Join Date: Apr 2005
Location: New England - Mass
For cars, yes. Official word is it is going to be brand consolidation. All cars will be under the Chrysler marque and all trucks will be under Dodge. Dodge as a name is not going anywhere, but it's going to be the Chrysler Intrepid and Chrysler Viper... (actually, they'll probably just call it the Viper and leave the marque off all together).
This is a move designed to eliminate redundancy in models and reduce operating and marketing costs. ALL 3 manufacturers are closing dealerships, Cerberus' plan is to require all of their dealers to carry all 3 marques under the same roof (Dodge, Chrysler and Jeep) and has strict guidelines for a dealer's profitability. If you don't sell X number of vehicles a month they pull your license.
While many brands want a dealer to have a separate dealership for each to showcase only their brand (Mercedes, BMW, Land Rover, just to name a few) it costs more for the dealer to support a separate business for each car marque (building, rent, taxes, personnel...) Many dealers fight and some win and shave a single dealership with some of those brands, but it's not easy. Cerberus realizes the costs involved (that's what they do..private equity firm and all) and knows that requiring all brands in a single locations reduces costs by a third- less physical locations to keep stocked with vehicles, less locations to deliver to reducing vehicle delivery costs, under performing dealers removed further reduces those costs and the required inventory of vehicles they have to produce to stock the system.
The brand is safe, there's just a few changes coming. How do I know all this? I'm attached to the industry in my line of work.
I don't know who wrote that article, but they really need to know more about a company before making conclusions like that. The above has been announced already to the industry over a month ago!
Incidentally, Compaq was NEVER a good home computer, HP decided to let them burn themselves out (I live in the home of Compaq/DEC) since they were approaching the lowest consumer satisfaction in the market.. They were visible from marketing, not quality. Lenovo had been making all Laptops and PC's for IBM for almost a decade before IBM decided to get out of the market and let Lenovo manufacture for themselves.
The author of this article did very little research and made a lot of personal assumptions, but then again, no one who relies on finance and business news looks to AOL for it- they're not exactly known for news.