AUTOSHOW - Chrysler to target $1000 per vehicle cost cuts (Outsourcing)

[OhioChick]

Sat Nov 18, 2006 5:26 PM IST

BEIJING (Reuters) - The head of the Chrysler unit of DaimlerChrysler said on Saturday the company will target cost cuts of $1,000 per vehicle through increased outsourcing outside of North America and other savings.

"We are willing to import, with the focus on being competitive," Chrysler head Tom LaSorda told reporters at the Beijing International Automotive Exhibition.

He said that over the next six to 12 months, the company would identify cost reductions averaging $1,000 per vehicle, with part of that coming from outsourcing.

He did not specify where the outsourcing would be done, saying "we are going to source where we can get good low-cost components and high quality."

LaSorda did not comment on whether layoffs would be a part of the cost savings as they have been at Ford and GM.

http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-11-18T171832Z_01_NOOTR_RTRJONC_0_India-276805-1.xml&archived=False

"good low-cost components and high quality?" Good luck with that one.....you get what you pay for.

[RC]

1. Golly Gee... They think war is a good thing, but they out source

any and every job that will be needed to those that would bring the chickens home to roost. Short sighted, very short sighted.

And who is to buy their products when their 'customers' are holding down two jobs to put food on the table?

[Missy M]

2. I would rather pay $1,000 more for a car and keep the jobs...

in this country. In my opinion "good low-cost components and high quality" do not exist.

[doc03]

3. Sorry but that's not true, I heard a report last week

the Ford Fusion was rated as the highest quality of all (domestic) autos. The sad part is the Ford Fusion is assembled in Mexico with 100% non-USA components. Also yesterday I heard that Toyota pays an average of $31 an hour in their US factories compared with GM's labor costs of $80 an hour. Most of that difference is from legacy costs since they have to pay all the pension and health care costs to their former workers. What the solution is I don't know, but eventually we the taxpayers will be stuck holding the bag because these companies failed to fund all these benefits they promised the workers.

[w4rma]

4. That doesn't sound "domestic" to me. (nt)

[doc03]

6. Exactly, doesn't this prove you can get get

quality products on the cheap?

[TheFarseer]

8. US Companies are only addressing one problem

and that "problem" isn't even a problem. Do you really think Japanese companies are forced to pay higher wages than US Companies? Our standards of living are pretty much the same. Their problems as far as costs go are healthcare, pensions, exorbitant salaries for upper management and then we need to talk about focusing on Hummers when gas is $3 a gallon and a perceived inferiority in quality vs. foreign cars. They need to re-work those union contracts, and the unions have got to be reasonable. $31/hr is a fine pay rate (I'd be damn happy with that!) and would help put GM/Ford/Chrysler on even footing with Japan. I'm not saying give away the store, I'm saying be reasonable about how much you should be making for what you are doing AND how the company is doing and that includes CEOs.

[notadmblnd]

5. so does this mean we can expect the price of new cars to come down?

Nt.

[liberal N proud]

9. LOL

Sure just like the tax cuts for the rich were going to trickle down through the economy to us below the elite class

[llmart]

7. If he "failed to comment on layoffs".....

that can only mean one thing - there will be layoffs.

[lumberjack_jeff]

10. Chrysler supports outsourcing!? I'm outraged! I'll buy Honda!

Tilting at windmills is in my nature, but I see little to disagree with here.

It is the job of a business to obtain/retain market share. If their products are overpriced (why should a Jeep liberty CRD list for nearly $40,000?) it is necessary to find ways to cut costs. Like it or not, the auto industry is already thoroughly outsourced/offshored/globalized.

Try to find an american made part on a Chevy Aveo.

That said, perhaps part of that $1000 per car cuts should come from executive salaries.

[Porcupine]

14. Lots of superior "imports" are assembled in the US

The fact is that the big 3 automakers put all their chips in the SUV/Pickup basket. Even after 9-11 with fuel prices climbing it didnt' occur to these idiots that maybe they needed to get some smaller vehicles into the pipeline so that they had something to sell. Now they've got nothing but trucks sitting on lots unsold and collecting birdshit.

When they do sell their current inventory they lose money on every vehicle. National health care would have saved them money. Having hybrids would have got people on their lots. Electrics would have sold like hotcakes when gas was $3.25 gallon here in California.

They've got nothing.

[PSPS]

11. National healthcare would save them almost twice that much per car.

[msgadget]

12. Yep.

[area51]

13. You're probably right.

Our insane anti-life policy of healthcare not being a guaranteed right like it is in the civilized countries adds a lot of cost to products. We can't complete with civilized countries here due to higher costs, and a sicker workforce.