Professor Elam

Jerry Flint has covered the auto industry since the 1950s, so I find his comments on its prospects quite interesting. While I am not teaching managerial accounting this semester, his comments figure heavily in what we study there. Here he comments on the viability of the bailout plan, as he and Rick Waggoner observed, it is hard to be profitable when no company is selling enough cars to be profitable. 

Can Chrysler survive? For those of you looking for a good book to read, I suggest Iacocoa's autobiography which should be required reading in college business courses. But frankly when he took over chrysler things were a bit different. He had Mitsubishi to design a great 2.2 L turbo four, and came up with the mini van. Flint suggests that an alliance with VW or Nissan would work. If VW and Nissan had lots of time and money that suggestion might have some merit. But frankly I doubt we need three manufacturers of large pickups, do we really?  Next time a toyota tacoma pulls up next to you, it is the 'small pickup' ask yourself how many consumers, non commercial folks, really need a pickup larger than that, the answer is they don't. I think the real Achilles heel for Chrysler is their incredibly weak dealership network.  Walk into one, compare it with a Ford or GM dealership and you see what I mean. And as he says, cost cutting has left chrysler reliability, always a problem, even worse off. And right now there is simply no Chrysler economy car. A takeover would mean closing chrysler dealerships, why buy a Nissan or VW small car with a Chrysler badge on it?

Actually there is one segment that Americans have that no foreign automaker has, commercial 3/4 to two ton vehicles. It might make more sense to me for a truck company, like Navistar, to acquire the Dodge Ram pickup line, they used to sell under the International brand, their own pickups and the original SUV, the Scout. As for the Chrysler cars, would anyone really miss them in a market swollen with over capacity?

I doubt Bob Lutz, in his mid 70s, would leave GM….