Monday, February 22, 2010

by Damien

chrysler_logo1

Another American icon files for Chapter 11 protection and edges closer to the cliff after creditors bailed at the last minute. I suspect concessions with the autoworker’s union had something to do with it.

The 85-year old company makes Dodges, Jeeps and Chryslers (duh). They’re as ubiquitous as lamp posts in the streets and parking lots of America.

The marque isn’t gone yet but it certainly will be if it fails to restructure under Chapter 11 in the following months.

Like a 3-legged stool, the US auto industry is held up by GM, Ford and Chrysler. They share the same suppliers down the line. If one leg goes, who knows when the supplier community will destabilise and pull the rug from under the other two. That’s how thin the ice is these days.

Personally, given what I know and putting aside my own sentiments about American cars, I think a bankruptcy will benefit Chrysler in the long run. You know how sometimes, nothing short of a near-death experience will make people change. As with General Motors, the comfort zone has stretched too deep and wide. As the world went by with smaller, greener and more cheaply produced cars, Chrysler and GM seemed content in their own little worlds.

Lesson to management and the unions: There is a price to pay when you insist on engaging with the world on your terms instead of the other way round.

So the party’s over. Its time to clean house. If Chrysler plays its cards right (and I hope it does), it’ll come back leaner, meaner and stronger.

Chrysler 300C SRT8. Source: www.cardotcom.com


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