Abbas's RRJ

Reading Reaction Journal #2

Reference:

Winterbottom, J and Kim, s. (2009, November 4). Chrysler offers revival plan but skeptics remain Reuters. Retrieved November 5, 2009, from www.reuters.com/article/email/idUSTRE5A34GX20091105


Summary:

According to the article, Chrysler's new chief uncovered a good outlook for the company future to automaker on Wednesday. He said that they are going to have more than double sales. Then, he said that they are going to get dozens of new cars, which were built on Fiat Platforms. So, they will be willing to pay to the United States taxpayers during the next five years. Sergio Marchionne, who is the executive chief of Fiat, said that Chrysler is going break by a net basis by 2011. Fiat's management thinks that Chrysler needs to find a new international market under the jeep brand. When he was in the stage, Marchionne he said that a lot of people were wrong because they misjudged Chrysler’s ways for reducing costs. Even after the Marchionne speech, many people did not believe that it would be that easy for Chrysler to rebuild interest in the United States market. Last October, the company sales were decreased by thirty percent and thirty-nine percents from the beginning of the year until today. Marchionne did not speak about an important question, which is where they are going to build the cars. He also said, by doing this business, they will provide fuel-saving technology and engine technology. Twenty percent of Chrysler’s stakes were given to Fiat for repairing and renewing the company investment. Also, he said that by 2014 half of Chrysler cars will be built by Fiat, and forty percent of them will have Italian engines, so Chrysler will be able to save 2.9 billion dollars.

Response:

I think that Chrysler got a great deal with Fiat. Chrysler lost a lot of money in the financial crisis, so they were trying to reduce their costs. One way that they will use to reduce the costs is to start building their cars in Fiat factories. I agree with this idea, because a lot of companies are doing it to reduce the workers salary expenses, which is good for these companies. Another way that the new boss mentioned, is by 2014 forty percent of the cars are going to have Italian engines. I belive that this is not a good idea for an important reason. People overseas loves American cars because of the American engines. So by doing that a lot of people are going to stop buying Chrysler cars, because they lost the most special thing that they have. Form my experience, Chrysler cars are not useful. My father bought a 2002 Van and during the first two years we were spending a lot of money to fix it from different problems. Because I’m majoring in business, this article interests me by telling me how companies solve financial problems.