When Bob Lutz introduced the Dodge Viper supercar to dealers more than a decade ago, he did so with a poem that included the couplet: “If Viper doesn’t turn your head, check your pulse … you may be dead!”
At the time, the third-biggest Detroit automaker needed a shot in the arm. But now it’s more in need of cash.
On Wednesday, Chrysler signaled the potential end of an era, indicating that its Viper sports car line could be sold as the company continues to spin off non-core assets.
The Auburn Hills automaker, a year into private ownership, announced in a statement that it is preparing to explore “strategic options for the Dodge Viper business.”
“We have been approached by third parties who are interested in exploring future possibilities for Viper,” Bob Nardelli, Chrysler CEO, said in a statement. “As the company evaluates strategic options to maximize core operations and leverage its assets, we have agreed to listen to these parties.”
The automaker stressed in the statement that the review is “unique to the Viper specialty vehicle” and emphasized that Chrysler “has not set a definitive timetable for completion of the review of its strategic options, no final decision has been made with regard to the Viper business, and there can be no assurance that any transaction will take place as a result of this process.”
Chrysler has hired financial adviser Lazard Ltd. to help in the process.
“It’s very unfortunate,” Aaron Bragman, an industry analyst with Global Insight, said, though not surprising. “This vehicle was created as the halo model to inject some excitement into the brand at a time when there wasn’t very much excitement to be had.”
The Viper was introduced as a concept car during the Detroit auto show in 1989; it came out as a production vehicle in the 1992 model year.
Fans loved the power and visceral design. Critics of Chrysler’s Dodge Viper described it as nothing “more than a vulgar, testosterone-laden expression of a teenage fantasy by a bunch of middle-age men,” former Chrysler President and Vice Chairman Bob Lutz, now with General Motors, wrote in his book “Guts.” “Actually, that assessment wasn’t far wrong!”
Lutz credited the Viper with helping turn around Chrysler and wrote that he delivered the Viper poem to dealers in Las Vegas. “It gave us a high-torque boost at the very moment we most needed it,” Lutz wrote of the car.
The Viper is hand-built at the Conner Avenue Assembly Plant in Detroit. Nardelli celebrated the 25,000th Dodge Viper to roll off the assembly line last March, presenting the vehicle to NASCAR driver Kurt Busch. The Viper, which starts at $85,710, is easily Chrysler’s most expensive vehicle.
The first sign of trouble for Viper came about a year ago when the UAW negotiated a new four-year labor contract with Chrysler and the Viper plant was left out of a plant closing and sale moratorium.
The UAW told members at the time that the “Dodge Viper continues through the product lifecycle. No future product identified. … Company plans to close facility during term of agreement.”
According to Chrysler, 115 employees work at the Conner Avenue plant. So far this year, Chrysler has sold 682 Dodge Vipers, according to Autodata.
Since Chrysler was acquired by Cerberus Capital Management, the automaker has undergone dramatic changes.
Chrysler has eliminated four products, including the Dodge Magnum and Chrysler Pacifica, and Chrysler executives have talked about the need to focus the automaker on areas of profitability.
Earlier this month, Tom LaSorda, a Chrysler president and vice chairman, said the automaker had identified more than $1 billion in noncore assets that could be sold to help generate cash and that about $500 million of those assets had already been sold. Those sold assets are believed to include a California design studio and Brazil engine plant.
Viper “is not core,” said David Cole, chairman of the Center for Automotive Research. “They’re trimming down to what is really core and everybody else is doing the same. … We’ve kind of wondered why they haven’t dealt with it before.”
In his statement, Nardelli said Chrysler will move forward with the Viper review “keeping in mind the best interests of those who have shown tremendous support for the vehicle — including employees, suppliers, dealers and a worldwide group of loyal Viper owners and enthusiasts. Viper is an integral part of this company’s heritage.”
Nardelli added: “While this is a strategic review, our intent would be to offer strong operational and financial support during any potential transaction, in order to ensure a future for the Viper business and perpetuate the legacy of this great vehicle.”
Bob Carroll, national president of the Viper Club of America, said club members met with Chrysler executives Wednesday to talk about the future of their beloved hot rod.
“We received a lot of assurances. They have every intention to continue the Viper brand,” Carroll said. “They told us that they’ve been approached by different groups for the potential for either partnership, joint-venture, equity acquisition or a variety of different configurations, all done to preserve the Viper.”
Bloomberg News quoted a CSM Worldwide analyst as saying that the Viper line could sell for about $100 million.
0 comments ↓
There are no comments yet...Kick things off by filling out the form below.
Leave a Comment