GM chief turns away from taking Chrysler in tow

[neshapop]

http://news.yahoo.com/s/afp/20070308...ompanytakeover

GENEVA (AFP) - General Motors president Rick Wagoner has backed away from prospects that his group might buy Chrysler.

German group DaimlerChrysler has signalled recently that it is considering all options to deal with persistent problems at the US subsidiary, and announced last month that it would cut 13,000 Chrysler jobs.
This has led to speculation that GM and DaimlerChrysler might do a deal for some form of alliance between GM and Chrysler.
But Wagoner played down any prospects that his company might acquire Chrysler assets in two interviews published on Thursday on the sidelines of the Geneva Motor Show.

Without referring to Chrysler by name, he told the Thursday edition of Financial Times: "The idea of taking a partial stake in someone is not something we view as a high priority -- what it does is to tie up capital.
"Our bias is to put the money into the projects that will yield the savings and return."

[tgagneguam]

Without referring to Chrysler by name, he told the Thursday edition of Financial Times: "The idea of taking a partial stake in someone is not something we view as a high priority -- what it does is to tie up capital.
"Our bias is to put the money into the projects that will yield the savings and return."

Smart thinking, Rick.

[Evo69]

"Our bias is to put the money into the projects that will yield the savings and return."

Damn right!

[Quickening]

Originally Posted by Evo69

"Our bias is to put the money into the projects that will yield the savings and return."

Damn right!

Freakin burn. Good for GM. They don't need that dead weight.

[69Firebird400]

I didn't think they would be able to afford it. Plus, talk about extra headaches! I'm much more confident in GM's long-term prospects without Chrysler than I would be with it.

That's smart management on Rick Wagoner's part, not trying to acquire their way to market share just for the sake of being #1.

[nadepalma]

Just to play devil's advocate --

Originally Posted by neshapop

Without referring to Chrysler by name, he told the Thursday edition of Financial Times: "The idea of taking a partial stake in someone is not something we view as a high priority -- what it does is to tie up capital.
"Our bias is to put the money into the projects that will yield the savings and return."

Just to play the other side, he's talking about a partial stake here -- which may or may not mean that they'll not take a partial stake but rather the entire company.

Secondly, he's speaking about putting out capital --- but some of the more recent talk has been about GM swapping a stake in the company to the Germans for the entire Chrysler Group --- no capital exposure as the company would be absorbed.

Nevertheless, if this is what they're thinking NOW then I agree with those who posted above that this might mean that it's less likely now.

The larger point to remember is that this isn't definitive ---- he might be putting up a smoke screen to their true intentions or just throwing folks off.

Just my two cents....

[HoosierRon]

I think you are right on, nadepalma. It would be completely consistent with this statement for GM to say to DC "Give us the Chrysler Group, and we will give you x% of GM (in the form of preferred, non-voting stock, of course)."

[mgescuro]

Originally Posted by nadepalma

The larger point to remember is that this isn't definitive ---- he might be putting up a smoke screen to their true intentions or just throwing folks off.

Or.... he's going to try to pull out another Daewoo situation....
Get the remnants of Chrysler Group for dirt cheap and revamp the operations under Lutz's auspices.

Still.... As I've said before in other threads, I don't think DCX wants to get rid of its foothold in the US market -- considering that foothold is tenuous at best with teetering sales of Mercedes and Maybach. And SMART isn't in the US yet. It might not be such a bad idea to maintain the Chryseler Group under the Daimler umbrella -- or at least partially.

The only part I still can't get my head around is GM acquiring Chrylser Group. Synergies are sketchy at best -- though more than Fiat-Nissan. Product overlap is rampant -- with T&C/Caravan, Crossfire, 300, and most of the Jeeps being the true non-overlaps. I'm not even sure if Chrysler's European penetration is that significant for GM either.

THe only true benefit is that GM stays ahead of Toyota in terms of sales for at least 5-6 years.

[goblue]

Originally Posted by mgescuro

THe only true benefit is that GM stays ahead of Toyota in terms of sales for at least 5-6 years.

Toyota becoming number one is the best thing possible for GM - I don't see it as a benefit at all to buying Chrysler.

[PhishPhood]

Originally Posted by nadepalma

Just to play devil's advocate --



Just to play the other side, he's talking about a partial stake here -- which may or may not mean that they'll not take a partial stake but rather the entire company.

Secondly, he's speaking about putting out capital --- but some of the more recent talk has been about GM swapping a stake in the company to the Germans for the entire Chrysler Group --- no capital exposure as the company would be absorbed.

Nevertheless, if this is what they're thinking NOW then I agree with those who posted above that this might mean that it's less likely now.

The larger point to remember is that this isn't definitive ---- he might be putting up a smoke screen to their true intentions or just throwing folks off.

Just my two cents....

Good pick up. What he said was perfect 'corporate speak'. It appears to be one thing and it is very definite. While actual events may be evolving in another direction.

I don't see him as a moron. He knows that Chrysler by itself is worthless. Nobody pays money for a worthless object.

[roteague]

Originally Posted by mgescuro

THe only true benefit is that GM stays ahead of Toyota in terms of sales for at least 5-6 years.

As much as I dislike Toyota, I wonder if it might be worth letting them have the mantle for a couple of years - let them be the bullseye, instead of GM for a change.

[JBsZ06]

This country always loves the underdog so I don't see GM not having the number one sales mantle a few years as a big deal as long as profitability goes up!

Thats the bottom line...

Let Toyota be the big bad business for a few years...

Lets see the media go after toyota instead of GM in negative press...

Then as GM's fine products sway buyers without a stigma (false lack of reliability IMO) They can once again be number one...



Buying Chrysler would be a mistake...

Selling DC the platform for the suburban or Tahoe is a good idea...

Let DC slap in a hemi ..and new body styles etc...different interior...and get the economies of scale much the same way DC is going to do with the VW hook up on the minivan...

GM would do well to get a few minivan platforms for Chevy or GMC with GM motors and body styles...

GM's nice 3.9 or 3.6 liter v8 would work out nice

[Hitman1970]

Goodbye, my beloved LeBaron. Great memories of my 1979's back seat in high school and college.

[Globalist]

not clear what Rick means--too vague.

[mrgto]

He's saying they are still interested but at the right price. I think they did make an offer to DCX and they are waiting to see if any other better offers come in...doubt they will though.