Chrysler CEO says company won't push inventory onto dealers again

Saturday, February 3rd 2007, 5:45 pm
By: News On 6

LAS VEGAS (AP) _ Those who sell Chrysler cars and trucks still remember last year, when the company built too many vehicles and pushed them off on the dealers.

On Sunday, Chief Executive Tom LaSorda will deliver a message to them at the biggest car dealer convention of the year: Chrysler won't do it again, and it will work to regain their trust.

In an interview with reporters Saturday, LaSorda said he has heard complaints about the inventory problems at the National Automobile Dealers Association convention in Las Vegas.

``We made mistakes. We admitted it. We told the dealers we'd get the inventory down and balance it with market demand, which we have been,'' LaSorda said.

Late last year, Chrysler, caught in the shift in consumer tastes from trucks and sport utility vehicles to smaller, more fuel efficient models, ended up building too many larger vehicles without having dealer orders.

As a result, it pushed the vehicles onto the dealers, causing them to pay more in interest costs for their stock.

The dealers, LaSorda said, pushed back. Chrysler fixed the problem as LaSorda personally took control of the company's sales and marketing efforts.

Chrysler had up to 100,000 unassigned new vehicles lined up on lots across the Detroit area several times last year.

LaSorda, who will address the dealers in a closed-door meeting Sunday in Las Vegas, said he knows it will take time for them to get over it. And he knows the gripes won't go away until DaimlerChrysler AG's Chrysler Group re-establishes its trust with its roughly 3,750 Chrysler, Jeep and Dodge dealers.

``It won't get over until there's enough confidence built that in the next couple of months, (dealers say) 'Hey, man, these guys did what they said. They finally did what they said,''' LaSorda said.

The CEO said he would keep the top sales and marketing job for a couple of months and then would fill it from within the company.

He also said the company has been working for three years to pare the number of Chrysler, Jeep and Dodge dealers so the remaining ones can be more profitable, and he's heard few dealer complaints about it. The company is doing it in a collaborative way with dealerships, he said.

LaSorda wouldn't talk much about the company's restructuring plan, to be announced with its 2006 earnings on Feb. 14.

``We're going to do what we need to do in all areas of the business,'' he said. ``It'll be widespread.''

He also told reporters that the company can't make the new Jeep Wrangler small SUV fast enough, and that it can't get enough parts to meet demand.

Chrysler Group's sales grew just under 1 percent in January, helping it gain momentum and pass Ford Motor Co. for the first time in Chrysler's 82-year history, LaSorda said.

Some industry analysts have said Chrysler used heavy incentives to help get the positive numbers. Chrysler officials said they were comfortable with the company's level of incentives.