Chrysler Secretly Being Run Into The Ground?

I was doing some research when I came across this little gem:

CEO sees Chrysler staying independent

I honestly laughed out loud. First, the fact that Robert Nardelli is coming out to tell me that he feels as though Chrysler will be an independent company three years from now is a joke. Robert Nardelli will be playing golf on any given workday three years from now having long forgotten about Chrysler.

Why?

Because Bob is a puppet to Cerberus Capital Management (who owns Chrysler through a 2007 purchase from Daimler AG for $7.4 billion dollars) and won’t be able to take the BS the buyout firm is going to push for in order to reduce costs and make the acquisition worth while. Besides, any first year MBA student can see Cerberus is setting Chrysler up to fail.

I know first hand that Chrysler almost tanked when they rolled out their 7/70 power train program years ago. They had so many warranty claims the company was close to going belly up. Which takes us to last year’s “lifetime power train warranty program.” This program alone is bound to doom the car manufacturer long after Cerberus has exited the scene with pockets stuffed with cash but it gets better. This summer’s marketing blunder is a cap on gas prices at $2.99 per gallon. Anything over that and Chrysler will pay you the difference up to 12,000 miles.

Get out your pencils boys & girls, time for a math quiz!

Chrysler sold 2,076,650 units in 2007 or approximately 520,000 every three months. The gas promo will go on through Summer 2008 or three months, so we have a baseline number of vehicles sold. The gas program is based on 12,000 miles per year on anything above $2.99 per gallon, which as of this writing, the national average was $4.04 a gallon. Now let’s assume the average gas tank holds 17 gallons, and the average driver fills up once a week.

17 gallons x $1.05(difference between $2.99 and $4.04 national average) = $17.85 per fill-up x 520,000 cars = $9,282,000 a week or $482,664,000 a year.

Now, also take into consideration that at last check, Chrysler LOST $1072 per vehicle, so that’s another $557,440,000 for a grand total of…..over ONE BILLION in costs on ten billion in sales, or just about 10%, and that’s only the first year, the gas program is for .

But, here is the irony, Cerberus will be out of this company long before these hens come home to roost, and I can almost guarantee that a once great American car manufacturer will be left to rot after Cerberus has sold off anything worth selling. Sure, there will be hearings into what went wrong, but I can save all of you a lot of time, a car company being run by a guy from the hardware business, owned by a buyout firm was never going to be a success in the first place.

Chrysler being run into the ground by cerberus