Originally Posted by Wall Street Journal

By MATHIAS KRUST and JOHN D. STOLL
November 10, 2006

The head of DaimlerChrysler AG's Chrysler Group is coming under increasing pressure to turn around the U.S. unit quickly, although the auto maker probably won't have a full-blown restructuring plan in place until the first quarter of next year, people familiar with the matter said.

For now, Chrysler chief Tom LaSorda appears to have the support of DaimlerChrysler Chief Executive Dieter Zetsche. But Mr. LaSorda's standing with the German auto maker's supervisory board -- the equivalent of a U.S. company's board of directors -- could weaken if Chrysler makes little progress toward profitability in the fourth quarter, these people said.

DaimlerChrysler expects its U.S. arm to come close to breaking even in the fourth quarter after reporting a €1.16 billion ($1.48 billion) third-quarter operating loss. But Chrysler faces an uphill climb. In October, the division's U.S. sales fell 3%. By comparison, sales at rivals General Motors Corp. and Ford Motor Co. rose 17% and 8%, respectively, last month.

Mr. LaSorda has told his management team at Chrysler's Auburn Hills, Mich., headquarters that his job and theirs are at stake in Chrysler's turnaround, people familiar with the matter said.

A DaimlerChrysler spokesman declined to comment and said Mr. LaSorda was unavailable.

All three of Detroit's auto makers are suffering from increasing competition from more cost-efficient auto makers like Toyota Motor Corp. and declining demand for the most profitable big pickup trucks and sport-utility vehicles.

Mr. Zetsche is supposed to outline at least the beginnings of a turnaround plan for Chrysler at a board meeting in December, and a team of executives from the company's Mercedes division are helping Mr. LaSorda identify ways to streamline Chrysler's operations.

One measure under consideration is the shuttering of a plant in Newark, Del., that makes a slow-selling Dodge SUV and operates only eight hours a day. But any plan to make major shifts in production and plant operations could take weeks to hammer out and may not be firm enough to seek the board's approval until sometime in early 2007, these people said.

"There is tremendous pressure on [Mr. LaSorda], but the whole thing about this recovery plan is that we're not going to be in a position to implement structural changes until the first quarter," a person close to Mr. LaSorda said. "There is a very intricate process being put into place, and that's going to take some time. We won't be able to tell you this quarter if there's going to be a plant that goes down. We won't know that until the first quarter."

Mr. LaSorda was a close lieutenant of Mr. Zetsche's when the latter executive was running Chrysler. When Mr. Zetsche was named CEO of the parent company last year, Mr. LaSorda was chosen as his successor at Chrysler, and the two men celebrated over champagne while flying back to Michigan from DaimlerChrysler's German headquarters.
Chrysler's third-quarter operating loss resulted from slumping sales, lower production and bloated inventories. Parent DaimlerChrysler remained profitable thanks to its Mercedes, truck and financial-services divisions.

For the past two months, Mr. LaSorda has been scrambling to increase sales and cut costs in hopes of staving off another loss in the fourth quarter.

In September, Mr. LaSorda traveled to eight U.S. cities to urge dealers to help the company by ordering from Chrysler's stockpile of unsold vehicles. So far, however, few dealers have stepped up ordering.

Chrysler also added heavy rebates to move the slowest-selling models in its lineup.

Originally Posted by guionM

Chrysler overproduced and forced the cars on their dealers with veiled threats to hold back allotments of hot models.

What do they expect the reaction is going to be when they fly around asking dealers to adsorb this excess after how they were treated?

Originally Posted by guionM

Probally went something like:
"if you want a bigger allotment of 300Cs and PT Cruisers, you need to order a few dozen more Sebring sedans & Dakotas.... and if you aren't pushing more loaded base V6 300s or V6 Dakotas to keep our CAFE numbers up, forget about getting an SRT8 or a convertible PT."

Originally Posted by RMC_SS_LDO

I'd be curious to see their overall numbers (their real numbers) on sales across the board.

I've been snooping at local dealers toying with the idea of a 300 SRT-8 (a tad more than I can afford for now). They have had a ton of them on the lots eating hay for over 7 months! If I could keep from getting raped on the trade and could actually get a good deal, I'd do it!

It just seems like the Mopars are stale across the board and the new stuff (Compass and Aspen leap to mind) are a huge swind-and-a-miss. They need to get their edge back and take chances with really fresh products like the LX cars were when released.