Chrysler's Product Cupboard Is Shockingly Bare
November 05, 2007
By Bill Visnic
Barely a week after the United Auto Workers ratified a new four-year labor agreement with Chrysler LLC, its top executives let fly with the facts of life under new hedge-fund owner Cerberus Capital Management: assembly-plant shifts will be cut, several lame-selling models will be axed almost immediately -- and as a result, as many as 10,000 more hourly jobs will fall by the wayside in 2008.
This shoe drops after the already deep cuts announced in February's Recovery and Transformation Plan, pre-Cerberus, when Chrysler still was owned by Daimler AG. Chrysler confirms the discontinuance of four models, but there are almost assuredly more to follow, as the new management team and Cerberus begin to understand the product cupboard is shockingly bare.
Where does this leave the new Chrysler's North American manufacturing base, and the products -- current and future -- built by this company that is shedding assembly capacity and products at a pace unprecedented by "old Detroit" standards? Here's our analysis of Chrysler's 14 North American assembly plants and the prognosis for the products they either currently build or might be building in the future:
Belvidere, Illinois
Currently producing: Dodge Caliber, Jeep Compass and Patriot compact cars
UAW workers: 3,815
Outlook:
Belvidere is losing its third shift in the first quarter of '08 -- not a minute too soon, as sales of these initially hot models have slowed. There's no shame in two shifts, but these models have quickly tired in the market, and have problems that must be addressed: conspicuously "costed" interiors, underwhelming powertrains further blunted by porky curb weights and, for the Jeep variants, questions about their entire raison d'etre 
from sources as high as new Vice Chairman Jim Press.
These compacts need help and need it fast -- the segment is filling with tough new competition, while the existing Honda Civic and Mazda3, to name two, seem brazenly better-engineered. That this is one of Chrysler's more-competitive products and facilities didn't sway Cerberus to make a product commitment past the current lifecycle of this iteration.
Grade: B-
Brampton, Ontario, Canada
Currently producing: Chrysler 300, Dodge Magnum, Dodge Charger; coming in 2008: Dodge Challenger
CAW workers: 4,200
Outlook:
Chrysler might not be here today if it weren't for a few billion bucks from Daimler -- and the 300, which resuscitated consumers' appetite for fullsize American cars when launched in 2004.
Nonetheless, a shift's being cut as well at Brampton, for a long while the garden spot of Chrysler's assembly-plant world. The Magnum is being cut, next year's Challenger is being deliberately (and wisely) limited to 5,000 units, and although the 300 still looks good, after four years, the visual wallop has diminished, and sales are off by double digits. Two shifts will remain as the plant anticipates the replacement for its current success story.
The next generation of Chrysler's rear-drive full-size platform, LY, has some large shoes to fill -- and it presumably will have to be done without the leftovers from the Mercedes parts bin that engineers so artfully leveraged for the current 300 and its variants. We've seen what Chrysler does when left to its own devices: the Sebring. So a hefty part of Chrysler's product-development credibility hinges on whether LY can be as good -- and look as good -- as today's Mercedes-derived LXs.
Grade: B
Conner Ave., Detroit
Currently producing: Viper SRT and its hand-built, 8.4-liter V10
UAW workers: 115
Outlook:
The Viper's almost surely dead -- the company wants to close this low-volume operation, and in the new 
labor agreement would not commit to any new product for Conner Ave.
We think Chrysler may be waffling about the Viper because it knows this is one of its few products that gets enthusiast blood flowing, so there could be reluctance to confirm its demise.
But aside from its ability to capture magazine covers -- an attribute creator Bob Lutz insisted was worth the cost of developing and building it -- the Viper's a money loser. It's unlikely the right-brain Wall Streeters at Cerberus will let emotion prevail in the decision whether to keep the Viper nameplate alive; either way, it appears this nifty operation is marked for termination.
Grade: F
Jefferson North, Detroit
Currently producing: Jeep Grand Cherokee, Commander
UAW workers: 2,400
Outlook:
The Grand Cheroke
Posted by Michelle Krebs at 12:00 PM under Analysis , Chrysler , Featured | Comments (14) | digg this | Seed Newsvine
Excellent analytical article that helps flesh out Chryslers future. What is really surprising is that Chrsylers newest cars - Caliber and Sebring are just so bad compared to not just new models (Accord and Malibu) but against models they should have been bench marked against (Mazda 3, Camry etc). Chrysler look pretty weak at the moment with no significant hybrids, small or mid size cars or crossovers.
Posted by: Guy Atherton | November 02, 2007 at 8:06 AM
Scary stuff. The Wrangler, the Caravan, Ram Trucks, and maybe the 300C. That's Chrysler these days. Some people have mentioned the Harley-Davidson model for recovery, but that means more of a boutique manufacturer - not real volumes. Plus, with the new tougher EPA MPG standards to come down the pike, even that scenario is looking less likely. Unless the new Ram, 300C, and PT Cruiser (they better replace it!) are big hits, I think it's the end of the line.
Posted by: Double Wishbone | November 02, 2007 at 1:04 PM
Wow, that is depressing. That is quite possibly the least competitive product portfolio for the modern market that I've seen. Daimler really did horrible things to Chrysler. It would be nice if they could just clean out the fridge and start fresh, but that isn't really possible. New product development needs to be working triple time if Chrysler wants to survive. Compared to GM and Ford, it doesn't look good.
Posted by: Tyler | November 02, 2007 at 1:59 PM
keep the viper alive dodge needs to compete with chevy corvette without the viper dodge has no sportscar ken schobert 1996 gts dodge viper love it
Posted by: ken | November 02, 2007 at 6:49 PM
I say put the Viper on 'pause'. Concentrate the engineering talent on getting the core products back in focus. And how about a swap with VW? Ship the Grand Voyagers to the EU, reload the boat with Seat Alteas & Salsas for the US. (Seat is a division of Volkswagen Auto Group-see www.seat.co.uk/ ). These are OK small cars that I think might do well vs the Yaris/Aveo/Scion/Versa segment; A place, I think, where Chrysler should get to quickly. I am not a production engineer, but it seems to me that between Chrysler and VAG they could get a deal worked out, tweak the cars for our DOT/EPA for lot less money and time than Chrysler alone starting with a blank computer screen. VAG could possibly brand a model under the Rabbit.
Posted by: fulcrumb | November 02, 2007 at 10:11 PM
I just saw the interior shots and exterior shots of the Journey. It looks fairly competitive with Kia. And Geeley.
The top tier of the American market is getting crowded. Perhaps Dodge should indeed aim low. As Hyundai moves upmarket and even Ford and Chevy drifting that way, why not compete at the bottom against Kia and the inevitable Chinese imports?
Dodge doesn't have one-up against Honda, Toyota, GM, or Nissan, but their superior dealer network and superior quality (relative to Chinese makes) would make them a formidable competitor against Geeley and the like.
I'm only half-joking about this. Cerberus should really consider the bargain basement niche.
Posted by: ThriftyTechie | November 03, 2007 at 4:44 PM
HOLY CRAP! ARE you freakin kidding me? the dodge viper...dead. I swear i will die if that happens.i've been dreaming of owning a dodge viper sice i was seven years old.i haven't even made it to college yet.And all of those dreams now all of the sudden don't matter anymore.I spend on an average of 1 1/2 hours a day looking up vipers on the internet.I'll admit that i'm obsessed with vipers and why am i obsessed ? hmmmm...this is a hard task.Maybe because it;s practically the most hard core sports car out there, there's none of that gay sissy nanny electronic crap, it's basically the only real "stick it to the man" kind of car nowadays and BELIVE me I can go on and on about this car.And not to mention all of the jobs that will be lost. So will advise chrysler to not end the dodge viper production.Or at do what that other guy said to do about it and, " put the Viper on 'pause'".
Posted by: Carter Morris | November 03, 2007 at 5:03 PM
As much as I'd hate to see the Viper go, I can understand why it might. This is a niche vehicle, and they never sell enough to make them viable over a long period of time. I'm actually surprised it hasn't been dropped already.
The Jeep brand really needs to trim the fat and get back to basics. It really only needs about 3 or 4 models to remain viable, as long as they are made the best they can be, and focused on Jeep's mission of building rugged, die-hard off-road vehicles. It doesn't need to be a "somethng for everyone" brand.
The rest of Chrysler's portfolio really is shabby. The only one of their usual big sellers that is all-new is the Minivan. The LX cars are slipping and due for a significant freshening already. The only one that has been is being axed soon. The truck line is also due for a redesign. The Dakota looks better than it did, but the Ram is dated, and the Durango/Aspen need serious help: kill the Aspen and completely redesign the Durango to be competitive. The Sebring and Avenger are sorry excuses for mid-size cars. The cars they replaced were better! The Caliber/Patriot/Compass line just need to go away........yesterday. If Chrysler wants to compete in the small five-door hatch market, these are not the vehicles! I test drove a Compass when they came out only because I liked the looks of it better than the Caliber. It was slow, sluggish, noisy and cheaply made. These cars just plain suck!! The PT was one of the forerunners in this market, and has been left to languish unchanged for a decade. Now they want to drop it after next year???!!
As for their small car portfolio................(crickets chirping and owls hooting). This is perhaps the biggest and most significant market in the auto industry today. How is it possible that Chrysler has NOTHING to offer here??????!!!!!!!
Thank you Daimler/Benz for ruining a car Company that was on a healthy rebound and making some pretty decent vehicles before you got a hold of it. They may not have been perfect, but what's left is just plain pathetic.
Posted by: Eric | November 05, 2007 at 12:57 PM
As Chrysler goes so will Detroit.
Posted by: Mr Stone Face | November 05, 2007 at 4:04 PM
Great Article.
Posted by: Mr Stone Face | November 05, 2007 at 4:05 PM
Oh, and one more thing , why in the hell would they decide to end the viper's production right when they introduced the 2008.What a waste of time i mean seriously now that everybody's all hyped up about it and now they end production.
Posted by: Carter Morris | November 05, 2007 at 8:49 PM
Well, they're also doing the same thing with the Magnum. Just freshened the front end made it look a little better, and now it's gone. At least the Viper will probably be around for another year or two. They haven't officially killed it yet, and sound somewhat hesitant to do so. They may just decide that keeping it around if only for the headlines it grabs might just be worth the cost.
I can see their reasoning, though. The Company is in dire straights and losing money. The Viper by its nature isn't a huge seller, just a very expensive enthusiast car. It was great in the 90's when Chrysler was making money and seemed like it could do no wrong. Today, it's still an awesome car, buy not a money maker for the Company. It's just too expensive to be. I would rather see the Viper go away and have Chrysler build some dynamite performing and dynamite looking cars that I can actually afford to buy and drive.
Posted by: Eric | November 06, 2007 at 5:50 AM
I know this will enrage those who've dreamed of buying, but in reality will never be able to buy, a Viper, but expand the line downward with V8 versions, put it on a real production line and let it compete with Corvette in the $50K range as a money-maker.
Otherwise Chrysler needs to do what it did in the late '70's through the '80's when it last got caught with its pants down in the small car market--find a partner/supplier and rebadge like crazy (hello Fiat?). I knew a few people back then would would not otherwise set foot in a Chrysler or Dodge dealership except to buy those Mitsubishi transplants. At this point it would at least buy them time to help revive the rest of their business.
Posted by: jgorzelany | November 06, 2007 at 8:17 AM
In regard to your outlook of the Brampton, ON Canada facility, while I do agree that the 300 has played quite the majoirty role in it's contribution to sustaining Chrysler, I almost enitrely disagree and dispute the assertion that it was Daimler's billions of dollars spent in R&D of that vehicle. Remember the failed attempt of Kirk Kerkorian back in 1994 to take over Chrysler? One of the very few things that Bob Eaton ever did right was put $8 billion USD cash in the bank to reinforce a stronger defense from future takeovers. Unfortunately though, when Daimler-Benz approached him about Chrysler, he handed it to them, along with their $8 billion USD, rather than use those funds for what their original intended purpose was. In short, the only "synergy" that Chrysler ever benefited from Daimler was the rear axle design of the current LX that was "inspired" by a previous model E Class rear axle. Apparently, that "inspiration" costed $8 billions dollars. I would have considered it money better spent had it been a rear axle design from a real German car company...aka BMW.
Posted by: Matthew Ungaro | November 06, 2007 at 10:06 AM