Chrysler CEO paid price for poor product planning

[skylight]

DETROIT (AP) - Chrysler Group chief executive Dieter Zetsche says a weak offering of new vehicles was the main drag on profits in the past year, but he hopes to remedy that with 25 new or redesigned cars and trucks over the next few years.

Zetsche, speaking Wednesday night to a gathering of Wall Street analysts in conjunction with the North American International Auto Show, said he inherited a product pipeline with two or three annual vehicle launches when he took control of DaimlerChrysler's North American unit three years ago.

One of Zetsche's first tasks was to beef up that supply. This year Chrysler will introduce nine all-new or heavily redesigned vehicles.

"We're now clearly seeing the start of the harvest of the seeds we planted on the engineering side throughout the past three years," he said.

Chrysler's performance also has been hurt by an influx of competitors - new vehicles from Asian and European companies arriving in North American showrooms - and by a fierce pricing war with General Motors and Ford.

Chrysler lost $1.1 billion in the second quarter but is on track to reach a break-even profit target for 2003. The company earned $639 million in 2002 after losing $4.7 billion in 2001.

Zetsche said Chrysler was able to offset product deficiencies and resulting poor revenue for a while with heavy cost-cutting. He said the company has cut material costs by 15 per cent and fixed costs by 25 per cent since the turnaround effort started.

The company also reduced its head count from 127,000 to roughly 92,000.

"But this is basically defence," he said. "That's blocking and tackling. The offence, the revenue side, obviously we haven't been similarly successful."

Zetsche said he was encouraged by a slight U.S. market share gain for Chrysler in the fourth quarter of 2003, but for the year the company's share fell to 12.8 per cent, from 13.1 per cent in 2002. Chrysler's 2003 U.S. sales fell 3.5 per cent.

Business was helped late in the year by the Chrysler Pacifica sports tourer and the introduction of the Dodge Durango sport utility vehicle.

Among the new vehicles scheduled for 2004: the rear-wheel-drive Chrysler 300C sedan, which Zetsche has called the brand's flagship; a convertible version of the PT Cruiser; and a revamped minivan lineup.

[quicksilverdon]

Supposedly the new minivans will have 2 rows of seats that fold under floor - an industry first.

[therents]

That sounds great for the mini van and I have often wondered what took them so long to figure it out. I had a 1974 Plymouth Wagon that had a third facing rear seat and everyone of them folded perfectly flat into the floor. If they could do it back then, why has it taken Chrysler so long to do it in their vans. It seems like a no-brainer to me. They had better do something or..............

[quicksilverdon]

quote:Originally posted by therents

That sounds great for the mini van and I have often wondered what took them so long to figure it out. I had a 1974 Plymouth Wagon that had a third facing rear seat and everyone of them folded perfectly flat into the floor. If they could do it back then, why has it taken Chrysler so long to do it in their vans. It seems like a no-brainer to me. They had better do something or..............

Chrysler has offered the minivans with 4-wheel drive, and the front-to-rear driveshaft, gas tank, and spare storage needs combined to make under-floor room tight - dunno what their answer is now - no 4-wheel drive option?? [:I]

Also- in this month's Automobile magazine they "slammed" Chrysler marketing for poor ad campaigns and for introducing the Pacifica and Crossfile fully loaded inducing sticker shock, and cited the Celine Dione contract as a waste of money (duh!). [:0]

[therents]

This, If I remember right, was the same tactics that they used on the PT when they came out. All the press was saying what a great car it was for seventeen grand. Ya sure. I couldn't find one in this part of the country for under twenty one. It was only after every one that just had to have one regardless of price did the less expensive ones show up. I'm not in business, but perhaps this is the way it is supposed to be done. My two cents worth.

[quicksilverdon]

quote:Originally posted by therents

This, If I remember right, was the same tactics that they used on the PT when they came out. All the press was saying what a great car it was for seventeen grand. Ya sure. I couldn't find one in this part of the country for under twenty one. It was only after every one that just had to have one regardless of price did the less expensive ones show up. I'm not in business, but perhaps this is the way it is supposed to be done. My two cents worth.

That only works when it's a "hit". If it's a moderate seller, turns people off. The low price is a "come-on" to get you to see it - if it's too high, nobody goes to see it. If nobody goes to see it, you can't sell any.

[R.E.]

I don't think that was Chrysler tactics, but rather dealership tactics. I know when I seen one in a showroom (and naturally a salesman approached me) and commented on the price, he said that's just the "starting" price. Implying it would go to the highest bidder. Also I know a guy who had ordered one and waited for quite awhile for it to come in. When it did, the dealer didn't want to sell it for the agreed upon price, because he knew he could sell it fast and for more money.

[PT-ERA]

There should be a way to buy straight from the plant, and not have to go thru all of the dealer crap. Buy a car, get the warranty, drive home, manufacturer keeps the profit. That should get those shady dealers to play fair!

[bobs turbo pt]

i like what pt era said!!

[crazyjoe]

LMAO. Excuse me? The CEO paid the price for poor product planning? Where was his pay cut? Where was his pink slip to go along with the thousands of other workers DCX gave the boot?

The CEO is still out happily spouting BS about how great it was for D-B to take over Chrysler and how bad Chrysler was doing, but Chrysler had years of record profits and a huge cash reserve...and then D-B took over and suddenly they are on the verge of bankruptcy.