Encyclopedia Of Detroit

Chrysler Corporation

On June 6, 1925, the Chrysler Corporation was officially formed by Walter P. Chrysler out of the ailing Maxwell-Chalmers Company. In 1928, Chrysler began dividing their vehicles by price and function, forming the Plymouth brand for the low-end of the market and the DeSoto brand for the mid-range market. The Dodge brand joined Chrysler’s lineup in the 1930s, catering to the truck market at first.

In 1934, the company introduced the Airflow models, revolutionary automobiles that featured an advanced streamlined body that was tested in the industry’s first wind tunnel. However, the sleek designs were not a hit with the public and, as a result, styling at Chrysler remained somewhat conservative for the next two decades.

Starting with the 1960 model year, Chrysler began building most of its passenger cars with Unibody construction; at the time it was the only one of the Big 3 automakers to utilize this construction technique (which is now the worldwide standard). Also in the 1960s, the company helped create the muscle car market in the US by introducing a series of affordable yet high-performance vehicles that included the Plymouth GTX, the Plymouth Road Runner and the Dodge Charger.

The 1970s brought a new challenge from foreign automakers and an overall economic slowdown. After a tough decade, on September 7, 1979, Chrysler petitioned the US government for $1.5 billion in loan guarantees in order to avoid bankruptcy. On December 20th of that same year, Congress reluctantly approved the loan. Former Ford executive Lee Iacocca was brought in as CEO and, within a few years, Chrysler began to slowly recover.

Still the weakest of the Big 3, Chrysler spent much of the 1980s and 1990s repaying its loans and attempting new initiatives to ensure that the company could succeed long-term. In 1998, in a move that shook the automotive industry and Detroit, Daimler-Benz purchased Chrysler, forming DaimlerChrysler AG. Although initially touted as a “merger of equals,” it quickly became clear that Daimler-Benz was the dominant partner.

As Chrysler’s financial situation worsened in the early part of the 21st century, DaimlerChrysler CEO Dieter Zetsche was sent to America to turn the division around. On May 14, 2007, DaimlerChrysler AG announced that it would sell more than 80% of its stake in the Chrysler Group to Cerebus Capital Management for $7.4 billion. In February 2008, Chrysler announced that it would begin reducing its product line from 30 models to 15 models.

 


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