Tuesday

Federal Investigations and Lousy Financials Haunt Chrysler

DaimlerChrysler looks to be facing tough times and tough troubles.

Recently the company announced that it had immediately suspended some senior managers after a probe uncovered what it calls "unspecified irregularities" (corporate speak for "we aren't gonna tell you how bad it is").

The company is already under investigation by the US Securities and Exchange Commission over allegations that it used slush funds to bribe foreign officials, as US financial regulators and criminal investigators continue looking into potential violations of anit-corruption laws because of payments the company has said deal primarily with transaction involving government entities in Africa, Asia and eastern Europe.

On top of that, the Chrysler group last month posted a $1.46 billion (with a "B") loss for the third quarter. Luckily, the Mercedes and Truck divisions are making up for it.

Meanwhile, rumors continue to float that the Chrysler group may be for sale. When asked, its Chief Financial Officer Uebber said "We don't exclude anything here," including structural changes as the company aims to improve its profit margins by a publicly announced $1,000 per vehicle.

Even at that, however, it's doing a lot better than GM and Ford, which are projected to be losing $1,271 and $451 respectively for each vehicle sold in the US while Chrysler squeezes out a narrow profit of $144. Even at that, all three are miles behind Nissan's $2,135 profit per vehicle Toyota's profit of $1,715 per vehicle and Honda's $1,259.

If you're in the market for a new car, the manufacturer's financial stability is something you might want to consider. When companies pinch pennies, quality control can be the first thing to go out the window. When that happens, the lemons start popping. If you get one, call or email or fax us.