CHRYSLER: THE TURNAROUND PLAN

Expect more cuts in vehicle lineup

Bradford Wernle
Automotive News
November 5, 2007 - 12:01 am ET

DETROIT — More models will get axed before Chrysler LLC CEO Bob Nardelli and his team are finished. A crossover code-named JZ49 — the Chrysler brand's proposed version of the forthcoming Dodge Journey crossover — already may have been cut, say two sources familiar with Chrysler's product planning. The Journey is to debut next spring in North America. The JZ49 is an example of the overlapping vehicles that Chrysler executives want to eliminate (see box at right). A source familiar with Chrysler's product plans says the automaker is considering more cuts. More than any other automaker, Chrysler depends on trucks and SUVs. None of its smaller, more fuel-efficient vehicles has been a real hit. Those vehicles include the Dodge Caliber small car and Jeep Compass and Jeep Patriot crossovers, made in Belvidere, Ill., and the Chrysler Sebring sedan and convertible and the Dodge Avenger sedan, made in Sterling Heights, Mich.

Too close for comfort Chrysler LLC executives want to eliminate vehicles that overlap. Here are the prime candidates. Dodge Nitro/Jeep Liberty Dodge Durango/Chrysler Aspen Jeep Compass/Jeep Patriot/Dodge Caliber Dodge Avenger/Chrysler Sebring

Said a source familiar with Chrysler's product plan: "They have a whole huge problem there. They've got one plant's worth of demand and two plants' worth of vehicles. Those (vehicle lines) are two major dogs for them."

The problem: Chrysler has spent several billion dollars to engineer those vehicles, and probably will have to soldier on with them for a couple of years. Those vehicles, the most fuel-efficient in Chrysler's lineup, are integral to the company's plans to expand overseas.

The Dodge Journey, a crossover introduced in September at the Frankfurt auto show, is due in North America early next year. A Chrysler sibling was to arrive in 2009, but Chrysler is said to be rethinking that. Sources say the PT Cruiser sedan will follow the convertible version out of production in 2009.

Last week, Chrysler said it would make hybrid versions of the Dodge Durango and Chrysler Aspen SUVs. Those vehicles will go into production after 2009. The two will use the Two-Mode hybrid technology Chrysler is sharing with Daimler, BMW and General Motors.

Industry analysts say the Compass, a controversial vehicle since its launch as a 2007 model, is a prime candidate to get the ax. Jeep purists consider the Compass to be less than a real Jeep because it has no off-road capability.

Nardelli says product portfolio decisions are tied to the company's dealer consolidation strategy. He endorsed a plan to make more dealerships Alpha stores, with Chrysler, Dodge and Jeep brands all under one roof. That would make it easier to kill similar vehicles sold by different brands.

John Casesa, managing partner of Casesa Shapiro Group LLC of New York, said the new Chrysler management team has a tough job. "They have to address product line, distribution and cost structure at the same time," he said. "That's why Daimler sold the business."