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Jim Press: Chrysler 'viable' by spring, but profit still too far off to gauge

 
3 987 views Jan 27, 2009

Chrysler's case is in many ways an exemplar of the rehabilitation of the U.S. and global auto industry

Chrysler's case is in many ways an exemplar of the rehabilitation of the U.S. and global auto industry

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The recently announced alliance to be forged with Fiat notwithstanding, Chrysler's current position in the market is regarded as precarious by buyers and analysts alike. Vice Chairman Jim Press is more optimistic, however, stating that Chrysler will be 'viable' during the first half of the year.

He carefully defines viability as the ability to avoid bankruptcy and develop new products, reports MSNBC, but he cautions that profitability is still too far off to predict.

The viability claim - definitionally tenuous though it may be - rests on an assumption of just 10 million cars being sold in the U.S. in 2009. That's a fairly low-ball estimate by anyone's standards, and therefore lends some hope to those that would like to see Chrysler succeed. And at this point, the whole industry is rooting for every participant, because a failure of a single major carmaker could have repercussions throughout the supply chain, and around the globe.

Bright spots in Chrysler's current market situation include a 10.1% market share as of January 22, the company's highest in months. That despite sales plummeting as much as 53% in December.

The sales fall-offs have led to equivalent production cuts, with Chrysler falling behind Toyota in North American vehicle production for the first time ever due to a 50.8% draw down in output on the continent.

The recent tie-up with Fiat is expected to yield a bevy of efficient and attractive new products for Chrysler, but that will take at least two years to get up to full speed. In the mean time, Chrysler will have to forge ahead with its own restructuring and product plan.



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Comments (3)

  1. ma_NoNameDenton avatar NoNameDenton Posted: 1/27/2009 1:34pm PST

    Better viable then on the brink of collapse, gonna be awhile till Fiat's cars will help with profitablility
     
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  2. ma_Roy avatar Roy Posted: 1/27/2009 2:41pm PST

    Have we fixed the unions yet? No. We have a choice. We can either fix the unions now and try to re-establish the US car market as a competitive industry or we let the market fix the unions later, with disasterous consequences for our car industry.
    Non-unionized auto manufacturing is already bigger in this country than unionized auto manufacturing. It's only a matter of time before it wipes unionized manufacturing out. The question is do we want to wait that time and allow the domestic US car manufacturers to go down the plughole?
    It's a simple question and I'd point out that we shouldn't listen to the unions for the answer because they're too wrapped up in their own self-preservation, even if it costs everyone money, jobs and retirement funds. And those bloodsucking leeches take 1% of all the salaries for administration.
     
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  3. ma_NoNameDenton avatar NoNameDenton Posted: 1/27/2009 6:23pm PST

    You can not "fix" the unions, they will never give concessions they have too much infulence to hurt.
     
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