basically a U.S. car patterned after the Japanese car making model.  The Big Three U.S. automakers are whistling past the graveyard. Consider this from the New York Times:
But now, Chrysler is fighting for its survival again, a situation that lays bare the failure of previous generations of managers to resolve, or even fully address, its many fundamental problems. Rather than using crises as opportunities to remake Chrysler in the model of its Japanese competitors, say analysts conversant with the company's trajectory, a revolving cast of corporate stewards repeatedly relied on silver bullets to revive the automaker. Over and over, they introduced a single hot-selling model here or tightened the screws on suppliers there, instead of doing the tougher work that real transformation required.
The marketplace, automotive or otherwise, is brutal. Survival of the fittest is the rule. Chrysler cannot count on Mercedes or the federal government this time.  If you buy a Jeep or Dodge Charger or a Viper today, the car may very well out last the company that makes them.