Strategic Management Chrysler Introuble

Chrysler in Trouble Chrysler Motors, LLC was the third largest automobile manufacturer in the United States filed for bankruptcy protection April 30th, 2009, under section 363 of chapter 11of the United States bankruptcy code. The company included its 24 subsidiary in the filing. In order to remain viable and as a condition of its bankruptcy filing Chrysler announce that it would form an alliance with Fiat spA. Fiat was scheduled to receive a 20% stake in the company which would increase to 35% over time. The Voluntary employees benefit association would secure a 55% stake in the company once it emerged from bankruptcy. The United States Treasury would also participate in this restructuring since they considered Chrysler an integral part of the U.S economy and for their concern would receive an 8% stake in the company. The Canadian and Ontario governments would also receive a 2% stake. Analyst surmise that the major reason for Chryslers financial problems result from their poor business strategy, lack of innovation and the global financial crisis. Chrysler failed marketing strategy failed to produce vehicles that met the needs of the American consumers. Chrysler unlike its competitors Honda and Toyota did not produce fuel efficient cars. The company continued to produce large Trucks and Suv’s, with the increase in fuel prices consumers could no longer afford their products. Chrysler’s lack of innovation and inability to market to market fuel efficient vehicles led to their demise. Product quality was also an issue at Chrysler; quality related issues tarnished their brand image. Chrysler’s products historically have been of substandard quality per the U.S. auto task force. In 2008, the U.S. The U.S. economy experienced down turn. Banks ceased lending. They were problems in the U.S. real estate markets. There was a rise in unemployment and a decrease in personal spending hampered consumer spending. Consumers who wished to purchase

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