Chrysler Stops the Bleeding, Now Comes the Tough Part

Chrysler grille
Chrysler grille

For almost a year, Chrysler has been the forgotten automaker.

Just as GM went through bankruptcy, so did Chrysler.

Just as the government took a stake in General Motors, the same thing happened at Chrysler.

And Just as GM shut down scores of dealers and made major cuts in bankruptcy, so did Chrysler.

And yet, there is little talk about America's fifth largest automaker.

Well, in case you haven't been watching, Chrysler has quietly stopped the bleeding.

Last month it once again beat Wall Street expectations with sales jumping 25% (compared with an estimate of 17%). It was the third straight month Chrysler posted better than expected numbers. Combine that with a first quarter operating profit and it's clear Chrysler is slowly but surely coming around. So why isn't anybody noticing?

For starters, the improved sales results are in comparison to horrible numbers last spring when Chrysler was on life support and many buyers avoided Chrysler, Dodge, and Jeep showrooms. Compared to that time, any company with a pulse should do better.

Also, we're still waiting to see if CEO Sergio Marchionne can grow the business with new models. Until now, Marchionne has largely been quiet. That's his style. When the new Jeep Grand Cherokee is ready for us to see and buy in the next couple of months, he'll show it to us. Until then, Marchionne believes there's little sense in getting caught up in making promises of what's to come.

Which brings up the question, are stabilized and improving Chrysler sales worth caring about?

Or is this a case of a sickly company doing slightly better while still bogged down with a slew of problems?

The answers are mixed.

When I talk with auto executives at other companies, suppliers, consultants who work with Chrysler, and Chrysler dealers almost everyone says the same thing: Chrysler is getting better. It's not the basket case it was in the last year leading up to it's bankruptcy. The usual answer I get about Chrysler under Marchionne is, "He's got a plan, and I think it will work."

Now, the skeptic will say comments like that are hardly a ringing endorsement. And Marchionne still has a long ways to go with Chrysler. After all, he's pedaling old models with major incentives. Once the new models start rolling into showrooms later this year and next year, we'll see if American car buyers like the new Chrysler. That will be the real test. But until then, give Chrysler credit for stopping the bleeding.


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