Friday, July 29, 2005

The Two Faces Of Chrysler

The German company that owns Chrysler, Daimler of Germany is running ads that make that make the company appear to be the American owned corporation of the 1980's where former CEO Lee Iacocca and actor Jason Alexander exchange some thoughts and the familiar. "If you can find a better car, buy it" line is used.

The problem is that this foreign owned corporation was once American owned. Daimler of Germany owns Chrysler now. And while Chrysler has a unique stable of intriguing products, and has higher profits that have improved from $698 million a year ago, to the increased level of $892 millon this year.

Current ChryslerDaimler CEO Jurgen Schrempp is stepping down early from Chrysler, and will be replaced by Dieter Zetsche who has been the executive behind many successful projects responsible for the Chrysler turnaround. The other major brand produced by ChryslerDaimler is the Mercedes nameplate. Yet the ads for Mercedes never note any connection for Chrysler. In this case such ads would not be a helpful connection. That is part of the strange advertising tightrope that DaimlerChrysler walks, to make the Chrysler nameplate appear to be American, although it is not, and make Mercedes seem German, although it is part of a globalized enterprise.

Lee Iacocca is a very fine man, and part of the money he receives from the ad spots go to a diabetes research project that Iacocca funds. His wife died from the disease. And Iacocca who supported Bush in 2000, but supported then John Kerry in 2004, has a flexible political outlook. However, it is sad that part of America's own automobile industry is now foreign owned. AMC which also become part of Chryler in the late 80's, had to seek a 49% financial stake by French carmaker Renault to survive until the Chrysler deal.

But the trend is clear, globalization of business is weakening the role of American industry in the world. Only in the area of military matters is America a real force. Yet the Iraq War proves a real weakness there. At 30,000 feet, with high tech aircraft America has a military dominance. In ground combat, poorly equipped insurgent fighters in Iraq seem to wear at American efforts to prevent any victory in Iraq from being achieved. And problems with the Space Schuttle program also call into question the American scientific or high tech product skills or abilities. With so many problems to this spacecraft, the more primitive Russian Soyuz spacecraft appears to be more dependable and reliable.

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