Chrysler’s new CEO Robert “Big Bob” Nardelli, formerly of Home Depot, has started cutting costs at Chrysler. The first to go will be the popular PT Cruiser, says the WSJ.
Chrysler, which is facing sluggish U.S. sales because of housing-market weakness and high fuel prices, this month announced an expansion of a restructuring plan unveiled in February, saying it would cut its North American hourly work force almost in half by 2010. The company has also made several high-profile executive appointments since Cerberus took over.
Meantime, Chrysler executives have also now decided to kill the entire PT Cruiser line after the 2009 model year, according to a dealer who was told of the decision this past week. The move further expands the auto maker’s push to eliminate slower-selling models. Chrysler, in announcing the expanded restructuring this month, said that it was dropping the PT Cruiser convertible, Chrysler Pacifica, Chrysler Crossfire and Dodge Magnum.
Also in the works, a new plan that would eliminate all passenger vehicles from the Dodge and Jeep brands. With all these models being dropped, there could be some deals to be had.
Chrysler Considers Slashing Number of Car Dealers [WSJ]
(Photo:susiewrites)
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@catnapped: Seeing as how shamelessly running a company into the ground these days guarantees a bazillion dollar severance package, a book deal, and a high-level appointment in the White House, I’d say you’re onto something…
It amazes me that Nardelli keeps managing to find work. He sure must talk a big game…
@TWinter:
Isuzu seems to be surviving by doing that.
@chrispiss:
“Crossovers” have probably killed it.
People just have to INTIMIDATE WITH STYLE. Also, once people got over the OMGBADASSOLDSCHOOLWAGON!-ness of it, its shortcomings (visibility, small rear hatch, fuel economy, poor power/weight ratio on V6 models) became apparent.
Anyhow, if this results in Chrysler not putting anymore of their latest abortions on the road (Avenger, Sebring, Pseudojeeps, Caliber), good.
“Big Knob” killed customer service at HD during his reign – he will kill Chrysler now; just watch….
@swalve: yes! That was my primary purpose in buying the Magnum. Road-trip vehicle. We drove ours with a 18 month old child in the back seat and two weeks worth of gear in the back, from DC to Oklahoma to Texas and back to DC, with each leg straight through. The car is so comfortable, was no problem sleeping in the passengar seat and taking turns driving. And with the MDS in use during highway miles, the mileage isn’t really that bad considering you’re taking a V8 on a road trip – we averaged over 20mpg. It was the most comfortable road trip we’d ever had.
I’m sad to see them go, but as long as I can still get parts for mine (don’t get rid of the Charger please!) I’m keeping it.
@Hanke: Actually, the Pacifica is just a “crossover”-bodied version of the last-gen minivan. The Crossfire is based off the old-model Merc SLK, which is no longer in production, and besides, it’s made in Austria, so they’re getting murdered on the euro exchange rate. It’s been dead in the water sales-wise for some time now (they were flogging them on Overstock.com last year).
Even though the Magnum has a lot of Mercedes engineering in it, it’s being killed off due to poor sales; the 300 and Dodge Charger have the same platform, and they’re being kept on.
I hate that the Magnum is going away (and it just had a facelift) but sales for all four of these models are in the crapper – double-digit declines over last year’s figures. When you’re cleaning and filleting a company for resale to somebody else (hello Renault!) it makes sense to kill the weak and improve your balance sheet.
I love how WSJ assumes Chrysler is in the dumps “because of housing-market weakness and high fuel prices”. It couldn’t possibly have to do with the fact that the public simply has a plethora of better choices at similar price points–nooo, that’s impossible.
As an economics graduate, I don’t deny that housing and fuel issues/cost are factors, but somehow, despite these matters, cars continue to sell. It’s a matter of them not taking responsibility for poor design and manufacturing choices.
The 300 and the Magnum have similar price points and fuel economy ratings, yet the 300 continues to sell well. Why? It probably has to do with the fact that nobody wants a 93-foot-long station wagon that most of their friends find hideous.
In other words, thousands will be without work because somebody at Chrysler thought we needed another hard-to-park yacht.
Or maybe they’re out of work because they can’t afford their mortgage and gas.
Who the hell knows, what with all the paradoxes?
@Gilbert: Wow, I guess what they say is true about opinion and assholes is true.
There’s a whole lot of speculation and opinion in the above comments being dressed up as “known facts”. I won’t address most of it, but I would like to clarify a few things about the death of the Magnum. Firstly, yes it was built on the same platform as the 300 and Charger, and no, it is/was not a dressed down Mercedes. Second, sales numbers for it were not as good as Chrysler had hoped, but it was still selling reasonably well in some markets. Lastly, and most importantly, no one has lost thier job with the Magnum stopping production. In fact, the biggest reason for no longer building it was that they needed the production capacity to produce the new Challenger (built on the same platform). Chysler is banking on the Challenger being a big seller (rightly so) and could not keep up production of the Magnum along with three other models at the same factory without increasing infrastucture and other costs.
On a side note, though I will miss the Magnum, the Challenger will knock your socks off. Though I do feel that the US market has become to Asian car-ified to appreciate it.
@onrampofframp: Wow, I can’t even get a backhanded comment right. “… what they say about opinions and assholes is true.”