The Sad State of Chrysler: Quick, somebody shine the Iacocca Signal!

“If you can find a better car, buy it!”

That one cocky phrase, uttered by CEO Lee Iacocca in the quintessential domestic car commercial of the 1980’s (advertising the much-loathed Chrysler “K” cars) paved the way to industry canonization for one of the last great, hard-nosed, “my-way-or-the-highway” Detroit auto executives.

Iacocca himself, and not the car - and CERTAINLY not Chrysler - lent the only measure of credibility to this bold but now-laughable television spot.



This was the man who took on the staggering challenge of averting Chrysler’s impending bankruptcy after he was unceremoniously fired from the Ford Motor Company he helped save twenty years earlier, the man who introduced the least expensive new car sold in America (in years…the aforementioned K-Car), the man who paid back the U.S. government’s bail-out loans seven years early, and the man who transformed Chrysler into a modern, efficient car company which ultimately became irresistible to Germany’s Daimler-Benz.



And just like that, in 1992, he was gone. Retirement from four decades in the car business was surely deserved, and with the company in the capable hands of people like Robert Lutz, who could blame him?

“Merger of Equals”



Despite the PR campaign at the time, Daimler-Benz’s acquisition of Chrysler was not, in fact, any sort of a merger. More akin to a hostile takeover, the massive German conglomerate saw an immediate opportunity to go “mainstream” in North America via one large purchase rather than suffer the trials and tribulations of introducing an all-new vehicle line and developing a dealer network, or by expanding (and cheapening) their lauded (and profitable) Mercedes-Benz brand.

Most of the Chrysler executives were caught off-guard as the two companies worked out the details, and Chrysler’s only senior manager who could speak and understand German – the aforementioned Bob Lutz – was excluded entirely from the highest level meetings.

Before long, however, things started going well and some synergy was realized. As worldwide sales of Daimler’s Mercedes-Benz division hit all-time lows, the entire corporation (now called Daimler-Chrysler) survived on the North American sales success of the highly-profitable Chrysler 300 (profitable largely because of sunk-cost development made possible by the car’s previous-generation Mercedes E-Class underpinnings). By 2005, Chrysler had announced plans to produce a throwback muscle car (the Dodge Challenger) to compete with Ford’s retro-themed Mustang and GM’s revived Chevy Camaro.



Build them and they will…pile up on dealer’s lots???

Corporate blinders – the classic fashion faux pas of the Motor City – are always a sure-fire recipe for trouble in the car business, but they were apparently too tempting for Daimler-Chrysler executives not to wear in 2006.

As the winds of change blew in the North American new vehicle market, cooling the sales of the company’s lucrative LH cars (the Chrysler 300, and the Dodge Charger and Magnum), Chrysler’s decision makers ignored the situation and refused to cut production in fear of a shareholder backlash.

Spirited production levels always show corporate health, anyway, and who was Chrysler to bear the bad news of a slowing auto market to Wall Street?

In a move that wouldn’t have happened at Ford or GM since the 1970’s, Chrysler just kept building cars, filling up dealer lots and perplexing industry analysts to no end. And, of course, it wasn’t long before this house of cards came tumbling down:

Last Week’s Headline: “Daimler Considering Sale of Chrysler”

This Week’s Headline: “GM In Talks With Diamler – May Purchase Chrysler”

Today’s Headline: “Chinese Automakers May Be Interested In Chrysler”

Where have all the cowboys gone?

And now, as Chrysler flounders, its products sitting idly on showroom floors and its future uncertain, where is the leader – the executive – the man or the woman who will emerge, as Iacocca once did, to take decisive action and save this once-proud American company?

Alan Mulally is busy trying to make a few “bold moves” over at Ford. Ditto for Ford’s Mazda-saving Mark Fields. Nissan-savior and global-auto-industry-golden-boy Carlos Ghosn has probably lost interest in such big ideas (after his desires for a Nissan/Renault/Ford alliance were thwarted last year). The man who was once heir-apparent to Iacocca’s throne, “Maximum Bob” Lutz himself, seems content to spend the rest of his 7th decade on this planet working for his current employer, General Motors. And what of Chrysler division’s own Dr. Z (Dieter Zetsche), the German-accented, mustachioed executive who served as the company’s TV pitchman for exactly five minutes before being promoted to the position of parent-company CEO? Why he’s now the architect of Daimler’s presently-attempted divestiture of Chrysler!

There just aren’t that many Superstars left in the global auto industry these days. Ransom E. Olds is dead, and so are Henry Ford and William Durant. Hank the Deuce is gone, as is Ed Cole and John Z. DeLorean. Roger Smith and Donald Peterson may still be around, but who knows where? And Bill Ford, Jr. and Rick Wagoner seem more than happy to sit back and let others pilot their company’s turnarounds.

It looks as if Chrysler’s future may just depend on one man and one man only.



Quick, somebody shine the Iacocca Signal!