WHILE IT HAS PUT MANY EXCITING PRODUCTS INTO THE MARKET IN ITS 85-YEAR HISTORY, CHRYSLER CORPORATION HAS ALWAYS EXCELLED IN PARTICULAR AT SELLING ITSELF. FOR THE THIRD TIME IN 10 YEARS, CHRYSLER HAS ATTRACTED A NEW PARTNER TO DANCE WITH, FIAT. BUT IT’S TIME TO ACCEPT THE FACT THAT THE MUSIC HAS STOPPED PLAYING. PART I: CHRYSLER, A GREAT AMERICAN ENTERPRISE In 1924, Walter P. Chrysler made a stir with his new car during the New York Automobile Exposition by placing it in the lobby of the nearby Commodore hotel, where he could buttonhole the journalists and financiers without the distraction of the other makes on the Exposition floor. But good as the car itself was, what Walter P. was selling was his management of the successful Buick brand until 1920, and the prospect that his new Chrysler Corporation would emulate GM’s success. Walter P. got the investment to put the Chrysler B-70 into production.
Walter P. and the 1924 Chrysler B-70
Walter P. (who, until his untimely death in 1946, remained close friends with Alfred Sloan as the heads of rival automobile empires) did a masterful job of mimicking the General Motors tiered product portfolio with Plymouth, Dodge, DeSoto and Chrysler. The “agile follower” strategy generally worked, and after World War II Chrysler surpassed crazy Henry’s Ford Motor Co. as the second-biggest producer. Never having the deep pockets of GM or Ford, Chrysler fell into a habitual boom-and-bust cycle. It would break the bank to climb atop a trend wave, and wipe out under the next one. The breathtaking 1957 “Forward Look” looked graceless and gaudy in 1960, but Chrysler had blown its capital converting to unibody construction. Chrysler muscle dominated the streets in the early 70s, but the lack of a subcompact left them flat-footed in the gasoline crisis. By 1979, Chrysler was finally ready with the top-notch K-Car and the minivan – but hadn’t the funds to produce them. So Salesman-In-Chief Lee Iacocca went to Washington to once again “sell” the Chrysler Corporation itself to the government as Walter P. had to the financial community more than five decades before. Iacocca got the loan, and Chrysler was back catching the perfect wave and wiping out by overplaying the K-car hand by the early 90s, and then rescuing itself on the backs of its Jeep acquisition foisting product development onto its supplier base – until being dunked again in the late 90s by globalization’s first spawn. Necessity drove Chrysler into the exploitive marriage with Daimler-Benz, and a victim’s admiration for its German captors drained the company of the gutsiness that had been bred from decades of rollercoaster riding. With its spirit shattered, Chrysler blew its scheduled boom by underselling the PT Cruiser, overselling its trucks, and pimping Jeep. The New Math of synergy was erased off the blackboard in the time it took to subtract the amount that Daimler finally unloaded Chrysler for – $5 billion – from the $38 billion they had paid. For chump change, Chrysler fell into the arms of the only people more arrogant and clueless about the American auto industry than the Germans: the smug Wall Street pac-man asset gobblers of Cerberus. But that ol’ Wall Street black magic quickly ran red when mixed with Detroit’s agonized capital structure, prompting the new owners to show the native product talent to the door and call Asia. So here we are: Chrysler has nothing in the pipeline besides a promise from Nissan to provide the last-generation Versa, and Cerberus has been knocked on its ass by the car market’s whimsical response to the end of funny money. The Plan? – Keep Chrysler’s culture of crisis alive with public money long enough to give it away to some other grandiose-minded sucker. And that’s a good idea because … ? NEXT IN PART II: FIXING A $10 WATCH THIS TIME, IT’S THE PUBLIC’S TURN TO BE “SOLD” ON CHRYSLER’S FUTURE, COUGH UP THE CASH FOR FIAT’S 35% GIFT STAKE, AND ALLOW CHRYSLER’S CAPACITY TO KEEP ON CLOGGING THE DOMESTIC INDUSTRY. HAVEN’T WE LEARNED BY NOW THAT THE MAGIC OF SYNERGY OFTEN DOESN’T CORRELATE WITH THE MATH OF THE AUTOMOBILE BUSINESS?
Walter P. and the 1924 Chrysler B-70
(c)2009 Joshua Davidson
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