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Chrysler was founded 84 years ago this month. Now controlled by Fiat, the one-time American giant offers a cautionary taleJust a month after Chrysler filed for Chapter 11 bankruptcy protection, a judge has approved its plan to form Chrysler Group LLC, which will be controlled by Italian automaker Fiat, as well as the American and Canadian governments and the United Auto Workers union.
Known as "The Big Three," General Motors, Ford and Chrysler were at the center of the 2008 automotive industry crisis. Their focus on higher, short-term profit margins led to a focus on the production of gas-guzzling SUVs. They generally abandoned research and development toward smaller, fuel-efficient passenger cars -- ideas that were embraced by their Japanese and European counterparts.
In Japan, automakers are required to make cars that achieve 45 miles per gallon (mpg). In the European Union, that number is 52. In America, that number is a paltry 25.
"That picture will almost surely worsen," according to the New York Times. "This week, General Motors, now in bankruptcy, announced it was closing or idling 14 plants across the country, including several in Michigan, which has the nation’s highest unemployment rate. The closings will affect as many as 20,000 workers."
As part of the bailout plan, Chrysler must produce nine "Fiat-derived" vehicles by 2014, four of which must be hybrid-electric or battery-electric.
"Senior members of the [President Obama-appointed] auto task-force found Chrysler to be better run in some ways than GM," according to the Economist.
Chrysler was founded today in 1925 by a one-time railroad mechanic from Kansas named. Walter P. Chrysler. According to the Kansas State Historical Society, Chrysler bought his first car in 1908, immediately dismantling it to see exactly how it worked.
And with the breakup of his company over four decades later, that philosophy still stands.
Will the owners of Chrysler Group LLC -- the American people included -- figure out how a car manufacturer works instead of just how it falls apart? If greed is taken out of the question, they just might.
But for Walter P. Chrysler's original car company, it's a not-so-happy birthday -- and goodbye. Or perhaps more appropriately, buon compleanno e arrivederci.
