Automotive Industry and Chrysler
Case Study 17 Chrysler
Chrysler Corp was established in 1929 ( by Walter P. Chrysler) during the time when the auto industry had just began to bloom. During the depression, smaller more specialized companies began to disappear and the larger companies began to consolidate and buy up some of their smaller competitors. It was at this point in time that the Big Three emerged (Ford, GM, and Chrysler). It was also around this time that the UAW (United Auto Workers Union) was established, and this union holds a major role in the auto industry to this day. From the 40 's-50 's Chrysler had some ups and downs, but some key factors were the development of their parts division (MoPar). The "Hemi" designed motor was created, they were the first to recognize the need for aerodynamics, and also created power steering, power windows, fuel injection, and alternators, just to name a few innovations that we still see today. During the fuel crisis (early 70 's), Chrysler stumbled badly. To try to compete in a new environment (need for fuel efficiency), Chrysler bought a 15% stake in Mitsubishi Motors. This move, they felt, would re-secure their position in the market, due to the technology Mitsubishi possessed. Unfortunately, that decision proved to be a vital error on their part. Consumer perception of the new automobiles seemed to be that Chrysler had cheapened its brand. By 1979 Chrysler was on the brink of bankruptcy. It was the combination of a 1.5 billon dollar Federal loan and the cost saving measures of newly appointed CEO Lee Iacocca that soon brought the company back to its feet. By 1983 a new "Iacocca" lead Chrysler had paid back all Fed monies. Some of Iacocca 's measures involved scale downs of factories, plant closings, layoffs, and benefit reductions. He also restructured the company in a way that would increase production of family passenger cars (Caravan, Voyager) and re focused the company on the development of mere fuel efficient vehicles. By
Chrysler Corp was established in 1929 ( by Walter P. Chrysler) during the time when the auto industry had just began to bloom. During the depression, smaller more specialized companies began to disappear and the larger companies began to consolidate and buy up some of their smaller competitors. It was at this point in time that the Big Three emerged (Ford, GM, and Chrysler). It was also around this time that the UAW (United Auto Workers Union) was established, and this union holds a major role in the auto industry to this day. From the 40 's-50 's Chrysler had some ups and downs, but some key factors were the development of their parts division (MoPar). The "Hemi" designed motor was created, they were the first to recognize the need for aerodynamics, and also created power steering, power windows, fuel injection, and alternators, just to name a few innovations that we still see today. During the fuel crisis (early 70 's), Chrysler stumbled badly. To try to compete in a new environment (need for fuel efficiency), Chrysler bought a 15% stake in Mitsubishi Motors. This move, they felt, would re-secure their position in the market, due to the technology Mitsubishi possessed. Unfortunately, that decision proved to be a vital error on their part. Consumer perception of the new automobiles seemed to be that Chrysler had cheapened its brand. By 1979 Chrysler was on the brink of bankruptcy. It was the combination of a 1.5 billon dollar Federal loan and the cost saving measures of newly appointed CEO Lee Iacocca that soon brought the company back to its feet. By 1983 a new "Iacocca" lead Chrysler had paid back all Fed monies. Some of Iacocca 's measures involved scale downs of factories, plant closings, layoffs, and benefit reductions. He also restructured the company in a way that would increase production of family passenger cars (Caravan, Voyager) and re focused the company on the development of mere fuel efficient vehicles. By
Bibliography: LUDVIGSEN 'S COLUMN: Fiat’s fraught future http://www.just-auto.com/comment/fiats-fraught-future_id104269.aspx Marchionne still wants Fiat-Chrysler merger http://www.usatoday.com/story/money/cars/driveon/2013/03/05/chrysler-fiat-marchionne-geneva-motor-show-uaw/1965275/ Fiat in Talks With Banks About Chrysler Deal, CEO Says no IPO http://www.bloomberg.com/news/2013-03-05/fiat-in-talks-with-banks-about-chrysler-deal-ceo-says.html http://www.fiatusa.com/en/ http://www.chrysler.com/en/ Strategic Management and Business Policy, Thomas Wheelen ; J. David Hunger