Chrysler To Ax Two Hybrid Models
by Andrew Posner, Providence, Rhode Island 
on 11.15.08
Detroit appears to be on the road to receiving a bailout of its own, and this story is just another example of why the Big Three are in so much trouble in the first place. According to the New York Times, "HYBRID versions of the Chrysler Aspen and Dodge Durango seem likely to secure a spot in automotive history: the two vehicles fell under the executioner’s ax in the same month they went on sale." Here's the real head-scratching part: "The hybrid S.U.V.’s became available at dealerships in early October. But on Oct. 23, Chrysler announced that at the end of the year it would close the Delaware plant where they are built." It gets worse.
So let's imagine you are Chrysler. You know that gas prices have been rising, as has the demand for smaller, more efficient vehicles. Toyota, Honda and other foreign manufacturers are taking away more and more of your market share. You have a plant in Newark, Delaware, that produces Dodge Durangos and Chrysler Aspens, and which you are planning on closing at the end of 2009. So what do you?
Well, Chrysler decided to begin producing hybrid version of both the Durango and the Aspen at the same plant--making a significant capital investment despite the fact that the plant, which is the only place making the new models, will soon be closed. As a result, even if the large hybrid vehicles were popular (and given the economic situation, that's unlikely) they would never have been able to produce enough of them to turn a profit.
When asked about the decision to build two new models at a plant about to close, a spokesperson for the company responded thusly: “Why not build them there, if we’ve got these large vehicles and they’re going to get better fuel economy by adding a hybrid?”
We've already noted that there needs to be a financial package to help public transportation around the country (as even the MTA in New York is facing a major budget deficit.) instead of a bailout for Detroit. But the nation is in a bailout mood and it seems likely Detroit will get the help it's seeking, so at the very lest, the bailout of the auto industry needs to get rid of the dodos who have been making these kinds of silly decisions over the last few decades while foreign competitors have had their lunch and eaten it too.
Via: ::NY Times
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Is the demand really there? If no one is buying the car, it's hard to justify keeping producing them.
I agree it's a shame to ax some eco-friendly models, but this may show that people aren't buying them.
An elbow in Joe Biden's ribs perhaps - to reinforce the bailout begging?
Demand weakness certainly should be a factor in product production decisions. However, the unique myopia displayed by Detroit has been their undoing. Might be time to think of these products as hedges against another hedge fund driven oil speculation rally or god forbid if we actually are at peak oil. The fact is the crushing cost of their unionized labor has boxed them in to having to chase short term profits just to stay alive and make what will probably be a bad decision in retrospect such as this one.
Obviously, Chrysler and it's shills never wanted these bastardized (read: improved) gas guzzlers to get any traction. Since profit margins couldn't compare to the good ole days, send them to an orphaned plant and hope nobody misses them.
Let the greenwashing fatcats fade away.
This post stops a little short of the whole story, which makes it sound like only the hybrids are being discontinued and that it's the end of Chrysler's hybrids.
ALL Durango and Aspens are being ceased when the plant closes, which includes the hybrids, and the hybrid system will be moved over to the Ram pickup line, which will continue to be produced.
The development and plan to build the hybrids began years ago under different management and different market conditions. The new team decided that given the declining demand, it is too expensive to keep the plant open any longer.
@ isny
Hybrid Aspens and Durangoes "eco-friendly"? Umm NO. That's like calling Taco Bell "authentic Mexican food"
Just from a PR standpoint this is a disaster. The vehicles that would show that someone at Chrysler is responding to the current situation are the ones they choose to axe. Clueless.
The fact that these Detroit car companies seem to have no idea how to run their businesses (despite lots of good examples from overseas) says to me that the leadership in these companies will drive them into the ground no matter how much cash is stuffed into them. A brain dead patient cannot be saved. Give the money to small innovative companies that will actually change the world, and give money to job creation programs. God knows our infrastructure needs it.
All auto companies should follow Chrysler lead and eliminate a nmber of models especially the guzzler variety and stay with the smaller vehicles to need less asphalt road and parking etc. etc.
I will not buy a car unless the company convinces me it is on the same side as I am regarding clean air and elimination of wastefulness from the world economies.and subscribes to the most efficient use of the resources.PROFITS YES GREEDY-GAINS-AND -PROFITS/ NO NO NO
Exactly, Raiyn. Hybrid hemi is naked greenwashing. These SUVs have green lipstick, but are still pigs.
Just cause you're a soccer mom/dad doesn't mean you all need to be able to drive a team in two cars.
What irk me about this entire situation is that Chrysler has clearly offered a portfolio of cars that was in the lagging position for a long time.
Why taxpayers should be responsible for the inept management decisions is beyond me, and while I understand the wider picture here, I think we need to find a way to not just bail the firm out.. but turn it around.
Simply bailing them out or letting them fail is not an option.
...Tie the bailout to improvements in environmental impact and efficiency
....Make executives take a sever haircut, and invest a portion of their previous bonuses back into the company
.. force Cerebus to ante up. It is not about forgoing profits, it is about holding them to a level of responsibility. they were supposed to be guiding the company, and obviously failed to do that
To let the firm fail would actually hurt the people that had little to do with the decision making. It would have an impact on the greater economy, on those on the line, and those in the community...
R
www.allroadsleadtochina.com
www.cleanergreenerchina.com
FWIW, the Chevy Tahoe hybrid has been a pretty dismal seller, so maybe the SUV market and hybrids just don't mix from a sales perspective.
In business, the bottom line is sometimes, well the bottom line.
I just have 0 sympathy for the big three. Sure they employ a lot of people, but offering sub-par market-lagging products is a false economy if it has to be propped up by government. Let them die. Their sales (and jobs) will go to more deserving companies like Toyota that have had Hybrid products on the market for years now.. YEARS! Subsidize lameness not!
"What irk me about this entire situation is that Chrysler has clearly offered a portfolio of cars that was in the lagging position for a long time."
".. force Cerebus to ante up. It is not about forgoing profits, it is about holding them to a level of responsibility. they were supposed to be guiding the company, and obviously failed to do that"
Cerberus has only owned Chrysler for a little over a year. The current portfolio of cars is the product of the previous management, Daimler-Benz.
CORRECTION NEEDED!!!
But the nation is in a bailout mood and it seems likely Detroit will get the help it's seeking
SHOULD READ
But the GOVERNMENT is in a bailout mood and it seems likely Detroit will get the help it's seeking
what about bailing out the companies - but using their assets to lower barriers to entry in the automotive industry ,by changing industry structure ? this would enable more startups to compete , increase innovation , do alot to reduce global warming , and since america is the best country in the world in building startups , it might enable america to have the best automotive industry in the world .
while not without risks , currently there are no low risk options to this crisis.
maybe worth a try ??