Table: Potholes Up Ahead
Zetsche wants to rev up Chrysler by cutting costs and boosting revenues, but he faces plenty of obstacles
Zetsche demanded that parts suppliers reduced prices by 5% immediately--and by a further 10% over the next two years. But these outfits are already struggling, and they say Chrysler is squeezing too hard.
Chrysler angered dealers when it cut financing and marketing support by $300 to $500 per vehicle. The two sides negotiated a more acceptable solution.
A lack of factory flexibility, along with labor pacts that ban plant closings, are hampering efficiency efforts.
Kicking the incentive habit is proving harder than expected in the hypercompetitive U.S. market.
Chrysler rolled out the Jeep Liberty and new Dodge Ram this year. It won't launch other major products until early 2004.