Challenger Garage

Trevor M. Creed, Chrysler’s 63-year-old Senior V-P of Design, is retiring at the end of this month. Creed came from Ford in 1985 as Director of Interior Design. In his tenure, he played what company CEO Bob Nardelli called a “key leadership role” in the development of the Chrysler 300C, PT Cruiser, Dodge Challenger, Ram, Viper and Plymouth Prowler. "Trevor has led a distinguished automotive design career," said Nardelli. "We thank him for his contribution to the Company and wish him well in his retirement."Creed will be succeeded on September 1 by Ralph V. Gilles, 38, currently Vice President of Jeep, Truck and Advance Interior Design and is responsible for the styling of the new Dodge Ram pickup. Gilles is also credited with the conception of the Chrysler 300 sedan’s distinctive look. Gilles joined Chrysler in 1992.In another change in the company’s management hierarchy, Gilles will report to Frank O. Klegon, Executive Vice President of Product Development. Creed had reported directly to Nardelli but Chrysler calls the change an improvement that will allow the groups to work together.Chrysler also announced another executive change. Andreas A. Schell has been appointed Vice President of Electrical / Electronics Engineering Core, effective immediately. Schell will be in charge of all electrical and electronics engineering design, development, quality and "voice of the customer" activities, succeeding William H. Mattingly, who left the Company last month. Schell is a crossover from Daimler-Benz which he joined in 1996 as a research engineer. He most recently served as director of Chrysler’s Recovery and Transformation Plan and Strategy.

The Chrysler, Jeep and Dodge Dealer Council met with company executives last week. After two days of meetings and a confidential preview of products in the Chrysler pipeline, the council co-chairs, Jim Arrigo of West Palm Beach, Florida, and Hayden Elder of Athens, Texas, came away with renewed confidence in the company and its future. They decided to share their impressions with their fellow dealers and bought a full-page ad in today's Automotive News. The text of their letter is below:Dear Dealer Colleagues,On behalf of the 18 members of your Chrysler, Jeep and Dodge Dealer Council, we are pleased to share with you the highlights of our recent two-day meeting with Chrysler management in Auburn Hills. Throughout the meeting, Jim Press, Steven Landry and Chrysler Financial's Darryl Jackson and Mark Manzo demonstrated that they are living by the ideals of "Customer First" and "Quality Period" and are committed to partnering with the dealers and driving dealer profitability. We left Auburn Hills very enthusiastic about our future products, and the processes being used to enhance their quality, appeal and reliability.The meeting included good healthy dialogue on the issues of the day. But more importantly, we got renewed confidence in the financial health of the company, the future product plans and the commitment to quality.Our first event was a visit to the Design Dome for an up close look at 2009-2011 models. Without a doubt, the current leadership's commitment to products and quality is having a significant impact on the lineup. The quality of materials put into the new interiors, such as in the new Dodge Ram, is unbelievable. The new approach to enhancing quality is evident in everything we saw. Jim Press then gave us an impressive look at product plans all the way out to 2014. Jim made it clear that Chrysler, with the support of Cerberus, is in this business to win and is making the investments in future products we need to succeed.The surprise of the day came when Lou Rhodes, the President of Chrysler's advanced propulsion technologies/electric vehicle group, ENVI, gave us an opportunity to experience a developmental advanced-electric-powered automobile. It was fast, quiet and the technology is closer to market ready than any of us would have imagined. ENVI is a significant part of our future as Chrysler, Jeep and Dodge dealers, and we were thrilled to see Chrysler's progress in environmentally friendly advanced technology for the next generation.We left Auburn Hills with two clear challenges. First, leveraging all the tools we have at our disposal to drive sales in August and September. There are strong incentives available that can help us run out the model year and be ready for a stronger 2009. Secondly, we have to focus on preparing our businesses for a greatly enhanced, high-quality Chrysler, Jeep and Dodge product lineup in the coming years.We look forward to our local council meetings to report out the details of our discussions and share some insight into Chrysler's vision of the future. At the end of the meeting, Jim Press made it clear that the company is "all in" to grow our business, and the dealer council echoed that commitment on behalf of all 3,400 dealers. We are truly excited about the opportunities that lie ahead for us.Thank you for your support.Jim Arrigo and Hayden ElderDealer Council Co-Chairs

This Thursday, continue the daytime employee Wild Wheels @ Work party at the Walter P. Chrysler Museum with Dodge Challenger Night, the sixth and final event of the 2008 Cruise Nights series. All makes and models are welcome from 6-9 p.m., rain or shine. Check out the 2009 Dodge Challenger and Challenger R/T, the 2008 Dodge Challenger SRT8®, the just-released Mopar® Drag Race Package Challenger as well as 1970 and 1971 Challengers along with the 1970 Dodge Challenger T/A. Join AutoWeek Senior Editor Kevin Wilson at 7 p.m. for a look at 50 years of automotive passion as celebrated in the pages of AutoWeek. There also will be "best of" awards, opportunity to win four tickets to the Detroit Belle Isle Grand Prix, music, food and museum tours. Cruise Nights are presented by the Chrysler Jeep® Superstores and the Motor City Dodge Dealers.Weather forecast is looking great so bring the wheels on out or just come on by!

A panel of credit-rating agencies says Chrysler is the most likely of the Detroit automakers to seek bankruptcy protection in the next two years.According to a report written by JPMorgan analyst Himanshu Patel, analysts from Standard & Poor's, Moody's Investors Service and Fitch Ratings discussed the outlook for the three automakers. The panel concluded Chrysler was most vulnerable, followed by General Motors and Ford.S&P and Moody's both cut Chrysler's credit one level last week, leaving it seven steps below investment grade. Fitch lowered Chrysler’s rating to CCC, eight steps below investment grade, at the end of July.“There seemed general agreement, too, that a filing by one of the Detroit three would be negative, on balance, for the remaining two companies,” Patel wrote, adding the result could create a drag on new-vehicle prices and trade-in terms.Responding to the report, Chrysler spokeswoman Shawn Morgan said, “Any discussions regarding bankruptcy are speculative and are not reflective of the facts of our financial situation. Morgan added bankruptcy “…is not a measure we are considering. The company has a clear strategy to build a profitable enterprise for the long term as an independent company.”The panel also said the automakers may have to rework agreements to form the Voluntary Employee Beneficiary Associations agree to in last year’s labor agreements with the United Auto Workers because the money promised for the initial funding may not be available. Ray Young, GM's Chief Financial Officer, has said GM might consider such modifications if the U.S. market continues to deteriorate.

Rumors of Chrysler’s imminent demise are overblown, according to Mark B. Warnsman, a New York-based auto analyst with Calyon Securities (USA) Inc., but the lack of transparency at the privately held automaker poses special risks to its competitors and business partners, from suppliers to dealers.In a note to investors, Warnsman cautions the secrecy about Chrysler's financial status and financial market expectations that it will ultimately be sold off may prove to be a problem when an improving economy brings relief to the battered auto industry which currently is facing its worst sales year since 1993."As a large, newly private concern Chrysler has and, in our view, will continue to present a challenge to the remainder of the industry as the industry adapts to the reality and potential for sharp changes in the competitive landscape driven by Chrysler's actions," Warnsman wrote. He also noted, "Chrysler has embraced its status as a private entity as an enabler for a series of decisions that, at best, are unsettling to the rest of the industry. At worst, they could prove to be highly disruptive."Responding to comments made by Chrysler president Tom LaSorda and other senior company executives, who maintain Cerberus is a long-term investor, Warnsman said, "Cerberus may be a long-term investor, but we see it exiting its Chrysler stake within five years of its initial acquisition."Warnsman places a low probability on Cerberus selling Chrysler intact or spinning it off with an IPO. He considers bankruptcy as "a more remote possibility.” In Warnsman’s view, the most likely scenario is a “partnership-to-sell” as the holding company creates partnerships for key parts of Chrysler and then sells those parts.Chrysler recently has become much more open about its finances, publicly stating it has $11.7 billion in cash and securities and had $1.1 billion in pre-EBITDA earnings. Tom LaSorda recently commented that Nissan carefully studied Chrysler’s financial health before giving its truck platform to the Auburn Hills-based automaker.Warnsman, a former Ford executive, was a senior analyst with Prudential until it shuttered its research operations in June last year. He then joined Calyon, a Paris-based investment bank. When he was with Prudential, he opposed the breakup of DaimlerChrysler, saying, "In our view, the original merger strategy remains sound, and it is the execution that has lagged."

Chrysler plans to trim its supplier base as it works to achieve a 25 percent reduction in supply chain costs within three years. "We're going to get rid of those that are not core," said John Campi, executive v-p of procurement. Campi noted that half of Chrysler’s 800 suppliers, taken as a group, provide about five percent of its parts."I am not looking to kill suppliers," he said. "But there are some I can't save."Campi, one of Chrysler CEO Bob Nardelli’s old Home Depot crew, said the automaker might cut as many as 100 of its largest 300 current suppliers while it looks for new sources.As an incentive, Campi said Chrysler plans to select up to ten key suppliers for its "Supplier Choice" program. These manufacturers would be exempt from competitive bidding but would work with Chrysler to set a market price for the contract. They would also be involved in vehicle development. Japan's Denso Corp. is the first company to be chosen and Campi hopes to announce a second company before the end of September.With the declining sales of domestic-branded vehicles, auto industry suppliers have been taking big hits, caught between rising costs and automakers’ demands for reduced pricing. This has led to a worsening of relationships between car companies and component manufacturers. A recent survey by Planning Perspectives Inc. reported Chrysler had the worst supplier relationships of any of the top six automakers. To improve the situation, Chrysler has formed a dedicated supplier relations team and expanded its supplier advisory council. Campi said the company is ending its "Materials Cost Management" program, which required suppliers to meet specified annual cost reductions, because it didn't work.On Thursday, in an effort to reassure suppliers that Chrysler is sound, Campi and Ronald Kolka, Chrysler's CFO, gave key suppliers an in-depth look at the privately held automaker’s finances.

Chrysler’s Auburn Hills headquarters was the scene of a peaceful demonstration Thursday morning. More than 450 members of the United Auto Workers union traveled from St. Louis, Missouri, to protest the company’s plans to idle the St. Louis South Assembly Plant.Joe Shields, president of UAW Local 110 which represents workers at the minivan plant, was among the protestors. Jeff Hagler, president of Local 412, encouraged UAW members in the Detroit area to turn out to help support the protest. In an e-mail, Hagler said the union needs to send a strong message to management.The demonstration ended without incident around noon.

The 2009 Dodge Ram will be priced lower than its predecessor while offering more features. Mike Accavitti, director of the Dodge Brand and SRT global marketing and communications, said automatic transmissions and significant safety features like side curtain air bags, traction control and electronic stability control will be standard on all models and the new trucks will have upgraded interiors and more storage.The new Dodge pickup will start at $22,170 for the base ST regular cab, $26,225 for the ST Quad Cab and $32,530 for the SLT Crew Cab. The Crew Cab is a first for Dodge and Accavitti noted the segment had grown in recent years, saying, "There's 50 percent of the truck market that we don't serve." All prices include $900 in destination charges.

Vice Chairman Tom LaSorda says Chrysler and Nissan have completed much of the work on the new Chrysler-styled small car the Japanese company will be building for the American automaker. "We've pretty much finalized the design of the product," LaSorda said. He also said a name has been chosen but declined to reveal it. The new car is due to go on sale in late 2010.Speaking at the Center for Automotive Research’s annual Management Briefing Seminars in Traverse City, Michigan, LaSorda also refuted reports the two companies were working on a new mid-size car or that there would be any expansion of the current relationship, noting, "We said we'd keep open dialogue but I think we're busy right now." LaSorda said Chrysler will continue to pursue additional agreements and is optimistic about being able to strike deals with companies in China India and Russia in the near term.Nissan will also build a version of its Versa for Chrysler to sell in South America and Chery continues to work on a new small car for the Central American market but LaSorda said the Chinese automaker had not yet produced a car that can meet Chrysler’s standards.LaSorda dismissed market speculation that Cerberus was considering selling Chrysler, saying, "We're going to rebound. It's just a question of time. Bottom line is they are holding on for the long term and we'll see what happens."

Chrysler is spending $1.8 billion to convert the Jefferson North plant in Detroit, which now makes the Jeep Grand Cherokee, to production of a car-based sport utility vehicle ("crossover"). Tom LaSorda told radio station WWJ that the money will be spent on new tooling and a flexible body shop at the plant, and that the new vehicle will use the Phoenix V6 engines. Production is scheduled to start in early 2010.

While considerable information about the 2009 model year changes is still under embargo, Allpar now has information on the 2009 changes and upgrades, limited to what was released by Car and Driver. Chrysler 2009 model year changes

Chrysler has released the Dream Cruiser Series 5, which is available as an automatic only, with your choice of standard or low-pressure turbocharged engine. Numerous features are included, the most visible being a two-tone white-and-black paint job and the billet aluminum grilles. For details, see this Chrysler PT Cruiser site.

Chrysler wants the United Auto Workers union help it save money by agreeing to a four-day work week at many of its manufacturing plants in North America."We're looking at doing four 10s across the shops to help reduce energy costs," said Frank Ewasyshyn, executive V-P of manufacturing. "For us, it's a big energy savings."Company spokesman Ed Saenz says having hourly workers shift to four ten-hour days will allow the automaker to trim a “significant” amount from its costs but did not offer specifics.According to Saenz, Chrysler will introduce a pilot program this week at a parts distribution center in Atlanta. The UAW could not be reached for comment but some industry experts say Chrysler's initiative might be a cause for concern among workers as it reinforces the belief the plant is making vehicles for which there is no demand and the move is a precursor to more shutdowns and layoffs. This view is reinforced by the fact Saenz said the new schedule would not be implemented at the Belvidere or Sterling Heights plants which produce more popular vehicles like the compact Caliber and mid-size Avenger.Ford has already instituted similar schedules at some plants that were running below capacity. A Ford spokeswoman says the company saves on electricity and other costs by running the equipment longer for four days, then shutting down on the fifth. This also allows maintenance to be done on the fifth day instead of the weekend when it is more expensive.General Motors says it has no plans to change its work week.

Chrysler scored the worst of the six largest automakers in a recent survey of supplier relations. Once highly regarded by suppliers, the company’s ratings have taken another big hit since the Cerberus purchase.According to the latest Working Relationships Index (WPI) prepared by Planning Perspectives, Inc. of Birmingham, Michigan, industry-wide automaker-suppliers relations have fallen to their lowest level in five years as component suppliers fight for survival as they cope with the automaker customers working to control costs and big increases in raw materials.The WPI rates the automakers on 17 criteria in five areas. Scores range from 0-500 with a score between 350-500 earning a “Good to Very Good” rating. A score in the 250-350 range is considered “Adequate” and a score below 250 being classed as “Poor to Very Poor.” While five of the six automakers lost ground from last year, the Japanese companies fared better than the Detroit three. Toyota was tops in the survey with a score of 367, a 48-point tumble from 2007. Honda was the only other automaker in the “good” range at 359. Nissan's ratings fell to a barely “Adequate” 253.Ford was the sole car company to show an improvement, though its relations were still rated “Poor” at 191. Over the last three years, Ford has trimmed its supplier ranks but worked to forge better relations with its remaining suppliers.GM’s score fell eleven points to 163, just two points ahead of Chrysler whose score fell 57 points, from a Detroit-best 218 to 161. From 2002 to 2007, Chrysler outscored the other U.S. automakers.

Moody's Investors Service has lowered Chrysler’s corporate family rating farther into junk territory and said the new rating remains on review for possible further downgrades. It also lowered the ratings on about $9 billion in Chrysler debt. In cutting the rating from B3 to Caa1, the agency said the company is particularly vulnerable to the shift in consumer demand away from the light trucks and SUVS that make up 72.3 percent of the automaker’s year-to-date sales.Moody’s gave credit to Chrysler’s "relatively aggressive and successful cost-cutting program" but said it will likely to continue to burn through its available cash in the intermediate term.

The New Hope Auto Show is this weekend, August 8 and 9 at New Hope-Solebury High School in New Hope, Pennsylvania. Show hours are from 9:00 AM to 4:00 PM each day.The New Hope Automobile Show has become a showplace for the magnificent antique and classic automobiles that compete. This year the show is limited to just 250 vehicles per day.Sunday will feature Chrysler Classic Cars and Dodge Vipers and Allpar’s David Zatz will be on hand for the festivities.Since its inception, the New Hope Automobile Show has contributed the majority of the funds raised to funding scholarships for deserving seniors at New Hope-Solebury High School. Since its beginnings, the show has raised tens of thousands of dollars for these scholarships through the generous support of our sponsors.This year’s show will also benefit Tabor Children’s Services of Doylestown and Germantown. Tabor has a 100-year history of keeping children safe, strengthening families, and promoting independence. Admission to the show is $7.00 per person. $5.00 for Senior Citizens 62 and over, children under 12 accompanied by an adult are free. Active duty military and dependents are free. On-site parking is $5.00.For more information, including directions, visit the New Hope Auto Show website.

Chrysler could be forced to shut down some production if Dana Holdings Inc. wins its lawsuit to end a money-losing contract. The automaker would have difficulty obtaining the drivetrain components Dana supplies for certain Jeep and Dodge vehicles.Dana is seeking a price increase and yesterday asked U.S. Bankruptcy Judge Burton Lifland to confirm that its supply agreement with Chrysler ends on December 31 this year.Speaking in an interview yesterday, James Gillette, a consultant with CSM Worldwide, said, “It puts an enormous amount of pressure on Chrysler. It's not like there are 200 other suppliers they could go to. Dana does have some level of bargaining power.” The latest dispute comes as Chrysler tries to reduce parts production costs by 25 percent over the next three years. Chrysler turned down a request for higher prices from Plastech Engineered Products Inc. in February, causing Plastech to file for bankruptcy, and is fighting with Germany's Continental AG over a parts contract. According to Continental’s CFO Alan Hippe, Chrysler owes Continental “substantially less than $100 million” for failing to purchase a guaranteed number of parts.If Dana prevails in its suit, Chrysler might be able to turn to Magna International or American Axle, but neither of those companies are likely to accept a money-losing deal. Dana says it will lose $75 million a year if the current agreement is upheld.

Despite an improvement in two of its brands, Chrysler remained the lowest-rated of the Detroit auto makers in the latest J.D. Power and Associates' annual survey of vehicle dependability with all three brands coming in below the industry average.The survey ranks 37 automotive brands based on the number of reported problems per 100 vehicles and covers models that are three years old. The 2008 survey used feedback from 52,000 original owners of 2005 vehicles. In the latest survey, the industry average was 206 problems per 100 vehicles, a 4.6 percent improvement over the 216 reported in 2007. Chrysler, which moved up from 29th to 24th in the rankings, had 229 problems, Dodge had 230 also improved on its 2007 results but dropped below Chrysler this year, coming in 25th. Jeep on the other hand, fared much worse this year, dropping to 32nd from 16th. Owners reported 253 problems per 100 Jeeps, up from 219 last year, when it was ranked the best of Chrysler’s three divisions. The average for the company’s divisions was 237 problems, a decline of 1.1 percent from the average of 235 in 2007Lexus maintained its place at the top with 120 problems reported while Land Rover remained at the bottom with 344.All three of Ford’s domestic brands scored better than average and Mercury took the second-place spot with just 151 problems. Lincoln was eighth on the list with 165 flaws while Ford itself came in at No. 14. David Sargent, vice president of automotive research for J.D. Power, noted this was the first time in recent memory that a domestic manufacturer had all its domestic brands ahead of the industry average.GM’s average results were 2.9 percent better than last year’s but several GM brands lost ground. Cadillac retained the No. 3 position but Buick, which shared first place with Lexus in 2007, came in sixth, behind Toyota and Acura. Pontiac, GMC, Chevrolet and Hummer were all below average with Chevrolet coming in at twenty-sixth, two spots lower than Dodge. Saturn came in just ahead of Jeep.Commenting on the results, Chrysler spokeswoman Mary Beth Halprin said they do not reflect the changes the company has made to improve quality in recent years. J.D. Power’s Sargent noted Chrysler continues to score poorly in J.D. Power's new car quality survey, too.

Steve Saleen’s new company, SMS, has announced the first product in its line of ultra-high performance parts, the SMS 296 Supercharger. Designed, engineered, manufactured and assembled in-house at SMS’ 150,000 square-foot facility, the SMS 296 with its innovative dual-screw technology allows owners of HEMI 5.7 and HEMI 6.1-equipped vehicles to boost under-hood horsepower by up to 45 percent. The company calls it “the ultimate supercharger for Mopar enthusiasts.”Saleen says the SMS 296 Supercharger is packed with new features created by the company’s engineers to provide optimum boost in an exceptionally compact package that will fit under the stock hood of any 2005 to 2009 HEMI-equipped Chrysler vehicle.Topping the list is SMS’ patent-pending Delta-Frame internal intercooler with two thin-core intercoolers and single-pass coolant flow. The new design provides for a large increase in surface area, minimizing pressure drop and optimizing thermal characteristics. The configuration also acts as a mechanical diverter for effective air transfer into the ports, while the angled manifold allows the packaging of runners that are much longer than those found in conventional layouts. The long intake runner optimizes airflow efficiency and contributes to the supercharger’s low profile.At the heart of the SMS 296 Supercharger are the asymmetric multi-lobe compressor screws, among the most efficient configurations for supercharging but also one of the most difficult to manufacture. For that reason, the components for the SMS 296 are machined in-house by SMS on state-of-the-art CNC equipment which allows SMS technicians to maintain incredibly tight tolerances.. The SMS 296 Supercharger also will be standard equipment on the highly anticipated 2009 SMS 570 Challenger and SMS 570X Challenger with power ratings from 500 to over 700 horsepower, respectively.

Dana Holding Corporation has filed a lawsuit asking a bankruptcy judge to allow it to terminate its agreement with Chrysler if it can’t get better terms. The Toledo, Ohio-based company says it is losing money on drivetrain components it is selling Chrysler under the current deal struck in August 2007 and confirmed by the U.S. Bankruptcy Court in New York in September.That contract expires on December 31, 2008 and Dana wants the judge to issue a declaratory judgment that it would not have to supply parts to the Auburn Hills automaker after that.Dana wants Chrysler to negotiate new prices for next year that will cover overhead and provide for a profit. But automaker says its long-time supplier does not have the right to end the agreement and must continue providing parts at current prices. Dana maintains doing so would result in annual losses of $75 million or more."Our goal is to establish a mutually rewarding supply agreement with Chrysler moving forward," said Dana Executive Chairman John Devine. "However, Dana is prepared to exercise its right to discontinue supplying Chrysler effective January 1, 2009, if we continue to be unsuccessful in engaging them to address this goal in a meaningful way.”Devine also said the action "…Serves to illustrate our commitment to pursue only market-competitive business opportunities moving forward."Dana has had a 70-year relationship with Chrysler. It supplies axles and drivetrains for the Jeep Wrangler, Liberty, and some versions of the Grand Cherokee as well as the Dodge Nitro and Viper and certain versions of the Dodge Ram pickup.