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Did Daimler Really Screw Chrysler?

According to an article by BusinessWeek, ex-Chrysler chief Lee Iacocca stated that, "Daimler screwed Chrysler royally" in the nine years that it owned Chrysler. According to Iacocca the recent sale of Chrysler to Cerberus Capital Management was out of desperation.

Iacocca claims that before Daimler acquired Chrysler in 1998, Chrysler was profitable due to their minivans, the Jeep Grand Cherokee and the Dodge Ram. Chrysler was the lowest-cost producer and the most profitable car company in the world, but now it is all but ruined.

"It took Daimler less than a decade to drive Chrysler off a cliff."

He also questions whether Cerberus is suitable to run the company and turn it around. This is the first time that an American automaker has been owned by a private firm.

"The biggest fear that people have about private equity firms like Cerberus is that their basic goal is to "strip and flip." That is, buy ailing companies on the cheap; "restructure" them by slashing costs, jobs, and benefits; then resell them for a big profit."

Can we really blame Daimler for all of the problems? Surely Chrysler is responsible for some of the problems as well?

Full Story: BusinessWeek

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Comments (6)

Snake:

We *can* probably blame Daimler for doing just about NOTHING *with* Chrysler.

Every Chrysler vehicle introduced since Daimler, with the exception of the 300, has been a bomb - a wishy-washy, miss the demographic BOMB.

At LEAST the "original" Chrysler was just that - ORIGINAL. Love them or hate them, their vehicles where unlike the competition. Daimler should have continued that and brough in *better* products, not more watered-down ones.

Better quality interiors, better construction quality, updates of market-dividing designs (minivans, PT Cruiser)...but no, Daimler did just about nothing to keep Chrysler moving. The Crossfire was a dud - why? Cheap interior and fittings. And Chrysler's SUV is too little, (way) too late in a dying SUV market.

Jim Lam:

The Chrysler management had autonomy and access to many of Daimler's parts bins. The Crossfire was based on the first generation Mercedes SLK and was a dud because Chrysler opted to integrate a cheap interior into the car.

Stop blaming Daimler for Chysler's failures. Daimler thought that Chrysler management could actually run the American arm of Daimler Chrysler. They were wrong. If you want to blame Daimler for anything, it would be the ill-conceived purchase of Chrysler in the first place.

As for Lee Iacocca's comments about royally screwing Chrysler, I'm actually impressed that Daimler spent XX billions of dollars to ruin a company. If Chrysler really is going down the tubes, we should thank Daimler for throwing out the garbage on their dime.

Snake:

With respect, you are saying that after spending BILLIONS in acquiring Chrysler, Daimler would do **nothing** to help, control, or assure that it's investment was worth it by completely keeping their hands off and allowing Chrysler's management complete and utter control?

For a full decade??

If you did, I am sure that it would be a worldwide corporate first!

Jim Lam:

With respect, I am saying that Daimler purchased Chrysler, gave them access to their parts bin (including full chassis'), and Chrysler still mucked up THEIR line of vehicles. If you're saying Chrysler should have been micro-managed by German management, so be it.

mykel toliver:

chrysler shouldn't have sold the rights to the Truck end of dodge. Every dodge truck with an automatic transmission was incapacitated at 50-75000 miles due to "luxury car" transmissions and horribly installed drivetrains. the trucks daimler put out were yes, powerful, but nowhere near reliable. The only dodge vehicles that could clear 100,000 miles without a new transmission were the 6 speed cummins.

Luke:

There were a lot of stuff that Benz wouldn't allow Chrysler to sell, like the ME-Four Twelve. I wouldn't be surprised if MB just took all of Chrysler's profits and gave them little to make anything vehicle wise.

I wouldn't be surprised if it was also to help cut MB costs in their own devision. Get part costs lowered by only letting Chrysler use MB crappy transmissions, selling that crap Crossfire, and building the 300/Charger on a MB frame.


In the time that Diamler had Chrysler, all they did was leave them with a new line of cars which was nice of them. Basically when they were leaving and left, everything on Chrylser's lines has recieved a make over or is totally new and I think that Diamler was trying to grab some credit for that before they left.

Their own cars in general are just a POS anyways and tried to ruin Chrysler.
With the 300/Charger, Challenger, New Avenger, New Dakota, New Ram, New Caravan, and if the Hornet gets released, Chrysler should be well off. Just get rid of some redundant vehicles and turn the Chrysler division into a true luxery division.

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