Consultant: GM-CG Merger Would Eliminate Most Chrysler Vehicles; 100K-200K Jobs Lost

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Thread: Consultant: GM-CG Merger Would Eliminate Most Chrysler Vehicles; 100K-200K Jobs Lost

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    Consultant: GM-CG Merger Would Eliminate Most Chrysler Vehicles; 100K-200K Jobs Lost

    Source: Special email alert from Automotive News

    Bradford Wernle - Automotive News - 10/30/08 4:00 p.m. EDT

    DETROIT -- A merger between General Motors and Chrysler LLC would result in the closing of as many as half of Chrysler's factories and elimination of all but about seven core models, according to a report by consulting firm Grant Thornton LLP.

    A deal also could result in a loss of 100,000 to 200,000 jobs at the two automakers, suppliers and other industry stakeholders, said Kimberly Rodriguez, principal of Grant Thornton's automotive practice.

    Rodriguez said she believes negotiators could reach an agreement in principal as soon as Tuesday, Nov. 4, election day. Reuters reported yesterday that GM and Chrysler's owner, Cerberus Capital Management LP, have resolved major issues and the final form of any accord will depend on financing and U.S. government support.

    "Chrysler as we know it will cease to exist very soon," she said at a briefing with reporters today in suburban Detroit. "There are few options available to either company."

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    Re: Consultant: GM-CG Merger Would Eliminate Most Chrysler Vehicles; 100K-200K Jobs L

    Think about that statement above for a minute.

    100,000 to 200,000 jobs lost.

    It's almost incomprehensible.

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    Re: Consultant: GM-CG Merger Would Eliminate Most Chrysler Vehicles; 100K-200K Jobs L

    All the jobs will be gone if both go under......

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    Re: Consultant: GM-CG Merger Would Eliminate Most Chrysler Vehicles; 100K-200K Jobs L

    Compared to how many jobs are going to be save versus Chrysler dissapearing and being broken into pieces. The alternative to merger is the scarier option.
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    Consultant: GM merger would eliminate most Chrysler vehicles

    SOURCE: AutoNews.com

    Consultant: GM merger would eliminate most Chrysler vehicles
    Ford wants 'parity' if government gets involved
    Bradford Wernle
    Automotive News | October 30, 2008 - 2:50 pm EST

    DETROIT -- A merger between General Motors and Chrysler LLC would result in the closing of as many as half of Chrysler’s factories and elimination of all but about seven core models, according to a report by consulting firm Grant Thornton LLP.

    A deal also could result in a loss of 100,000 to 200,000 jobs at the two automakers, suppliers and other industry stakeholders, said Kimberly Rodriguez, principal of Grant Thornton’s automotive practice.

    Rodriguez said she believes negotiators could reach an agreement in principal as soon as Tuesday, Nov. 4, election day. Reuters reported yesterday that GM and Chrysler’s owner, Cerberus Capital Management LP, have resolved major issues and the final form of any accord will depend on financing and U.S. government support.

    “Chrysler as we know it will cease to exist very soon,” she said at a briefing with reporters today in suburban Detroit. “There are few options available to either company.”

    Chrysler now has 14 factories, two of them already scheduled to close: Newark, Del.; St. Louis South.

    Chrysler has also offered its Viper business for sale, along with the Conner Avenue plant in Detroit where the sports car is made. Grant Thornton believes an additional four plants could close. Among the plants on the cusp would include Sterling Heights (Chrysler Sebring, Dodge Avenger), Toledo North (Jeep Liberty, Dodge Nitro), St. Louis North (Dodge Ram) and Saltillo, Mexico (Dodge Ram heavy duty trucks).

    The blended companies would command about one third of U.S. auto sales.

    In a related development today, if GM and Chrysler get federal aid, Ford Motor Co. will expect some help, too. Ford executives are staying in touch with federal policy makers and “the powers that be” to make sure they understand the challenges Ford also faces, said Mark Fields, Ford’s president of the Americas.

    “We just want to make sure we continue that ongoing dialogue and make sure that, whatever happens, there’s a degree of parity,” Fields told reporters at a press event today.

    Lesser of the evils

    Rodriguez acknowledges the merger of GM and Chrysler was not “an optimal solution,” but is still better than the alternatives, which would include one or both of the companies going out of business.

    “Despite the significant number of families that will be impacted, the benefits of combining the two companies are both structural and strategic,” Rodriguez said.

    Consolidation of the dealer bodies of both companies would likely accelerate with a merger, according to the Grant Thornton study. The two companies have about 22,000 dealer franchises, more than half of those in the United States.

    The remaining Chrysler dealers would have many fewer vehicles to sell. Grant Thornton estimates Chrysler now has 26 models, but only seven are core. Surviving Chrysler vehicles would likely be the Dodge Ram pickup; Chrysler and Dodge minivans; and several Jeep models, including the Wrangler and Grand Cherokee.

    The merger, while unpalatable in many respects, would provide several benefits:

    • GM’s leadership in plug-in hybrid technology
    • A stronger position in full-size pickups, displacing Ford as industry leader
    • More liquidity, thanks to the cash on Chrysler’s balance sheet
    • Cost reduction by elimination of overlapping staffs, especially in sales, marketing and administration.

    An expensive deal

    Rodriguez says the industry consolidation that would follow a GM-Chrysler merger would be a very costly proposition, especially if the industry approaches it responsibly, as she expects it will.

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    Re: Consultant: GM merger would eliminate most Chrysler vehicles

    Interesting that models would be cut and the combined market share is expected to remain at 1/3.

    Also interesting that they expect the new market leadership in full-size pickups. I thought the Sierra+Silverado combined have more sales than the F-150. We say the F-150 is the market leader because it sells more under one badge. If GM ends up with the Ram+Sierra+Silverado, whats different? They'll still sell more but that won't matter because they'll be under different badges.
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    Re: Consultant: GM merger would eliminate most Chrysler vehicles

    Looks like this is going to happen. I wonder what kind of gov't support will get thrown in?

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    Re: Consultant: GM merger would eliminate most Chrysler vehicles

    As long Wrangler stays true to being Jeep Wrangler, I fully support this.

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    Re: Consultant: GM merger would eliminate most Chrysler vehicles

    I thought the market had effectively eliminated most Chrysler vehicles.



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    Re: Consultant: GM-CG Merger Would Eliminate Most Chrysler Vehicles; 100K-200K Jobs L

    DETROIT, Oct 30 (Reuters) - A potential merger between General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) and Chrysler LLC could result in the closing of at least four more of the No. 3 U.S automaker's factories while 16 of its vehicle models were at risk of being eliminated, according to a study by Grant Thornton.

    A merger between GM and Chrysler is the best option under the circumstances, said Kimberly Rodriguez, principal of Grant Thornton's automotive practice.

    "It's not optimal but positive in the current environment," she said.

    GM has been in talks with Cerberus Capital Management since September about a merger with Chrysler LLC, the struggling U.S. automaker owned by Cerberus.

    The study said Chrysler has 26 vehicle models, of which only seven were core.

    http://www.reuters.com/article/marke...0081030?rpc=44

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    Re: Consultant: GM merger would eliminate most Chrysler vehicles

    So many jobs to be lost. This is terrible no matter how you look at it.
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    Re: Consultant: GM merger would eliminate most Chrysler vehicles

    Quote Originally Posted by tirediron View Post
    As long Wrangler stays true to being Jeep Wrangler, I fully support this.
    totally agree it is a legendary American vehicle.

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    Re: Consultant: GM merger would eliminate most Chrysler vehicles

    She is right. A merger is better than having both of them fail. Still I am not sure if I like the arrangements.
    They said it couldn't be done. That is until I did it.

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    Re: Consultant: GM merger would eliminate most Chrysler vehicles

    No 300/Charger/Challenger?? Some of Chrysler's BEST PRODUCTS??

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    Re: Consultant: GM merger would eliminate most Chrysler vehicles

    Quote Originally Posted by elderon View Post
    So many jobs to be lost. This is terrible no matter how you look at it.
    Better than both companies going down the chute...with Ford to follow.

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