Chrysler Would'a, Could'a, Should'a Been Like Toyota. Now It's Too Late

Implications: Lee Iacooca Restructured Chrysler just as he had restructured and saved Ford before that, and it worked for him and "the New Chrysler Corporation" again.  Juergen Schremp sang (to the melody from My Fair Lady)  "Why Can't A Chrysler Be More Like A Daimler" as he restructured the company to become an entry level vehicle maker for Daimler. That didn't work, because the agenda was never allowed to get off the ground, and it harmed both companies by drainig resources.   Finally John Snow who impusively bought Chrysler from Daimler hired Bob Nardelli to restructure Chrysler with the idea, at first, that Chrysler could be made over into a Home Depot for cars. Now, since he can't think of what else to do, Nardelli is hiring Toyota marketing people to make Chrysler look like a Home Depot that operates and has made for it cars such as those made by Toyota. It isn't going to work.   I hope the 2010 liquidators can unravel the mess and get some value out of the wreckage.

Analysis: In the mid-1980s a slumping and worried Ford Motor Company decided to buy 250 Toyota Camrys and disassemble them in a massive reverse engineering program to engineer a Taurus that was supposed to be better than, or at the very least, as good as, a Camry; Ford's engineers and designers were discouraged to discover that the whole Camry was greater than the sum of its parts. They could not duplicate its quality for the same cost. Although the Taurus was at first successful it ultimately failed, because Camry kept on evolving and Taurus didn't. Ford ultimately took the money it earned during the heady days when Taurus was the best selling car in the US and wasted every cent of it on a growth by acquisition combined with a plan for a totally recyclable car. This program did in the Ford Motor Company, because it used up the money that would have allowed Ford to engineer future generations of cars and green power trains. Ford will not recover from this senseless waste of its capital, and will either fade away or be sold, probably, piecemeal.

Chrysler was once considered  the best of the big three at engineering. By the time it hired Lee Iacocca in the late 1970s the company was moribund. Iacocca used his connections to get a Federal 'bailout' and, with the money, he had designed a car series, the 'K' cars that sold very well and brought Chrysler back into the black, able to pay off its government loan, and make money.

Iacocca's successors soon found themselves back in the soup and cooperated with, and probably coerced Daimler, into the ultimate bailout, a merger. The acquisition of Chrysler by Daimler was cynically labeled a 'merger of equals' by an arrogant Juergen Schremp, but it was just a takeover and more over it was clear that Daimler had no interest in the ideas or even the designs of Chrysler's Americans. Their function was only to say, "Jawohl!"

A mustachioed German manager, Doctor (A lawyer called by the German courtesy title of 'doctor' based on his academic degree) Dieter Zietsche,  allowed some popular Chrysler programs, such as the PT Cruiser and the 300, to come to fruition and, as to the rest, simply pasted band-aids on Chrysler's worst problems and as soon as Chrysler had a couple of profitable quarters was summoned back to the Wolf's Lair to take command of Daimler from a fallen Juergen Schremp who had lost so many Deutsche Marks that the Board of Daimler sent him packing.

Doctor Zietsche, operating on the greater fool theory, soon found that John Snow of Cerberus Capital was not too tightly attached to his capital and soon convinced him that all that was needed was yet another restructuring. Apparently Snow felt that stale designs, commoditized brands, engineering mediocrity, and powerful competition could be overcome by simply getting rid of the UAW and closing some plants.

Snow seems also to have thought that outsourcing everything would enable him to structure Chrysler as a Home Depot making money by selling 'store' brands made by others ultimately with no input from Chrysler other than a financial one. This might once have worked in emerging countries; it will not work in the USA, and it is too late for the emerging economies as Tata and Chery mover ahead with too much capital and too much head start on Bob Nardelli. 

Chrysler is just about over; it may even predecease Ford, although the two companies are in a fierce race for the bottom of the American heap.

GM, and to be fair, Toyota have small cars, diesel engines, hybrids, battery powered cars, fuel cell powered cars and immense research and development and advanced engineering complexes. These two, along with Renault-Nissan, Honda, and VW are now the world's OEM automotive powerhouses. They cannot be imitated only admired by the mismanagers of today and the recent past who destroyed any hope for survival in the top tier of Ford or Chrysler.