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Chrysler in Trouble

In: Business and Management

Submitted By marie1781
Words 1711
Pages 7
Synopsis In 1921, Walter P. Chrysler became chairman of Maxwell Motor Corporation. Due to its high debts and declining sales after World War I, automobile production under Maxwell was stopped. In 1924, the Chrysler Six was launched in the U.S. for $1,565.00. Chrysler Motors LLC has been the third largest automobile manufacturer in the United States since 1928 with its acquisition of the Dodge Brothers firm. Over the years the company introduced many different models, but they were able to survive The Great Depression due to the strong sales of their entry-level Dodge and Plymouth brands. Chrysler’s many automobile innovations such as the HEMI engine developed in 1951, power steering, power windows, power brakes, the alternator and electronic fuel injection have made them extremely popular with consumers (Wheelen & Hunger, 2012, p. 17-2). By 1960s, Chrysler expanded their company into Europe through multiple company acquisitions, but with environmental pollution issues and the oil crisis of the 1970’s Americans started preferring Japanese’s fuel-efficient cars instead of bigger American cars causing sales to decline. In 1979, Chrysler promoted Iacocca as Chairman and CEO who in turn revamped the company and set up a new management team. He started cost-cutting measures to lower their $4.75 million debt and expanded the line of their passenger automobiles through a $1.5 billion federal loan (Wheelen & Hunger, 2012, p. 17-3). In 1983, the company had recovered from their crisis and repaid the federal loan ahead of schedule. Chrysler Corporation financial condition started deteriorating again. In May 1998, Chrysler Corporation and Benz AG, a German automobile manufacturing company, created a merger of equals. The company failed to make the merger with Daimler-Benz successful due to significant differences in the two companies. Nine years later, DaimlerChrysler

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