Chrysler Still in Massive Trouble After Bankruptcy

Saving Chrysler was a bit of a Herculain task. It took dragging Fiat into the mix to make it happen. Well, we have bad news. Chrysler is still in massive trouble after bankruptcy.

Bankruptcy was supposed to solve much of what ailed Chrysler. Well, it didn't. Although most debt was extinguished, two things are still killing the company. First, the vehicles offered are largely hunks of junk and are not finding much traction with the buying public. Second, there appears to be a bit of a backlash against the company for the bailout money it took from the government. It would appear the American taxpayers have had about enough of the government propping up companies.

How bad are things? Well, let's do a quick comparison. The Cash for Clunkers program ended in August, so we saw a drop in sales for all the big car companies. This was natural, but the figures also show us something dramatic. Ford had a drop of 5 percent. Chrysler? A staggering 42 percent drop. 42 PERCENT! That is simply horrific and no amount of government help is going to keep a company with this kind of performance floating.

Chrysler CEO Sergio Marchionne who turned around Fiat looks to be aging dramatically each day and has that expression that says, "What did I get myself into?". To his credit, he is taking hard and fast action. He has fired long time managers and plans to ditch most of the current model lines in exchange for smaller, fuel efficient Fiat models that will be re-branded as Fiats. The problem is he needs 18 months to make that happen and nobody knows if Chrysler can last that long.

Marchionne took on a disaster at Fiat and turned it around. He’s taken on a bigger one at Chrysler. Introducing new models can go a long way to saving things, but he still has to figure out how to get the American public to come back to the brand. If he can swing that, he’ll be an iconic figure in Detroit.

Will Chrysler make it? It is difficult to say as the odds look to be about 50/50.

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