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Published: Tuesday, 2/20/2007

Chrysler's future

THE new reality of the domestic auto industry is such that Chrysler's announcement that it was planning on trimming 13,000 jobs over the next three years almost sounded like good news.

Tragic as any job loss is, those figures looked small compared to the tens of thousands of jobs lost forever at General Motors Corp. and the Ford Motor Co. Chrysler's loss last year of $1.4 billion, while bad, also was a far smaller pool of red ink than at Ford or GM.

Yet that was dwarfed by the blockbuster news that the parent company, DaimlerChrysler AG, is no longer refusing to rule out a sale of its American subsidiary. Since that Valentine's Day bombshell, the rumor mill has had everyone except Anna Nicole Smith's baby buying Chrysler. But the speculators may be missing the story.

DaimlerChrysler said only that the firm refused to rule out a sale, or anything else that would be good for the company. There are those who think the main point of the whole announcement was to reassure German investors that they had the financial health of the entire company in mind - and, indeed, the stock price in Frankfurt soared.

Completely lost in the shuffle were some signs that Daimler is in fact committed to not only the survival but the long-term health of Chrysler. The automaker pledged to spend $3 billion on its Phoenix V-6 engine project, which is certain to mean new jobs somewhere.

DaimlerChrysler is doubling production of four-cylinder engines at its plant in Dundee, Mich., touting a newly redesigned Jeep Liberty, and apparently no layoffs in Toledo are in the plans.

These are rough times for all domestic automakers. Chrysler clearly made some mistakes last year, building too many of some vehicles. Higher gas prices took a toll on sales in an SUV-heavy fleet.

But this is a company, like the mythological Phoenix of old, that has risen from the ashes before. Few gave Chrysler much chance for survival in the grim days before the 1979 federal bailout. Rumors of the automaker's demise proved to be vastly exaggerated.

Some rough sledding may lie ahead, and it may be rougher if the United Auto Workers union insists on negotiating its next contract as if this were a rich multinational company, not a troubled American division that has the same problems its sister does. Yet today's Chrysler is, all things considered, a far healthier company than the one Lee Iacocca revived a quarter-century ago.

Nothing in today's automotive world is certain. But we don't expect the Pentastar to stop shining quite yet.

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