Stock Ideas 
Market Watch Is Chrysler Getting Fixed?
Market Watch Is Chrysler Getting Fixed? 
Market Watch
| NEW YORK - Stocks fell in early trading Friday after a weak manufacturing report raised concerns of a further economic slowdown. | |
| More... |
Most Popular
Login Form
| Is Chrysler Getting Fixed? |
| Wednesday, 21 November 2007 | ||||||
|
There’s a big reason why American car manufacturers aren’t as profitable as their Japanese counterparts. And it finally looks like Chrysler is chipping away at that lead by doing something very logical. First, they got a new UAW agreement that saves them a few billion dollars a year. This agreement is enough to give them about a thousand dollars more profit for every vehicle they manufacture. And now, the company wants to start combining their three brands (Dodge, Chrysler, and Jeep) into cohesive units that won’t compete with each other. In other words, Dodge would sell trucks and work vehicles. Chrysler would sell cars. And Jeep would sell, well, Jeeps and SUVs. What does this do? Well, now they won’t have a midsize Dodge sedan competing against a midsize Chrysler sedan. Since there are fewer cars to manufacture, they save even more on development and research. And they gain economies of scale more easily. If this experiment works with Chrysler, expect Ford and GM to follow suit. This move alone could bring them much closer to the type of profitability that Nissan, Honda, and Toyota enjoy. P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
|
||||||
| < Prev | Next > |
|---|
