I'm listening to WINS 1010 AM for traffic on the radio this evening leaving NYC and hear the following: "Chrysler is going to cut products and dealers"!!! What will be the first to go the Viper or Tator's? Is it possible both? All I can say is my ACR will be the ONE & ONLY Chrysler product I will ever own if the answer is both! I guess NO SRT-8 Jeep or Challenger for me in the future. The Viper and Tator's are the BEST!!! Long live both. Chuck you are the best.
Chrysler to cut products & dealers
- Thread starter John ACR
- Start date
GRNBGON
Enthusiast
Tator is too big for them to cut. The Viper on the other hand has Emission issues to contend with.
OppositeLock
VCA Member
Chrysler to cut as much as 1/2 of model line-up and 1/3 of dealers as part of its "Project Genesis" initiative. Here's a link to the AP article on Yahoo finance:
Chrysler to Cut Models, Dealerships: Financial News - Yahoo! Finance
Chrysler to Cut Models, Dealerships: Financial News - Yahoo! Finance
Matt M PA
Enthusiast
Hey guys...it's all about the money. Cerebus could care less about people....or the product line as long as it is profitable.
My 2 cents? It would be a tragedy to cut Tator's off. There's another thread about that so I won;t go into that there. There is no new Chrysler product that interests me these days...but I hate to see an American maker go down. USA quality equals or exceeds that of the imports...even the exalted Toyota. (Who, in 2006 recalled more cars than they built)
In many cases, even GM is cutting the number of dealers by gently (used loosely) forcing single point dealers to sell our to bigger dealers and have all their franchises under one roof. (It's foolish if you ask me. Id rather deal with someone like Chuck than some big Mega-Auto-Land.) But...it's nothing new either, Chrysler has been trying to get single point Jeep dealers to sell out to Chrysler dealers (or vice-versa) for many years.
My 2 cents? It would be a tragedy to cut Tator's off. There's another thread about that so I won;t go into that there. There is no new Chrysler product that interests me these days...but I hate to see an American maker go down. USA quality equals or exceeds that of the imports...even the exalted Toyota. (Who, in 2006 recalled more cars than they built)
In many cases, even GM is cutting the number of dealers by gently (used loosely) forcing single point dealers to sell our to bigger dealers and have all their franchises under one roof. (It's foolish if you ask me. Id rather deal with someone like Chuck than some big Mega-Auto-Land.) But...it's nothing new either, Chrysler has been trying to get single point Jeep dealers to sell out to Chrysler dealers (or vice-versa) for many years.
kcobean
Enthusiast
More here:
http://forums.viperclub.org/rt-10-g...-featured-wards-dealer-business-magazine.html
and sign the petition here:
Protect Tator's Dodge, a unique & valuable Dealer Petition : [ powered by iPetitions.com ]
(note that the donation request goes to the petition site, not Tator's Dodge, so no need to donate unless you want to support the petition website)
http://forums.viperclub.org/rt-10-g...-featured-wards-dealer-business-magazine.html
and sign the petition here:
Protect Tator's Dodge, a unique & valuable Dealer Petition : [ powered by iPetitions.com ]
(note that the donation request goes to the petition site, not Tator's Dodge, so no need to donate unless you want to support the petition website)
Steve 00RT/10
Enthusiast
Cerberus is agnostic to anything but the bottom line...and lining their pockets with a potential IPO down the road. Dan Quayle is a honcho in Cerberus. Former Bush Treasury Secretary John Snow leads the operation. This is corporate America doing what it does best -- squeezing the little guy
Cerberus owns much more than just Chrysler. In our area, they bought into paper mills a few years ago (MeadWestVaco -- 5 coated paper mills across the country -- now called New Page). Last year they bought a competing mill 60 miles from their most profitable mill with nary a hint of what was to come. This mill was the life blood of a little town and had been running successfully since the early 1900s. A few weeks ago Cerberus issued a press release that this new acquisition was to be completely shuttered by the end of this April. In essence, they bought it to shut it down. 319 people out of work in a town of 1880.
I read the Ward's article and signed the petition. I wish Chuck the best. He is a huge asset to all things Viper. That being said, because of emissions, there is a more than likely chance the Viper won't make it. So saying, if 85% of Chuck's business is Vipers, he would still be able to carry this portion of his business on successfully. The he.. with Cerberus.
Steve
Cerberus owns much more than just Chrysler. In our area, they bought into paper mills a few years ago (MeadWestVaco -- 5 coated paper mills across the country -- now called New Page). Last year they bought a competing mill 60 miles from their most profitable mill with nary a hint of what was to come. This mill was the life blood of a little town and had been running successfully since the early 1900s. A few weeks ago Cerberus issued a press release that this new acquisition was to be completely shuttered by the end of this April. In essence, they bought it to shut it down. 319 people out of work in a town of 1880.
I read the Ward's article and signed the petition. I wish Chuck the best. He is a huge asset to all things Viper. That being said, because of emissions, there is a more than likely chance the Viper won't make it. So saying, if 85% of Chuck's business is Vipers, he would still be able to carry this portion of his business on successfully. The he.. with Cerberus.
Steve
ViperJay
Viper Owner
one thing they are hoping for is a migration of viper owners to other chrysler products. they got me. im ditching the bmw for an srt8 jeep or 300. i still cant get a straight answer to the question "which has a better 1/4 mile time". depends who you ask and which one they own.
Here is what the local dealership told me today:
Chrysler will be cutting the following vehicles from their line-up for 2009:
PT Cruiser Convertible (hard top will remain)
Magnum
Crossfire
Pacifica
They also said that dealerships who are not 5-Star rated will be cut.
Chrysler will be cutting the following vehicles from their line-up for 2009:
PT Cruiser Convertible (hard top will remain)
Magnum
Crossfire
Pacifica
They also said that dealerships who are not 5-Star rated will be cut.
ViperJay
Viper Owner
the crossfire is cut already, isnt it?
Les Quam
Enthusiast
Reprehensible to consider cutting Tator Dodge it certainly isn't hurting other Dodge dealerships in the area and should be cherished as a part of Chrylers history. It would make a great TV marketing campaign about Dodge and the American small town.
Chuck 98 RT/10
Enthusiast
Exactly what I thought.
"Since 1914 Dodge...etc. etc. ...serving America...etc. etc."
And to actually have a family owned dealership in the commerical. Powerful stuff.
Absolutely
GuitarSteve
Enthusiast
I really hope the whole model cut and dealer cut won't be as bad as we all think.
-Steve
-Steve
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Does anyone have the build statistics for each of the SRT vehicles for 2004, 2005, 2006, and 2007? ( Magnum SRT and the Neon SRT can be excluded since both are already cancelled and the VIper had no 2007 model.) Numbers drive and sometimes reveal decisions. I think that it might be informative to see what the production numbers show across the SRT line for the past four years. The discounting across the SRT line suggests that demand may have dropped off to some extent. If this is the case, the hand writing may be on the wall for not only the Viper but other SRT equipped vehicles. But not necessarily right away. I think that the timing of the cancellation of an SRT vehicle would depend, to some extent, on upcoming federal law changes; and, the amount of SRT parts currently in Chrysler's inventory and to what extent each of the underlying models are going to be changed or cancelled and when they are going to be changed or cancelled. An example of this is shown by the recent Magnum cancellation. On the other hand, the Challenger is good news. But overall, as I posted the other day, the evidentiary trend is not good. We should all be grateful for the wonderful SRT vehicles we currently own and the pleasure each of us derives from them. Enjoy them while you've got 'em!! And if you do not have one now, buy one while you still can.
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Boxer12
Enthusiast
Tator should tell Dodge to STICK IT WHERE THE SUN DON'T SHINE! Just be Viper Techs...stick to what you do best!
(unless you are staying afloat with warranty work).
(unless you are staying afloat with warranty work).
Burntrubber
Viper Owner
I saw an article in a magazine "2008 Viper ACR w/ 6.7L Turbo Cummins"
I thought that sounded better than a V8, but its still no V10.
Either way think about the torque that thing would have.
I thought that sounded better than a V8, but its still no V10.
Either way think about the torque that thing would have.
Steve 00RT/10
Enthusiast
New vehicle safety requirements for 2010 could also be very problematic and cost prohibitive for the Viper.......namely as relates to side airbags and stability control. I would like to think that these issues, as well as any potential emissions problems could / will be worked through. However; with Cerberus at the helm, my optimism is somewhat muted
Steve
speedpup
Enthusiast
Saturday, February 9, 2008
Analysts see clouds for Chrysler
It's 'not viable' as stand-alone company, former CFO says.
Eric Morath / The Detroit News
CHICAGO -- Chrysler LLC owner Cerberus Capital Management LP likely is developing alternative plans for the company's future, two auto industry veterans with ties to Chrysler and Cerberus said Friday.
Cerberus likely will merge Chrysler with another foreign partner, Jerome York, Chrysler's former chief financial officer, said during an automotive conference. Chrysler as "a stand-alone company is not viable," he said.
Kathleen Ligocki, another industry veteran who has worked with Cerberus, said the private equity firm likely has two plans for Chrysler: turn it around with improved products, better efficiency and stronger global alliances; or break it up and sell assets such as the Jeep brand. She said Cerberus likely will look for results in three years or less.
Chrysler officials say the automaker is focused on the long term and is flexible enough to act on opportunities to build a sustainable company. York, who is CEO of Harwinton Capital LLC, a private investment firm and an adviser to financier Kirk Kerkorian, said Chrysler must grow or acquire a presence in fast-growing countries, such as India and China, he said.
From 2007 to 2013, Chrysler's global production is projected to fall more than 4 percent, the most of any automaker, according to CSM Worldwide. The average growth for nearly every other automaker is expected to be 3.9 percent. Chrysler now has virtually no sales in the world's fastest-growing markets.
If a global alliance merger doesn't happen, breaking up the company would be more difficult than some predict, York said.
Intertwined manufacturing, engineering and sales operations make it nearly impossible for any single brand to be spun off, and the company has few non-automotive assets.
Ligocki is now an independent consultant after serving as chief executive of auto supplier Tower Automotive. She left Tower after Cerberus financing allowed the Novi supplier to exit bankruptcy last year. Cerberus still controls Tower.
If they are successful with turnaround plans, "they'll create enough value and make a profit for investors," she said. "If not, they would have to see if they could unlock value by selling Chrysler off in parts."
She said Chrysler Chairman and CEO Bob Nardelli bring an "investment mentality," and won't wait long to make bold moves, if they don't see results.
Cerberus has addressed Chrysler's labor and legacy costs, and is now working to tighten up its dealer network. Those actions will make the company more attractive to sell, possibly to a Chinese or Indian company, she said.
Chrysler spokesman David Barnas said the company is confident that it will recover. He said the addition of several top executives from other automakers is evidence of Chrysler's viability.
"The company has proven time and again that it is a survivor," he said, noting that the automaker has been exceeding its business and financial targets since Cerberus acquired it.
A Cerberus spokesman said the firm remains "extremely enthusiastic about our investment in Chrysler. Under the leadership of Bob Nardelli, Tom LaSorda and Jim Press, Chrysler is already on track to exceed its multi-year restructuring and recovery plan on virtually all key metrics. We are confident that Bob, Jim and Tom are taking the right steps to bring Chrysler to profitability. Our mutual resolve to restore Chrysler to its leadership position as an iconic brand is unwavering.
Analysts see clouds for Chrysler
It's 'not viable' as stand-alone company, former CFO says.
Eric Morath / The Detroit News
CHICAGO -- Chrysler LLC owner Cerberus Capital Management LP likely is developing alternative plans for the company's future, two auto industry veterans with ties to Chrysler and Cerberus said Friday.
Cerberus likely will merge Chrysler with another foreign partner, Jerome York, Chrysler's former chief financial officer, said during an automotive conference. Chrysler as "a stand-alone company is not viable," he said.
Kathleen Ligocki, another industry veteran who has worked with Cerberus, said the private equity firm likely has two plans for Chrysler: turn it around with improved products, better efficiency and stronger global alliances; or break it up and sell assets such as the Jeep brand. She said Cerberus likely will look for results in three years or less.
Chrysler officials say the automaker is focused on the long term and is flexible enough to act on opportunities to build a sustainable company. York, who is CEO of Harwinton Capital LLC, a private investment firm and an adviser to financier Kirk Kerkorian, said Chrysler must grow or acquire a presence in fast-growing countries, such as India and China, he said.
From 2007 to 2013, Chrysler's global production is projected to fall more than 4 percent, the most of any automaker, according to CSM Worldwide. The average growth for nearly every other automaker is expected to be 3.9 percent. Chrysler now has virtually no sales in the world's fastest-growing markets.
If a global alliance merger doesn't happen, breaking up the company would be more difficult than some predict, York said.
Intertwined manufacturing, engineering and sales operations make it nearly impossible for any single brand to be spun off, and the company has few non-automotive assets.
Ligocki is now an independent consultant after serving as chief executive of auto supplier Tower Automotive. She left Tower after Cerberus financing allowed the Novi supplier to exit bankruptcy last year. Cerberus still controls Tower.
If they are successful with turnaround plans, "they'll create enough value and make a profit for investors," she said. "If not, they would have to see if they could unlock value by selling Chrysler off in parts."
She said Chrysler Chairman and CEO Bob Nardelli bring an "investment mentality," and won't wait long to make bold moves, if they don't see results.
Cerberus has addressed Chrysler's labor and legacy costs, and is now working to tighten up its dealer network. Those actions will make the company more attractive to sell, possibly to a Chinese or Indian company, she said.
Chrysler spokesman David Barnas said the company is confident that it will recover. He said the addition of several top executives from other automakers is evidence of Chrysler's viability.
"The company has proven time and again that it is a survivor," he said, noting that the automaker has been exceeding its business and financial targets since Cerberus acquired it.
A Cerberus spokesman said the firm remains "extremely enthusiastic about our investment in Chrysler. Under the leadership of Bob Nardelli, Tom LaSorda and Jim Press, Chrysler is already on track to exceed its multi-year restructuring and recovery plan on virtually all key metrics. We are confident that Bob, Jim and Tom are taking the right steps to bring Chrysler to profitability. Our mutual resolve to restore Chrysler to its leadership position as an iconic brand is unwavering.
Chrysler: Dealers' Turn For Pain
Joann Muller, 02.11.08, 6:00 AM ET
Detroit -
Chrysler's new management has figured out one thing: It can't fix the company without dramatically shrinking the carmaker's bloated dealer network. The handwriting has been on the wall for years. Having too many showrooms is not good for dealers or for the brands they sell.
The plan from Chief Executive Robert Nardelli and Vice Chairman James Press sounds simple enough: Eliminate overlapping models and consolidate showrooms so that Chrysler, Jeep and Dodge vehicles are sold in the same stores. The initiative even has a fresh-sounding name: Project Genesis.
This is not a new idea. Chrysler has been trying for nearly a decade to encourage its dealers to merge or sell out, in hopes of creating a core network of stronger, more profitable "Alpha" stores selling all three brands. As with similar initiatives under way at General Motors (nyse: GM - news - people ) and Ford Motor (nyse: F - news - people ), progress has been glacially slow. One reason: a slew of state and federal franchise laws that protect dealers' rights. Also, buyers and sellers often can't agree on how much a store is worth. Besides, dealers can still make decent money on service and used car sales, so they aren't terribly motivated to shutter a family business built over generations.
Now, amid a wrenching contraction in Detroit, Chrysler's private owners at Cerberus Capital Management have a new tactic to force the issue. They plan to starve dealers into submission.
This, of course, is not how Chrysler executives paint their new strategy. They say that for too long, Chrysler has allowed its marketing decisions to be driven by manufacturing concerns--how many vehicles can a factory churn out to maximize efficiency? As a result, Chrysler produced too many overlapping models that consumers didn't really want, causing Chrysler, Jeep and Dodge dealers to compete with each other with ever-higher incentives.
The solution, says Press, is to pare back the three brands' lineups by eliminating copycat vehicles, while adding new models in market segments where Chrysler currently is weak. For example, Chrysler has two minivans, the Dodge Grand Caravan and the Chrysler Town & Country. "They really serve the same customers," said Press. "Why not have a great van for families and mature people, and have another that went after young people, like Scion does?" he said, referring to the youth brand owned by his former employer, Toyota (nyse: TM - news - people ).
Likewise, he said, Chrysler doesn't need two look-alike midsized sedans in the Chrysler Sebring and Dodge Avenger. "Isn't it better to do one that's world-class, and then add a crossover utility off the same platform?" (a strategy that's worked well at Toyota, with the Camry sedan and Highlander crossover, for instance). "Why do we need 11 SUVs?" Press added. Four or five would be better, he said.
Media reports have suggested Chrysler will winnow its lineup to 18 or 20 vehicles--perhaps six cars, six trucks and six SUVs--down from 30 today, but Press said those decisions haven't been made yet. "We don't know how many models we're going to have. Nobody knows that."
No one can argue with Chrysler's logic. "This is long overdue," says industry consultant John Casesa, managing director of Casesa Strategic Partners, and a former Wall Street analyst. Having a strong, profitable dealer network is a huge advantage for Toyota, and a huge disadvantage for domestics like Chrysler, he says. "In the case of the Japanese, strong dealers have the profitability to reinvest in their facilities, hire the best salespeople and, perhaps most importantly, spend more on advertising and marketing to ********* the market."
One thing's clear, however: By sharply reducing the number of overlapping models offered under each brand, Chrysler will make it all but impossible for stand-alone dealers to survive. "Dealers understand that if they don't have all three brands under one roof, they won't be able to sell the entire lineup of vehicles," explained Press.
That's the stick. But where's the carrot? Chrysler and its deep-pocketed owners are underestimating how difficult and costly it will be to force dealers to close their doors. Of course, they could fix this problem once and for all if they would ante up some cash incentives to dealers, the way they've handed out billions in buyouts to unionized workers.
Mercedes-Benz proved in the 1990s that a massive buyout of dealers can be successful. Back then, Mercedes dealers were getting clobbered by newcomers Lexus and Infiniti. As a result, they weren't investing in their stores, and risked falling further behind. So Mercedes bought out more than 100 underperforming dealers (20% of the total) and convinced the remaining ones to invest some $2 billion in their stores over the next decade. Dealer profits improved dramatically, as did Mercedes sales.
Forbes estimates that if Chrysler were to apply a buyout formula similar to the one used at Mercedes--say $2,000 per car sold annually--it would cost about $1.9 billion to buy out some 1,600 dealers. That would leave Chrysler with about 2,000 dealers, each selling a healthier 1,000 cars a year. Chrysler, Dodge and Jeep franchises currently sell a combined 756 vehicles per store, vs. Toyota, which sells 1,821 vehicles per store (not including Lexus). To right-size its dealer networks, GM would have to spend about $3.3 billion, and Ford would have to spend about $2 billion, Forbes calculated.
Yet this is not money Detroit automakers are likely to spend. "We could write these really big checks," said Press, "but they would bounce."
And Chrysler might not have to, given the sorry state of the industry. Amid weak car sales, Chrysler might have enough leverage to convince struggling dealers they have no other options.
It's a brutal, but most likely effective, strategy. "I think it'll scare a lot of them," says Alan B. Helfman, vice president of River Oaks Chrysler Jeep in Houston, who also owns a Dodge dealership. "It's an ominous thing when the factory tells you they're going to do this."
"
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Joann Muller, 02.11.08, 6:00 AM ET
Detroit -
Chrysler's new management has figured out one thing: It can't fix the company without dramatically shrinking the carmaker's bloated dealer network. The handwriting has been on the wall for years. Having too many showrooms is not good for dealers or for the brands they sell.
The plan from Chief Executive Robert Nardelli and Vice Chairman James Press sounds simple enough: Eliminate overlapping models and consolidate showrooms so that Chrysler, Jeep and Dodge vehicles are sold in the same stores. The initiative even has a fresh-sounding name: Project Genesis.
This is not a new idea. Chrysler has been trying for nearly a decade to encourage its dealers to merge or sell out, in hopes of creating a core network of stronger, more profitable "Alpha" stores selling all three brands. As with similar initiatives under way at General Motors (nyse: GM - news - people ) and Ford Motor (nyse: F - news - people ), progress has been glacially slow. One reason: a slew of state and federal franchise laws that protect dealers' rights. Also, buyers and sellers often can't agree on how much a store is worth. Besides, dealers can still make decent money on service and used car sales, so they aren't terribly motivated to shutter a family business built over generations.
Now, amid a wrenching contraction in Detroit, Chrysler's private owners at Cerberus Capital Management have a new tactic to force the issue. They plan to starve dealers into submission.
This, of course, is not how Chrysler executives paint their new strategy. They say that for too long, Chrysler has allowed its marketing decisions to be driven by manufacturing concerns--how many vehicles can a factory churn out to maximize efficiency? As a result, Chrysler produced too many overlapping models that consumers didn't really want, causing Chrysler, Jeep and Dodge dealers to compete with each other with ever-higher incentives.
The solution, says Press, is to pare back the three brands' lineups by eliminating copycat vehicles, while adding new models in market segments where Chrysler currently is weak. For example, Chrysler has two minivans, the Dodge Grand Caravan and the Chrysler Town & Country. "They really serve the same customers," said Press. "Why not have a great van for families and mature people, and have another that went after young people, like Scion does?" he said, referring to the youth brand owned by his former employer, Toyota (nyse: TM - news - people ).
Likewise, he said, Chrysler doesn't need two look-alike midsized sedans in the Chrysler Sebring and Dodge Avenger. "Isn't it better to do one that's world-class, and then add a crossover utility off the same platform?" (a strategy that's worked well at Toyota, with the Camry sedan and Highlander crossover, for instance). "Why do we need 11 SUVs?" Press added. Four or five would be better, he said.
Media reports have suggested Chrysler will winnow its lineup to 18 or 20 vehicles--perhaps six cars, six trucks and six SUVs--down from 30 today, but Press said those decisions haven't been made yet. "We don't know how many models we're going to have. Nobody knows that."
No one can argue with Chrysler's logic. "This is long overdue," says industry consultant John Casesa, managing director of Casesa Strategic Partners, and a former Wall Street analyst. Having a strong, profitable dealer network is a huge advantage for Toyota, and a huge disadvantage for domestics like Chrysler, he says. "In the case of the Japanese, strong dealers have the profitability to reinvest in their facilities, hire the best salespeople and, perhaps most importantly, spend more on advertising and marketing to ********* the market."
One thing's clear, however: By sharply reducing the number of overlapping models offered under each brand, Chrysler will make it all but impossible for stand-alone dealers to survive. "Dealers understand that if they don't have all three brands under one roof, they won't be able to sell the entire lineup of vehicles," explained Press.
That's the stick. But where's the carrot? Chrysler and its deep-pocketed owners are underestimating how difficult and costly it will be to force dealers to close their doors. Of course, they could fix this problem once and for all if they would ante up some cash incentives to dealers, the way they've handed out billions in buyouts to unionized workers.
Mercedes-Benz proved in the 1990s that a massive buyout of dealers can be successful. Back then, Mercedes dealers were getting clobbered by newcomers Lexus and Infiniti. As a result, they weren't investing in their stores, and risked falling further behind. So Mercedes bought out more than 100 underperforming dealers (20% of the total) and convinced the remaining ones to invest some $2 billion in their stores over the next decade. Dealer profits improved dramatically, as did Mercedes sales.
Forbes estimates that if Chrysler were to apply a buyout formula similar to the one used at Mercedes--say $2,000 per car sold annually--it would cost about $1.9 billion to buy out some 1,600 dealers. That would leave Chrysler with about 2,000 dealers, each selling a healthier 1,000 cars a year. Chrysler, Dodge and Jeep franchises currently sell a combined 756 vehicles per store, vs. Toyota, which sells 1,821 vehicles per store (not including Lexus). To right-size its dealer networks, GM would have to spend about $3.3 billion, and Ford would have to spend about $2 billion, Forbes calculated.
Yet this is not money Detroit automakers are likely to spend. "We could write these really big checks," said Press, "but they would bounce."
And Chrysler might not have to, given the sorry state of the industry. Amid weak car sales, Chrysler might have enough leverage to convince struggling dealers they have no other options.
It's a brutal, but most likely effective, strategy. "I think it'll scare a lot of them," says Alan B. Helfman, vice president of River Oaks Chrysler Jeep in Houston, who also owns a Dodge dealership. "It's an ominous thing when the factory tells you they're going to do this."
"
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We're going to be the best damn little car company in America," says Press. But nobody said it wouldn't hurt
