Imagine this -- In a few years, we could be talking about the Big Two Detroit automakers. Speculation has begun that high gas prices could kill off one storied American brand.
The Detroit News reports, "Chrysler Chairman and CEO Bob Nardelli warned of worsening U.S. automotive sales and encouraged employees to stay focused in an e-mail sent to workers Tuesday." The automaker has already announced plans to plans to "cut shifts at five assembly plants," idle one large truck factory for at least five weeks this summer, and "reduce its headcount by 12,000 workers."
According to Reuters, Nardelli predicted that "industry-wide U.S. sales in June were expected to fall to the lowest level in 16 years." Chrysler's sales have fallen more than those of any other U.S. automaker this year, "as it struggled with a product line-up that relies more on trucks and SUVs than its larger rivals at a time when more Americans are looking to buy smaller and more fuel-efficient vehicles."
More than any other automaker in recent years, Chrysler has built its image on power -- featuring fuel-thirsty Hemi V8s heavily in its advertising, naming its cars with firearm terms (See: Caliber, Magnum), and bad superhero names (see: Avenger), and pouring resources into the debut of the 2009 Dodge Challenger -- a big, powerful muscle car. Autoblog adds, "The next vehicle set to debut for Dodge is the completely new Ram, which will appear just as gas prices have seriously trimmed truck sales."
Now, a blog post from Motor Trend has begun asking whether Chrysler can recover at all. "The receding economy means there's a better-than-ever chance that there will be only two, and perhaps one, American automaker left by the middle of the next decade." MT continues, "All are somewhere in the middle of 'turnaround' plans, with General Motors in the lead, here, at least in terms of good product." Ford recently "gave up on the idea of meeting The Way Forward's plans to return to profitability by the end of 2009."
But both Ford and GM have significant overseas markets to fall back on. MT continues, "Unfortunately, Chrysler's market outside of North America -- unlike GM and Ford, which are practically surviving off non-North American sales -- is miniscule."
The New York Times adds, "Chrysler recently announced a production deal with Nissan Motors that would give it the small car it lacks by 2010. But analysts say the step might not be enough for the struggling automaker if the U.S. market remained depressed into next year."
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