Auto Industry

Chrysler's Jedi Mind Trick: "Let's Refuel America" – $2.99 per Gallon Gasoline Guaranteed for Three Years

Marketing

Chrysler’s new campaign “Let’s Refuel America” gives customers that buy one of its cars a guarantee that will ensure them gasoline at $2.99 per gallon for the next three years (CarReview.com, 2008). This is such a great idea – hats off to the marketing team that came up with this campaign. The fact is that consumers still ends up having to shell out more money since Chrysler is way behind in the fuel-efficient car category. Just check out this Consumer Reports article that breaks down the financial aspects related to purchasing a Chrysler instead of more fuel-economic cars. A consumer could purchase a hybrid Honda, which is the only company that actually turned a profit this last fiscal cycle, and save a lot more money. Besides, Chrysler has announced that it will shutdown its factories for two weeks this July just to cut costs (NPR, 2008)

That’s all fine though…the marketing was great…and even though Consumer Reports found holes in the plan I don’t think this is a tough one to push past a sizable amount of consumers. This campaign sure sounds less shady than the ’employee pricing’ ploys.

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Chrysler’s Employees Threaten Strike Again – But can they afford it?

Current Events

What’s the strike about?
The United Auto Workers (UAW) union that represents about 45,000 employees at Chrysler has once again threatened to strike, this time they mean business. The strike is set to occur at 11:00am EST today if the UAW and Chrysler do not come to an agreement on health care issues. The central issue: the proposed union-run retiree health care trust. The UAW’s confidence is high after sealing a contract with GM last month that addressed the same issues.

Employees will hurt before Chrysler’s financial burden begins.
The employees at GM “are angry and they’re scared,” in the words of Paul Thayer, a welder repairman at Chrysler’s stamping plant. Anyone would be weary of striking if they lived in Michigan – it ranks 51st with the worst unemployment rate in the nation at 7.4%. Perhaps they can afford to strike for a week…but what about two weeks…or worse, what about a month? Chrysler can use some down time anyway, they’ve already shut down half of their plants because they have too much inventory – they have three months worth of inventory and their number one selling ‘Jeep Wrangler’ is assembled at a non-UAW plant in Ohio.

Michigan: The Worst state for a strike
The UAW will pay striking employees $200 per week. I can’t speak for every employee…but a lot of people I know have ZERO saved up for a rainy day. If the UAW forces its workers to strike for a long time – we can expect to see some of those workers go back to work…being a ‘scab‘ is better than being broke and homeless. Michigan’s economy is in horrible shape. It was the only state whose GDP actually fell, its poverty level is higher than the national average, its the worst state for foreclosures, and the list goes on.