What' Happening to Daimler-Chrysler?

Recent news of huge losses, and the phase-out of the PLYMOUTH brand have made me curious about the (former) Chrysler Motor Co. To begin: before M-B bought them, they were (supposedly) the most profitable US car mfg. (on a profit/vehicle basis). Now, they are drowning in red ink!
Now to the really weird thing: last week, I was driving on Rt.2, about 45 miles west of Boston. I spotted a new Dodge “Neon”, which looked a bit different-on the back, it had the lettrs “ACR”, so I got curious. I pulled up behind the car (which was being driven by a gorgeous blonde), and noticed something very strange-this car had no Dodge/Chrysler badges-instead it carried the Mercedes-Benz “3-pointed star”! I wonder if M-B isn’t trying to turn chrysler into M-B? But why put the exclusive M-B badge on a crappy little car like the Neon?
Anybody in Detroit know what M-B has planned?

I don’t know whether D-C is going insolvent, but I’ve noticed these things as well.

To start with, that’s cool about the Mercedes Neon! I’ve seen a Chrysler Neon, and noted that for its oddness.

An article in Popular Science last year pointed to the cost of advertising and a steady decline in sales for what were basically the same cars as the reason for the end of Plymouth (although specific models with selling power, such as the Voyager, were supposed to stay for another year or two.

Another point: Dodge (in particular) has had a pretty extended offering of 0.9 financing on new cars, financed directly through D-C, which in light of your question, seems to point to the need for capital ASAP.

I think the recent losses are due to two things: (1)The guys at Mercedes-Benz have no clue how to run an American company, and (2)Quality-wise, Chrysler has always had a spotty reputation.

As for what D-C is doing now, they’re planning on closing plants. Supposedly the Jeep Wrangler is going to get the axe, and rumors say that they might chop the Dodge Neon too. They’re also going to consolidate their two Mexican plants into one. There may be more closings and layoffs that they haven’t announced yet.

BTW, as for the reason for putting the M name on a Neon, they may just be gearing up for BMW re-release of the Mini.

ACR is the American Club Racer version of the Neon. It has a track-tuned suspension setup and handles REALLY well for a little econo-car. I think it has a little more power than your basic Neon too. As for the M-B symbol, maybe that person just stuck it on there? I’ve never seen anything like that. Its like all the Hondas you see with the “Type-R” stickers, they don’t come that way, people just stick them on there to make other people think they have some limited edition model or something. The only legit “Type R” in the U.S. is the Acura Integra Type R and they are pretty rare.

Seems like something like this would bring me out of lurk mode and into posting mode. I am a neon owner and like was said, ACR stands for American Club Racer and comes with a stronger engine, and better suspension. They do not come from the factory with those badges on them, they will either be Dodge, Plymouth (not after this year) or Chrysler (overseas). And I have heard the reason Daimler-Chrysler is not doing very well is because Daimler is charging Chrysler for R&D on Mercedes parts. I don’t know many details, maybe somebody could clarify for me.

They did a 60 minutes on D-C. From what I remember, most of the top Chrysler guys are gone, Daimler’s basically taking over, and the shareholders are up in arms because the deal is turning out to be more of a takeover by Daimler than a merger, which is what it was billed as. The CEO of Chrysler (Dieter Zetsche) is from what was formerly Daimler-Benz.

What I’ve heard (admittedly second-hand through various car magazine editorials) boils down to this:

[Short Answer]
Daimler-Chrysler is currently run by arrogant imbeciles.

[Long Answer]
Daimler took over a profitable company (Chrysler) and fired all the people who were making it profitable. Little else has been done to consolidate the two organizations. According to some sources, Chrysler people still working for D-M have been trying to suggest ways of realizing savings while improving quality, but the German management does nothing. Daimler, having installed their own management, further confounds the experts by ignoring one of the better means of reducing costs: platform sharing.

Example: Ford realizes savings by basing the Lincoln LS and Jaguar S-type and the upcoming Thunderbird on the same platform. Results: they develop three cars for only a little more than it costs to develop just one new car, and in less time. GM builds the new Saab 9-5 on a platform shared with Opel, Saturn, and Cadillac. I forget the opel platform – is it the the Vectra? Saturn’s L-series and the Cadillac Catera are also based on the same platform (personally, I’d like to see them built on the V-8 powered Holden platform). GM has more cars to sell and saves bucks.

D-C has done no such thing. As far as I can tell, they believe no-one would buy a Mercedes if they knew the next 300M might be built on the same platform, so no-go for sharing platforms. It seems to me that this “merger” will end up like the one where BMW bought Rover (another disaster) and finally wound up selling it. Of course, BMW did manage to salvage the new Mini, but that’s like saving the toaster when your house burns down.


I thought it was just the Cherokee they were discontinuing. They introduced the Liberty, but I don’t think it was intended to replace the Wrangler. D-C may not know what they’re doing with Chrysler, but I don’t think they would be stupid enough to discontinue a product as popular as the Wrangler.

Out of curiosity, wasn’t there a ‘companion’ vehicle to the Neon when it was under the Plymouth name? I think it was something like Breeze.

Kirk Kerkorian does have a Lawsuit filed, allegeing that the stockholders were intentionally misled about the “Friendly Merger”. Could be fun.

*Originally posted by Jeep’s Phoenix *

Yep, the Liberty was designed to replace the Cherokee but the way I heard it the Liberty will be sold alongside the Cherokee for a while simply because the Cherokee tooling has been paid off since sometime in Reagan’s second term and every unit is pure profit for D-C. The Wrangler is selling like beer in the desert so D-C won’t discontinue it anytime soon.

To answer your question, the Breeze was a part of the Plymouth lineup in the late '90s. It was a sedan based on the Dodge Stratus/Chrysler Cirrus platform and therein was the problem.

Over the past 20 years Chrysler watered down the Plymouth brand by making Plymouths carbon copies of Chrysler’s other products. Since the local Chrysler dealer could put Plymouth customers in a Chrysler for a few bucks a month more, it was easier for them to sell more prestigious Chryslers and Plymouth suffered accordingly. Eventually, the corporation made Plymouth redundant.

Couple that with the D-C takeover. Once it became clear that the transaction was a takeover and not a merger, the Germans fired or kicked out the Chrysler guys who knew how to make good cars as well as lots of money. Since then, the Germans have made it clear that Chrysler is the untermenschen in the relationship. All of the Chrysler products are now badged as DaimlerChryslers but Mercedes products are still from Mercedes-Benz. It’s clear who the inferior is in the Germans’ view.

One of the ideas that has been floated is that Mercedes might sell Chrysler to its management in an attempt to avoid getting sucked into a morass the way BMW did with Rover. Hopefully it will happen before it’s too late.

Reminds me of a joke circulating in the automotive press shortly after the takeover:

Q: Is the new name pronounced “DamelerChrysler” or “DimelerChrysler?”

A: “Dimeler.” The Chrysler is silent.

Oh well, things ain’t what they used to be. . .



I’m still a little lost. The lack of platform sharing makes sense (as a source of non-synergies, that is). But Daimler was not regarded as having poor management prior to buying Chrysler. I seem to recall that they even got into trouble when they first tried to list ADRs on the NYSE because they took unusually large reserves, hiding how profitable they really were.

So what were they doing right at M-B that they messed up at Chrysler?

That’s funny.

Yet they’ve demonstrated that people will buy a Mercedes built in America. To me, that defeats the purpose of buying a Mercedes.

Ok, first the Plymouth form of Dodge Neon was the…Neon!

Now for the real post, Chrysler went to Daimler-Benz about a merger to expand their presence in Europe primarily, and Daimler has pretty much screwed them ever since.

Yet another reason for my personal dislike of Mercedes. (The main reason is that I’m a motorcyclist and I’ve noticed that in L.A. Mercedes drivers keep trying to kill me.)

I have a '99 Cherokee. The Cherokee sold more units than the Wrangler, and yet the Cherokee is being discontinued. Part of me says that the Cherokee has been virtually unchanged (at least when you look at them from the outside) since its introduction in 1984. That’s a long time. Maybe it’s time for it to go? On the other hand, why mess with success? I see a lot of older Cherokees on my morning commute. A mechanic told me that the Cherokee engine and drivetrain are “bulletproof”, but cosmetic items and non-engine/d-t problems drive people nuts. (In my case it’s the computer-controlled vent flap – AKA “blend door”. What’s wrong with a cable?)

Although the Cherokee outsold the Wrangler, D-C (sounds like a woman’s “procedure” if you abbreviate it that way) would be foolish to discontinue the Wrangler. People like “jeep” Jeeps. Since the Rover Defender (I think that’s the jeep-like one) is not being imported any more due to roll-over problems (Duh! People just have to learn how to drive off-road vehicles!), and since Toyota’s FJ-40 is long-gone, what’s left? The Wrangler! When you’ve got the market cornered, you don’t drop the product.

As for me, I like my Cherokee. I wouldn’t buy the mini-van-looking Grand Cherokee (older models still looked like a Jeep, but the new ones don’t). The M-B SUV entry looks more like a mini-van than an off-road vehicle.

I’m in the market for a '46 to '48 CJ2A. Now that was a Jeep!

I’m sure I read an article in the Detroit Free Press saying that they were considering killing the Wrangler because it’s so old. I agree that they’d have to be idiots to discontinue the Wrangler but, as Baloo pointed out, they are idiots so anything’s possible.

Diceman, according to [url=“http://www.auto.com/industry/jeep22_20001122.htm”[This Site Detroit Free Press Business Writer Lawrence Ulrich:

So: The Cherokee will be in production for about another 18 months; but since its size and price falls between the Cherokee and the Grand Cherokee, I have little doubt that the Cherokee will be replaced by the Liberty.

Nothing in the article says anything about replacing the Wrangler. At least not specifically.

If Deneau is taken at his word that “three quarters of [the] product line” will be replaced in the next few years, and since the article goes on to say that D-M expects to introduce a new version of the Grand Cherokee in 2003, does this mean that the Wrangler will be replaced? “Three quarters” would also include the Liberty. Maybe he meant half?

You’re right that the Wrangler is “old”. Old Jeeps have been replaced for decades. The first civilian model, the CJ-2A was sold alongside of, and replaced by, the CJ-3A and CJ-3B. That was replaced by the CJ-5, which had a production run of about 30 years. There was also a CJ-6 for a while. (This was a “stretched” CJ-5.) Then came the longer-wheelbased CJ-7 which was sold alongside of, and replaced by, the CJ-7 in an effort to introduce a vehicle that was (a little) harder to roll over. The CJ-8 was basically a re-introduction of the CJ-6, based on the CJ-7. Then came the Wrangler. It was more resistant to roll-over than the CJ-7 and had a more efficient engine. I never did care much for the Wrangler. I hated the rectangular headlights. Apparently other people were bugged by the headlights, because the Wrangler got the round ones back. Maybe they will retire the Wrangler in the next few years. But if they have any brains at all (which as this thread indicates is an issue that is in doubt), they will replace it with a new jeep-like Jeep: a small, soft-top off-road vehicle like its predecessors. Judging by the number of Jeep Wranglers (and the occasional CJ-7, rare CJ-5, and some DJ Postal Jeeps), there is a demand for this type of vehicle.

FWIW, the article said that Cherokees sold 117,582 last year, compared to the Wrangler’s 73,598. Not quite 2:1, but close enough for argument.

Fixing the vB:
This Site is the Detroit Free Press article.

I think you’ve got it with the Wrangler, Johnny. They’re probably going to be replacing it with another jeep-jeep. (as opposed to the SUV “jeeps”).

On a related note, Deiter Zeich(sp?) has said that he’ll be reducing Chrysler’s capacity. This means fewer plants running and fewer models of automobiles being made, right?

Breeze = Stratus
Neon = Neon