Chrysler Shows Its Weak Hand

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Chrysler (DCX) is mailing a $1,000 off coupon to 3.4 million people. The incentive is in addition to others already being offered. The company’s already reported inventory problem must be getting worse. Consumers can’t use it to buy a Dodge Viper and a couple of other high-end cars. What a shame.

According to industry research expert Edmunds.com, Chrysler is the only US manufacturer that should see unit sales drop in November. Given the inventory mess, that is especially bad news.

The incentives raise several issues. If Chrysler cannot sell cars, will it cut production for early 2007? Shut plants? Cut more of its white collar work force?

There is also the matter of Chrysler’s parent, Daimler, sending management to Detroit to try to fix the mess, and Chrysler’s senior management may be shown the door.

The problem is that Germans cannot do any better than Americans if consumers don’t want the products.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.