Chrysler is losing money by the truck-load, and its vehicles aren't selling, so common sense dictates that team Pentastar was going to start making cuts soon. That time is now, when Chrysler notified workers that it would be cutting 1,000 white collar workers. Chrysler spokesman David Elshoff told employees that the company would achieve its cut target through retirements, attrition, and buyouts, which means people won't be handed boxes and receive security escorts just yet. Chrysler management is making the cuts with the belief that the current economic situation here in the States isn't going to improve any time soon. A quick look at the Pentastar's car lineup shows the privately owned company would be in trouble even if the economy had a rosy outlook. No timetable was given for the white collar cutback.
After nearly eight years of getting little or no attention from the White House, it seems as though Detroit's automakers will be a major focus the 2008 Election. With the economy looking worse by the day, lawmakers in Washington have been kicking around the idea of a second economic stimulus package to get people shopping again, and Mowtown's lawmakers want in on the money. Michigan's two Democratic senators are attempting to use the prospect of such a bill to include federally-backed loans to help automakers and suppliers build new factories and engineer new models. The $4B would be used to offset the costs associated with the Treasury Department giving automakers $25B in loans at a discounted rate. Automakers have been against such a loan in the past, but with worsening conditions and tighter lending practices the idea is likely to sound much more exciting this time around.
Presumed Democratic Presidential candidate Barack Obama told the UAW in a letter that he supports the $4B in federal aid, stating that he would "provide real solutions necessary to help this industry compete and win in the global economy." Obama also promised tax breaks for consumers that purchase ultra fuel efficient vehicles and tax credits for automakers as well. Presumed Republican nominee John McCain opposes the idea of federally backed loans, but he does support tax breaks to those that purchase fuel efficient vehicles and a $300M in prize money for electric battery powered vehicles
In the wake of GM's Tuesday press conference detailing its plans to have enough cash on hand through 2009, politicians have been eager to voice their thoughts regarding the possibility of a government bailout. President Bush gave the possibility a strong no, but the two guys in line for his job have taken a different route.
Senator Obama has said that he supports automaker's attempts to restructure without outside help, but says he's willing to work with the companies on fuel saving tech. Republican Senator John McCain took an even stronger pro-automaker stance, saying "if it looks like it is approaching that, everyone has to consider every option." The Arizona Senator and presumed Republican nominee has stated in the past that he wouldn't support a buyout, but would instead provide tax breaks and infrastructure support to create more fuel efficient vehicles. McCain's "every option" comment may not sit well with his party, but it could sound good to Detroit automakers. McCain is visiting the GM tech center today. Both presidential candidates are working hard to woo Michigan voters, which will be a key state to win in the November election. Even though GM has stated it isn't looking for a handout, Michigan residents would love to know that the automaker would get one if it really needed it.
Gas prices are up, which has led to increased interest in midsizers, more specifically, the midsize offerings from Chrysler's competition. The Sebring has taken a 30 percent sales whack this year, mostly due to reduced fleet sales. The Avenger's year has been a little brighter, posting a two-percent gain. Contrast that with everyone else; Malibu, Fusion, and Accord are up ten percent or more this year; and therein lies Chrysler's problem. Ditching Chrysler's outmoded V6 for the four-cylinder powertrain will deliver more competitive fuel economy, if you can stand the NVH increase.
Top heavy with trucks and taking fire over the Avenger and Sebring's interior quality and efficiency, Chrysler's seriously looking at re-jiggering the sedan twins, killing the top R/T and Limited trim levels and sliding some of the good stuff down to the SXT and Touring trim levels. The 3.5-liter V6 will be left out as standard equipment, though, as it doesn't post great fuel economy. The goodies that normally accompany the six, like heated leather power seats, dual exhausts, and 18 inch wheels, will end up as standard gear on the Sebring Touring and Avenger SXT. The prices of those models get bumped - 9.9 percent for the Dodge, now starting at $21,750, and 3.4 percent for the Sebring, offered for $21,670. What's up with the Avenger costing more than the Sebring? We don't know. The Journey is also being considered for this initiative, rumored to be called the "Fight Back" plan, and suppliers had until yesterday to give Chrysler a yes or no on feasibility.
We busted our humps getting to Podcast #100, and then promptly slacked off. Chris Shunk and Dan Roth make the effort this week to get Autoblog Podcast #101 out the door while the rest of the team remains difficult to corral. The usual banter about what's been in the Autoblog Garage starts us off before we dive headlong into the pithy GM news from earlier this week. Love it? Hate it? Send your comments, suggestions, or anything else to podcast at autoblog daht kahm. Thanks for listening!
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Despite recent rumblings to the contrary, both General Motors and Chrysler claim that they will not be going bankrupt any time soon. Still, as much as the two American automakers would love to quell fears of unsustainable liquidity, questions remain, especially as the pickup market in the United States continues to dwindle. In a note sent out to dealers, Chrysler's Jim Press and Steven Landry say that the automaker will focus its efforts on small cars for the rest of this year, though the current pickings from the automaker's stable seem a bit slim. Chrysler is surely banking on its alliances to bolster its line of small car offerings, which could help to dampen the blow of lost truck profits -- somewhat. General Motors, for its part, has invested heavily into its upcoming Delta platform vehicles, which will include a compact Chevrolet-branded car known as the Cruze as well as the Chevy Volt electric vehicle.
[Source: Automotive News (Chrysler and GM) - Sub. Req.]
UPDATE: We've been informed that the 0% financing for 72 months offer is only available for the 2008 Dodge Ram. Financing details for the 2009 Dodge Ram will be announced at a later date.
The 2009 Dodge Ram appears to be a top-notch competitor in the light truck market, but that won't keep the soon-to-be-released model from feeling the pinch of high gas prices. Chrysler told dealers in a July 8th conference call that the new Ram would be launched with 0-percent financing... for 72 months. To put this into perspective, an all-new $30,000 vehicle with 7-percent financing would translate into a $511 per month car payment over 72 months. With 0-percent financing, the payment would be only $417, for a savings of nearly $7,000.
When the 2009 Dodge Ram was unveiled to the public at the Detroit Auto Show, it was looked at as a potential savior for the Pentastar. Only seven months later and two months before its scheduled to go on sale, It's going to be launched with the same financing as the slow-selling outgoing model. Ouch.
Most automakers are struggling with horrible US market conditions right now, but unlike competitors such as Toyota and Ford, Chrysler doesn't have sales in other areas of the world to fall back on. The Pentastar is looking to improve its fortunes overseas while also benefiting from low labor costs by partnering with the Great Wall Motor Company. The young Chinese automaker doesn't specialize in the small vehicles Chrysler needs here in the States, however, as the company's primary focus is on trucks and SUVs. The goal of the union is to share distribution channels, technology, and components, which should save both companies money in R&D and improve economies of scale. The deal is unrelated to a separate pact with Chery to produce a small, Dodge-branded car for sale in North America.
With sales down in the states by 28% in June, Chrysler appears to be in the most trouble of the Detroit automakers in the near term. Branching out to other markets to drive down costs and add sales could be the automaker's best hope for survival in the future.
One of the more useful bits of technology we encountered at the Chrysler What's New for 2009 event last week was "Rear Cross Path Detection," a byproduct of the new blind spot monitoring system on 2009 minivans that employs two radar sensors mounted on the corners of the rear bumper. Blind spot monitoring has become increasingly common on luxury vehicles in recent years, but Chrysler is claiming that the 2009 Caravan and Town & Country are the first minivans to be equipped with the technology.
If you've found yourself in a parking space flanked by two mondo SUVs, you've found it difficult, if not damn near impossible, to back out safely, and all too often drivers trolling parking lots are too busy looking for an empty slot to pay attention to cars backing out. When in reverse, the cross path detection uses the radar sensors to look to the sides for oncoming vehicles. If someone is in your path of travel the system audibly warns you of impending disaster. Check out the videos after the jump to see how both systems work.
Those of you steeped in drag racing lore are undoubtedly familiar with the 1968 HEMI-powered Dodge Darts and Plymouth Barracudas. These limited edition, track-bound '68 package cars brought out some of the biggest names in drag racing and helped solidify the automaker as a force to be reckoned with down the 1320. When Dodge unveiled the Challenger drag race package at SEMA, we knew the Mopar crew had something serious up its sleeves, and we've got an exclusive clip of what's to come.
Chrysler isn't releasing the details on this non-street-legal, drag-race ready model yet, but earlier reports suggest an overall weight savings of around 800 pounds by stripping the interior down to the bare essentials (one seat, a set of gauges and no sound deadening material), nixing the wipers and A/C and replacing many of the body panels with composite material. The front brakes will also be modified, along with the rear end and front crossmember, and a roll cage is assuredly part of the package. As for power, expect a big HEMI V8 under the hood producing over 500 hp and close to 500 lb.-ft. of torque. All of that is speculation for now, but expect official word from Mopar shortly. Check out our exclusive video after the jump to keep you satisfied in the interim.
Sales of Chrysler, Dodge, and Jeep vehciles are down a scary 36 percent year over year, which means even the somewhat interesting marketing gimmick of the $2.99 gas guarantee isn't working very well. Unfortunately, gas for just under $3 is all Chrysler, LLC had up its sleeve this summer, as the Pentastar has extended the deal through July 31. We'd reported earlier that only 5-10 percent of all Chrysler product buyers were opting for the seemingly attractive promotion, which leads us to believe that the deal isn't much of a deal after all. Maybe Chrysler can borrow the tried and true "Do you have a job? Do you have $199?" from Kia, because the Korean automaker's sales are up 21%.
Automakers had until July 1st to plead their case to the NHTSA overlords before the government agency set off to finalize the 2011-2015 CAFE standards. After hearing comments from Detroit automakers, Toyota, Daimler, and others, it seems that the new standards are going to have a sweeping effect on both consumers and auto industry employees. The Auto Alliance states that the cuts would hasten the exit of 82,000 jobs, cost $29 billion for consumers, and raise the cost of your favorite truck by $4,000 or more. The added cost of vehicles will also cut annual production by up to 850k units industry-wide.
Complaints from automakers are in stark contrast to claims from NHTSA, which says the added fuel economy will result in 9,000 more jobs. The two sides do agree that the new standards will cost a lot of money, as NHTSA estimates that the new rules could cost $47 billion by 2015, though automakers estimate it will cost even more. While the Alliance wants some slack in the new rules, Congress wants to see even tougher regulations. The wise guys and gals on the hill say the proposal doesn't reflect $4-per-gallon gasoline, and automakers feel the regulation doesn't reflect common sense. Since the new rules begin to take effect in late 2010, automakers contend that the product cycle is already baked in, and changing at this stage in the game would be like moving an Egyptian pyramid with Two Guys and a Truck.
Whether automakers can meet these stringent deadlines on time or not, the industry is being turned on end. With gas approaching $5 a gallon, automakers don't need the government to tell them that they need more efficient vehicles. Cash-carrying customers are doing that just fine, thank you.
Click above high-res gallery of the 2008 Dodge Grand Caravan SXT
Now that General Motors and Ford have completely abandoned the minivan market for good, the American originator of the species faces only Honda, Toyota, Nissan, Kia and soon Volkswagen as manufacturers that also offer competitive choices. Perhaps you'd think that Chrysler would be benefiting as the only domestic automaker currently playing in the segment, but it seems that sales are down this year by 13 percent for the Chrysler Town and Country while the Dodge Grand Caravan is down an alarming 35 percent. High gas prices are the obvious reason why the minivan market is seeing such a harsh downward trend, and likely the culprit behind Chrysler's impending move to idle its St. Louis South minivan plant as early as December, which would leave some 1,500 employees jobless.
Utility vehicles have been the biggest gas-price casualties, and slow sales are said to be forcing the Jefferson Avenue assembly plant in Detroit where the Jeep Grand Cherokee and Commander are assembled and the Toledo, Ohio North assembly plant which builds the Jeep Liberty and Dodge Nitro into extended shut-downs, as well.
Despite the fact that Chrysler shares are no longer sold on the stock market, rumors regarding the company's financial standing continue to haunt the number three domestic auto manufacturer in America. Last week, rumors regarding the negative cash flow were so rampant, a company spokesperson went out of his way to deny that the automaker was headed towards bankruptcy. Now, despite constant assurance from Chrysler that it's hitting all of its internal goals, the lack of announced future product and credit warnings from major firms such as Merrill Lynch and Fitch Ratings are causing some industry insiders to predict major changes from the automaker. Some analysts even believe that Cerberus is looking to offload or break up the company, allegations that Chrysler vehemently denies.
Because the automaker is privately held, the world will just need to sit back and wait to see how Cerberus' so-called "buy, fix and hold" strategy will work out. Despite what took place back in the '70s, Chrysler shouldn't get its hopes up for much federal assistance. It goes without saying, though, that Chrysler is going to need some major revamped products if it plans to make it in the tough U.S. market much longer.
Back in the late seventies and into early eighties, Chrysler had gotten itself into such horrid financial shape that the U.S. government decided to step in and fix the situation itself. Considering the sorry state of affairs that all three of the Detroit automakers find themselves in today, some may wonder if a government-funded bailout is in the cards. Not so much... at least according to John McCain. "Frankly I just don't see a scenario where the federal government would come in and bail out any industry in America today," says the Republican.
So, what plan does McCain have in store for the Detroit 3? More Chevrolet Cobalts and Pontiac G5s for one, as the Arizona Senator said the above words after touring the plant in Lordstown, Ohio where the GM compact cars are made and a where third shift has just been added. "I am convinced that what is being done at the Lordstown assembly plant is the future of the American auto industry," added McCain.
In more related good news for the U.S. automakers, McCain says he supports nationwide CO2 standards and would oppose any state's individual plans -- California, we're looking at you. The Presidential hopeful also wants to see more fair-trade standards implemented with the other various auto-building nations and quicker violations for unfair practices. We await a response from the Democratic side.
Click above to view a video of Chrysler's uConnect in action.
At Chrysler's annual "What's New" gathering at its Chelsea Proving Ground, we were able to get a demonstration of the new uConnect Web system, which transforms any vehicle into a rolling WiFi hot spot. The hardware consists of a WiFi router with a built in wireless 3G modem. The 3G modem automatically connects to the internet and allows any WiFi enabled devices, such as a laptop, iPod Touch, Nintendo DS or XBox to connect, as long as you're within range of a cell signal. Chrysler is offering the system as a dealer installed option through it's Mopar parts division starting this August. Initially, it will only be available for 2009 models, but earlier models will be added further down the road. The system will cost about $500 installed plus $29 a month for unlimited service, and if you sign up for a two-year contract you get two months for free. Theoretically, you could use the system as your home internet service with your car parked in the garage, making the initial cost of installation and monthly service charges a bit more palatable. Check out a video of the demonstration we received after the jump.
Though we've known Chrysler has been planning to offer in-car internet connectivity on its 2009 models as an option through Mopar for a few months now, the Auburn Hills-based automaker has now given it an official name and bundled the technology with a suite of in-car tech solutions. Called uconnect web, the in-car wi-fi capability will be offered alongside other technologies called uconnect phone, uconnect tunes, uconnect gps and uconnect studios. uconnect phone is basically bluetooth compatibility that enables hands-free calling, stores your cell phone's address book and also records memos. uconnect tunes includes a 30GB hard drive for storing songs and viewing photos, and also allows playback of movies on the dashboard screen while in Park (no word on whether video can be stored on the in-dash hard drive and played back, though). uconnect gps is a touchscreen navigation system with voice recognition, and uconnect studios is Chrysler's offering of SIRIUS Backseat TV. The latter technologies are all well known and familiar, so it's understandable that everyone's going ga ga over Chrysler's promise of in-car wi-fi. We're currently checking with the automaker to find out what type of hardware the system will use, whether or not a cell phone carrier will be involved and what type of coverage area will be available. Stay tuned.
Chrysler's Project Genesis plan has been gaining traction as of late. The goal is to cut out redundant models between the Chrysler, Dodge and Jeep brands, which would also mean consolidating its entire product line into one dealership which offers all three marques. While there are some dealership owners fighting the strategy, The Detroit News reports that Chrysler already has fifty-eight percent of its dealerships offering its three brands, and its been able to cut out some smaller, less profitable sites in the process. While franchise laws prohibit Chrysler from requiring the switch, reducing its model line can have the same effect, forcing its dealers to offer the entire product catalog from the company in order to offer a full line of vehicles.
As a side benefit, the automaker hopes that its dealers can upgrade their franchises, offering a modern look and high-tech features such as Wi-Fi and a cafe on site. Of course, Chrysler needs to do its part by producing some good vehicles for those dealers to offer.
The Chrysler Sebring has been a major league disappointment since its introduction in 2007, but execs at Chrysler headquarters have promised that a new, better midsize sedan is on the way. The photo to the right is not that magical new Chrysler, but is what appears to be a warmed-over version of the Sebring we already have. The most obvious change arrives at the hood, where the Sebring's ungainly washboard ribbing is replaced by a smooth surface. There is significant camouflage covering the front bumper and lower fascia, but due to some un-kept grass, we can't see any details. The Chrysler experts over at Allpar say that the updates will mainly improve aerodynamics and reduce wind noise, which will also help improve fuel economy.
Chrysler also plans to simplify manufacturing by making many former options standard equipment, adding the Premium and Luxury group as standard on the Limited model. The Touring model a eight-way power driver seat, chrome and leather shift knob, and traction and stability control. What we don't know is whether Chrysler has updated the Sebring's interior, but the automaker has insisted that it was racing to update it quickly. The good news for interior designers is that the Sebring redo can only get better.
Chrysler, already hurt by slow sales of its bread-and-butter pickups and SUVs, doesn't think things will improve any time soon. According to an email sent by CEO Bob Nardelli to Chrysler employees, he believes that sales will continue to spiral down the drain. So far, though, the third of the Detroit 3 isn't ready to announce any additional layoffs or plant closures. Chrysler must have had some really foresighted, or extremely pessimistic, people on the team who set early '08 predictions, as Nardelli claims that the company he's leading is still on track to achieve its goals.
Dodge has already shut the doors of its Saltillo plant in northern Mexico in an effort to "adjust" inventory levels of the current Ram pickup. The next vehicle set to debut for Dodge is the completely new Ram, which will appear just as gas prices have seriously trimmed truck sales. For Chrysler, the Hornet can't come soon enough.
Automakers had until July 1st to plead their case to the NHTSA overlords before the government agency set off to finalize the 
The Chrysler Sebring has been a major league 
