时间：2022-05-19 03:14:43
At the beginning of May, Chrysler filed for bankruptcy protection. The Italian automaker Fiat became its largest partner. Will this influence Chrysler’s business in China?
John Kett, Chrysler’s Vice President and CEO of Chrysler Asia said on May 4 that Chrysler and its 24 wholly-owned branch institutions have already filed to seek the bankruptcy protection to the bankruptcy courts in the southern region of New York, the USA according to the Title 11 of the US Bankruptcy Code. He especially attenuated that Chrysler’s business in China will not be influenced and hoped that the new company after restructurings will back to China’s mainstream market soon.
Bankruptcy Protection, Not Bankruptcy
Chrysler proposed the application according to the Article 363 of the US Bankruptcy Code, asking the court to approve its agreement with Fiat. The new company will be founded in 30 to 60 days.
If all the relevant interest parties could seek compromise before the deadline which is set on April 30 by the US government, Fiat and Chrysler would form a strategic union. However, things go on against one’s will. So Chrysler had to seek the bankruptcy protection.
Bankruptcy protection and bankruptcy liquidation have different meanings in the US laws. It is known that Chrysler will restructure its businesses according to the Title 11 of the US Bankruptcy Code. The company can operate its businesses as before. The corporate management can continue to manage the daily businesses. The trade of its stocks and bonds is still active in the market. But the company’s big operation decisions, if any, must be approved by the bankruptcy court. It also needs to submit reports to the US Securities and Exchange Commission.
This bankruptcy’s case has a great difference from the former cases, which is: in this case, the enterprise will sell its assets with the conditions of protecting the benefit of all the relevant parties under the supervision of the court.
As John Kett explained, bankruptcy protection is just like cleaning the computer’s hard disk which is to delete the useless documents to free more spaces and then restart the computer. The computer will be more efficient because of the fewer documents.
Actually, during Chrysler’s 85-year history, the company faces the threat of bankruptcy for several times. The Great Depression in the 1930s and the regression period of the US economy in 2000 all made Chrysler face the problems of how to survive. It cut a lot of jobs, closed many factories and reduced the production. The news about the bankruptcy was often seen in the newspapers and TV programs. However, Chrysler was fortunate enough to get past these tough periods through innovations in its products and marketing.
No Way to Give up China’s Market
In the Shanghai Auto Show 2009 held at the end of April, Chrysler sold about 130 vehicles. Its sales amount in China in the first quarter of 2009 also saw a 17% growth. Its most sold products in China are the imported Dodge JC, Wrangler and 09-style Jeep and so on. Presently, Chrysler mainly sells 9 kinds of vehicles in China. Though the sales amount is limited, Chrysler still holds different marketing activities in China to maintain the fame of the brands.
According to John Kett, no international businesses were included in the file for bankruptcy protection. Neither is its business in China. Presently, Chrysler builds up its business in China with the imported vehicles as the core.
He said that Chrysler will continue to sell products in China. The service before, in and after the sale and the supply of components will not be influenced. In the long-term view, Chrysler will continue to manufacture the vehicles of Jeep, Dodge and Chrysler and provide the customers with the components of the Mopar vehicle for the consumers.
It is known that the US government will guarantee the quality of the Chrysler’s vehicles sold to the different places of the world. Meanwhile, Chrysler will contribute funds to the suppliers to help them maintain their normal operation.
Chrysler is the earliest foreign automaker entering into China’s market. In 1983, Chrysler contributed to found Beijing Jeep Automobile Co., Ltd, which was the first joint venture in China’s automobile industry. It mainly produces the Cherokee Jeep vehicles. However, this factory only produced 250 thousand Chrysler’s vehicles after its foundation and its market performance kept deteriorating. After divorcing with Daimler, Chrysler retreated from the joint venture with Beijing Automobile Industry Company (BAIC). Chrysler (China) Automobile Sales Company is responsible for the distribution and after-sale service of the imported vehicles of Chrysler in Mainland China.
John Kett said: “Chrysler always has the strong will to regain the important role of China’s market. We are not satisfied with the current role of marketing in China. We want to be a mainstream enterprise which can provide vehicle design, production, sale and service.”
Jia Xinguang, a senior analyst of vehicle industry said that China has already provided the Top 6 automakers in the world with a market in which those automakers can sell 1 million vehicles each year. Volkswagen and GM are trying to reach the goal of selling 2 million vehicles each year. S. Korean Hyundai possessed the determination to sell 1 million vehicles in China each year when it initially entered China’s market and now it nearly realizes the goal. After the reconstruction of the four main bases, Toyota also has the ability to produce 1 million vehicles in China. Frankly speaking, selling 1 million vehicles a year in China is quite difficult for Chrysler. But to sell 300 to 400 thousand units is not a problem after its restructurings with Fiat. What’s important is to set a long-term objective in China.
Joint Venture Expected in China
John Kett said: “Chrysler is longing to get back to China’s mainstream market. When we get ready for our new products and technology, we hope that we can find a partner in China.”
He said that it is not the right time to talk about influence upon China’s market from the cooperation of Chrysler with Fiat. “We have to do things step by step.”
In the future, Chrysler will build a joint venture in China in the future if the conditions are ripe. Chrysler does not consider what it will get from the partner; instead, it cares what it will bring to the partner, such as the latest products and other resources.
It is said that BAIC is interested in buying a part of Chrysler’s assets. John Kett attenuated that the cooperation in assets and acquiring assets are two different concepts. Parts of Chrysler’s idle assets are always in sale, like the production lines of some kinds of vehicles whose productions have been stopped and some idle plants. BAIC is interested in buying this part of Chrysler’s assets, not Chrysler itself.
Actually, both Chrysler and Fiat have got problems in their development in China. Jia Xinguang said that right now Chrysler has weak ability in negotiation. Fiat, after ending the cooperation with Nanjing Automobile Group, is also in dilemma in China. For the restructured company, the most ideal partner is Guangzhou Automobile Industry Group. Chrysler has advanced technology and rich experience in SUV and Fiat is good at small vehicles. These are just what Guangzhou Automobile Industry Group needs.