Chrysler: Fasten Your Seatbelts

With yesterday's news of intensified job cuts and acclerated reshaping of the automaker's product portfolio, Chrysler CEO Bob Nardelli seems to be moving on the prescribed schedule.

While Chrysler's public statements no longer feel like they're being translated from German by an automated program, yesterday's announcement does have that clear, clunky, American-manufacturing-company feel to it. Most important, the statement actually seems to reflect a company that is moving decisively against a clear strategy, detailing a thorough list of actions, both defensive and offensive.

Three things jumped out about the statment.

1. Timing. Coming just days after the UAW membership ratified the new labor agreement, the quick timing says management undertstands that the meter is running at Cerberus.

2. Framing. The company is undoubtedly looking to radically reset its fundamental cost structure, and it is explicitly using the slow-down in sales as the rationale for moving as hard as it can. That framing works well, because that downturn is undeniable, and thus gives strong credibilty to idea that the cuts are "required."

In almost every successful business turn-around story, the guys at the wheel leverage the big negatives to their own advantage. The Chrysler team seems to understand that they need to make the most of this window of adversity, because it will be much harder to justify meaningful cuts once sales return to growth.

3. Executive Roles. The quotes/attributions reflect a clear role sort -- as advised -- in a management suite many have said would be too crowded for good functionality. Here are the roles, with the quotes translated for easy comprehension.

Nardelli: The Strategy Guy.

Quote: "The market situation has changed dramatically in the eight months since Chrysler established the Recovery and Transformation Plan as its blueprint. Annual industry volume (U.S. market) then was running at a 17.2 million clip. Now, we expect a seasonally adjusted annual volume for 2007 to be significantly lower and carry over into 2008."

Translation: "It's bad out there, people. Very bad."

Quote: "I'm confident that we have the right team in place and a business plan that doesn't need to be re-written. Like all good plans, the RTP has built-in flexibility that allows us to stay one step ahead of market change. And that is the way to long-term sustained profitability."

Translation: "As today's cuts prove, the RTP is loose enough for us to do whatever we want and still claim to be on the same strategy."

LaSorda: The Labor Guy/Apologist

Quote: "We have to move now to adjust the way our company looks and acts to reflect a smaller market. That means a cost base that is right-sized and an appropriate level of plant utilization."

Translation: "The market is shrinking, and so are we."

Press: The Savvy Car Salesman

Quote: "These actions reflect our new customer-driven philosophy and allow us to focus our resources on new, more profitable and appealing products. Further, these product actions are all in response to dealer requests."

Translation: "We're going to make cars that people want to buy, and that our dealers want to sell."

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