Chrysler chief in move to boost dealer morale

By Bernard Simon in Toronto

Updated: 7:40 p.m. PT March 19, 2007 - -Tom LaSorda, Chrysler's chief executive, is due to meet several dozen of the carmaker's biggest dealers in Florida on Tuesday as part of a drive to boost morale during a period of intense uncertainty over the future of DaimlerChrysler's North American unit.

Chrysler said on Monday that the meeting was one of a series designed to bolster relations with its 3,750 dealers, listen to their concerns and outline future product plans.

Improving relations with the dealers has been among Mr LaSorda's priorities since he assumed responsibility for sales and marketing late last year.

He took on the extra duties after dealers flexed their muscles by demanding the removal of Chrysler's previous sales and marketing chief, Joe Eberhardt. Mr Eberhardt had antagonised many dealers by pressuring them to accept unwanted inventory.

More recently, the dealers have been unsettled by lacklustre sales and by DaimlerChrysler's search for a possible buyer for Chrysler.

"There are probably a lot of Chrysler dealers who would like to sell their dealerships right now, but there's no demand for them", said Sheldon Sandler, head of Bel Air Partners, a New Jersey-based dealership consultant.

"The question is", Mr Sandler added, "do they hold out for better days or capitulate to market forces?"

Chrysler's turnround plan, being implemented in tandem with the search for a buyer, envisages reducing the number of dealers by 10-15 per cent, although it has set no deadline to meet this target.

Chrysler's share of US light vehicle sales slipped to 13.9 per cent in February from 15.1 per cent a year earlier, according to Autodata, an automotive research group.

The carmaker has recently pushed up discounts and other incentives on several models to boost sales.

"Money talks," said Gary Junge, co-owner of a Chrysler dealership in Center Point, Iowa. "We've got good products," Mr Junge added. "Now we've got to get Americans to buy them."

Participants at Tuesday's meeting are expected to question Mr LaSorda on Chrysler's future product plans, in the hope that new models would stimulate fresh interest and bring buyers back to their showrooms.

The carmaker launched 10 new models in 2006 and has plans for another eight this year.

But none has so far captured buyers' imagination on the scale of the PT Cruiser hatchback or the Chrysler 300 saloon, two models that fanned optimism in earlier years about the Chrysler-Daimler Benz merger.

The carmaker plans to reduce the number of Chrysler, Jeep and Dodge models as part of the recovery plan.