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Daimler and Chrysler announced they had split a few months ago, after a stormy nine-year relationship that began in 1998 with promises of everlasting love.
They were warned. It can't last, said industry analysts. Long-distance romances and all that. One partner in Germany and the other in the US. The luxury German and the working-class American. Daimler drinking Moselle at the football in Stuttgart and Chrysler knocking back Bud at the World Series in Motown.
There will be clashes, blood on the floor. It will end in tears and tempers, they said. The analysts were right.
But Daimler and Chrysler pretty much parted friends, despite a few personal fits of pique at the end. Daimler left a thank you card, too, by retaining a 20 per cent stake in Chrysler in a US$7.4 billion ($9.6 billion) deal.
The American carmaker's new partner took over the reigns recently. New York private equity firm Cerberus Investments said it would return Daimler's 20 per cent vote of confidence by turning the carmaker round.
Private ownership would help the company focus on longer-term growth, it said. Chrysler lost US$618 million in 2006 and US$1.98 billion before interest and taxes in the first quarter of this year and has said it will remain unprofitable until 2008 as it restructures, cutting jobs and closing plants.
Cerebus said it has the people to change Chrysler's fortunes. Its chairman and public face is John Snow, once the boss of the US Business Roundtable, a top corporate lobby group. Snow, 67, was also Secretary of the US Treasury last year, before President Bush forced him out.
Most analysts expected Cerberus executives to pick a US motoring industry heavyweight to to run Chrysler, after its former chief executive Wolfgang Bernard reportedly declined the job.
But like Ford, which poached aviation chief Allan Mulally as its main man, Cerebus picked the former boss of home improvement chain Home Depot, Bob Nardelli.
The appointment raised eyebrows but analysts said could be just the jolt needed to revive the ailing carmaker.
Nardelli, a former General Electric executive, left Home Depot under a cloud in January after a shareholder rebellion sparked by his hefty pay and the company's stagnating stock price. His severance package, worth an estimated US$210 million, made him a poster child for excessive executive pay.
Now Nardelli is moving into Chrysler's corner office as the US carmaker faces a raft of challenges, including a crucial round of contract negotiations with the United Auto Workers union.
Chrysler is desperate to secure cuts in pay and benefits to make it more competitive with Japanese heavyweights Toyota, Honda and Nissan.
Chrysler isn't saying what deal it cut with Nardelli. It doesn't have to - it's a private company. Reportedly, Nardelli will take home just US$1 a year and will likely get an ownership stake in the company if he can revive its fortunes. Nardelli, say US reports, has a results-driven management style that rankles both employees and customers, but he helped increase revenue and profits at Home Depot and his strong leadership style could be just what Chrysler needs.
Nardelli's reputation as a deal maker may also be crucial as the carmaker needs to forge new global alliances, probably with names like Hyundai, Volkswagen, or Renault-Nissan.
The feeling among US analysts is that Chrysler on its own is going to have a tough time surviving. It has to be aggressive with products and prices worldwide.
And that's what it did in New Zealand this week, slashing prices across its Chrysler, Dodge and Jeep range, some by as much as $13,000. The Jeep Grand Cherokee SRT8, for example, is down from $91,990 to $84,990.
Chrysler announced the new prices of the all-wheel-drive Jeep Patriot and front-drive Dodge Avenger sedan.
The Patriot starts from $34,990. The traditional grille and square bodyshell styling gives it away as a member of the famous off-road family, more so than the Compass, which arrived earlier in the year.
Standard safety features include a stability programme, traction control, anti-lock brakes, anti-roll system, and electronic brake aids. There are front and side curtain airbags, too. The Patriot's electronic four-wheel-drive system splits drive front and rear on- and off-road. It also allows both front and rear axles to be locked to improve traction.
There are two engine options: a 2.4-litre petrol unit delivering 125kW of power and 220Nm of torque and a 2-litre Volkswagen-sourced diesel unit producing 103kW and 310Nm. Gearboxes are CVT and five- and six-speed manuals.
The Dodge Avenger, the third Dodge to land here in 12 months, has been dubbed the "mini Charger" after the muscular rear of the original muscle car of the 1960s and 1970s. But there comparisons must end. The Avenger enters New Zealand as a family sedan, capable enough and with plenty of room for passengers and luggage, but largely uninspiring compared with allround sharper rivals in the segment.
There are two models, the entry level SE at $33,990 and the higher spec SXT at $38,990. Both are powered by a 2.4-litre engine developing 129kW at 6000rpm and 225Nm at 4400rpm.
This engine drives through a five-speed manual or a four-speed automatic transmission. The four-speed unit often gets lost looking for a suitable ratio, certainly when punching into the hills. The engine is harsh at the top end, too.
Early next year, the Avenger SXT will get a 2.7-litre V6 petrol engine and a turbocharged 2-litre common rail diesel engine, both mated to six-speed automatic transmissions with sequential shift.
No word on prices yet but they are expected to be sharp. Chrysler/Jeep/Dodge owner Cerebus Investments is here to stay.
