Chrysler to Daimler: “Drop Dead!”

Chrysler to Daimler: “Drop Dead!”

By Christopher Platt

I wish Cerberus Capital Management good luck with their 80% stake in Chrysler from Daimler-Chrysler. I certainly wish them more luck than I had last year when I tried to buy Chrysler. Oh, wait! I mean when I tried to buy A Chrysler. Until I heard that Cerberus was trying to buy the company, I thought my 2006 experience with Chrysler was an aberration, a result of trying to interact intelligently with a series of comically and chronically inept Chrysler employees at all levels. Now, I know that their ineptitude was merely a ruse -- corporate terrorism on a small scale. What Chrysler has done to Daimler, however, amounts to a “scorched-earth” plan – that is, unconventional corporate warfare on a grand scale.

I don’t use the word warfare lightly. Didn’t we win World War II? What were these defeated Germans doing here in the USA, buying up one-third (the smallest third, but still) of the Big Three. Wrong question. How can a small fish get a big fish to spit it back up again? That’s the right question.

The scorched-earth weapon has been used since at least ancient Roman times, and usually means literally torching the whole countryside to deny its bounty to the enemy. The Romans used it. Rome’s enemies used it. Sherman used it on his march to Atlanta during the Civil War. Russia and Germany both used it during World War II. America used it in the Vietnam War, employing Agent Orange to defoliate jungle regions, denying cover to our enemy. Iraq used it when they ignited Kuwaiti oilfields as they retreated in the first Gulf War. And Chrysler has used it since Daimler absorbed it against its will in 1998. The dowry Daimler paid back then was $36 billion—for a company it would happily palm off on the first bidder for just $7.4 billion, nine years hence.

My family always had – and loved -- Chrysler cars, as far back as I can remember. The blue 1951 Dodge… the 1956 Dodge Royal in black, pink and white – we called it “the Good-and-Plenty car”… our 1957 Plymouth Belvedere (just like the one unearthed in Tulsa last week)… our 1961 Chrysler Windsor. The cars didn’t last that long back then, but they all were Chryslers. The first family car I bought was a 1983 Dodge Omni. Then, I bought a 1989 Jeep Cherokee, which I still drive. To us, and other enthusiasts, Chrysler was always notable for its designs, its engineering, its “firsts.” First streamlined car – the Chrysler Airstream (1934)… first four-wheel disc brakes (1949)… the “hemi” engine (1951)… first pushbutton (what fun!) automatic transmission (1956)… first cruise control (1958), and many more innovations, besides.

Unfortunately, Chrysler also was the first American automaker to need a huge bailout from the private sector – a 100-year, $250-million loan from Prudential in 1954… another $1.5 billion loan soon after – and was the first US car builder to get bailed out by the federal government, with the landmark 1980 $1.5-billion loan guarantee engineered by Lee Iacocca. With this wondrous mix of can-do American engineering knowhow and can’t-do, running-around-with-their-hand-out financial acumen, it’s no wonder Chrysler has always been the boom-or-bust company it’s been.

Let’s look at my attempts to buy the first Daimler-Chrysler creation with any sex appeal at all. The 2-door, 2-seat Chrysler Crossfire was supposed to be symbolic of the new “partnership,” marrying existing Mercedes/Daimler technology with Chrysler’s appealing design concepts. I can imagine Chrysler execs telling their new bosses, “How’s this for synergy? We’ll use your out-of-date platform for the Mercedes SLK, which you’re abandoning anyway, topped by our version of a ’30’s boat-tailed roadster body. Then, we’ll stuff the high-performance version – the SRT6 – so full of horsepower and torque that the car will blow the doors off any production sports car on the road. But we’ll keep it simple in the cockpit, no gadgets or widgets to drive up costs or do anything to challenge Mercedes’ rep as technology leaders. Then, we’ll tell the car magazines what a hot car we cobbled together.” And, as the smug Germans smiled benevolently upon this show of fealty from their American lackeys, one Chrysler guy turns and whispers to the guy next to him, “… and then we’ll make sure almost nobody can find one, let alone buy one.”

I tried for six months in 2006 to get behind the wheel of this little speedster, frustrated at every turn by what seemed a company determined to make me just go the Hell away. In the NY Metro area, it’s not often possible to get a test drive for a car simply by walking in off the street. Most dealers want you to make a reservation. I found a dealer in Queens, with a salesman who said, “Sure! Come in next Saturday, and we’ll take it out for a spin!” Only, that Saturday, when I showed up at the appointed time, the salesman was off for the day -- and the dealership had returned their only Crossfire to Chrysler because it hadn’t sold in a reasonable time. I found another dealer in Westchester – but he only had the underpowered roadster version – and I was looking for the SRT6 convertible. Tried the Chrysler dealer in Manhattan. Same thing. And the sales manager there actually called me back to ask why I wanted a test drive. He told me, “I’ve never test-driven any car I’ve ever bought, and it’s always been alright.”

I contacted the Crossfire division people at Chrysler HQ, who told me there were no Crossfires available in the northeast for test drives (no kidding!), did I want to just go ahead and order it? I did not. Finally, months later, I found a dealer in Brooklyn who had two Crossfires – one SRT6 roadster, and one convertible with the small engine. Could I test-drive them? Sure. I went out there and they actually put me behind the wheel of a nasty-looking (that’s good!) black, 2005 Crossfire roadster SRT6. We pulled out onto Kings Highway and I stomped on the gas. In less than five seconds, I was doing 60 and had to stomp on the brake for the red light. Light turned green. Stomped on the gas. Up to 60. Stomped on the brake. What fun (Not!), going herky-jerky up Kings Highway. Can I please take this bad boy out onto the Belt Parkway and turn it loose for a couple of minutes? Sorry, no. So I turned around and drove it back to the dealership. I said, “Okay, that wasn’t bad. How about getting me a 2006 version to try?” That IS a 2006, they said – and that’s when I told them how full of crap they were, because the 2006 model had changed the brushed chrome windshield frame this one had for a body-colored surround. Get me a 2006 SRT6, I said, and we can do business. They told me how hard that would be, and was I SURE I didn’t want the 2005 they had – they’d give me a great price. So I went out to look at it again. Opened the hood. Saw components with labels indicating they had been manufactured in 2004. And I saw the beautifully machined SRT6 aluminum valve covers covered with corrosion. Do you know how long a car has to be sitting outside, or maybe under water, for there to be that much corrosion on milled aluminum? This was apparently a “Katrina car,” dried out, cleaned up, and trucked north after the hurricane battered New Orleans.

So I walked away and did not look back. Turned to my other choice of hot, sexy, 2-seat convertibles from another manufacturer. Not so much a car as a big hit of testosterone in a very pretty can. Ordered a 2007, custom-made to my specifications, and it was delivered on-schedule two months later. My first non-Chrysler car in 30 years.

See, until Cerberus, I thought my experience was just Chrysler being stupid. Now, I know it was Chrysler cleverly sabotaging itself – scorching the earth (its loyal customer base) to make the company, and its once-vaunted cars, utterly worthless to its new Teutonic corporate masters. And so it has. I’m wondering if maybe Cerberus, that mythical, three-headed dog, didn’t have all three of its mythical heads up its mythical butt when they cooked up this deal. Are you guys nuts? Chrysler workers don’t even want to make cars anymore. Before the sale was finalized, Chrysler offered buyouts to hourly workers to cut its payroll. They hoped just 4,700 workers would take the offer. Instead, 6,400 raised their hands. Remember, Cerberus, not only are you taking on a car company for $7.4 billion, but you are also assuming pension obligations costing $17 billion. What a bargain! So, I wish you a lot of luck – if all Chrysler wanted was to get back into American hands again, you may have a shot.

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