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Chrysler could drop weak sellers

September 08, 2007|From Times Staff and Wire Reports

Chrysler Group's new chairman and chief executive, Bob Nardelli, plans to keep the automaker's three brands but might cut some products as he leads the company through a restructuring.

"Clearly Chrysler, Dodge and Jeep are all very, very valuable brands," Nardelli said after a speech to the Automotive Press Assn. "I think we have to look very hard at some of the products within those brands."

In one of his first public appearances since becoming chairman last month, Nardelli wouldn't say which vehicles might go. Among those struggling are the Dodge Magnum wagon, which saw sales drop 35% in the first eight months of this year, and the aging PT Cruiser, which saw a 25% decline.

"We have to make intelligent decisions about the products and the brands," said Nardelli, former CEO of Home Depot Inc. "We can't just have emotional attachments about some of the products and brands that are out there."

Chrysler's new owner, private equity firm Cerberus Capital Management, has hired Nardelli and a handful of other executives to turn around the automaker.

Nardelli said he was pleased with the vehicles in Chrysler's pipeline and would make investments to improve quality, a problem that has bedeviled the company. The Chrysler, Dodge and Jeep brands all scored below average in this year's J.D. Power & Associates initial quality study.

"Those are the metrics by which consumers make their decisions," he said. "We're not going to fight those. We're going to embrace them."

Microsoft in deal for auto products

Microsoft Corp. is working with Germany's Siemens VDO Automotive on a line of communication, information, entertainment and navigation products for vehicles.

The deal extends Microsoft's quiet push into the automotive realm. The new products, which the companies said included high-end multimedia units and ways to better use portable devices such as digital music players in cars, would be built on the Microsoft Auto platform.

Siemens VDO Automotive, which was spun off from German engineering company Siemens this year, makes a wide range of products for cars, including navigation devices, stereo systems, and night-vision and blind-spot detection tools.

Financial details of the Microsoft deal were not disclosed.

Siemens VDO and Microsoft said they would deliver their products to the market faster than the typical automotive industry's product-development cycle. The first product, a multimedia platform built by Siemens that lets drivers use portable entertainment devices in the car, is expected to go into production as early as 2009.

Microsoft also is working with Ford Motor Co. on the Sync system, a $395 package that lets drivers use voice commands or steering wheel buttons to control their digital music players and cellphones. Sync is expected to be available on 11 Ford models by the end of the year.

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