What a rush the past few weeks have been. Stock market crashing, credit market crumbling, banks failing, people losing tons of faith in banking institutions as well as the government. With a presidential race as a proverbial icing on the cake, the news is jammed with story after story of eye catching headlines. But yesterday, we all saw the one big headlight that seemed to escape regular media. GM is looking to pick up Chrysler in a merger. This sent shock waves across the automotive landscape with everyone's first reaction was "What does GM want with Chrysler?"
Well, we can look at the financial end and see that with GM burning through cash, that this would be a silly move for them. With Chrysler's lack of quality in recent years, again this is another questionable move. But lets look into this. GM wanted to buy Chrysler over a year ago...but why? Just to have more brands? Market domination? What would this really mean? What could happen in this merger? And the final question, is this going to make GM stronger?
I asked myself these questions and tried to really come up with an idea of what is going on with this. After many dead ends, much deep thinking, I came to the realization that this could be the best or the worst thing to happen to GM. Now, we all know what the worst case situation would be, failure of two American automotive brands and the loss of tons of jobs, a huge problem right now in this economy. They would be bankrupt, stripped down, parts sold off to the highest bidder. Gone would be history, memories, dreams of what has gone and what will come.
Lets take a look at the other scenario. The best thing that could ever happen to GM. The obvious good things would be this would easily place GM as the #1 auto maker in the world by far, putting Toyota's dreams out with one massive sweep. It also gives GM tremendous access to engineering and development world wide. Semi-German engineering programs that are probably still on the books, tie ins and other ideas could help improve this new GM program. People scream that there would be too much overlap, too much cannibalizing of each other sales. I say bull.
We are not talking about developing a new company, starting a new division, creating a new idea, we have a preexisting infrastructure that has been in place for many years. That doesn't mean that Ram's will be powered by Vortec engines, or Hemi Powered Camaros. Chrysler could retain its identity, without having to merge powertrains too much. Transmissions, that would most likely be a different story as other running gear would most likely switch over to the much more reliable GM units. Other powertrains such as the Ecotecs verus the Chrysler World Engines would be a big battle, but with Ecotecs being GM's baby, and the likeliness that Chrysler cars would be on GM platforms, Ecotecs would win out.
Going on to platforms, GM could shut down most of Chrysler's plants and shift production of Chrysler vehicles into GM's plants, increasing production. This is a double winner as GM keeps capacity high, and they will most likely need more workers so some that might be let got in the merger could be rehired and put to work in GM factories. This would mean that less plants making more cars, which is what GM wants to do. Chrysler could throw away any "Project D" plans they currently have and start to design Sebring and Avenger replacements on Epsilon. GM could also use its amazing depth in platforms to bring to market such cars like the Hornet concept on a Gamma platform giving Dodge a fun to drive compact. Combining Chrysler's designs with GM's designs and their world class platforms, we are talking about a massive turn around for American cars. We are also talking about the return of Zeta!! Yes, ladies and gents, LX and LY development could be thrown away and Zeta II SWB and LWB could bring Holden some new jobs as well as fill up the Oshawa plant easily! Gone would be the old MB derived platform and in would be the all new Zeta II program to the US! Hodlen fans and employees rejoice! You could be hoping for this! This also means that Challenger replaces the Firebird as Camaro's sister car. Yes Pony Car fans, the Challenger and Camaro could possibly be built on the same platform, sharing a lot of parts, and being able to turn the Challenger into a better pony car, or perhaps it could be a GTO replacement? A larger, more luxurious coupe could fill in that hole left by GTO and Monte Carlo. Dodge would in turn become the Pontiac we dreamed of.
And that gets into the greatest part of this merger, globalization. Dodge has, while minimal, a world image. That is something that Pontiac does not have, nor GMC. Dodge gives GM another division in China and Europe as well as a full line company for the US. Dodge could replace Pontiac AND GMC in current showrooms giving both performance vehicles and rugged trucks. Therefor GM gets Dodge's image and their brand loyal people into GM showrooms and introduce them into the GM culture. Jeep also gives GM the chance to fight Land Rover and do it RIGHT! My original idea to save GMC was to turn it into a luxury off road brand like Land Rover all the way to a fun off road company like Jeep. With Jeep a part of GM, the Jeep brand can now truly fight Land Rover on several levels WORLD WIDE! No problem trying to establish a GMC system around the world, the JEEP has been known world wide since World War 2! That is 60+ years of image, marketing, and desire for their vehicles that GM could never get with GMC. I have always had a theory that everyone, at some point in their life, will want to own a Jeep Wrangler. That image is what made Chrysler so desirable before, and now GM is surely going to capitalize upon this. But this brings up a problem that has plagued GM since the 80's.
GM has yet to show that they can market a brand successfully. Sorry folks, they really cannot do it. I have done a better job at marketing for GM then GM has. But this is where GM can win big. Chrysler has, by far, some of the best ads and ideas for marketing out there. They always have been very edgy and have had very awesome marketing programs, developed great commercials, and really pushed their brands back into the minds of America. Problem is Chrysler has had semi-poor quality cars, where GM has the opposite. Great cars, poor marketing. GM can now take Chrysler's marketing team and use them to make their great cars stand out. This could be the best way for GM to not only boost its own divisions, but Chrysler's revamped line up.
The only problem with all this is that it wont happen over night. As said in the other article, it would be a product cycle or 5-6 years till we saw this happen. This could be one of the best things GM has done in a long time. GM obviously sees a reason to merge with Chrysler enough that they were in talks twice. GM needs to move quickly and capitalized on this situation, move GMAC off to Cerberus and move forward on making cars. This could do great things for GM, and it could really push GM back into some serious market share numbers. There will blood, no doubt about it. Dealers were suffer, union workers will be out of work, and there will be a blood letting that will try to turn GM into a leaner fighting machine. This really could be one of the best things to happen to GM. Let us just hope they have the same optimism I have.
Thank You For Your Time
Big Al