Thursday, December 07, 2006

Will another shoe drop, with Bernhard in the wings?

Edward Lapham is the executive editor of Automotive News. He writes commentaries for Automotive News online every business day. His commentaries also can be found here.
Edward Lapham | | Automotive News / December 5, 2006 - 4:01 pm If you squint, the shakeup in Auburn Hills, Mich., looks a lot like it did six years ago, right before DaimlerChrysler CEO Juergen Schrempp fired Jim Holden.

Back then, a glut of carryover 2000-model minivans clogged the launch of the new, improved - and more costly - 2001 models, which meant using beefy incentives to move the iron.

In what seems like deja vu, Joe Eberhardt's sudden departure comes after Chrysler slapped an obese $7,000 dealer incentive on carryover 2006 models to get them out of the way of 2007 models.

The cheers and laughter you hear cascading across America aren't coming from early holiday parties. It's just the resounding joy of Chrysler's dealers who are dancing and singing in the streets like Munchkins now that the automaker's head of global marketing and sales is gone.

Dealers have been in open revolt for more than a year over the company's vehicle ordering and incentive policies, which they say makes it tough for them to sell the right cars and trucks - or make money.

Fast-tracker

Yes, Eberhardt was the point man with dealers, and his manner troubled them. But the sales exec who came to Auburn Hills as a fast-tracker from Mercedes-Benz wasn't the sole author of Chrysler's situation.

You have to figure that Chrysler group CEO Tom LaSorda had a hand in it. Some even point their fingers at DaimlerChrysler CEO Dieter Zetsche, suggesting this year's overly optimistic build schedules may have been used to boost his candidacy for the top job in Stuttgart.

That seems like a stretch. Zetsche got the nod more than a year ago, and the company could have turned off the production spigot at any time after he was elevated in January.

Still, you have to wonder what, or who, is next. If Eberhardt won't be alone, is LaSorda the next to go?

Sure, it looks a lot like 2000, but there are differences.

Schrempp, in a single surprising stroke, fired Holden and dispatched Zetsche and Wolfgang Bernhard to Auburn Hills to fix things, which they did.

It's a little different this time, largely because of the buzz in Auburn Hills, Stuttgart and Wolfsburg about the possible return to Chrysler of Bernhard, whose future at Volkswagen is far from certain these days.

Dump Chrysler?

Many German analysts and media say Chrysler isn't worth the effort. They suggest that DaimlerChrysler ought to spin off or sell Chrysler, forgetting that it was the American side of the family that brought home the groceries while Stuttgart struggled to fix Mercedes' quality, image and profit issues.

Down deep, even the diehard Mercedes parochialists must know that divesting Chrysler wouldn't be easy.

Perhaps the only way to salvage the situation in Auburn Hills is to bring in another German savior.

Right.

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