“There is no economic justification for the existence of the Chrysler”

Once an icon of American automotive might, Chrysler has reached a new low in its rocky eight-decade history by filing for bankruptcy and cutting its business to a shadow of its former size.

“Chrysler has flirted with bankruptcy on and off since 1954,” said automotive historian Bob Elton. “It’s been a wild ride between very prosperous periods and serious disasters.”

“They have finally qualified as a real failure,” he added.

Weighed down by a cost structure that made it uncompetitive against Asian rivals, two years of crumbling auto sales and the credit crisis, Chrysler filed for Chapter 11 bankruptcy protection on Thursday and announced an alliance withItalian automaker Fiat SpA (FIA.MI) after debt restructuring talks broke down.

That alliance raises a key question: can Chrysler rise Phoenix-like from the ashes when it emerges on the other side of bankruptcy and resurrect a brand once synonymous with American craftsmanship? Or is it too late?

Few industry experts seem to rate the company’s chances of longer-term survival highly.

“Chrysler is a company that has been failing for the last 35 years,” said University of Michigan Professor Gerald Meyers, a former chairman of American Motors Corp which was acquired by Chrysler in 1987. “There is no economic justification for the existence of the Chrysler Corporation.”

Chrysler saw its U.S. market share shrink to 11% in 2008 from 13.3% in 2002, according to industry tracking firm Edmunds.com. Since February 2007 the firm has announced 22,000 factory job cuts. It now has around 26,800 unionized workers.

The marriage with Fiat also raises the ghost of the Italian automaker’s own poor track record in the United States and what that portends for its chances of helping Chrysler to win over American consumers.

Once an icon of American automotive might, Chrysler has reached a new low in its rocky eight-decade history by filing for bankruptcy and cutting its business to a shadow of its former size.

“Chrysler has flirted with bankruptcy on and off since 1954,” said automotive historian Bob Elton. “It’s been a wild ride between very prosperous periods and serious disasters.”

“They have finally qualified as a real failure,” he added.

Weighed down by a cost structure that made it uncompetitive against Asian rivals, two years of crumbling auto sales and the credit crisis, Chrysler filed for Chapter 11 bankruptcy protection on Thursday and announced an alliance withItalian automaker Fiat SpA (FIA.MI) after debt restructuring talks broke down.

That alliance raises a key question: can Chrysler rise Phoenix-like from the ashes when it emerges on the other side of bankruptcy and resurrect a brand once synonymous with American craftsmanship? Or is it too late?

Few industry experts seem to rate the company’s chances of longer-term survival highly.

“Chrysler is a company that has been failing for the last 35 years,” said University of Michigan Professor Gerald Meyers, a former chairman of American Motors Corp which was acquired by Chrysler in 1987. “There is no economic justification for the existence of the Chrysler Corporation.”

Chrysler saw its U.S. market share shrink to 11% in 2008 from 13.3% in 2002, according to industry tracking firm Edmunds.com. Since February 2007 the firm has announced 22,000 factory job cuts. It now has around 26,800 unionized workers.

The marriage with Fiat also raises the ghost of the Italian automaker’s own poor track record in the United States and what that portends for its chances of helping Chrysler to win over American consumers.

Read the rest from Reuters:
http://www.foxbusiness.com/story/m
arkets/industries/transportation/ch
rysler-reaches-new-low-rough-ride/

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