Chrysler, R.I.P.

To service these staggering obligations, GM is counting on taxpayer funding and might have to sell off bits of Chrysler to the highest bidder. Jeep, Chrysler's most precious possession, might fetch $2 billion, says McAlinden. (That's down from $5 billion a few years ago, when SUVs were still hip.) Nissan might be interested in buying the Dodge pickup-truck business. GM might want to hang onto Chrysler's profitable minivans, unless someone makes them a good offer. Chrysler's slow-selling cars aren't expected to attract much interest, but the automaker is already trying to sell its Viper sports-car line. "We'll see who is around to pick over the bones," says Meyers.

Why would the government want anything to do with this car carnage? The alternative is automotive Armageddon. Without the GM-Chrysler combo, its advocates argue, all of Detroit will tumble into bankruptcy. And that will take down thousands of parts suppliers, dealers and other businesses that depend on the American automakers. Even the Toyota, Honda and Nissan auto factories in America could shut down because their U.S. suppliers would go belly up. Total job loss: 2 million Americans, according to a study by the Center for Automotive Research. "A graceful exit for Chrysler is highly preferable to a catastrophe," says Cole. That's why the governors of six states just asked Treasury Secretary Henry Paulson and Fed chairman Ben Bernanke to take "immediate action" to bail out Detroit. The White House says it is talking to the automakers, but Paulson is reportedly reluctant to dip into the $700 billion in bailout money at his disposal. Rather, the administration is working to speed delivery of the $25 billion authorized by Congress last month to help automakers retool to make fuel-efficient cars.

In order for Detroit to live, by this reasoning, then Chrysler must die. Before it goes, though, it is worth having its illustrious, tempestuous, life flash before our eyes. It burst on the scene at the 1924 New York Auto Show, where former railroad mechanic Walter P. Chrysler wowed the crowds by introducing the Chrysler Six, a mechanical marvel with a powerful six-cylinder engine. After adding Dodge, Plymouth and De Soto to his empire, Chrysler overtook Henry Ford in the 1930s to become America's No. 2 automaker. During World War II, Chrysler cranked out 18,000 Sherman tanks, the main combat vehicle of the Allied forces. In 1952, Chrysler produced the Jupiter missile that carried two monkeys into space. In the muscle-car era, Chrysler produced memorable models like Plymouth Road Runner and the Dodge Challenger (which just came back to life). And finally, there was Iacocca, who engineered his K-car driven turnaround in the 1980s, paying off his government loans seven years early and with a $400 million profit to taxpayers.

I tried to reach Iacocca to hear his epitaph for the company he once saved. But his secretary says he doesn't want to talk about it. Friends, though, say he's saddened by this turn of events. Meyers, who once sold his company to Iacocca, sees no irony or even much similarity in Chrysler's fate today. "Back then you had a very successful company, Chrysler, buying into an unsuccessful company, AMC," says Meyers. "Now you have one unsuccessful company buying another unsuccessful company."

In the end, Chrysler lost its way. It survived wars, recessions and a depression. But after nine years of German ownership and one year in private equity's grip, Chrysler had become a shadow of the feisty company that did its best work when its back was against the wall. Instead, insiders say, the new product pipeline has run dry and now workers just fear for their future. There is neither the will, nor the wherewithal to mount that final comeback Nardelli asked for. "There's no economic reason for Chrysler to exist anymore," says Meyers. "This time, it's done for."

© 2008