Chrysler on the rocks?

For quite some time, the focus of Detroit’s troubled present and future has been on Ford and GM – and rightfully so. They’re the 2 largest domestic automakers, and besides – Chrysler was taken over by merged with Daimler-Benz, so they have a German sugar daddy to take care of them. All along, I’ve been saying that Chrysler was in the woods right there alongside Ford and the General – and maybe they had it even worse ( as if that’s possible ). Why do I say that? Well, let’s take a look.

Chrysler is offering it’s dealers absolutely massive incentives to move leftover 06 product. When I say massive, I mean really, really big. As much as $7,000 – and that’s American dollars, not Canadian funny money. For every 06 Dodge Ram a Dodge dealer sells, Chrysler will send them a check for $7,000 – that’s no joke. I know, some of you are saying ‘ OMG that’s a great deal I always wanted to get me a Dodge pickemup truck yeehaw! ‘ But the rest of you are hopefully thinking that it’s the dumbest thing you’ve ever seen. How bad does your product have to be that you need to stroke a $7,000 check to your dealers for selling one? I mean, really. Chrysler will take an absolutely massive hit for this desperate attempt to reduce inventory promotion.

And that brings me to my next point – analysts are suggesting the big C may lose as much as $2 billion ( yes, with a B ) in the 4th quarter of this year. This is following a cool $1.5 billion loss in the third quarter – you’re going the wrong way guys! Anyone want to take bets on how long until Daimler-Benz tries to separate from this monetary black hole? I’d suggest that they sell it, but who in their right mind would pay money for Chrysler?

Published on December 6, 2006 in Ponderings

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