You can now count two Pacifica’s as casualties of the cost-cutting axe at the “new” Chrysler. The first was the Chrysler crossover that never got the play it deserved. The second is the Carlsbad, California-based design studio opened in 1983 to help create exciting designs outside of the confines of the Detroit bubble. Chrysler’s design figurehead Trevor Creed reportedly gave his blessing to closing the studio, creating the most ominous piece of news to come out of the now private automaker—at least for now.

The news uproots 20 designers at the studio that planted the seeds for such notable concepts as the Chrysler Nassau, Dodge Slingshot and Dodge Hornet, as well as a few notable production vehicles: Dodge Viper, Plymouth Prowler, Chrysler 300C, and Dodge Challenger. Funny thing: all of these production cars were once highlighted as clear signs that Chrysler was back in the game at various times in its tumultuous existence. It was Pacifica that provided Chrysler with the creativity it needed to get its designers in Detroit to think outside the confines of the status quo—or of the way of life in metro Detroit.

“This is part of the ongoing consolidation of our North American business and achieving a right-sized operational footprint to match our market realities,” Chrysler said in a statement. Had Chrysler brass really been concerned about saving money, they could have cut through the PR-speak and issued a one-line release: “This move was made to save money, plain and simple.”  They aren’t kidding anyone.   The “right-sizing” for “market realities” makes little or no sense, since automakers much smaller than Chrysler have West Coast design studios, including recent intensive care patient Mitsubishi. Could it be that Cerberus is running out of cash faster than it expected? Probably. The honchos at the top of Cerberus undoubtedly never expected the car business to be so difficult, or for the U.S. economy to follow the declining value of the dollar into the abyss.

Still, Pacifica’s demise is a most dire sign for Chrysler because it cuts off an incubator of new ideas and concepts. Where will that creativity come from now? Auburn Hills? The designers there are a talented bunch, when given the ability to run free, but now are missing that semi-independent “sixth sense” that can give them insight into what the rest of the country wants. At Pacifica, the ability to run without the shackles of committee meetings to determine what color the corporate stationary should be or the dress code limitations on casual Fridays was a plus Chrysler will miss.  And it should be noted that many designers who are in Auburn Hills once had the opportunity to serve a stint at Pacifica, which was something that all of them we’ve talked to spoke of in only the highest regard.

Increasingly I am disgusted with Creed, as well as Chrysler executivess Bob Nardelli, Tom LaSorda and Jim Press. If they look beyond the accounting ledgers and face up to the competitive market reality, where companies win by having superior designs—as Chrysler once did--they’d realize Pacifica was neither a cost center nor a profit center. It was a contributor to the success of Chrysler. I never thought it would come to this, but it might not be all that bad when the Chinese take over; maybe they will have the wisdom to know that saving a few dollars now could end up costing millions down the road.