Maybe they won’t sell any car
Word was out a week or so ago that Chrysler LLC was killing the PT Cruiser convertible. But, according to the Wall Street Journal, the Home Depot cost cutter brought in to make Chrysler the end of Cerberus’ rainbow has now decided to can the entire PT Cruiser line-up. It will die at the end of the 2009 model year.
According to the newspaper, Chrysler is also contemplating taking Dodge entirely out of the passenger car business, leaving it only with trucks. The Jeep line-up would be refocused on off-road capable vehicles.
That shouldn’t be hard to do. At the rate Chrysler is going, they won’t have any passenger cars to sell.
So far, financial analysts seem impressed with Chrysler CEO Bob Nardelli’s moves, but analysts often confuse movement with progress. So far, Nardelli’s moves have boiled down to this: He hired several executives with experience working for other car companies, companies which had no difficulty in selling their products. He arranged a “me too” settlement with the UAW after GM did all the hard work. He then made a big announcement about how many jobs he was going to eliminate, just before the people holding those jobs voted on the UAW contract. And, he’s made it clear that he intends to downsize the dealer network and drop models the company is currently offering.
Nardelli may be clearing out the deadwood, but cutting losses is not the same thing as making a profit and Nardelli still has not announced how he intends to do that. Of course, he’s not required to let us in on that secret.
The whole thing, however, is becoming increasingly reminiscent of Nardelli’s tenure as CEO of Home Depot. When there, he cut costs by dumping employees, which made him a lot of enemies. But it didn’t make Home Depot any money. As its costs fell, so did its revenue. Customer service suffered and per store sales stagnated. So, they fired him.
It’s too soon to count Chrysler out. But, it’s not too soon to wonder whether Nardelli is capable of selling cars.
So far, he hasn’t tried.