Autoblog: Don't let the door hit you in the ass: Dodge Caliber will end production in November.

Schrempp's approach to economics was very "American". He often expressed his fondness for the American way of doing business. He believed our German way of doing things was too provincial, too careful and too fuddy-duddy. When he took power at Mercedes, he christianed the company's principal office in Stuttgart "Bullshit Castle" (he used that English term).

There was a time back in the 1990's, during the successful Clinton administration, when several German top managers thought they have to go American in order to remain successful. And Schrempp was one of the outriders. That's why I made that reference in the brackets.

So ironically Chrysler became victim to a German, who tried to act American. And he drove Mercedes into a crisis as well.
 
Last edited:
I wonder how dodge Felt when nobody really cared about this announcement. I can count the number of dodge calibers i've seen on the road with two hands since it's release.
 
edkwon said:
I wonder how dodge Felt when nobody really cared about this announcement. I can count the number of dodge calibers i've seen on the road with two hands since it's release.
Click to expand...

I see a lot around here, I saw a loaded one red one with leather (whyyy?!?!) just today. Then again it is central PA, people are big on domestic products here.
 
rickhamilton620 said:
I see a lot around here, I saw a loaded one red one with leather (whyyy?!?!) just today. Then again it is central PA, people are big on domestic products here.
Click to expand...

You poor pennsylvanians. I feel for you guys. Out of the small handful I remember seeing, 2 of them happened to be SRT-4s, which I admit, didn't look half bad. Can't attest to how they drove since I only saw them moving in straight lines.
 
rickhamilton620 said:
I see a lot around here, I saw a loaded one red one with leather (whyyy?!?!) just today. Then again it is central PA, people are big on domestic products here.
Click to expand...

Quite a few in the NE corner of the state too. Hell, there's still a decent amount of Malibu Maxx's around.......
 
Wallio said:
Quite a few in the NE corner of the state too. Hell, there's still a decent amount of Malibu Maxx's around.......
Click to expand...

yeah its kinda weird to see the stuff no one bought in abundance in PA. I've even seen those envoy pickup truck/SUV hybrids driving around.
 
MacGuffin said:
Schrempp's approach to economics was very "American". He often expressed his fondness for the American way of doing business. He believed our German way of doing things was too provincial, too careful and too fuddy-duddy. When he took power at Mercedes, he christianed the company's principal office in Stuttgart "Bullshit Castle" (he used that English term).

There was a time back in the 1990's, during the successful Clinton administration, when several German top managers thought they have to go American in order to remain successful. And Schrempp was one of the outriders. That's why I made that reference in the brackets.

So ironically Chrysler became victim to a German, who tried to act American. And he drove Mercedes into a crisis as well.
Click to expand...
Hey guys! Mercedes causing Chrysler to suck is Americas fault. Isn't that obvious?
 
What you guys seem to blind out, is the time frame. The "merger of equals" happened in 1998. Within the first year of the merger, Chrysler still made a profit of about 5 billion US dollars. So far, so good. Nobody complained back then and the shareholders were happy.

The trouble started in 2000, when the profit suddenly turned into a loss. But if you look at the car portfolio of Chrysler and Dodge in 2000, you'll see that it consisted only of cars, that were designed and developed before the merger, when Mercedes didn't have a hand in it yet.

Granted, Mercedes' attempts to save the brand were futile in the end and maybe foolish. But the cause of the downfall was already there, before they took over. Even the worst management cannot drive a healthy car company from 5 billion profit into a loss within one year after taking over without actually changing anything in the line of products.

Chrysler would have been bankrupt in 2007 anyway, no matter who was at the rudder. The road to insolvency was already laid before 1998, before the PT Cruiser and the Crossfire, before the Sebring and the 300C, before the Pacifica and the Aspen. All those cars were introduced after 2000, when Chrysler was already on its way into the abyss.

There is no reasonable explanation, why they should have done better, than Ford or GM, no matter under which management. But as it is, people now have a scapegoat: Ze evil Germans from Mercedes.

But maybe it's comforting for you, if you believe, that an American management would have done better. So I grant you the illusion.
 
Last edited:
MacGuffin said:
What you guys seem to blind out, is the time frame. The "merger of equals" happened in 1998. Within the first year of the merger, Chrysler still made a profit of about 5 billion US dollars. So far, so good. Nobody complained back then and the shareholders were happy.

The trouble started in 2000, when the profit suddenly turned into a loss. But if you look at the car portfolio in 2000, you'll see that it consisted only of cars, that were designed and developed before the merger, when Mercedes didn't have a hand in it yet.

Granted, Mercedes' attempts to save the brand were futile in the end and maybe foolish. But the cause of the downfall was already there, before they took over. You cannot drive a healthy car company from 5 billion profit into a loss within one year. So who fooled who, hm?

Chrysler would have been bankrupt in 2007 anyway, no matter who was at the rudder. Or is there any reasonable explanation, why they should have done better, than Ford or GM?
Click to expand...

If I recall correctly, Daimler had instituted cost cutting measures that affected product quality right out of the gate in 99: http://www.allpar.com/neon/engineering.html

That said, it wasn't their fault that Eaton had decided to cut corners on several key components of top selling car models, and the results of that were beginning to trickle in. But decision making later that could have stemmed the tide wasn't made.

EDIT: Reading that further, yes, they did stop development of models, albeit none that were in production in 2000. It was partially a good thing though as it raised expectations for crash test results there (why on earth would one be ok with just "acceptable" crash test results)
 
Last edited:
The way I remember it, a key factor to the whole mess was also the discount battles happening at the time. The "Big Three" competed with each other so much, that they offered more and more and higher discounts all the time to sell their cars, selling them with a loss in the end.
 
Last edited:
Except you left out the part that under the prior management, Chrysler was bringing new models to market in 18 months. Between 98 and 2000, they could have (and were working on) refreshed most if not all of the lineup. But before this could happen, Mercedes said "NEIN NEIN NEIN NEIN NEIN" and demanded everything be reviewed, re-reviewed, and re-re-reviewed in Stuttgart, thus turning an 18 month product development cycle into an eventual FIVE YEARS.

So, no, Chrysler might not have been bankrupt by 2007. You also forget the massive cash reserve ($9.6 BILLION dollars) that Chrysler had, and how Chrysler was massively undervalued in the stock market.

Your examples are also grossly inaccurate. The Sebring was around in 1994, the PT Cruiser was conceived and shown as the Pronto in 1997 and was under development before the merger, the 300C is a pre-Mercedes Chrysler LH platform car with Mercedes suspension bits grafted on and was under early development (sans Merc bits) before the merger. The remaining products, strangely enough, were all commercial failures orchestrated by Stuttgart - and just about everyone but ze Chermanz thought they'd fail.

The only illusion here is that Mercedes didn't screw it up by the numbers, because they did.
 
Last edited:
What would you have done, if you took over a company? Leave everything as it is? Or check what you got, before you decide about the strategy to move on?

The thing is, that we'll never find out, how Chrysler would have done without the merger. So it's very convenient either way, that you have someone from outside to blame. I can understand that of course. It's a naural reaction. With the lack of an alternative timeline, it's always easy to put the blame on somebody else but the way I percieved the situation then and now, is simply different.

From an outsider's point of view, the key problem to the whole mess was the American car market itself. It had (and still has) unsolved structural problems. You admitted that for Ford and GM. Again: I don't see, how Chrysler could have done better than those two, no matter under which management.

And as we'll never find out, speculation is all we have.
 
Last edited:
MacGuffin said:
What would you have done, if you took over a company? Leave everything as it is? Or check what you got, before you decide about the strategy to move on?

The thing is, that we'll never find out, how Chrysler would have done without the merger. So it's very convenient either way, that you have someone from outside to blame. I can understand that of course. It's a naural reaction. With the lack of an alternative timeline, it's always easy to put the blame on somebody else but the way I percieved the situation then and now, is simply different.

From an outsider's point of view, the key problem to the whole mess was the American car market itself. It had (and still has) unsolved structural problems. You admitted that for Ford and GM. Again: I don't see, how Chrysler could have done better than those two, no matter under which management.
Click to expand...

Of course, I'd see what's going on, but I'd have faith in the company that I merged with in theory "as equals" not "taken over." If there were things that were horribly bad: the whole accepting mediocre crash test results thing for example, I'd go "whoa whoa guys, we gotta match the competition that's getting five stars and best picks. What can we do to improve the scores on these models" but if I was looking over the financials and found that Chrysler was literally making bank, had a competitive, fun to drive, AND fuel efficient small car, had what many people considered to be the best minivan money could buy, and could design stunning looking vehicles way faster than the competition...I'd probably follow the "if it's not broke, why fix it" adage.

Would I try to improve things? Sure. The JX cloud cars, for example, were dynamically among the best in the class, ditto styling. The interiors though were kinda meh, so I'd improve that, along with reversing some decisions that resulted in somewhat marred product quality/reliability.
 
MacGuffin said:
What would you have done, if you took over a company? Leave everything as it is? Or check what you got, before you decide about the strategy to move on?
Click to expand...

That's called "due diligence." You do that before you purchase a company, not after.

The thing is, that we'll never find out, how Chrysler would have done without the merger. So it's very convenient either way, that you have someone from outside to blame. I can understand that of course. It's a naural reaction. It's always easier to put the blame on somebody else with the lack of an alternative timeline but the way I percieved the situation then and now, is simply different.
Click to expand...

One problem with your theory is that the pre-merger company plans for Chrysler are still available, there are many books written by ex-executives, there's paper trails and there are existing interviews that all contradict the traditional German view of "Ach, it was Chrysler's fault." It is actually possible to track the bad moves and failures back to their sources. And they almost all lead back to Stuttgart.

And if you think we're all saying this to 'have someone else to blame,' you are wrong. If this was the case, we should be blaming the many joint ventures that GM got into as reasons why that company tanked, and nobody does that.

I suggest you read up on non-German sources regarding the failure. It's a case study in many business schools these days. Even as early as 2001 it could be seen that Mercedes was killing Chrysler. David Waller's Wheels On Fire was an insightful book from that year that predicted the eventual failure.

In 2002, Dartmouth College published a paper analyzing the merger and predicting the failures.

I'd suggest you watch this video as well, where Thomas D. Zweifel is interviewed about various topics and touches on why D-C failed.

http://myspeaking.speakingchannel.t...weifel-on-Bloomberg-TV/video/427923/9176.html

There's more, but I can't be arsed to bring them in.

From an outsider's point of view, the key problem to the whole mess was the American car market itself. It had (and still has) unsolved structural problems. You admitted that for Ford and GM. Again: I don't see, how Chrysler could have done better than those two, no matter under which management.
Click to expand...

By those standards, Ford is out of business now. Oh, wait, they're not.

[citation needed] on the unsolved structural problems for the US automotive market, especially those I have supposedly admitted to for Ford and GM.
 
Last edited:
Chrysler was the best run company at the time. Ford didn't get back on track until Mulally took over and saved the from the Firestone disaster which almost killed the company.
 
Well, that all might be true but someone at Chrysler must have agreed to the merger, right? I mean, it wasn't a hostile takeover.

So at the time both companies must have thought, that it was a good idea. It's not exactly fair play, when ex-managers write books later, that they knew it would all go wrong anyway. In the end, I think, the true reason for the failure was a clash of different company cultures.
Analysts felt that though strategically, the merger made good business sense. But contrasting cultures and management styles hindered the realization of the synergies. Daimler-Benz attempted to run Chrysler USA operations in the same way as it would run its German operations. Daimler-Benz was characterized by methodical decision-making. On the other hand, the US based Chrysler encouraged creativity. While Chrysler represented American adaptability and valued efficiency and equal empowerment Daimler-Benz valued a more traditional respect for hierarchy and centralized decision-making.
Click to expand...

So let's see, if Fiat does it better. So far I have the feeling, that Marchionne is only using the Chrysler brand as a vehicle to push his own products onto the American market.
 
Actually, many of the execs said at the time that it was a bad idea. Bob Eaton, for example, thought it was a good idea at the time, but immediately after regretted it. There is email evidence of this, as well as interviews with uninterested parties who knew and observed Eaton at the time. However, Chrysler's board (keep in mind, in the US, when we talk about execs we're usually not talking about the members of the board per se) thought it was a good idea as the offer was greatly in excess of the then-current stock market valuation.

And yes, we'll see if Fiat does it any better, but so far they seem to be more interested in what the American branch has to say (see the 500 revisions, for example) than Mercedes was. And to be honest, Mercedes left Chrysler bereft of any significant competitive product outside of the LX/LY cars, the Ram trucks and maybe the 200, so filling out most of the line with rebadged Fiats wouldn't exactly be making things worse.
 
Ah if only Iaccoca had put aside his differences and chose Lutz over Eaton.
 
You must log in or register to reply here.
Top