A brief history of Chrysler: From the American Dream to the Chrysler Group LLC.
[vc_single_image image=”47430″ img_size=”article-image”]Chrysler is a marque as iconic as the New York art deco skyscraper that bears its name. One of the original American “Big Three” automakers, Chrysler models may not be as recognisable as those of GM and Ford, but the firms’ contributions are undeniable. We look at the interesting history of Chrysler.
When did Chrysler start making cars?
Walter P. Chrysler more or less embodies the American dream. An engineer who got his start as a railroad mechanic, he worked his way up from chief of production at Buick in 1911 to president of the company in just four years. His tenure at Buick made him a fabulously wealthy man, but his sights were set on forming his own company. Walter P. purchased the ailing Maxwell Motor Company in 1921. The first Chrysler produced was the Chrysler 70 and shortly after, Chrysler Corporation was founded in 1925.
Not long after its foundation, the firm began offering different brands targeted at various markets. Plymouth was more affordable, while DeSoto occupied the mid-range market and the recently produced Dodge provided the company’s range of trucks. Chrysler soon became second-place for US sales, a position they kept until 1949.[vc_single_image image=”47429″ img_size=”article-image”]
Imperial and Valiant
[vc_single_image image=”47428″ img_size=”article-image”]It is thought that the creation of multiple marques under the Chrysler umbrella was inspired by General Motors. For example, a top model of the Chrysler brand, Imperial, became a separate make on its own, as did the Valiant in 1960. In the US, however, Valiant was sold as a model in the Plymouth line and the DeSoto was discontinued.
When did Chrysler acquire AMC?
Chrysler acquired American Motors, or AMC, in 1987. One of the conditions of this sale was to create the Eagle marque in 1988. This was to be sold at existing AMC-Jeep dealers. The marque lasted a decade and the Plymouth was ended three years later.
When was the Plymouth Barracuda introduced?
A Valiant sub-model, the Plymouth Barracuda, was introduced in April 1964.Unfortunately, two weeks later, the Ford Mustang was also launched. This meant that the Barracuda was the first Pony car. A pony car is essentially a car that has been inspired by the Ford Mustang.
The Mustang outsold the Barracuda by 10-to-1 and the perception was that the Barracuda was essentially a reskinned Valiant.
When was Chrysler Europe formed?
Chrysler Europe was formed in 1967 and was a merger between French Simca, British Rootes and Spanish Barrieros companies.[vc_single_image image=”47427″ img_size=”article-image”]Unlike its competitors Ford and General Motors, Chrysler never had much luck outside North America. In 1958, Chrysler purchased 15% of Simca stocks from Ford, increasing that stake to 63% in 1963 and thereby controlling the company. In 1963, Chrysler acquired 35% of Barreiros and 30% in Rootes Group the following year. Rootes was taken over by Chrysler in 1967 and became Chrysler (UK) Ltd in 1970.
The first European Chrysler was the Chrysler 180, launched in 1970. The Chrysler Alpine followed in 1975, the Sunbeam in 1977 and the Horizon in 1978.
However, confused branding led to a lack of profit and Chrysler in the United States were also struggling. Their new CEO showed little interest in the European market, which led to Chrysler Europe being sold to PSA Peugeot Citroen for just $1.
[vc_single_image image=”47422″ img_size=”article-image”]The 1970s were a struggle for Chrysler. The company, like other automobile companies in the US, were reliant on cheap oil and smog-filled cities. But, times were changing, and Chrysler couldn’t keep up. They were slow to adopt the anti-pollution regulations and to catch up, simply detuned its existing engines to meet emissions requirements. Unfortunately, this led to lower fuel economy at a time when fuel prices were rising.
And then the 1973 fuel crisis happened. The crisis meant that Americans were no longer looking for gas-guzzling machines and were turning towards smaller, more fuel efficient vehicles. You may have noticed that this was not the type of machines Chrysler was producing.
They did, however, see success with the Chrysler Cordoba, a personal luxury car. But then they run into trouble again, as they rushed the introduction of the Dodge Aspen and Plymouth Volare. This led to huge warranty costs due to faulty design and terrible construction. This also, in turn, led them to lose the trust of loyal fans of the Dart and Valiant predecessors.Things were about to get worse after the sale of Chrysler Europe for $1 as Chrysler ended up selling Chrysler Australia to Mitsubishi Motors. As the second fuel crisis struck, sales of Chrysler’s trucks and larger cars dropped considerably, seriously damaging the brand.
When did Lee Iacocca become CEO of Chrysler?
For someone who had recently been fired from Ford, Iacocca was aggressively sought after by Chrysler. He became CEO of the company in 1978 while the company was losing millions.
He started rebuilding the company from the ground up and introduced the Mini-Max project which led to the successful Dodge Caravan and Plymouth Voyager. He proved himself to be a good spokesman, appearing in Chrysler advertisements and was extremely good at Japan-bashing and instilling pride in American products.
The Chrysler Corporation Loan Guarantee Act of 1979
After the stark realisation that the company would fail unless some serious intervention, Iacocca approached Congress to ask them for $1.5 billion in loan guarantees.
Somewhat reluctantly (as you can imagine), Congress passed the Chrysler Corporation Loan Guarantee Act. The military bought thousands of Dodge pickup trucks and released the K-Car line up. The first cars of the line-up were the Dodge Aries and the Plymouth Reliant. Because these were released in the middle of a major recession, they sold well. They also reintroduced the full-sized Imperial as the company’s flagship car.[vc_single_image image=”47426″ img_size=”article-image”]Because of these successes, Chrysler were able to pay back the government several years ahead of time. Not only that, but they were enjoying such success that they purchased Lamborghini. They later sold it in 1994.
While Iacocca was credited for turning Chrysler around, enjoyed celebrity status and was even rumoured to run for Presidency, this ultimately led to his downfall. His desire to make Chrysler stand out from the stereotypical automotive company, he invested in the likes of Gulfstream Aerospace, Electrospace Systems and other various companies, lead him to shrink the company’s working capital to just $1.7 billion (from $14.3 billion, in case you were wondering). Iacocca was…asked to retire in 1992, with Robert Eaton taking his place.
When did Chrysler form a partnership with Daimler-Benz?
[vc_single_image image=”47421″ img_size=”article-image”]The 1990s saw Chrysler step back into Europe by setting up production in Austria and began manufacturing right hand drive Jeeps for the UK market.
Chrysler and Fiat also reached an agreement that meant Chrysler would be the main distributor of Alfa Romeo in North America. This lasted until Alfa was taken out of the North American market in 1995.
Iacocca returned in 1995 to assist Kirk Kerkorian’s hostile takeover of Chrysler. This was unsuccessful but it did result in a five-year agreement between the two that involved a gag order preventing Iacocca to talk publicly about Chrysler.So there’s that. Also, they were boycotted by gay rights groups because they pulled advertising from sitcom Ellen, deeming it ‘controversial’.
Anyway, in 1998 Daimler-Benz and Chrysler entered a partnership, legally naming Chrysler Corporation DaimlerChrysler Motors Company LLC. While it was named a ‘merger of equals’, once Eaton retired it was clear that Daimler would take control.
Cars during this period were the Chrysler 300, the Dodge Magnum, the Chrysler Crossfire and Chrysler Pacifica.
Despite some success, it’s line-up was mainly unsuccessful and Chrysler was still relying on high-emission SUVs.
When did Cerberus buy Chrysler?
Fast forward to May 2007, DaimlerChrysler announced it would be selling its 80% stake in the Chrysler Group to Cerberus Capital Management. Chrysler officially became Chrysler Holding LLC. It took on two subsidiaries, Chrysler Motors LLC which will produce Chrysler, Dodge and Jeep and Chrysler Financial Services LLC. This took over operations of Chrysler Financial.
Chrysler unveiled a new logo and launched its new website in 2007, displaying that it was a new age for Chrysler. Until the automotive crisis happened.
The Automotive Crisis
The Automotive Crisis, sparked by the 2008 financial crisis, saw Chrysler in serious trouble yet again. After announcing that they might not make it past 2009, as might be the case with many other US automakers, George W. Bush announced a $13.4 billion rescue loan for US car makers, with an extra $6 billion to Chrysler the following year after they announced an alliance with Fiat.[vc_single_image image=”47425″ img_size=”article-image”]
The present day
Fiat and Chrysler announced they had a non-binding term sheet to form a global alliance. This meant that Fiat were to take a 35% stake in Chrysler. Chrysler then filed for chapter 11 bankruptcy protection and announced an alliance with Fiat.
Chrysler LLC filed for bankruptcy and a plan was approved for a new company, Chrysler Group LLC. In 2011, Fiat bought Chrysler shares held by the US treasury. Fiat now sells its own models as Chryslers in the US. Other cars around this time include the Chrysler Ypsilon. Fiat Chrysler were recently thrown into the limelight after the death of Star Trek star Anton Yelchin. The model that caused his untimely death was recalled by Fiat Chrysler after complaints of a confusing gear shift.