Chrysler's deal

On Independence Day 2007, Chrysler – no longer a division of Daimler-Chrysler, and once again a US headquartered operation – announced a deal with a Chinese auto company -- a company that has a name that oddly echoes its own, Chery.

The is the first-ever deal in which one of the US “big three” has agreed to have a car built in China and then sold here in the U.S. Everything else has been outsourced, but the actual assembly of the cars has hitherto always been done here for sale here.

The cars that Chery builds under this deal will be compacts, sold under the “Dodge” brand, yet assembled in China.

You can look at this deal in any of a number of ways. On the one hand, you might see it as a triumph for Cerberus, the venture-capital investor that bought 80% of Chrysler in May. Cerberus made the deal with Daimler so that it could take Chrysler private (meaning that ordinary folk can't simply call up a broker and buy a piece of Chrysler through a stock exchange now). Perhaps the Chery deal is precisely the sort of move that needs to be made to save Chrysler, and the sort of deal that can't be done in the context of a publicly traded corporation, with the regulations, transparency, and the general games-playing that status can bring.

Or maybe you can look at the deal through a somewhat more jaded pair of glasses. Maybe it'll go down in history as a landmark in the rise of China and the decline of the United States as economic powers. I'll discuss that possible reading further in tomorrow's entry.