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Old 11-30-2006, 07:58 AM   #1
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Default Chrysler exec "Joe Eberhardt" seeks to mend dealer relations

Chrysler exec "Joe Eberhardt" seeks to mend dealer relations


Pic of Joe Eberhardt @ 2006 LA Auto Show

LOS ANGELES -- Chrysler's sales chief Joe Eberhardt said Wednesday in an interview the automaker is working to mend relations with dealers and help them become more profitable.

Eberhardt, Chrysler's vice president of global sales and marketing, is in the middle of tensions between the company and its 3,400 dealers whose support it needs to recover from a $1.5 billion third-quarter loss and mounting sales woes.

Some dealers have criticized Eberhardt and Chrysler for pressuring dealers to take excess inventory in recent months as sales have slumped.

In an interview with several reporters at the Los Angeles Auto Show, Eberhardt said many factors cutting into dealers' profits are beyond the company's control. He pointed to rising interest rates, a changing market and more sales of high-priced vehicles, which tend to cost dealers more to showcase and sell, as the key reasons behind the dealers' financial worries.

Chrysler, the Auburn Hills-based division of DaimlerChrysler AG, can better manage its inventories and work to boost sales by producing vehicles consumers want like the new Chrysler Sebring, Eberhardt said.

"They realize that we know in order to be successful, they need to be successful," he said of the dealers. "The industry was caught by some external factors that could not be seen. I'm not so sure we could have reacted differently. We need to try to react even quicker."

Eberhardt deflected questions about his job security amid dealers' complaints and Chrysler sales problems.

"At a certain level, your job is never secure," he said, adding that he believes he has support from the top offices in Auburn Hills and Germany. "Unless someone tells me different, I will continue doing what I'm doing."

Chrysler has been criticized by dealers and industry analysts for adjusting too slowly to meet customer demand and employing high-pressure tactics to get dealers to order more cars than they can sell.

The company was carrying an inventory of 647,000 vehicles by July and failed to generate enthusiasm for its vehicles with the reintroduction of employee-style discounts for all buyers and a multimillion-dollar Dr. Z ad campaign. Companywide, North American sales were down 7 percent through October.

"The situation we are in is not an easy one -- not for us, not for our dealers," Eberhardt said.

He said part of the reason the employee pricing campaign failed is that other automakers launched more aggressive incentive offerings that Chrysler was not willing to match.

Eberhardt, along with Chrysler Chief Executive Officer Tom LaSorda, have recently visited dealers in each of the company's eight dealer business centers. He communicates regularly with dealers through meetings and Internet broadcasts.

Despite the tensions, he said, Chrysler is well-positioned to improve.

Chrysler reduced incentive spending this year, and will do so again next year, and is having success in bringing down inventories, he said.

Sales have picked up in some key markets, including in California, where 10 percent of the nation's vehicles are sold, he said. Chrysler is trying to translate some of that success to the northeast, another stronghold for foreign vehicles.

"He has to diminish the inventory of unsold trucks and SUVs in a tough market and launch new products," said Jim Sanfilippo of AMCI in West Bloomfield. "He's a very busy guy."
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