Discussion on the possible Chrysler-GM Deal

[FoMoCo Fan]

It helps to look at what is in the pipeline, not on lots right now. Also, another thing, GM could purchase Chrysler, keep what they want (Jeep, minivans) and then sell off the intellectual property to stuff they don't want, or duplicates what they already have.

[jbartley]

this isn't a merger, this is GM buying chrysler. Chyrsler basically dissapears and only exists in the brand name. interesting.

I don't like the idea of dodge, chyseler, and jeep still existing. I want the jeep brand to vanish.

[HEVguy]

Originally Posted by nadepalma

..."They're not far along enough, in my assessment, to take on something as gigantic as absorbing Chrysler," said Gerald Meyers, a business professor at the University of Michigan and former chairman of the AMC automaker acquired in 1987 by Chrysler...

That is what worries me the most... There really would be a lot of risk to acquiring Chrysler.

However, as Daimler said, an alliance might make sense. GM and DCX in an alliance would allow increased synergies, but not the 'mess' of all these brands under one roof. However, these types of alliances typically require 'cross ownership' of each other, and bring their own messes with them... so I am unsure if this would be better.

[ocmdog]

Originally Posted by guitarlix

If this actually happens and they don't nail the execution, it'll be mass suicide. I seriously hope this move isn't being made with an eye on retaining the #1 position. Pride comes before a fall.

Interesting when you consider this from TSkyline5 at MT Forums:

TSkyline5:
"So this could possibly be a defensive move on GM's part? I guess that aspect of the deal makes sense...like, if GM doesn't buy Chrysler, suppose someone else like, say, Toyota does? Then GM would be faced with an even bigger, badder rival. GM already has their hands full as it is...

I guess it comes down to this: which is worse for GM? A costly acquisition, or the risk of facing a strengthened, nearly unstoppable, rival? The acquisition is a very risky move, but GM may not have much of a choice...

Correct me if I'm looking at this the wrong way."

[56 Starchief]

Originally Posted by tamatt27

Care to elaborate?

Berkshire-Hathaway is run more similarly to the way GM was run years ago-as independent operations (GEICO, Dairy Queen) that feed funds to the main unit (Berkshire). All the operations are run by their own people, and given a large amount of freedom. All that is demanded is that they perform. If they do not, they are let go or shut down.

Of course that isn't completely translatable to GM, but something along those lines could possibly be one way GM deals with Chrysler and its brands. Perform or die.

I think GM, as I mentioned in another thread, will ultimately be pulling a Renault-Nissan (which in and of itself is much like Berkshire) and take a 51% stake and let Chrysler run itself while techinically taking credit for market share, etc. Platforms could be shared, but at arm's length.

REMEMBER, GM needs to protect that dual-mode hybrid from Toyota, Hyundai, and others in China. This I think is one of the primary reasons.

As scary as it may seem, I think this is a very real possibility. There are too many comparisons to AMC, including some of the same players (Bob Lutz) and the same scenarios (a company coming back from the brink to buy a smaller player to beef up). Chrysler will be far enough so there won't be overlap though, unlike AMC, I think.

[chevyman62]

Chrysler....I guess would be an ok addition for cars.
Jeep.....A Great addition if done right with Hummer
Dodge.....Get rid of it.

[genjy]

I have a feeling if the buy-out goes through, it's going to be an epic-size disaster that will take decades to sort out... if GM survives that long. GM is going to lose a bunch of money and resources to get everything back on track.

This is not like the MBZ-Chrylser merger where one was an European luxury company and one was an American mainstream company... this is two massive, American companies with similar, competing products.

[lio45]

Originally Posted by jbartley

this isn't a merger, this is GM buying chrysler. Chyrsler basically dissapears and only exists in the brand name. interesting.

If history is any indication, you're wrong... engineering would be shared both ways. They'll keep the best of both companies, unless they're hopelessly stupid.

For example, Nissan didn't become a brand name for Renault. Renault is getting Nissan-designed engines and platforms, as well as giving it some engines and platforms (in both cases, it was usually the "best" stuff that was kept).

Example closer to the point, AMC had a significant role in the Intrepid/Concorde and Grand Cherokee designs... and Neon to a lesser extent...

[Quickening]

GM absord their technologies and destroy the brands. If GM trucks get the Cummins, they have won back my dad and brother.

[OKsweetrides]

I see this more as defensive posturing. Chrysler has a huge amount of property that Toyota would love to grab.
What does Chrysler et. al. have that Toyota doesn't?
RWD archiecture and expertise <-- When's the last time you saw a Toyota carrying a RWD sedan or car that wasn't a Lexus?
3/4 and 1 ton pickups <-- Very very attractive to Toyota
Sports car expertise <-- Viper anyone? 'Yota couldn't touch that one with a 10 ft. stick with any past or present or future offerings. and then the muscle heritage

I would much rather an American company get Chrysler et. al. than any of the Japanese companies (who would then strangle the remaining of the U.S. auto industry).


I don't see negatives as long as it's setup to have an arms length relationship, but in safe distance to fend off imports.

I feel sorry for all the Mopar fans that are shouting "I'd rather Toyota buy it!" "Close up shop completely!" and sitting there saying "I'm a true American." Sadly very shortsighted fellows.

[lio45]

Originally Posted by genjy

This is not like the MBZ-Chrylser merger where one was an European luxury company and one was an American mainstream company... this is two massive, American companies with similar, competing products.

Somewhat "successful" example of two domestic automakers merging: Peugeot + Citroën.

Originally Posted by Wikipedia on PSA Peugeot-Citroen

The two brands retained their separate sales and marketing structures, but have benefited from a common technology, development and assembling assets.

I'm hoping GMChrysler will look more like PSA than like British Leyland.

[lio45]

Originally Posted by Quickening

GM absord their technologies and destroy the brands. If GM trucks get the Cummins, they have won back my dad and brother.

The only way it will make sense for GM to take Chrysler's liabilities is to get the volume that goes with it.

Destroying the brands would be a move of abysmal stupidity.

[kenman923]

When GM takes over Chrysler, first thing they should do is move the Caliber and Compass to the Delta platform, the Patriot to the Theta platform, and the Sebring/Avenger to the Epsilon platform.

[1931Chevy]

This is not like the MBZ-Chrylser merger where one was an European luxury company and one was an American mainstream company... this is two massive, American companies with similar, competing products.

Thats why I think it would be a disaster too, GM already have all the bases cover from the cheap,sport,semi luxury,luxury and off road, and buying 3 more brands will make really a mess for GM, IMO I posted that Ford could be a good combination for Ford, they need a sport youth brand and Dodge can cover that and Jeep for the off roader so they can compete with hummer and give the Chrysler 300c pt cruiser and the vans to the Ford bran and kill the Chrysler brand here in the states maybe on a global basis Europe they can let the brand stay, but as we know Ford is in a big mess too so it would be very difficult thinking this will happen,if GM do this all I can see for GM is absorbing Chrysler products and engines hell a Camaro with a Hemi and killing the Chrysler and Dodge brand and put the Jeep with Hummer under the same roof

[Highlander]

Originally Posted by red_xtreme95

This will be a good thing....The Slivreado can get a Cummins and i think GM is on the right track

Why?

Then again, just think about ALL of the "why's" in all of this. Why assume the liability? Why would you want a Cummins instead of the newest DMax? Why would you want to sidetrack what appears to be a growing turn around? Why would you want to add additional overlap when most see the existing overlap as already out of control?

I can think of lots of questions and lots of risks. Not many answers or positives. Scary.. What would be a "successful" scenario if this does happen?