Chrysler Chairman Robert Eaton made news three weeks ago when he ordered $1 billion in capital spending cuts before the end of this year.
The move came in the wake of Chrysler's slow sales, down 7.3 percent through June, compared with an industry decline of 2.0 percent during the same period.
Eaton imposed a hiring freeze and restricted travel. But he said the cost-reduction program would not affect products in the pipeline.
Although the announcement got a lot of ink, Chrysler is adept at squeezing out cost while improving quality and developing new products.
This time, however, the manufacturer runs the risk of shooting itself in the proverbial foot.
If the budget cutters are let loose on Chrysler's marketing programs, they could jeopardize the best shot yet that the manufacturer has to create a flagship car.
Eaton also promised that product launches won't be affected by the cuts. Chrysler's marketing executives, no doubt, hope he means it.
But when Chrysler killed off the K cars, marketing staffers axed their marques - Acclaim, LeBaron, Shadow. Even the venerable New Yorker badge bit the dust.
So their replacements had no name recognition.
Chrysler has five new sedans coming to market in the next nine months. In order to give the second generation of new cars higher profiles and move the metal, Chrysler's sales staff will have to spend some money - lots of it - on advertising and marketing.
Often, when manufacturers want to reduce spending by a large amount in a little time, marketing feels the cold edge of the budget ax first.
Last November, Chrysler started a new corporate brand campaign, 'Great Cars. Great Trucks,' which is designed to build up to the launch of the new Chrysler Concorde and Dodge Intrepid this fall.
The Concorde and Intrepid will be followed next spring by the launch of the Chrysler LHS, the Eagle Vision and a new luxury, high-performance sedan, the Chrysler 300M.
Chrysler's sales and marketing executives readily acknowledge that they lack a flagship car like Ford's Taurus or Mercedes' S class, which symbolize their corporations.
Although the hot rod Prowler, which went on sale this month, will more than likely put a halo over Plymouth, it is from the five new sedans that Chrysler executives expect their flagship car to emerge.
But that will be difficult if the ax wielders cut Chrysler's marketing budget.
Frank S. Washington welcomes comments. He can be reached at (313) 446-0374 or via e-mail at [email protected]