Question 1
Mr. Obama’s first decision about the troubled US auto makers during the great recession of auto industry was that he would be the central player in the debate. Steven R. Rattner, a New York investment banker was appointed by Obama to lead a car industry task force established by the president.
G.M. was told it had 60 days to complete the agreements to reduce it debts to bondholders by two-third, and finalize a deal with United Auto Workers about shifting some of its health care costs to the union. The task force concluded that Chrysler was no longer viable to stand alone as a company, and therefore it was given 30days to complete its planned partnership with the Italian auto maker Fiat. Chrysler completed its deal with Fiat, largely ending its quick trip through bankruptcy and helped the auto industry to keep its workers employed and laid the ground for a rebound and therefore Mr. Obama did not give too much to fiat keeping in mind that Chrysler is becoming more vital to Fiat’s strategy with European auto sales heading south with the continent’s struggling economy. Also the combined strengths of the two companies’ Fiat and Chrysler lower costs and improve quality.
Question 2
International efforts, that means going global
Making more models available globally
Licensing production to local carmakers in some developing countries
Question 3
Aiming the global market
Predominantly Chrysler is looking to put on the market cars in fast-growing developing markets, particularly China and Russia. But it also expects to boost sales in already established markets, as well as Western Europe and Japan. In Europe, for instance, 100 new dealerships are being added up to give support to that effort. Doubling foreign sales to 400,000 cars in a period of five years is the Chrysler executives least objective. Chrysler’s non-U.S. sales moved suddenly to 10% in the second quarter of the year, and by the end of 2007, it looked forward to selling 250,000 cars in a foreign countries thus the early results were encouraging.
Making more models available globally For instance, in the U.K., 18 models will be on offer by next year up from six in 2003. On the other hand, Chrysler cars still reflect the company’s domestic orientation. The cars are built for American drivers and U.S. conditions hence limiting the foreign markets appeal. When Chrysler started taking international needs into account, it began addressing that problem in 2003. It’s having three times the number of cars available with right-hand drive, for instance, and quadrupling to 16 the number with a diesel engine option. It also launched its Dodge brand overseas for the first time last year with the introduction of the compact quality. Without doubt the Caliber is so far doing well: its first-year overseas sales hit 35,000 to 40,000.
licensing production to local carmakers in some developing countries
This is the fastest way to introduce products in foreign markets. Under a licensing arrangement, China’s South East Motors began producing Grand Voyager minivans in August. Subsequently licensed production of Chrysler cars in Russia could begin within the year. Moving into emerging markets and using combined undertakings are very pleasing propositions, but these takes time. But as foreign competitors increasingly put the squeeze on Chrysler on its home land, it can’t afford to take an easy scenic route to global success. Chrysler’s major concern is it left it too late to put its international objective into high gear.
Question 4
Chrysler should announce that it will reopen its Conner Avenue Assembly Plant in Detroit to produce the next generation SRT Viper. The company stopped production of the car last year. President Barack Obama should slap punitive tariffs on all car and light truck tires entering the United States from China in a decision that could anger the strategically important Asian powerhouse but placate union supporters important to his health care push at home.
References
Cannice, M., V. (2010). Management. Mumbai :Tata McGraw-Hill Education publishers.
Ackerson, R. (2007). Chrysler’s Classic Design for a Moder. St. Paul: MBI publishing company