GM + Chrysler: What it may look like post-merger

[nadepalma]

GM + Chrysler: What it may look like post-merger

The last 24 hour have certainly brought a great deal of attention to these two Detroit icons.

While pundits and analysts peer into the future, GMI has already gotten word from inside sources on what a "new GM/Chrysler" may look like post-merger.

First, our sources tell us that GM has "war-roomed" the idea of buying Chrysler a few times in the past. Just like the Pentagon, GM's war room studies every "what if" scenario and they've already done their homework on what a combined auto-giant would look like in the recent past.

When it was made public that the former DaimlerChrysler was looking to spin-off Chrylser Corporation, GM quietly entered into talks to purchase the company from the German automaker. At that time, GM reviewed Chrysler books and crafted a series of plans if a purchase was to move forward. We now know that if GM should buyer Chrysler, some version of these plans will be revived and implemented:

*Make huge reductions in Chrysler white-collar work force (product devlopment, administrative, sales, marketing, etc) and combine the left over operations with GM's own team.

*Eliminate excess Chrysler capcity over time by redesigning and making products on GM platforms and plants. Those plants that closed could be sold off to a foreign automaker seeking to establish a presence in the United States (Fiat, PSA Puegot Citroen, etc) or sold to parts-suppliers.

*Continue to consolidate Chrysler's dealer network. Cerberus has already started on this and GM would look to accelerate it just as they are pushing to do the same on their end. The resulting combined company would end up having a greatly reduced dealer footprint to bring it more in line with their competitors.

*Continue with the Chrysler's ambitions to make both Dodge and Jeep global brands. When Dieter Zetsche was in charge of Chrysler he began this strategy and made some inroads in Europe and China. His goal was to make Chrysler a truly "global" company and wanted to achieve 1 million sales outside the United States. GM would leverage their own worldwide operations to facilitate this faster.

GM crafted much of this strategy as it was negotating with DaimlerChrysler, but the plan ultimately fell through due to the issue of Chryler's underfunded pension and debt. GM didn't want to take on the additional burden. Ultimately, most - if not all - of the Pension obligations resided with Daimler in the end and Chrysler was bought by Cerberus.

This time around, however, many of those obstacles would not derail any arrangement. Behind the scenes, Cerberus has done quite a bit to get Chrysler clsoer to fighting form - and it would make the company a much more appealing partner than it was over a year ago.

However, any combined company would need to be carefully coordinated in order to succeed. Should they move forward, GM would control over 30% of the market - but it would also mean huge redundencies.

Our insiders expect that will mean both Chrysler and GM would have to cut some brands to make the strategy work. The most likely scenario will mean that GMC wold possibly be eliminated since it would create more redundencies with the Dodge brand. Chrysler branded vehicles may also get elminated due to the fact that the Buick brand already serves much of the same customers and has a global presence in larger markets like China.

Hummer we already know is being prepped for sale and would have only overlapped with Jeep. Though, GMI openly wonders if GM were to get their hands on Chrysler, if they would make changing the "seven-slot grille" a pre-condition to any sale? This would mean Hummer's new owners could not use the iconic seven-slot appearnce as both Jeep and Hummer currently do. It should be recalled that GM and the former DaimlerChrysler went to court over this very issue years ago. GM won and the right to use the grille was preserved, but if GM owned Jeep in a Chrysler takeover, would they allow a new competitor to cash in on the signature look? Could this be revisited?

Assuming the company were combined our insider says a four-channel sales strategy would continue and would be established as: Chevrolet, Dodge-Jeep, Saturn-Buick-Pontiac, and Saab-Cadillac.

This framework would allow GM to continue to build on Chrysler's stengths while preserving their own.

The product sharing potential would almost be intriquing under a new regime:

GM's mid-sized Epsilon II platform could underpin the next Dodge Avenger while the next Dodge Journey crossovers could move to the Theat II platform, creating bigger economies of scale for both companies.

Chrysler's minivan could be shared with Chevrolet and possibly Saturn to give GM an immediate entry into the segment.

GM's DeltaII platform could provide a replacement for the Caliber crossover/hatch and possibly create a proper sedan to anchor the bottom of Dodge's lineup.

And GM and Chrysler together could design replacements for the Silverado and Ram fullsized pickups, the Colorado and Dakota mid-sized picksups and even a slate of SUVs to serve both Jeep and Chevrolet.

All of this, however, would take money, time to iron out, and possibly consume more than a single product cycle to truly be integrated.

We will report more from our insiders as further information becomes available. Stay tuned!!!

[LONGHORN]

Chrysler cars that SELL (read the 300) will move to Buick.

Minivans to Chevy and Dodge looses theirs.

Dodge will take the place of Pontiac.

Pontiac and GMC gone.

Makes sense to me and may work. The only thing in the way, a year with presidential elections and some pissed off Dealers who just spent some major coin to refurbish or build new Chrysler,Dodge and Jeep dealerships.

[1931Chevy]

Well first of all if we thinked that the billion GM spended killing oldsmobile whats too much I would say that they would need about 4billion to trim all the excess dealers they will have plus some of the brands will have to go, I would expect the killing of Pontiac, Chrysler and the selling of Saab and Hummer, that way can have GMC,Dodge and Buick or give the GMC products to Dodge and align Saturn under the Buick, Dodge and Saturn sales channel and let Caddy apart, then realign the global sales department and introduce Dodge as a global brand, move the 300 platform as a Chevy, merge the SSR with the PT cruiser , merge the dakota with the canyon etc but for something like this im estimating that GM would need close to 10 billions to be able to achieve this unless they are counting that they will get their 25 billion and will wait when Chrysler get their 25 billion loan too and then acquire them.

IMO I just hope this doesnt happen because right now GM its like a patient that had a stroke one month ago and its trying to eat a fat burger that could kill him instantly

[mkwelbornjr]

Why would GM need to add to its list of cars that don't sell??? They have enough issues and a better mid price RWD platform than Chrysler. I rode in a G8 the other day....blows the Chrysler products off the road.

[Uzzy]

I really don't see this as a good thing. GM has to cut the fat and become leaner, not add more bloat.

[YSSMAN]

I for one am completely against this merger, lets leave it to the boys at Nissan-Renault to play with Chrysler. But if it were to happen...

Basically, cut the trucks completely from every line (including Chevrolet). Let Dodge handle the BOF trucks and SUVs, give GM a light sprinkle of crossovers, and let it be done with. Merge HUMMER and Jeep together as one, cut the products down to essentially the Cherokee, Wrangler, H3 and H3T, and let it be done. Cut Saturn out and leave that spot to Chrysler, being slightly sub-Buick in terms of luxury and value. If Dodge is to have a car line, make it sub-Chevrolet.

Otherwise, this is the time to trim the fat. Period. I don't see much use with the overwhelming majority of Chrysler's engine or transmission equipment (as it is either Daimler, Mitsubishi or Hyundai in design), their chassis are for the most part out-of-date, and in the end they all come off as sub-par to what already exists at GM.

Simply put, I do not see a clear future for Chrysler if GM is to buy-in at any point.

[t-rex]

It's simply impossible to merge two companies selling vehicles in the same segments.

There'd be virtually nothing from Chrysler that could fold into GM's lineup. The Hummer H3 could dovetail nicely into the Jeep lineup. GM sure could use a minivan; and the Journey is an interesting product. Everything else is overlap, and every Chrysler product is inferior to GM's in most respects.

I just can't see any such scheme being remotely feasible. Something tells me such an endeavour would spell the end of both companies.

[jbernie]

I can see where platform sharing would save massive amounts of money which could then be returned as extra investments in the platforms to make sure every platform is class leading. I just don't know if the merger in the first place is wise.

That being said, if GM swapped its 49% of GMAC for Chrysler.... even if Chrysler doesn't seem that good, it maybe a win win situation. It could also really make GM such a big company that the Feds would step in and ensure it didnt fail.

Given GM is/was in talks with Cerberus... I would think that there is obvious some benefit that GM sees from the marriage.

[Buick Riviera]

These only thing Gm see's out this is selling off the rest GMAC that is all. There will be no marriage.

[ZHDesign57]

I am for this. Do it.

I would rather see GM and Chrysler merge than GM die.

Just as long as I never see a Hemi Impala, I think I will be ok.

Do it for the sake of the American Automobile, GM. Please don't let yourself die.

[spidge]

Originally Posted by t-rex

It's simply impossible to merge two companies selling vehicles in the same segments.

There'd be virtually nothing from Chrysler that could fold into GM's lineup. The Hummer H3 could dovetail nicely into the Jeep lineup. GM sure could use a minivan; and the Journey is an interesting product. Everything else is overlap, and every Chrysler product is inferior to GM's in most respects.

I just can't see any such scheme being remotely feasible. Something tells me such an endeavour would spell the end of both companies.

Agreed. What's the point?

I can see keeping Jeep, and selling HUMMER, but having both Dodge AND Chevy around is pointless. It will just mean even more divisions for a company that should be working on reducing the number of divisions.

The Caliber and PT Cruiser are unnecessary with the HHR.

The Avenger and Sebring are unnecessary with the Malibu/Aura/G6.

They should use the LY platform for the STS and Lucerne, and the minivan platform, as another poster said.

[Tstag]

It's making a bit more sense if GM can lose GMAC as part of the deal. But integration would take at least one product cycle probably 2 and that's the big problem. GM need a cash injection more than anything else, with cash it could affort to rationalise without it there's just a bigger problem.

[vxl]

Originally Posted by ZHDesign57

I would rather see GM and Chrysler merge than GM die.

I'd rather see GM + Ford and let Chrysler go. Although, Chrysler could share platforms with GM thus reducing costs whilst selling to rentals/fleets to keep revenues flowing.

[srd275]

I have one word for GM on this "Merger".

NO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

1. Chrysler doesn't offer GM products that GM doesn't already have (with the exception of a mini van that GM moved away from).

2. Chrysler has a dealer network way larger than GM.

3. GMAC is going to be selling off its toxic debt to the federal goverment soon. Gm needs something outside of cars over the long term.

4. GM would have to kill other brands that would make the killing of Oldsmobile seem cheap, but would no doubt alienate customers who like GMC or Pontiac. (I have had a Dodge Pickup a few years ago, frankly I prefer my wifes Yukon by a wide margin).

5. Chrysler has same debt problems with unions and pensions that GM does. GM does not need the liablity.

6. By doing this you will sink both companies into bankrupcty, and not just one Chrysler.


Chrysler is not going to make it. It is sinking. If Gm tries to save it it will sink too.

Chrysler needs to merge with someone else. A foreign base firm that can bring to it products that it doesing have. That will be tough in this economy.

[1G6]

Seeing the Cummins in GM trucks? The LY platform at Buick? Hell yeah.