Thomas LaSorda, president and chief executive of Chrysler, has said that the whole of the Chrysler business is currently under review.
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“We must scrutinise the complete business: turnover, growth, products and also our costs,” he told the Borsen Zeitung business newspaper.
A German management task force has been sent to the US as part of a ‘Project Refocus’, which aims to cut the cost of a vehicle by $US1,000, and there is speculation that LaSorda’s position is at risk.
According to the paper, LaSorda is particularly concerned about being at a disadvantage because GM and Ford have reached new agreements with unions. LaSorda estimates that Chrysler has a several hundred million dollar competitive disadvantage compared to its Detroit-based rivals.
Suppliers are coming under particular pressure from Chrysler’s cost-cutting offensive, according to SupplierBusiness.com. Chrysler is seeking long-term relationships with suppliers, but some suppliers are resisting the high price cuts demanded for that relationship.
In an editorial, SupplierBusiness.com editor Edmund Chew wrote: “US parts makers still maintain that among the Detroit three, Chrysler has the most collegial, open-minded and productive working relations. But the company’s over-production and growing financial crisis has begun to put pressure on those partnerships.”
Chew added: “The growing impression among suppliers is that the emphasis is no longer on collegial relations and innovation, but on cutting prices – a reversion to Chrysler’s unpopular cost reduction drive under Wolfgang Bernhard six years ago, a power play from which the company’s supplier relations had only begun to recover.”
