Chrysler (2009)

Chrysler's 2009 bankruptcy was its second death in 31 years—the company had required government rescue in 1979 under Lee Iacocca. The 2009 collapse demonstrated that previous survival doesn't confer immunity; organisms can develop the same disease twice. Chrysler's fundamental weakness was scale without efficiency. The company was large enough to need massive production volumes but not efficient enough to produce them profitably. Daimler's merger (1998-2007) had stripped technology and engineering resources without providing benefit—parasitic mutualism that weakened both partners. Cerberus Capital's 2007 purchase loaded the company with debt while extracting value through fee structures. Chrysler's mechanism failure was attempting to compete on product appeal without product excellence. The company's vehicles were consistently rated below competitors on quality, reliability, and fuel efficiency. Marketing could not overcome product deficiency when customers had alternatives. This is competitive exclusion through quality—Toyota and Honda offered better products at similar prices, gradually capturing market share until Chrysler's position became untenable. The Fiat merger post-bankruptcy provided the technological infusion Chrysler needed—small car platforms, efficient engines—that Daimler had refused to share. Chrysler survived only by merging with an organism that had complementary capabilities, demonstrating that survival sometimes requires abandoning identity.