Chrysler\'s Decade of Debacles: 2001-The

Chrysler's Decade Of Debacles: 2001-the Present

As early as 2003, Chrysler's obituary was being written by Jerry Flint of Forbes.com. According to his article "Chrysler's marketing mistakes," Chrysler had done considerable damage to the reputation of its brand for quality in an effort to make short-term profits. As more automobile companies made encroachments into the high-end SUV market, threatening to outpace Chrysler's Jeep brand, Chrysler began to market cheaper cars "some with anemic four-cylinder engines" to make inroads into the demographic of budget-conscious consumers who still wanted to purchase a large vehicle (Flint 2003). Although sales were initially brisk, when the brand's lack of quality became evident, Chrysler suffered. Chrysler had invented both the Jeep and the minivan, classic American cars, but had failed to change with the times (Rutenberg & Vlasic 2009)

Some trace Chrysler's problems back even farther, to when Daimler acquired the company. During the 1990s, "Chrysler had carved an enviable niche for itself in the home market; a powerful base in economy and light truck manufacture -- and highly innovative models, like the striking and ridiculously fast Viper, the first of the people carriers (and the best-selling in the U.S.), the Voyager, and recently the cultish PT Cruiser" (Smith 2001). However, even then, Chrysler was reputed to be in potential trouble, as it was neither as "well-managed nor so focused as Ford" and "lacking the sheer bulk and reach of General Motors" (Smith 2001). Chrysler remained tainted by the need to ask the government for a bailout in the 1980s, in many investors' minds, even though the public was buying Jeeps.

After Daimler failed miserably in its attempt to market Chrysler (using its eccentric but uncharismatic CEO as a spokesman in its 'Dr. Z' campaign became the paradigmatic example of 'how not to market a car' in recent American advertising history) the company passed into the hands of the Cerberus Capital Management. At the time of Cerberus' acquisition "almost three-quarters -- 73%" of prospective car buyers "said they were hesitant to put a Chrysler Group product on their shopping list" (Halliday 2007). Also, inventory had reached record highs: "Beginning in late 2005, the automaker ignored dealers' pleas to slow production and kept building more vehicles than the retailers could sell. Chrysler compounded the problem by producing a 'sales bank' of as many as 100,000 unassigned units not ordered by dealers or buyers" (Halliday 2007).

After being acquired by Cerberus, Chrysler was beset by the same problems as the other American car companies: gas prices escalated, scaring people away from buying large vehicles. Chrysler, unlike Ford with its Focus, had no popular, fuel-efficient cars. In fact, even after the first government bailout, "Chrysler's big reveal at the International Auto Show was a new Jeep Grand Cherokee. Not what the government wants the company to be spending time and bailout money on" (Gap, 2009, Key Splash Creative). As GM was planning a new line of cars, and formulating a prospective electric car, the Volt. Chrysler remained out of touch.