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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