Monday, August 6, 2007

Chrysler Takes Slow Lane En Route To Identity Change

by Karl Greenberg, Monday, Aug 6, 2007 5:00 AM ET
DAIMLER HAS SEVERED CHRYSLER FROM its business and its name, and former division Chrysler Group has become "The New Chrysler." The company, now 80.1% owned by a division of New York-based private equity company Cerberus Capital Management, will be called Chrysler, LLC--while DaimlerChrysler AG is to be renamed Daimler AG, pending a decision by shareholders on Oct. 4.

DaimlerChrysler will retain a 19.9% interest in Chrysler. As of Friday, however, the Board of Management of DaimlerChrysler AG will no longer include Chrysler executives Tom LaSorda, Eric Ridenour and Tom Sidlik.

Former Chrysler Group COO Wolfgang Bernhard, who is credited with having helped Chrysler roll out products like the 300C sedan in 2003, is now a senior advisor at Cerberus. Although rumors abound that Bernhard will become Chrysler CEO, the company has not said what his role or official title will be at the newly unfettered company.

Bernhard left Chrysler Group in 2005 to become chairman of the Volkswagen Brand Group at company headquarters in Wolfsburg, Germany; he left VW in January this year after a leadership shake-up there. He is advising Chrysler CEO Tom LaSorda, for Cerberus.

At Chrysler Group headquarters in Auburn Hills, Mich., the company on Friday raised a blue banner on the flank of its main building that says merely, "Get Ready." Today Chrysler will resurrect the old "Pentastar" trademark that it jettisoned after the 1998 acquisition by Daimler that created DaimlerChrysler.

In bringing back the Pentastar mark, Chrysler may be taking a risky bet, given the mark's association with K cars and Lee Iacocca.

"It is not a good idea," says Gerald Meyers, a professor at the University of Michigan's Ross Business School and former head of American Motors, the automaker that once owned the Jeep brand. "In fact, it is a poor idea. It smacks of the old days of Iacocca, whom everyone wants to forget.

"The idea is to move ahead with the new Chrysler, not muck around under the banner of the old Chrysler logo. Ford went back to the Taurus because it was fondly remembered as a success symbol, correctly, but they would not have done it if the name smelled bad to the buying public."

For his part, Chrysler spokesperson Mike Aberlich does suggest the new logo will be an updated version of the Pentamark.

Aberlich says the corporate changes won't be trumpeted with a quick change in logos and corporate advertising. "It's not going to necessarily be a key part of all of our marketing efforts. It's more subtle and symbolic."

"I define it as rolling launch, not something where, [today] we will suddenly cover or replace all the signs; practicality is the name of the day, and unless you are ready to spend huge dollars, you aren't going to be able to change your identity overnight--there's not a phone booth you can jump into for a quick change."

He adds that changes in company policy are already apparent, and that the company was able to launch a lifetime powertrain warranty relatively soon after deciding to do so because the company has more flexibility under Cerberus. "We found that with Cerberus we were able to get a quick decision and move."

Chrysler's next vehicle launch--and an especially critical one, given the company's dominance of the minivan market--is the new Chrysler Town & Country minivan, rolling into dealerships this month, with a fall campaign on tap.

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