Strategic plans for American car manufacturer Chrysler - Essay Example

However, in 1970s, oil crisis led to a high demand in oil efficient vehicles. In the year 2009, the third largest automobile manufacturer filed for bankruptcy. This essay is based on a case study analysis of the management aspects of Chrysler and develops recommendations that can improve the profitability of the automobile manufacturer. The company hired a new leadership in 1978. The new management team initiated cost-cutting measures which includes shutting down some plants, temporary layoffs, scaling down nonproductive plants and stopping a number of employee benefits.

The company appealed for a federal loan as the debt escalated. The loan revamped the company has the product line of the company begun to expand again. The company embarked to manufacturing fuel efficient cars and passenger vehicles. The company entered into a strategic alliance with Samsung in 1987 and increased its shareholding in Mitsubishi motors’ corporation (Zaccaro & Klimoski 2001). The company was struggling to stay afloat even after receiving financial aid from a federal loan of $ 4 billion in 2009.

The federal government insisted that the company had to merge with Fiat in order the get additional funding of $ 2 billion. This additional funding request was one of the strategies to ensure that the long-term viability of the company is ensured (Hampton 2009). The management was requested to cut the costs through negotiating with both united auto workers and Canadian auto workers. The failure of the debtors of agrees on debt restructuring caused the company to file for bankruptcy. The company is seen as suffering from poor business management.

Besides, the Japanese cars were smaller, oil-efficient and had competitive prices. The Japanese cars had a better performance. This led to a decline in the sales of the Chrysler products. The company has a history of failing to respond decisively to the prevailing challenges. This has caused the other competitors to take