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Cramer-Krasselt: Winning the Spin Ba...   There Are Rats in the A-hed!!!
Feb 7 2008 11:39PM EST

Chrysler: On Strategy, In Public

From a business spin perspective, Neal Boudette's Thursday evening WSJ scoop on Chrysler's intention to slash its product line illuminates two important realities.

Point 1: Given that the DFP's Tim Higgins then reported the automaker will be cutting its line-up by half, Bob Nardelli clearly understands the business model must be fundamentally restructured to a much smaller scale. Jack Flack pointed that out in an October Rescue Memo, and advised the redemption-craving CEO:


Point to a long history of woes, and make the case that Chrysler will never escape from recurring crisis until it is completely recast. Your language should sound something like this:

"Folks, it's much, much worse than we thought. Our business model is fundamentally flawed, and it has been for decades. Iacocca couldn't fix it, and neither can I. If we want Chrysler to exist a decade from now, then we are going to have to drastically change our basic composition. We can create a great business, but we will have to move boldly."

Point 2: When it comes to generating headlines, the new Chrysler team is surely learning by now that sharing news with its independent dealers is only slightly less efficient than issuing a press release or running a pretend cattle drive. (Punchline: telegraph, telephone, tell-a-dealer. Yuk-yuk-yuk.)

In fact, Jack Flack imagines dealers beaming to Boudette seven-second-delay cell-phone videos of Jim Press offering this behind-closed-doors statement:


We are a 2.7 million vehicle a year company, not a four million a year company.

Jack Flack has frequently parse-ecuted Chrysler about its stilted talk, but also has noted that its walk looks increasingly like the gait of company that is executing a bold strategy with decisiveness.

This latest move only further reinforces that notion, particularly given that Chrysler's recent union agreement reportedly tied most of its job guarantees to specific car models. And if half of those models go away, Chrysler is indeed well on its way to a radically different cost structure.

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