Given my co-author's recent discussion of transportation costs, Chrysler's announcement today that it is aiming to cut supply chain costs 25% within the next three years seems particularly relevant.It's certainly a strange time to announce such a thing. With manufacturing centers all over the world (that are expensive and take a long time to construct), insanely complex shipping systems, and heavy products, car companies are the last corporations that should be able to cut costs so quickly and dramatically. On paper, Chrysler, as the smallest and least diversified of the big 3, should lose the most from rising oil prices. But apparently, "reducing complexity and maintaining a stable production schedule" is all you need to do (sounds easy enough, right?).
Remember that Chrysler is a private company; if it was traded I would be inclined to believe this was a PR stunt to prop up share prices. But as a Cerberus holding, the company has no public responsibilities. So what gives?
Chrysler has been taking a lot of heat lately for keeping their financial cards so close to their vest. An announcement like this is meant for one of two things. It is either a way to assure those associated with the company (and skeptical market types) that Cerberus is serious about actually streamlining the company and getting it back into the black OR it's a ploy to convince a number of
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