Press: Chrysler to slash Q4 production by 82,000

[Flybrian]

Chrysler will cut 4Q production
Press says automaker to purge vehicles, invest in new products

David Shepardson | The Detroit News

LAS VEGAS -- Chrysler LLC's top product strategist on Wednesday said the automaker will deepen production cuts in the fourth quarter while pumping $3 billion into developing new products.

In a candid assessment of Chrysler's product woes, Vice Chairman Jim Press outlined plans to turn around the automaker's lagging sales during a dealer event to showcase new vehicles.

The company's market share outside of North America "rounds to zero," he said. "It can't go down. It will go up."

Press said Chrysler has been building vehicles customers don't want. To begin to remedy the situation, he said, the carmaker will cut 82,000 vehicles out of fourth-quarter production. The move will cut revenue by $1 billion.

The cuts should reduce inventory by 100,000 units by this time next year, Press said.

At the same time, Chrysler's new owner Cerberus Capital Management LP will spend $3 billion in capital expenditures this year to improve the company's product portfolio.

Press said the company needed to "broaden the product portfolio" in some areas and kill overlap in others. He praised Chrysler's Jeep nameplate, calling it a "bullet-proof brand."

"You have to be relentless in trying to stay not with but ahead of the competition," he said, adding automakers must be "paranoid" to be successful. "It never stops."

Press also confirmed that the company will end its dealer allowance program that's been in place for six years, replacing it with a no-strings $400 allowance.

He said the company was looking at simplifying option packages and being more efficient.

In the long-term, Press said, Chrysler will continue to study its product lineup.

"We're still going through the process of studying the long-term strategic vision of what the company's product portfolio should look like in five, six, 10 years," he said. "We have a lot of products customers want that we can't build. We need to match these two things up."

Outside North America, Chrysler is on track to bolster its market share in fast-growing international markets, he said.

"Chrysler will be the proof that an American automobile company can and will compete very successfully on the global stage with the world's best," he said.

Press said the production cut was approved by Cerberus during a seven-minute conference call.

[Newbiewar]

this guy is on drugs...

pres is the pr toyota needed to sell that junk...

I mean... okay was it not obvious over a year ago... when chrysler was sitting on half a million vehicles the dealerships didn't want... that was a sign they need to build something different?

okay build less... sure

grow globally? excelent! but proof american cars are wanted globally... look at gm grow like crazy... gm is losing market share in the us... but hitting automotive records for number of vehicles sold annually...

new product line... a blitz? just as toyota blitzed its way to the top... chrysler will do the same thing in 3 years chrysler will be nasty... but cerbrus should know I it grows too much it won't find a single buyer for anything over what daimler paid... and although its nice to split things up get more... it would ruin chrysler as a monument in automotive history lots of people love them...

should be interesting

[6t5frlane]

It's a step in the right direction. Start with a clean sheet of paper. They have the 4x4 market figured out. Some tweaks needed. Now build a Camry beater

[VenSeattle]

Heh... is this why the strike didn't last long? I can here it now...

"Go ahead, strike for a few weeks or more. Pay the plant workers. We don't care. We're shutting them down anyway to cut inventory by about 100,000 units. Now are you ready to accept our offer?"

I know it's oversimplifying and probably completely incorrect... but still a funny thought...

[FUTURE_OF_GM]

I'm just going to go ahead and say it:

Chrysler will be a real threat in 3-5 years.

The resaons: 1) Cerberus has deep pockets to develop any kind of product imaginable 2) The UAW isn't really a huge factor at Chrysler in the first place & 3) The company has no one to answer to... It's privately held, so they pretty much have a carte blanche to reinvent the whole operation.

Ya know, I wonder if Ford and Chrysler have considered a tie up? That probably wouldn't be a good thing for GM. But since Ford has somewhat of a global presence and Chrysler has the cash Ford so desperately needs...