Worried About Chrysler? Short Term: Yes.....Long Term: No

Implications: Liquidity concerns for all U.S. automakers have risen as sales drop and credit issues rise. What's in store for Chrysler?

Analysis: With too many dealers, too many plants, too many people and making the wrong product at the wrong time, the short-term prospects for Chrysler are not good.

Nearly 70% of the line-up is made up of trucks, and of those, the majority are large body-on-frame pickups and SUVs. Sales of these types of vehicle have plummeted. But this is not unique to Chrysler, as the rest of the industry has been facing similar drops in the segment as fuel prices skyrocket.

What is more troubling for Chrysler is the fall in its passenger car sales. The company's cars are simply not resonating with consumers. Sales of the Sebring sedan are down 16% for the year, while sales of the Charger fell 7.8% and those of the aging 300 sedan declined a full 30% in the first five months of the year.

With all forecasters predicting the worst auto sales year in decades and an economic slump expected to last throughout the rest of this year, there simply is no other way to put it: Chrysler is in serious trouble.

In addition to the drop in sales, Chrysler CEO Bob Nardelli's efforts to instill a GE-like corporate culture at Chrysler have yet to produce anything other than a stream of departures of talented personnel. Whether or not the system will successfully translate to an automaker is yet to be seen, but the more pressing question is simply whether or not Chrysler has enough time to try it.

With new products that might help Chrysler turn around its fortunes  still nearly two years away, one cannot help but think that Cerberus amy soon be looking at its options for Chrysler.

If the private equity owner decides to break up the company most analysts feel there is high inherent value in the troubled automaker. If they go ahead with the break up, I am convinced Cerberus will make a lot of money on the transaction. In the process, Chrysler may get broken up into pieces in order to keep the constituents of its brands alive.

Long term Chrysler has what a lot of people want. There is brand-particularly Jeep-and technology, design capability and U.S.-based, dollar-based capacity that can hit the market relatively quickly.

I think the company is going to get through this time, but it will probably be smaller with less products, but Chrysler will not go away.