Chrysler Restructuring – Valentine’s Day Massacre 2007
DaimlerChrysler announced a massive restructuring of Chrysler Group on Valentine’s Day – February 14, 2007. Wags in the press have taken to calling this the “Valentine’s Day Massacre” of 2007.
Chrysler Joins General Motors and Ford in Restructuring
Following years long restructuring by its crosstown rivals General Motors and Ford, Chrysler Group completes the Domestic Three in their attempts to restructure.
Still saddled with tremendous unsold inventory and a mis-match between capacity for traditional SUVs and big pickups and demand, Chrysler announced the closing of one SUV plant (Delaware) and reducing shifts on others.
The inevitable headcount reduction will total 13,000 hourly and salaried workers bringing the combined headcount reductions by the Domestic Three into the range of 100,000 workers. While operations all around the USA will be affected, selling a house in Southeastern Michigan will be a long and probably expensive task with a huge inventory of unsold homes offered at prices that can only come down.
DaimlerChrysler May Cease to Exist
You remember the “merger” back in 1998 that combined Daimler-Benz and Chrysler Corporation. Characterized as a merger that was indeed a take-over, the synergies anticipated from the match have not been realized. Sure there are the outstanding Chrysler 300, Dodge Magnum and Dodge Charger cars that use the IRS from a previous generation Mercedes, but that is a rare example.
In statements surrounding the restructuring, DaimlerChrysler head Dieter Zetsche admitted that all alternatives were on the table including spinning off Chrysler Group. Rumors immediately arose that DCX was in talks with General Motors about GM absorbing Chrysler Group. Rumors.
So, this puts all three domestic auto makers in restructuring mode just as Toyota and Honda are beginning to get their second wind. It’s going to be a tough few years around Detroit.