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Sound the Chrysler Death Knell: Analysts

Unprofitable lines are likely to kill automaker despite bailout

By Jim O'Neill, Newser User

Posted Dec 11, 2008 8:33 AM CST

(Newser) – Chrysler’s lack of profitable vehicle lines will lead to its demise, reports the Detroit Free Press, regardless of whether the feds jump in with a bailout. With bad market conditions predicted to worsen next year, the struggling automaker will downshift its production on some lines and eliminate others, prompting bankruptcies and layoffs at suppliers.

“Can we see Chrysler as a viable entity for five or six years? I don’t think anybody thinks that,” says an auto industry analyst. Another predicts that as many as 100,000 jobs could be lost by 2011 as a quarter of suppliers liquidate or enter bankruptcy. The only upside? Reduced US production will bolster a down market for Chrysler's competitors.

[Images (4)]

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A lot full of unsold Chrysler Motors products at a dealership in Dormont, Pa., Tuesday, Nov. 11, 2008. (AP Photo/Gene J. Puskar)

Analysts say Chrysler lacks the scope of GM and Ford and likely will not survive, even with a federal loan. (AP Photo/Reed Saxon)

In this Aug. 4, 2007 file photo, sign installer Brian Bartkowiak reveals the new Chrysler sign after removing the DaimlerChrysler sign from in front of their headquarters in Auburn Hills, Mich. (AP Photo/Jerry S. Mendoza, file)

In this Oct. 25, 2007 file photo, the Chrysler logo is shown on one of its cars at a dealership in Portland, Ore. (AP Photo/Don Ryan, file)

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“Right now there are three Detroit manufacturers. One of those manufactures doesn't really have the scale ... that is really required to survive in this market."
- Michael Robinet,
auto industry analyst

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Sound the Chrysler Death Knell: Analysts