Nouvelle Wallonochia
04-07-2007, 18:06
http://detnews.com/apps/pbcs.dll/article?AID=/20070704/AUTO02/707040338&theme=Autos-Chrysler-China
Chrysler plays China card, or is it wildcard?
Having Chinese automaker build, export small cars should help U.S. player compete.
The soon-to-be-again Chrysler Corp. has long been Detroit's version of an "early adopter" -- first to get a federal bailout, first to sell out to a foreign rival, first to be dumped by the foreign parent and gobbled up by a private-equity house. Now this:
Chrysler and Chery Automobile Co. of Wuhu, China, late Tuesday finalized a strategic framework that is expected to culminate in Chery building small cars, slapping Dodge and, perhaps, Chrysler badges on them and exporting them to Europe, Latin America and the United States.
The first vehicles to debut under the agreement likely will appear in South American markets by the end of next year, I'm told, with subcompacts developed for the U.S. market to come later -- not soon enough considering the growing American appetite for more fuel-efficient rides.
How you greet this depends on your world view: At the UAW's Solidarity House and union locals across the country (and Canada), this is yet another scary thrust of low-cost Asian players into the heart of the North American industry, evidence the Chinese are winning American auto jobs, whatever the economics.
In executive suites, conference rooms and strategic planning departments from Detroit and Stuttgart to Paris and Japan's Aiichi Prefecture, home to Toyota Motor Corp., this is inevitable in a global economy with vastly variable labor costs.
They're both right -- the union types and the suits.
Chrysler's 'quick-strike' play
The deal with Chery, conceived under Chrysler's German parent but endorsed by its new owner, Cerberus Capital Management, is the most far-reaching effort yet by a major automaker to tap low-cost Chinese manufacturing capability to quickly -- and profitably -- fill a void in its domestic lineup.
"We've got to develop a quick-strike approach," a Chrysler executive tells me. Why? Because an independent Chrysler won't have direct access to the global resources of soon-to-be Daimler AG or the ability of a Toyota or General Motors Corp. to drop billions into exploiting a new market.
In return, Chery gets access to Chrysler's enviable (if bloated) distribution network, Western marketing and communications know-how and, potentially, the benefit of Chrysler's (diminishing) political influence in Lansing and, especially, Washington.
A statement prepared to announce the strategic tie-up hails it as "a win-win" for both companies. Beyond specific technical benefits, Chery effectively will acquire the legitimacy that comes with Chrysler's brands and, more broadly, a window into the world's richest market.
Chrysler CEO Tom LaSorda says he gets the cornerstone for a new business model that should help Chrysler deliver more all-new products faster to North American consumers.
Theory, reality collide
As distasteful as Chrysler's China play (and potential tie-ups with Russians and Indians) may be to traditional sensibilities, union rolls and America-firsters, this may be one of the few ways Detroit's tiniest automaker can go it alone.
For Chrysler, right here and right now, the Chery deal makes sense. But it has "we'll see" written all over it.
Daniel Howes' column runs Mondays, Wednesdays and Fridays. You can reach him at (313) 222-2106, dchowes@detnews.com or http://info.detnews.com/danielhowesblog.
Bold move for Chrysler or beginning of the end? Given the current prices of fuel I'd imagine there'd be a market for a cheap and fuel efficient car (sadly, a foreign concept in Detroit) but will these rebranded Cherys be quality enough vehicles that people will want to buy them?
Chrysler plays China card, or is it wildcard?
Having Chinese automaker build, export small cars should help U.S. player compete.
The soon-to-be-again Chrysler Corp. has long been Detroit's version of an "early adopter" -- first to get a federal bailout, first to sell out to a foreign rival, first to be dumped by the foreign parent and gobbled up by a private-equity house. Now this:
Chrysler and Chery Automobile Co. of Wuhu, China, late Tuesday finalized a strategic framework that is expected to culminate in Chery building small cars, slapping Dodge and, perhaps, Chrysler badges on them and exporting them to Europe, Latin America and the United States.
The first vehicles to debut under the agreement likely will appear in South American markets by the end of next year, I'm told, with subcompacts developed for the U.S. market to come later -- not soon enough considering the growing American appetite for more fuel-efficient rides.
How you greet this depends on your world view: At the UAW's Solidarity House and union locals across the country (and Canada), this is yet another scary thrust of low-cost Asian players into the heart of the North American industry, evidence the Chinese are winning American auto jobs, whatever the economics.
In executive suites, conference rooms and strategic planning departments from Detroit and Stuttgart to Paris and Japan's Aiichi Prefecture, home to Toyota Motor Corp., this is inevitable in a global economy with vastly variable labor costs.
They're both right -- the union types and the suits.
Chrysler's 'quick-strike' play
The deal with Chery, conceived under Chrysler's German parent but endorsed by its new owner, Cerberus Capital Management, is the most far-reaching effort yet by a major automaker to tap low-cost Chinese manufacturing capability to quickly -- and profitably -- fill a void in its domestic lineup.
"We've got to develop a quick-strike approach," a Chrysler executive tells me. Why? Because an independent Chrysler won't have direct access to the global resources of soon-to-be Daimler AG or the ability of a Toyota or General Motors Corp. to drop billions into exploiting a new market.
In return, Chery gets access to Chrysler's enviable (if bloated) distribution network, Western marketing and communications know-how and, potentially, the benefit of Chrysler's (diminishing) political influence in Lansing and, especially, Washington.
A statement prepared to announce the strategic tie-up hails it as "a win-win" for both companies. Beyond specific technical benefits, Chery effectively will acquire the legitimacy that comes with Chrysler's brands and, more broadly, a window into the world's richest market.
Chrysler CEO Tom LaSorda says he gets the cornerstone for a new business model that should help Chrysler deliver more all-new products faster to North American consumers.
Theory, reality collide
As distasteful as Chrysler's China play (and potential tie-ups with Russians and Indians) may be to traditional sensibilities, union rolls and America-firsters, this may be one of the few ways Detroit's tiniest automaker can go it alone.
For Chrysler, right here and right now, the Chery deal makes sense. But it has "we'll see" written all over it.
Daniel Howes' column runs Mondays, Wednesdays and Fridays. You can reach him at (313) 222-2106, dchowes@detnews.com or http://info.detnews.com/danielhowesblog.
Bold move for Chrysler or beginning of the end? Given the current prices of fuel I'd imagine there'd be a market for a cheap and fuel efficient car (sadly, a foreign concept in Detroit) but will these rebranded Cherys be quality enough vehicles that people will want to buy them?