Chrysler in Trouble

Chrysler in Trouble
Case Code: BSTR338
Case Length: 21 Pages
Period: 2008-2009
Pub Date: 2009
Teaching Note: Not Available
Price: Rs.300
Organization: Chrysler Motors LLC.
Industry: Automobiles
Countries: US
Themes: Managing in Trouble Times, Slowdown in Global Automobile Industry, Bankruptcy
Chrysler in Trouble
Abstract Case Intro 1 Case Intro 2 Excerpts


The case details the events that led to the financial crisis at Chrysler Motors LLC (Chrysler), the third largest automaker in the US. Chrysler's inability to launch vehicles in accordance with customers' requirements and poor business strategy resulted in declining auto sales. Moreover, the global financial crisis in 2008 worsened the situation further; Chrysler found it increasingly difficult to continue its operations. To overcome its problems, Chrysler approached the US government for a loan. The company received a federal loan of US$ 4 billion in January 2009 out of the requested amount of US$ 7 billion. In order to get additional federal loan, Chrysler was asked to establish an alliance with Fiat SpA (Fiat) on or before April 30, 2009, restructure its debt and negotiate with UAW (United Auto Workers) and CAW (Canadian Auto Workers) to reduce costs.


The case is structured to achieve the following teaching objectives

  • Analyze the reasons for the financial problems faced by Chrysler
  • Study the rationale for poor business performance of Chrysler in the recent years
  • Evaluate the alliance between Chrysler and Fiat and examine its potential synergies
  • Analyze the future challenges of Chrysler



Chrysler Motors LLC, Bankruptcy Protection, Fiat SpA, Voluntary Employees' Benefit Association, US Treasury Department, Federal Loan, Restructuring Plan for Long Term Viability, United Auto Workers, Canadian Auto Workers, Debt Restructuring, Bob Nardelli, Global Financial Crisis, Business Strategy, Lack of Innovation, Lee Iacocca, DaimlerChrysler Merger, Merger of Equals, Restructuring Plan, Fiat-Chrysler Alliance, Powertrain Technology, Fiat's Global Distribution Network, Strategic Partnership, Winding Up of Operations

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