Business Failure of Chrysler, Llc.
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The Business Failure of Chrysler, LLC.
Juqita D. McClure
LDR/531
17 May 2010
In 2008 Chrysler approached the Federal Reserve Bank for help. If help was not provided then Chrysler would be forced to file for bankruptcy (Szczesny, 2010). According to Szczesny, the effect on the economy might have been more traumatic then the aftermath of the collapse of a large bank no one had ever heard. The Midwest would effectively be the sight of the largest economic collapse in U.S. history. Chrysler did file for bankruptcy and to avoid an economic meltdown did receive Federal assistance. This document will discuss how old Chrysler Corporation associate decisions led up to bankruptcy and the request for Federal assistance, and what adjustments did Chrysler make throughout their reorganization into the new Chrysler, LLC. that may have temporarily saved the company.
Chrysler Management Decisions
It was only 30 years ago when the last government bailout occurred for the Daimler Chrysler Corporation. In June 1993 Daimler Chrysler Corporation reorganized its service operation by creating a Customer Satisfaction and Vehicle Quality group. Thomas Sidlik was made the VP to handle customer problems and dealer concerns. Sidlik’s team would be made up of 1,100 personnel (John, n.d.). The new department’s budget was not anticipated beyond the immediate requirement for customer satisfaction. With mismanagement of expenditure and rising costs of logistics, Chrysler’s executives and management teams failed effectively manage the organization and its resources. Chrysler executives were not motivated to resolve the issue and looked at bankruptcy as a way out compounding debt (Anonymous, 2009). After announcing that Chrysler would be filing for bankruptcy, the organization hired the global law firm Jones Day to analyze bankruptcy as a viable option. The firm determined that the “impact to the overall domestic automotive industry would be devastating” (Wernle, 2008) and...
Juqita D. McClure
LDR/531
17 May 2010
In 2008 Chrysler approached the Federal Reserve Bank for help. If help was not provided then Chrysler would be forced to file for bankruptcy (Szczesny, 2010). According to Szczesny, the effect on the economy might have been more traumatic then the aftermath of the collapse of a large bank no one had ever heard. The Midwest would effectively be the sight of the largest economic collapse in U.S. history. Chrysler did file for bankruptcy and to avoid an economic meltdown did receive Federal assistance. This document will discuss how old Chrysler Corporation associate decisions led up to bankruptcy and the request for Federal assistance, and what adjustments did Chrysler make throughout their reorganization into the new Chrysler, LLC. that may have temporarily saved the company.
Chrysler Management Decisions
It was only 30 years ago when the last government bailout occurred for the Daimler Chrysler Corporation. In June 1993 Daimler Chrysler Corporation reorganized its service operation by creating a Customer Satisfaction and Vehicle Quality group. Thomas Sidlik was made the VP to handle customer problems and dealer concerns. Sidlik’s team would be made up of 1,100 personnel (John, n.d.). The new department’s budget was not anticipated beyond the immediate requirement for customer satisfaction. With mismanagement of expenditure and rising costs of logistics, Chrysler’s executives and management teams failed effectively manage the organization and its resources. Chrysler executives were not motivated to resolve the issue and looked at bankruptcy as a way out compounding debt (Anonymous, 2009). After announcing that Chrysler would be filing for bankruptcy, the organization hired the global law firm Jones Day to analyze bankruptcy as a viable option. The firm determined that the “impact to the overall domestic automotive industry would be devastating” (Wernle, 2008) and...