Chrysler may join GM, Ford in making cuts

Alisa Roth Feb 5, 2007

Chrysler may join GM, Ford in making cuts

Alisa Roth Feb 5, 2007

KAI RYSSDAL: Next time you find yourself in a Ford dealership, take a close second look at the guy trying to seal the deal, cause it might be Ford CEO Alan Mulally.

Over the weekend, Mulally was giving a speech to a national dealer’s association. One of ’em invited him to spend a couple of days on the sales floor.Mulally said it was “cool” that they know he likes to spend time with his customers.

The troubles that Ford and General Motors are having are pretty well-known. Until about a year ago, DaimlerChrysler was the bright spot among Detroit’s Big Three automakers. But lately, even the German-American company’s been struggling.

Today, the Detroit News reports DaimlerChrysler’s putting together a major restructuring plan. Marketplace’s Alisa Roth explains we’ll know a whole lot more next week.

ALISA ROTH: Chrysler’s not talking till Valentine’s Day. That’s when the company releases its earnings report — and details of the restructuring.

But word on the street is that Chrysler’s looking at job and plant cuts much like those at rivals GM and Ford.

Chrysler already went through a major restructuring about seven years ago. So for awhile, it was cruising along. Even when GM and Ford were suffering.

Greg Gardner

of Harbour Consulting

says American drivers’ tastes have changed. And now all of the big three automakers are facing the same challenge.

GREG GARDNER: Chrysler’s trying to adjust to the change in type of vehicles that are growing in demand, principally midsize and smaller crossover and passenger car-type vehicles . . . and away from midsize and larger sport utility vehicles.

He says the country’s fourth-biggest car maker’s also trying to figure out how many assembly plants — and workers — it actually needs.

But more titillating than proposed plant cuts is rumor of greater transatlantic collaboration. Word is, Mercedes and Chrysler could start sharing pieces like chassis and suspension systems.

Economist Steven Szakaly

of the Center for Automotive Research

says the company has to be careful not to dilute the cachet of the luxury brand.

STEVEN SZAKALY: Certainly, if I was thinking about buying an $80,000 Mercedes and I found out that the $35,000 Chrysler up the street was essentially the same vehicle, I . . . I might hesitate.

That kind of collaboration can work well, though. Szakaly points out that Lexus is basically a dolled-up Toyota Camry . . . with a wildly successful marketing campaign.

In New York, I’m Alisa Roth for Marketplace.

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