Not long after Daimler-Benz took over Chrysler Corp., Daimler sent two of its best and brightest to lead its new U.S. subsidiary.
CEO Dieter Zetsche and COO Wolfgang Bernhard are trying their best to fulfill the goals of the headquarters in Stuttgart, but obviously things are not working quite as planned.
The Chrysler group has a slew of inventory that must be sold. New models with a lot of German content and German engineering aren't being received as well as Chrysler had hoped. But Chrysler isn't the only automaker with that sort of problem.
One bright spot, though, is the U.S. dollar's erosion against the European euro. For DaimlerChrysler, that makes last week's announcement of a $1.2 billion second-quarter operating loss in North America much smaller than it would have been a year ago. If you're going to lose money in the United States, now is the time.
The success of the new Chrysler Pacifica is still a question. It appears that Chrysler in its quest for profits put far too much content and too high a price tag on the original units . That may explain why the Pacifica carries rebates after only a few months on the market.
Some of us remember an era not too long ago when Chrysler would keep producing cars and trucks even though it didn't have orders from its dealers. Chrysler, Dodge and Plymouth vehicles would be parked all over Detroit. Then the sales department would have the unenviable job of selling to dealers out of the "sales bank."
It's a tough time for the Big 3, and Chrysler probably is feeling the stress and the financial challenges the most.
Chrysler managers are doing as well as any Daimler-Benz people could do under the circumstances. They are taking some bold and brave chances with new products that will follow the Pacifica.
We've already seen some casualties in the executive ranks at Chrysler, and we'll probably see more.
Everyone always looks for a scapegoat.
But perhaps the man with the largest risk is Juergen Schrempp, CEO of DaimlerChrysler and the man who engineered the takeover.
Nearly five years later, his vision of a global car company hasn't produced the financial results that he thought were possible. The stock price has plummeted since the Chrysler takeover.
Chrysler and its marketing staff have their challenges. The products are in the pipeline, so Chrysler has dealt its own hand. It will be interesting to see how Chrysler does in this increasingly competitive marketplace.