Chrysler product chief says could cut more models

LOS ANGELES (Reuters) - Chrysler LLC could cut more vehicles from its line-up as it restructures its dealer network and shifts more showrooms to superstores that handle all three of its brands, the automaker's product development chief said on Wednesday.

Frank Klegon, the company's executive vice president of product development, said plans to stop production of four slow-selling models marked the start of a process to eliminate overlap between the Chrysler and Dodge brands.

Privately held Chrysler said this month it would eliminate shifts at five North American assembly plants and stop making the Dodge Magnum wagon, the convertible version of the PT Cruiser, the Pacifica crossover utility and the Crossfire sports car.

"There's nothing (more) in the near term, but we'll continue to look at it," Klegon told Reuters in an interview on the sidelines of the Detroit Auto Show.

Chrysler's decision to eliminate the four vehicle models and cut up to 10,000 U.S. factory jobs over the next 14 months angered critics in the United Auto Workers union who said a four-year labor contract that was narrowly ratified last month did not go far enough to protect U.S. factory jobs.

Analysts had largely praised the move as a way for Chrysler, now owned by private equity firm Cerberus Capital Management CBS.UL, to invest more competitively in developing and marketing a smaller number of models.

In the past, Chrysler rolled out a Dodge-branded mid-size sedan, the Avenger, to satisfy Dodge dealers asking for a mid-size equivalent of its Chrysler Sebring that they could sell in showrooms limited to the Dodge brand.

The Chrysler Aspen, a full-size sport utility vehicle, was intended to give Chrysler dealers an equivalent of the Dodge Durango, Klegon said.

But under Cerberus, Chrysler is looking to pull away from that strategy in order to free up more money for developing all-new products, Klegon said.

"The future potentially says I have one full-size SUV, whether its Dodge-branded or Chrysler-branded it doesn't matter," he said. "It depends on the demographics you're trying to hit and you focus your engineering on doing a new product rather than another vehicle just to satisfy the dealer."

He added: "I think the near-term actions are done, but as we continue to move to a dealership structure that looks like Chrysler-Jeep and Dodge in one store, do we need two variants of a (mid-sized) car?"

Chrysler is using the Los Angeles Auto Show to roll out hybrid versions of the Aspen and Durango for the 2009 model year.

The hybrid technology was developed by General Motors Corp GM.N, Chrysler, Daimler AG's (DAIGn.DE) Mercedes-Benz and BMW AG (BMWG.DE). The automakers say the system -- known as a two-mode hybrid -- can boost fuel economy by up to 25 percent.

The timing of the rollout of the Chrysler hybrid SUVs makes it the last of the major car makers to sell a hybrid vehicle.

But Klegon said Chrysler was looking to move more quickly now that it had set up an in-house development unit focused solely on alternatives to traditional gasoline engines.

As part of that, Chrysler is also looking at the potential for rechargeable electric vehicles known as plug-in hybrids. Klegon said he thought Chrysler would look to develop and sell a plug-in vehicle, a market GM is racing to reach first.

"I think there's lots of pluses and minuses on plug-in hybrids, but I think they have a home," Klegon said. "I think there's a lot of potential with plug-in hybrids."

Daimler sold a roughly 80 percent stake in Chrysler to Cerberus earlier this year.

(Editing by Braden Reddall)