In 2006, Chrysler (NYSE: DCX) lost $1.5 billion as the company failed to adapt to changing trends in the auto industry, focusing on minivans, pickups, and sport utility vehicles. By way of explanation, Chairman Dieter Zetsche offered this, which is probably one of the dumbest quotes I've seen so far in 2007:
"The crucial factor was the unforeseeable shift in demand to smaller, more fuel-efficient vehicles, which was triggered by increased gas prices in the U.S." (emphasis added)
Wow. What's next? Will people continue to buy dog food that kills their pets? Will Atari explain the declining sales of the Atari 2600 by saying that "the crucial factor was an unforeseeable shift toward higher quality, more enjoyable video games"?
All I can say is that if the chairman of an automobile manufacturer considers the shift toward smaller cars in light of rising gas prices as unforeseeable, the company probably needs new leadership.
On April 5th, Kirk Kerkorian offered $4.58 billion for the company, so maybe change is on the way.
Closing Bell: Dubai sends jitters throughout the market (S, BBY)
Heinz looking good after the second quarter?
Why isn't Bank of America updating its shareholders on CEO situation?
Reader Comments (Page 1 of 1)
4-08-2007 @ 8:48PM
BUTCH WINTERS said...
WE NEED NEW PEOPLE TO RUN CHRYSLER. I WORK AT BELVIDERE,IL PLANT AND HOPE KIRT'S OFFER WILL WORK
4-09-2007 @ 1:27AM
Jack Yan said...
Heck, even I foresaw it in 2000 and what a mess DaimlerChrysler would make:
http://www.jyanet.com/cap/2000/0212ob0.shtml
http://www.jyanet.com/cap/2000/1214fe0.shtml
If a Joe Schmo like me could work this out seven years ago, why couldn’t he?
4-09-2007 @ 4:03PM
Michael Manicone said...
Chairman Zetsche is as poor a leader as are Mercedes and Chrysler vehicles good reliable cars. They are inferior to other makes say consumer magazine testers; perhaps a new management team would correct and improve the product, either together as DCX, or individually as in a breakup