Chrysler Seeking Additional Partners
By Byron Pope WardsAuto.com, Feb 9, 2008 5:24 PM

SAN FRANCISCO – Chrysler LLC is in talks with other auto makers about product tie-ups that will allow the auto maker to expand its reach into additional vehicle segments, Vice Chairman and President Jim Press says.

Chrysler already has announced a deal whereby Nissan Motor Co. Ltd. will supply it with subcompact cars for the South American market starting next year and a separate pact with China’s Chery Automobile Co. Ltd. for small cars to be sold worldwide, including the U.S.

But Press says there could be more collaborations to come.

"We can top-hat another manufacturer’s car or platform," he tells journalists at the annual National Automobile Dealers Assn. conference here. "That’s a way to be more efficient with our resources and develop truly exciting products.

"We’re talking to people about that," he says.

Press also sheds some light on Chrysler’s "Project Genesis" initiative, which is designed to streamline the auto maker’s product portfolio and dealer network.

Although he says it is too early to tell whether Genesis will result in more or fewer products in Chrysler’s portfolio, he does admit the auto maker’s manufacturing footprint likely will be impacted by the plan.

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"We would like to be more efficient in utilizing the capacity in our plants," he says, noting that doesn’t necessarily mean hourly workers will face additional job cuts.

One possible scenario under Genesis could see the elimination of either the Dodge Durango or Chrysler Aspen SUVs, Press says.

Combined, the two SUVs account for roughly 40,000 units annually, he says.

"The reality is one of those should be able to do 40,000 by itself," Press says.

Instead, "we could have one at 40,000 units, and then you could do a cross/utility vehicle that may have more of a luxury feeling," he says. "By separating those over a bigger market footprint, you may lose 5,000 to 10,000 Durangos, but you’re going to pick up 15,000 to 30,000 from a different product in a different market with an upscale CUV."

Chrysler has the money to support its new-product initiative, Press says, noting the auto maker has earmarked $3 billion annually for product development.

The trick is being "more efficient with our resources," he says. "We need to get a more-effective product portfolio and be better represented in key segments."

Because of its purchase by Cerberus Capital Management LP last year, Chrysler now has a speed advantage over its publicly traded competitors, Press contends, pointing to the 21 months it took to develop the upcoming Dodge Challenger muscle car.

bpope@wardsauto.com