Whither Chrysler?

If you follow the business section of the paper – or the general automotive press for that matter – then you probably know that the much-ballyhooed honeymoon between Chrysler and Daimler-Benz has pretty much come to an abrupt end. A combination of decreased sales, surplus inventory and deep retail price cuts to remain competitive in the marketplace have caused Chrysler to predict a whopping $2 billion loss for this year. That’s right, billion with a “B”. Needless to say, the boys in Stuttgart are not amused.

The board at Daimler, led by Jurgen Schrempp, responded pretty quickly by lopping off a few key heads near the top, one of which being Chrysler president Jim Holden. At this point, you may be wondering what this has to do with the price of Porsches in Peoria? Well, I’ll tell you. I recently had a conversation with one of the top people in Chrysler’s marketing division. He told me that due to a combination of Chrysler’s yearly losses and its tremendous financial commitment to starting a factory NASCAR program (reputed to be $18 million at startup and a remarkable $20-30 million/year to operate), Chrysler was terminating all of its sponsorship and support of vintage racing except for those deals which it was already contractually obligated to for 2001. Turn out the lights, Jurgen, the party’s over.