By MICHELINE MAYNARD 

DAIMLERCHRYSLER always seems to outdo itself at the Detroit auto show, and this year was no exception. The company showcased celebrities like the pop singer Seal and the chef Bobby Flay, and then generated a fresh round of buzz via an artificial ice rink (its surface carefully scuffed to keep visitors from slipping) that it built to show off its legendary Mercedes-Benz line.

For DaimlerChrysler itself, however, the corporate mood was just as cold as the ice. Although the German auto giant&rsquo s chief executive, Dieter Zetsche, shook hands warmly with each of about two dozen journalists who came to a press briefing at last month&rsquo s car fest, he grew unusually frosty when asked about the future of Chrysler, its struggling American brand. &ldquo We are in recovery mode again,&rdquo he acknowledged.

Less than six weeks later, on Valentine&rsquo s Day, Mr. Zetsche announced that DaimlerChrysler was keeping all options open as it tries to tackle its Chrysler problems. At least one of those options involves a possible sale: the company recently retained JPMorgan Chase to scout for a buyer willing to take Chrysler off its hands, most likely at a bargain-basement price. Suddenly, it seems like 1979 all over again: Chrysler is in crisis, with sales falling, costs rising and cars piling up on dealer lots. But this time, there is one big difference: No one is talking about a government-financed bailout to give Chrysler another chance &mdash in part because it is no longer an American icon.

Chrysler is not &ldquo too big to fail,&rdquo as it was described then, its tens of thousands of well-paying union jobs too vital to lose. It is now a vestigial part of a sector of the economy &mdash manufacturing &mdash that does not loom as large in the nation&rsquo s consciousness. &ldquo It is a new world,&rdquo said Ron Pinelli, the president of Autodata in Woodcliff Lake, N.J., which tracks industry statistics. &ldquo If Chrysler disappeared, would anyone&rsquo s life change, except for the people that work for the company?&rdquo

Chrysler&rsquo s rebound from its near-death experience of the late &rsquo 70s is the stuff of legend. It survived back then by closing plants and persuading its remaining workers to accept pay cuts, among other things then it repaid the government aid, with interest, well ahead of schedule. As recently as two years ago, the company was the money-spinning master of hot cars like the 300C and the PT Cruiser.

But now, Chrysler is fighting for its survival again, a situation that lays bare the failure of previous generations of managers to resolve, or even fully address, its many fundamental problems. Rather than using crises as opportunities to remake Chrysler in the model of its Japanese competitors, say analysts conversant with the company&rsquo s trajectory, a revolving cast of corporate stewards repeatedly relied on silver bullets to revive the automaker. Over and over, they introduced a single hot-selling model here or tightened the screws on suppliers there, instead of doing the tougher work that real transformation required.

Many in Detroit say they feel as if they have been sucker-punched. Overnight, Mr. Zetsche has gone from the jovial &ldquo Dr. Z,&rdquo who gamely starred in several hokey television commercials last summer in an effort to bolster Chrysler&rsquo s sales, to someone whom some employees regard as a symbol of betrayal by their German parent.

&ldquo It really did seem as if it came out of nowhere," said Kevin Boyle, a history professor at Ohio State University who was raised in Detroit and has written extensively about the auto industry. &ldquo People thought that this was the trade-off: they would give up being a hometown company for the security that the takeover was going to bring.

&ldquo It was absolutely a false sense of security,&rdquo he added. &ldquo But you see what you want to see.&rdquo

EVEN if the public spectacle of the last 10 days &mdash Is Chrysler for sale? Who wants it? Who is a serious suitor and who is just flirting? &mdash has been nothing more than an exercise in determining the company&rsquo s value on the open market, analysts say it is abundantly clear that the powers in Stuttgart have no special sentiment for Chrysler. Mr. Zetsche is already struggling with sagging popularity in Germany. A number of officials inside DaimlerChrysler blame him for failing to fix Chrysler when he served as its chief executive from 2000 to 2005, say people who advise the automaker but didn&rsquo t want to be named because of their ties to the company.

In particular, some of these officials have questioned why Mr. Zetsche allowed the company to keep developing big gas-guzzling S.U.V.&rsquo s and pickups when it became clear that gas prices were headed higher. Moreover, he left Chrysler in a virtual product drought for the better part of last year, after the company had gained sales and market share during 2005.

article taken from www.nytimes.com

article by Tom Van Riper.

Altria Group's Philip Morris tobacco unit cheered a legal victory Tuesday, though it's possible the party could be short-lived.

In a 5-4 decision, the U.S. Supreme Court tossed out a $79.5 million punitive damage award against Philip Morris that had been granted to a smoker's widow by an Oregon court. In its majority ruling, written by Justice Stephen Breyer, the court wouldn't let stand a jury's decision to award punitive damages as a punishment for harm to individuals who are not before the court.

" To permit punishment for injuring a non-party victim would add a near standardless dimension to the punitive damages question," Breyer wrote for the majority. The case will now return to the Oregon Supreme Court, which had upheld the award to Mayola Williams, whose husband Jesse Williams died of lung cancer in 1997 after years of smoking.

The ruling naturally pleased Philip Morris executives, who, along with others in the business community, hope it sets a precedent for limitations in punitive damage awards in lawsuits.

" There are clearly constitutional limits to the imposition of punitive damages, and today's decision makes clear that state courts must properly instruct juries on those limits to ensure that they are punishing only for harm caused to the plaintiff and not to strangers," said Philip Morris associate general counsel William Ohlemeyer in a statement.

But businesses shouldn't necessarily be celebrating a new era of punitive damage limitations just yet. The court's decision still leaves a lot of the judicial landscape in flux with respect to such litigation, notes Ted Frank, an attorney with the conservative American Enterprise Institute.

" They decided this case on very narrow grounds," Frank says, pointing out that the Supreme Court did not set any type of limit on punitive damages relative to actual damages. The plaintiffs, he says, should be happy that the case is returning to the Oregon high court, which could ostensibly tinker with the wording of its earlier decision to have it pass muster with the Supreme Court. For example, the Oregon court could specifically state that the award is not meant for other smokers not represented in the lawsuit, and that Philip Morris' behavior " was reprehensible under the circumstances."

Basically, Frank says, the Supreme Court punted the case back to the state, which means the original verdict could still stand. The big question businesses are looking at, he says, are whether the high court's two new conservative justices nominated by President Bush, Samuel Alito and John Roberts, will prove to be strict conservatives " or pragmatic conservatives like Sandra Day O'Connor, who was generally unwilling to reverse precedent." And while both Roberts and Alito voted with the majority to throw out the damage award, they still left the door open for its return.


article from www.forbes.com