Friday, February 23, 2007

VW Becomes Latest Automaker To Say No Thanks To Purchasing Chrysler

VW has now become the third automaker to refuse to want to purchase the Chrysler division from German owner Daimler, following a refusal by RenaultNissan and Hyundai. Chrysler may prove to be a harder sale than anticipated because of fears of the slow collapse in American manufacturing although the huge market for automobiles in general is a very desirable goal of any world automaker. And although some automobile workers in Europe earn very good wages, where unions are far stronger than in the U.S., still some automobile companies may not like the current contracts that American UAW workers have negotiated. Buyouts and layoffs have become common among the U.S. automakers looking to trim costs or to downsize to profitability.

Is Chrysler headed the way of so many former U.S. automobile brands that have collapsed over time? It is not known at this point. But while U.S. automakers such as GM, Ford and Chrysler have been in a retreat mode in the last few years, other automakers such as Toyota and Honda with large scale American production plants have done extremely well by comparison. Part of the problem is customer perceptions of quality, technology and style, which have only tended to hurt U.S. automakers in recent years, although most U.S. autos are given a quality rating only slightly behind some Japanese and South Korean brands, and ahead of the quality of many European automobiles, yet this has not translated into better sales.