Category Archive:

What a Relief – Chrysler Imperial Cancelled

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As the auto industry reviews its future under what certainly will be tougher Corporate Average Fuel Economy standards, cycle plans at each company are being scrutinized. What is happening is that some vehicles are being deferred as studies are carried out to determine if their fuel efficiency can be improved. Those that will definitely damage CAFE are being put on the chopping block if acceptable offsets cannot be found. On July 17, 2007 Chrysler Group announced that the Chrysler Imperial is being scrapped.

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Thank Heavens The Emperor is Dead
This is one of the few benefits that can be expected from the more stringent CAFE standards. The Imperial, first seen during the 2006 Auto Show season has to be one of the most contrived, unattractive concepts shown in years. It goes into the “what were they thinking” category and we wondered if it was just a cruel joke.
Based on the Chrysler rear wheel drive platform the Imperial would have been assembled at Chrysler’s Brampton Assembly Plant along with the Chrysler 300, Dodge Magnum and Dodge Charger. Chrysler states that the Brampton change-over for the 300/Magnum/Charger would continue moving forward just without the Imperial.
With Different Styling, Imperial Could Have Been a Reasonable Line Extention
Our complaint with Imperial is that it is ugly. It is an example of Chrysler styling having run amok following the “merger of equals” with Daimler-Benz. These are the same folks, you know, that have given us the ungainly Jeep Commander. The best styling coming out of Chrysler since the “acquisition” have been the Chrysler 300 and Dodge Magnum. Neither the Charger or the Imperial shared the same spark. We hope that with Tom Gale – Chrysler’s former design boss – joining Cerberus as an advisor, that Chrysler can find its design mojo once again.


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Cerberus Corporate Identification

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By now everyone has heard that Cerberus is acquiring Chrysler Group from DaimlerChrysler… uh, Daimler-Benz AG or Daimler AG. Going by history, when Lee Iacocca renamed Chrysler Corporation the NEW Chrysler Corporation after their loan guarantee in the early 1980s, it is apparent that Chrysler will now be called The NEW Chrysler Corporation II.
But in recognition of their acquisition by Cerberus Capital Management, they need a feature model and what feature model is more appropriate than the Chrysler 300Cerberus comlete with its own three-headed dog hood ornament. We assume this will not meet pedestrian collision requirements in Europe.

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The Chrysler Corporation Returns

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Chrysler is Back in Private, American Hands; Current Management Stays On
On Monday, May 14, DaimlerChrysler and Cerberus announced the pending sale of the Chrysler Group, including Chrysler Financial. Among the firestorm of conferences, board meetings, and announcements following, we attended a Chrysler press conference where the new Chrysler Corporation boss Tom LaSorda gave a short briefing and took some direct questions.

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Perhaps the most significant element of the change in ownership is not who makes up the management team, or even in which country home base now is. It isn’t whether or not Wolfgang Bernhard returns to Chrysler, or even who is the boss. It is that the new company is privately held.
The new Chrysler Corporation is not required to report quarterly (or annual) sales, profits, returns, management salaries, production, or most of the other indicators that Wall Street watches so closely. The negative of quarter-by-quarter reporting and evaluation is a tendency to think short term, which can be deadly for a business whose core products have a four- to six-year natural lifecycle. (Including LaSorda’s and other managers’ salaries, which he seemed nearly gleeful that he’ll no longer report.) When pressed, LaSorda cited short-term focus as the driver for the ill-fated sales bank strategy, and as something done to please the German bosses and done against long-term strategy and goals. As a private company, LaSorda says, they “will be able to run it as we want, without worrying about quarterly numbers and what people think of them.” Chrysler Corporation will not report quarterly earnings (nor management salaries/benefits), and LaSorda would not commit to continued reporting of monthly unit sales.
LaSorda expects a Cerberus to demand a similar level of governance than they are used to, and they will have to ultimately make money for them. They will also need, as LaSorda recognized, to clearly define goals and metrics for employees to be able to target and meet. But these elements need not be part of the public forum or debate, and ownership support for long-term over short-term objectives can significantly impact overall strategy.
LaSorda was clear and emphatic that the Chrysler Corporation’s management team will not change from that today at the Chrysler Group. No further job cuts are planned as a result of the new ownership, but the 13,000 cuts spelled out in February are still on the chopping block. Speculation will continue as to whether or not Wolfgang Bernhard is brought aboard again, but plans to make that change were vehemently denied.


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Cerberus Takes Chrysler Off Daimler's Hands

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Private equity firm Cerberus is in the process of taking Chrysler Group out of the hands of the automaker formerly known as DaimlerChrysler AG (DCX). What will soon become Daimler AG will continue to own 19.9% of the new company – Chrysler Holdings LLC – with Cerberus owning the remainder. This is the end of the Jurgen Schrempp dream for Daimler-Benz to create a global auto colossus made up of Mercedes-Benz, Freightliner, Chrysler, Mitsubishi and Hyundai.
Daimler-Benz took over (no merger – ever) Chrysler Corporation in November 1998 for $36 billion. Nine years later, DCX agreed to sell 80% of what is now Chrysler Group to Cerberus Capital for $7.4 billion. Clearly Schrempp’s plan did not work.
Impact on Opinion of Chrysler –
In late March, a VehicleVoice survey indicated that the opinion of Chrysler Group had deteriorated drastically from a year earlier. Our respondents variously said: “Daimler bought ’em, raped ’em and threw them away,” “Why would I buy a car from a company that’s parent company is trying to sell it?” Perhaps the purchase by Cerberus will serve to offset some of this deterioration, but time will tell.

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Cerberus Has Auto Industry Heavyweights Involved
Cerberus is the mythological three-headed dog that guards the gates of hell. Cerberus Capital is an interesting firm in its own right. Secretive to a fault, at least three auto industry heavyweights are on its letterhead (if they had one): David Thursfield, former Vice Chairman of Ford and an aggressive cost cutter; Wolfgang Bernhard, former COO of Chrysler Group (with Zetsche) and then head of Volkswagen in Germany prior to his Cerberus gig; and Robert Rewey, former head of Sales at Ford. Rewey could sell anything any day of the week. While Cerberus says they will keep the present Chrysler Group management team in place, it is only a matter of time that “adjustments” begin being made.
Remember the character in Pretty Woman played by Richard Gere? He was a private equity magnate that wanted to buy a shipbuilder, break it up and sell the pieces for a profit. A private equity firm like Cerberus isn’t too much different and the jury is still out on how Cerberus will handle its investment in Chrysler Group.
Cerberus has an interesting portfolio – a large stake in Delphi, 51% of GMAC – General Motors’ financing arm, Tower Automotive, Guilford Mills, Albertson’s, Sav-On, and others. The fact that Cerberus now controls Chrysler Financial and over half of GMAC gives it substantial clout in the automotive financial services market.
So, now, Chrysler Holdings can stay below the radar as a privately held company. Unfettered of its requirements to be transparent financially the company will largely be able to restructure itself outside the glare of the media and Wall Street. What will emerge after three, five or seven years is unknown, but the story will be fascinating to watch as is unfolds.


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2008 Chrysler Sebring Convertible: Still Rental-Car Heaven

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Arriving in Chrysler dealers over the coming weeks is the latest Sebring convertible, of which we brought you news from the Los Angeles show in November. This month, we had the chance to drive the new droptop from Santa Monica to Simi Valley and back. Most preview trips are graced with fabulous weather, so it only stands to reason that sometimes Mother Nature may refuse to cooperate. In this case a cold, rainy day meant little experience with the top down for Vehicle Voice contributor Stephanie Brinley, though contributor Keagan Patrick’s drive a few days later was less weather-challenged.

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The Sebring Converitible is available in three flavors – retractable hardtop, cloth top convertible and vinyl top convertible. This breadth of selection is unique in the industry and will give the Sebring convertible a definite advantage when rental car agencies are selecting convertibles in their fleet. You might even be able to find Sebring retractable hardtops in Minneapolis.


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It's Finally Here: Satellite TV for the Car

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Having Trouble Getting Your Couch Potato in the Car? Chrysler and SIRIUS Offer a Solution
As you may have noticed from our Detroit auto show coverage, Chrysler’s latest minivans, the Town and Country and Dodge Caravan (click for story and podcast), arrive this fall with several new features for making life on the road more pleasant and easier for the whole family. Today, Chrysler announced the latest development for family-friendly road trips: SIRIUS Backseat TV. Chrysler’s George Murphy and Frank Klegon announced the new feature in New York, with a helping hand from SpongeBob SquarePants and some local kids. At first, SIRIUS Backseat TV will offer three channels, well chosen for families and include Nickelodeon, the Disney Channel, and the Cartoon Network. (One more channel is needed: ESPN, for Dads to watch while waiting for the beloved family to just get done shopping already! Or even better, for tailgating before the big game.)

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SIRIUS Backseat TV uses an in-vehicle satellite video receiver and two roof-mounted antennas, and will complement the upcoming minivans dual-DVD rear-entertainment package nicely. It’s already set up so that second and third rows can watch different media, and the addition of TV to the mix only increases options.
SIRIUS Backseat TV will be a $470 option and requires opting for the rear-seat entertainment package and SIRIUS satellite radio. That $470 includes the first year’s subscription, but requires a subscription to SIRIUS satellite radio. Based on pricing for the single-DVD rear-entertainment systems for the 2008 Dodge Avenger and 2007MY minivans, it looks as though buyers might be able to get the SIRIUS Backseat TV and dual-DVD system for well under $2000. After the first year, SIRIUS Backseat TV costs $7 a month (after the first year) on top of the SIRIUS radio’s $12.95 month fee.
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Who Else Gets SIRIUS TV?
Initially, this system will only be available on Chrysler Group products, but the minivans won’t be the only ones having the fun. The 2008MY Chrysler 300, Jeep Commander and Grand Cherokee, and Dodge Charger and Magnum will also offer the feature. What hasn’t been indicated yet, though, is when SIRIUS will add TV stations, nor when TiVo or other DVR will be added to the whole shebang.


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2008 Dodge Avenger: Stuck in the Middle With You

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We brought you coverage of the Dodge Avenger concept reveal at Paris (click here), then the production reveal in Detroit (click here). We recently had the chance to drive the Avenger around Phoenix, and now we bring you the first VehicleVoice and AutoPacific driving impressions. Avenger relies on its looks to draw buyers in and close the deal, as it settles mid-pack among its mid-size sedan competition (Ford Fusion, Pontiac G6, Saturn Aura, new-for-2008 Chevrolet Malibu, Mazda6, Kia Optima) by nearly every other measure. Inside and out, it is better than some, but not so good as others. Avenger is head and shoulders above the 2001-06MY Stratus, but Stratus had been allowed to slip into mediocrity, and Avenger competes against modern offerings instead of the past.

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Chrysler Restructuring – Valentine's Day Massacre 2007

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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.

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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.
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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.


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VehicleVoice#62 – The 2007 Toyota Tundra and the Future of Minivans

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Most of you already know that Jim Hossack is AutoPacific’s expert on a lot of things – fuel prices, powertrains, trucks. But did you know that he’s also an expert in minivans? For the past several years, when we’re covering the big auto shows, Jim’s assignments have always been about the new truck models and minivan breakthroughs. But recently, there hasn’t been a lot of news surrounding minivans. Ford and GM have been clear that they think the segment is dying, and their exit strategy is uncomplicated. They’re just getting out. But Jim was in the Chrysler booth to check out the new 2007 Town & Country, aka Dodge Caravan, and he says, “not so fast” Ford and GM. There’s still a healthy segment here.
In this podcast, we’ve got Jim doing double duty at the Toyota booth. The Japanese manufacturer is taking it’s (first, second, third) fourth carefully planned step into the full-sized truck market with the new 2007 Tundra. And according to Jim, Toyota’s latest try is right on the money.
New Vehicle Reviews –
Dodge Caravan
Toyota Tundra

Show Runtime – 6:02


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2007 Detroit Auto Show: Return of the Avenger

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Revived Avenger Takes Charger Cues in Sheetmetal and Hobbies: Avenger Race Car Part of 2007 NASCAR Car of Tomorrow Program
At the 2006 Paris auto show, Dodge showed off an Avenger Concept. At the time, we offered up our first impressions of the new sedan (click here for our story). A mere four months later, Dodge revealed the production version at the 2007 North American International Auto Show. Avenger is important to the Dodge franchise and promises to be a far better competitor than the defunct Stratus was in its end days, but VehicleVoice readers will not be surprised that the Avenger name replaces Stratus, or that the production car is much like the concept, minus the concept’s SRT-like bodywork.

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Dodge also reinforced their commitment to motorsports with a Car of Tomorrow Avenger NASCAR also on stage. NASCAR driver Kurt Bush helped Dodge introduce the updated Viper, but Juan Pablo Montoya was on hand to help introduce the racing Avenger.
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Dodge needs Avenger to play an important role in its car lineup, replacing the Stratus, which dropped after the 2006 model year. Despite initial comments about some confusion in its styling details, the Avenger is more successful at incorporating the Dodge family elements than the Sebring is for Chrysler, but that would not have been difficult. The two share nearly the same overall dimensions, but Avenger’s Charger-inspired shoulders give the rear a more finished look than the truncated Sebring’s short deck allows. Avenger’s competition will include the Ford Fusion, Saturn Aura, and Chevrolet’s all-new 2008 Malibu (also revealed this January in Detroit), as well as the older Mazda6 and the even less expensive Kia Optima. The mid-size sedan segment has historically been highly competitive, and the 2007/2008 model years are no easier. The Detroit reveal gives us the chance to bring you more details on the production car and its available equipment, but in February we’ll have our first driving impressions.
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