The day investor Kirk Kerkorian offered $4.5 billion for ailing Chrysler Corp., a car salesman in Southold, N.Y., dusted off a framed print.
“Time to hang this up again,” Chrysler dealer Dick Mullen said, smiling at the editorial cartoon from the 1980s. It shows a car bursting from the ground beneath a gravestone marked “Chrysler: R.I.P.”
Mullen’s 80-year-old shop on Long Island is a microcosm of the rise, fall and stubborn survival of Chrysler through decades of miscues. Mullen lent Chrysler $10,000 when it neared bankruptcy in 1980. As an auction by German parent DaimlerChrysler AG clouds Chrysler’s future once more, Mullen is leavening the wait with gallows humor.
“It’s the fourth time I’m going out of business with you guys, I’m getting a little tired of it,” Mullen, 70, says he told Chrysler sales chief Steve Landry at the New York Auto Show. Mullen suggested Chrysler write a book based on his up-and-down ride to pass out to executives.
“Most of our dealers have faith, and they know that whatever happens, our brands and products are not going anywhere,” Landry says, confirming the conversation.
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Surveying the fortunes of Mullen and his fellow car dealers on Long Island, it’s hard to miss the larger themes: The rise of Japanese carmakers with a single-minded focus on reliability; the overdependence of U.S. makers on big cars and trucks at the expense of basic, fuel-efficient sedans; and their inability to stem price competition among other makes’ dealerships.
Chrysler has been a “Big Three” U.S. automaker with General Motors Corp. and Ford Motor Co. since 1929, yet it’s rarely been secure.
The Auburn Hills, Mich.-based company pushed gas guzzlers just as the 1970s oil shocks changed buying habits. Chairman Lee Iacocca averted bankruptcy with $1.5 billion in government-guaranteed loans. After a revival behind the compact K-car and minivan, the U.S. automaker embarked in 1998 on a rocky, $36 billion marriage with Daimler, maker of the Mercedes.
Prosperity from hit cars gave way to financial crises — in 1962, 1974, 1980, 1992, 2000 and again last year. A $1.5 billion loss at the Chrysler unit prompted its German parent to investigate a sale, and Chrysler surrendered the No. 3 slot in U.S. market share to Toyota Motor Corp.
Mullen has weathered every storm. He and his father each bought $10,000 of Chrysler’s debentures in 1980, earning 11 percent interest a year. Their Chrysler dealership was the first in the U.S. to sell Jeeps after the company bought American Motors in 1987. Mullen met Iacocca twice. Later, he was among a handful of dealers invited to lunch at New York’s Waldorf Astoria hotel on the first day on the job for Iacocca’s successor, Robert Eaton, in 1993.
Daimler bought Chrysler intending to gain a mass-market U.S. foothold. It has struggled with price discounts and union retiree costs that add $1,300 to the price of each car. Now, with fuel prices dimming demand for Chrysler’s hottest sellers, some investors see a worse outlook.
“When the product cycle turned, the ugly really outweighed the good,” says Tim Gilbert, who helps manage $110 billion in assets, including Chrysler bonds, at Principal Global Investors in Des Moines. His firm is adding bonds of the Stuttgart, Germany-based carmaker, which should be more stable if it sells Chrysler.
The only public bidder is Kerkorian, a Los Angeles-based investor in casinos and movie studios whom Chrysler rebuffed in 1995.
So far, Mullen says, publicity about a sale isn’t hurting business. “A lot of people don’t mention it,” he says, clasping his hands in prayer. “I just hope they [Daimler] don’t make too much of a circus out of it.”
“They always seem to be at their best when times are worst,” Mullen’s son, Rich, says of Chrysler.