Although Chrysler has kept a fairly optimistic outlook amid the current market slump, an internal email written by company CEO Bob Nardelli to Chrysler’s employees reveals that things aren’t so rosy at the country’s third largest automaker. Although no further cuts were announced in the email, industry analysts say the letter foreshadows further reductions.
Nardelli revealed in the email that June sales are about 20 percent below what Chrysler had originally predicted – greatly contradicting his statement from late last month that Chrysler’s sales forecasts “have been spot-on.”
With a sales decline that sharp, it seems almost inevitable that Chrysler will make further cuts to bring its production in line with consumer demand.
Nardelli blamed the significant sales drop on the weak economy, slumping housing market and rising fuel costs. So far this year, Chrysler sales are off by 19.3 percent, far out pacing the overall industry’s drop of 8.4 percent.
We’ve already seen production cuts from General Motors and Ford , but more could be on the way with a market that continues to sag. According to J.D. Powers, if June’s sales were annualized, total 2008 sales would total 12.5 million – well off the predicted 16 million units. If the trend continues, Erich Merkle of IRN Inc. told the Detroit Free Press that it would be “Armageddon” for the automakers.
