Chrysler hit hardest in U.S. auto slump

By Alex Gary

BusinessRockford.com

Chrysler LLC fared the worst in a dismal month for most of the major automakers in the United States.

The privately owned, Detroit-based automaker nearly fell to No. 6 in the U.S. in sales in August, selling 110,235 vehicles, down nearly 35 percent compared with August 2007.

Chrysler was the shakiest of the Detroit Three, outsold by Japanese rival Honda Motor Co. and nearly passed by Nissan Motor Co., the only major automaker to gain compared with last year.

“The industry is changing rapidly in terms of what vehicles and features customers want and the leasing and financing options available to them,” Jim Press, Chrysler vice chairman and president, said in a news release.

Chrysler, run by Rockford native Bob Nardelli, received little help from the fuel-efficient trio of vehicles built at the plant in Belvidere.

U.S. dealers sold 9,643 Dodge Calibers, Jeep Compasses and Jeep Patriots, down slightly from July and off nearly 47 percent from its August 2007 totals. Chrysler officials blamed at least part of the sales decreases to planned cutbacks in fleet sales to rental car companies and governments. That may have contributed at least to the Caliber’s decline. Industry statistics showed that more than 56 percent of the Calibers sold in the first half of the year went into fleets.

August marked the third straight month of weakening sales of the Belvidere three compared with 2007, a concern to the automaker because higher gas prices have consumers flocking to fuel-efficient vehicles.

In August, for example, Toyota’s Camry and Honda’s Accord outsold Ford’s F-series pickups, which has long been the market leader in the U.S.

Despite this shift toward fuel-efficient models, sales of the Caliber are running more than 8 percent behind 2007’s sales, and Compass sales are off 24.7 percent. Only the Patriot is showing an increase, 8.9 percent, but it’s important to note that the Patriot didn’t hit most car lots until March 2007.

Chrysler converted the Belvidere plant six months ago from a three-shift operation with more than 3,800 workers back to a two-shift plant with 2,700. Those cuts, along with cuts at Chrysler suppliers around the plant, helped push the jobless rate in Boone and Winnebago counties to 9 percent in July.

The struggles raise the possibility that the company could cut further, moving the plant back to one shift, hearkening to the final days of Dodge Neon production from 2001 to 2005.

Reach Assistant Business Editor Alex Gary at agary@rrstar.com or at 815-987-1339.

Ford, GM, Toyota hurting, too
Ford Motor Co. reported a 26.5 percent drop Wednesday in its August sales in the U.S.
Nissan Motor Co. was the only major automaker to show a gain, 13.6 percent, largely on the strength of its truck sales, which climbed 34.8 percent.

General Motors Corp. reported a 20.3 percent drop in sales from a year ago but a 31 percent improvement over its July totals, thanks to employee pricing incentives on many models.
Ford said its Ford, Lincoln and Mercury car sales dropped nearly 9 percent, while truck sales were off more than 32 percent last month.

For GM, sales of light trucks tumbled 24.1 percent and car sales fell 13.9 percent. The automaker has extended its employee-pricing offer until Sept. 30.

Honda Motor Co.’s sales dropped 7.3 percent to 146,855 vehicles, as car sales fell 4.9 percent and demand for trucks tumbled 10.3 percent.

— The Associated Press

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