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Selling the snake: Will Chrysler unload Viper?
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Has Dodge put Viper up for sale? Not individual cars but the whole shebang. Someone else would be building Dodge’s—nay, the Chrysler group’s—premier 600-hp “halo,” a model that reflects positively on the rest of the line, makes a point about a company’s engineering capabilities, and helps build that all-important floor traffic at dealerhips.
Chrysler doesn’t call what’s going of as “looking to sell.” Instead, the pentastar people say they’re going to “explore strategic options for the Dodge Viper business.” Which is a corporate way of saying “maybe.”
“This strategic review comes as the Company focuses on enhancing its core business and leveraging its assets,” is the corporate line. That means (a) we’re not going to do any peripheral stuff that’s not central to what we (think we) do, and (b) we’re going to use the stuff we have to get what we need.
It’s not something that Chrysler went about looking to do, says Bob Nardelli, Chairman and Chief Executive Officer of Chrysler, but it’s a response to being approached by “third parities” who’d like to buy the Viper operations from Chrysler, and Chrysler, says, Nardelli will consider the proposal.
“As the Company evaluates strategic options to maximize core operations and leverage its assets, we have agreed to listen to these parties,” says Nardelli. “We will do so 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. 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.”
A third party buying Viper to continue operations is a doable proposition. Viper is built largely on a standalone micro-production line in what Chrysler calls a “low-volume, modular process at the Conner Avenue Assembly Plant in Detroit.” The facilities could easily be moved elsewhere, or the buyer could simply lease the space from Chrysler.
Chrysler hasn’t set any timetable and indeed is being quite coy about the whole process, no doubt as a damage control tactic. Better to take the p.r. initiative than get entangled in rumors.
Why would Chrysler even consider such a thing? USA Today cites Kevin Tynan, an analyst at Argus Research, who estimates the Viper operation could go for $140 million to $150 million.
While that’s a tidy sum, especially for a division that made fewer than 500 cars last year. it’s less than what Aston Martin brought Ford, although admittedly Aston was a larger operation with more dedicated assets. But Aston Martin was a separate entity before being bought by Ford and had its own pre-Ford history.
Viper, however, is all Dodge.
We can understand how selling an asset with the substantial “goodwill” that comes with it could bring needed cash, but Viper is no ordinary asset, like refrigerators to an appliance company. When figuring return on investment on Viper, Chrysler needs to look beyond the simple objective dollars and cents and include the subjective “goodwill income” that comes to Dodge just from Viper being there. Selling Viper would make Chrysler look desperate indeed..
After all, Viper is Dodge’s “halo,” and indeed, what does it mean when you sell your halo?
For professional road tests and car reviews of the Dodge Viper, visit carbuzzard.com.
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