At Chrysler Now, the Fast Track Runs Downhill

Fabrizio Costantini for The New York Times

Jeff Poisson, who has worked at the Windsor plant for over 20 years, said the problems were partly a result of the merger with Daimler-Benz.

MICHELINE MAYNARD |DETROIT, Dec. 14 — Chrysler executives startled investors in late October when they acknowledged that the company had been building tens of thousands of cars on spec to keep its factories humming. Those cars were not included in the company’s estimates of its backlog of unsold vehicles on dealer lots — a figure that was already high by industry standards.

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Buckle Up

Claro Cortes IV/Reuters

Thomas W. LaSorda may soon leave Chrysler, an official asserts.

But Chrysler’s chief executive, Thomas W. LaSorda, said Thursday on a company blog that Chrysler would continue to build cars that dealers had not ordered — just fewer of them.

At the company’s holiday party later, Mr. LaSorda declined to discuss why the company let the inventories build up.

“Let’s say we did, and we’ll get out of it,” he said. “I took responsibility for the situation, and I’ll get us out of it.”

As for the turnaround plan that many in Detroit have been expecting from Chrysler, Mr. LaSorda said he would have more to say after the first of the year.

And so Chrysler — on a perpetual roller coaster ride in recent decades from financial crises to surging sales from hit products like the 300C sedan — will probably have more bad news in coming months.

There has been plenty of bad news already, beyond the backlog of unsold cars. This year, Chrysler lost its No. 3 spot in the American market to Toyota, watched its once-envied profits evaporate, and faced a near rebellion from dealers who were angry at being saddled with an oversupply of mostly gas-thirsty vehicles that were out of step with consumers’ demands for more fuel-efficient vehicles.

“This year was one to forget for them,” said Jesse Toprak, an industry analyst with Edmunds.com, which provides car-buying advice.

Heads have already rolled. Chrysler’s German-born marketing chief, Joe Eberhardt, the main target of dealers’ ire, left last week to run a Mercedes dealership.

Mr. LaSorda could soon be leaving Chrysler, too, for a job at its parent, DaimlerChrysler, a senior company official said this week. But at the Thursday night party, Mr. LaSorda said in an interview: “I’m not worried about my future. It’s solid.”

If Mr. LaSorda is promoted or leaves, that could clear the way for a Volkswagen executive, Wolfgang Bernhard, Chrysler’s former president, to return in the top job — an outcome that some industry analysts have said is likely if Mr. LaSorda vacates his current job.

For now, though, Mr. LaSorda is racing to put together yet another turnaround plan, which Chrysler is expected to roll out in late January to stem losses that are expected to top $1.2 billion this year.

The plan, still being written, is expected to include plant closings, job cuts and reductions in spending — actions that are intended to trim Chrysler’s costs by $1,000 a vehicle.

“We have to study every part of the company,” Mr. LaSorda said.

Chrysler has pulled off turnarounds before with hit products — besides the 300C, it has scored big hits through the years with its minivans, aggressive pickups built to resemble semis and the PT Cruiser.

But those earlier comebacks occurred when Detroit companies were still in firm control of the American market. Chrysler must now battle Asian carmakers like Toyota that are in their strongest shape since they began selling cars here nearly five decades ago.

This year, Chrysler lost market share that it picked up since it introduced the 300C two and a half years ago. Through November, it held just under 13 percent of the American market. At its peak, in the mid-1990s, Chrysler held nearly 17 percent.

If Mr. LaSorda cannot fix Chrysler, it may find itself with not just a new leader, but potentially a new owner.

DaimlerChrysler has acknowledged it cannot build a small car at a profit in North America, and is in talks with Chinese companies to build one that it can import.

Should Daimler officials run out of patience with Chrysler, analysts have said, a Chinese owner might be the logical option to take the company off Daimler’s hands.

A top DaimlerChrysler executive fanned such speculation this summer when, in response to a question, he declined to rule out the possibility of selling off Chrysler. Soon after, the company said Chrysler would not be sold, but the question mark lingers, and analysts have said a Chinese buyer for Chrysler makes sense because such a deal would provide access to the American market.

Not long ago, Chrysler was in good shape. It was the only Detroit carmaker to gain market share and increase sales in 2005, when it earned a $1.8 billion operating profit, compared with G.M.’s $10.6 billion loss.

Its previous chief executive, Dieter Zetsche, who now runs DaimlerChrysler, declared numerous times that Chrysler’s primary competition was not G.M. or Ford, but Asian auto companies, with their lean operating styles and loyal customers.