What a difference a day makes! Just yesterday Bob Nardelli was ringing his hands ready to sell the family farm for fear that the bank would be looking to take his deed. (See the “Who’s going to save the Savior” post) Today, rose colored glasses were handed out at Chrysler as a statement came out late this afternoon saying all is well despite Nardelli’s grim recent assessments.

The only thing that might have been grim was the way Nardelli was probably spoken to off the record concerning his announced strategy of land for cash. The PR hacks had to burn the midnight oil to churn this spinning top out.

I guess the new strategy is to blame journalists for the company’s ills and lead us to believe that Bob Nardelli had a body double responding to a journalist questions. At a meeting earlier this month, chief executive Bob Nardelli told employees the company is headed for a substantial loss this year and is trying to sell assets to raise cash.
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I think many at Chrysler were getting a little delusional. Cerberus seemed to be a fairy godmother that would arrive on a white horse, wave a wand, and produce gold specks gently falling from the sky, bathed in bright light, that would help to alleviate all woes and woeful products.

Reality has come to Fairyland as Chrysler has slipped into a major financial funk just a few months into Cerberus Capital being crowned King of the ailing automaker.

At a meeting earlier this month, chief executive Bob Nardelli told employees the company is headed for a substantial loss this year and is trying to sell assets to raise cash.
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Chrysler and Cerberus couldn’t provide the UAW with specific product guarantees because they’ve figured out they have too many vehicles that do too little for sales and the bottom line.

The Auburn Hills, MI-based automaker is expected to cut at least five vehicles from its product lineup, including the much ballyhooed, but cannibalizing Jeep Commander. Did they really need another Grand Cherokee that, if possible, looks cheaper and is less comfortable? Clearly not.

Other models expected to get the boot include the Dodge Magnum wagon and PT Cruiser. Additionally, newly hired executive Jim Press, fresh from Toyota North America, sat in a Sebring and discovered in less than five seconds why Chrysler is having some problems: the interiors look cheap. So the automaker is also undertaking a review of its interiors and will made adjustments according, according to a published report.

Tweaking the interiors is just one of many changes Cerberus is going to be trying to affect over the next two years. Shutting down plants is likely next and in spite of the new contract being more favorable to the UAW than many expected, it does allow for the closure of some plants.

However, Chrysler is not the only one that should be and probably will be reviewing product lineups. Ford is still seeing Wall Street analysts call for the death of the Mercury brand. They cannot see the value in the mid-level product linuep. For example, a fully equipped Ford Fusion is just as appealing as the Mercury Milan. The only difference is the front fascia, rear fasica and the price. Ford CEO Alan Mulally has said in the past that every aspect of the company is being reviewed. If they’re willing to dismantle the Premier Automotive Group (Jaguar, Land Rover, Aston Martin and Volvo), cutting Mercury might not be as far fetched as some think.