[nadepalma]

SOURCE: MotorAuthority

Cerberus won't split Chrysler up, wants single buyer
Posted Today, 12:13 PM by Nelson Ireson

Talk of General Motors purchasing or merging with Chrysler, sale to a third party or other speculation has been refined somewhat by Cerberus' statement today that it is trying to find a single buyer for Chrysler. The ideal situation for Cerberus would be a merger with GM, stake in the combined company and more of an interest in the GMAC financing company currently split between Cerberus and GM, according to the latest reports.

By not considering a split-up of the company across several buyers, Cerberus can leverage the full value of the Chrysler brand - whatever that may be - in its negotiations, as it owns an 81% interest in the company. Daimler, of the former DaimlerChrysler merged company, owns the remaining 19%. By keeping its stake in a single block, Cerberus may be able to command a better price, as opposed to breaking it into smaller, less valuable chunks. That's why Chrysler is reportedly less enthusiastic about a possible deal with Renault-Nissan, which is believed to be seeking a minority interest in Chrysler, reports the Detroit Free Press.

MORE HERE

 

[Chaz_23]

At leat that's good news. I'd hate to see Chrysler gutted and eventually disappear.

 

[Uzzy]

So Gm buys it and sells the truck portion to Nissan and the car portion to... Isuzu, or Suziki, or something (hopefully not Chery) and keeps Jeep and the cash, what's the hold up?

 

[EldoFan]

This is pretty much the same sort of situation Fleming presented Kroger with, when they offered up our chain (Baker's Supermarkets) for sale in 2001. Kroger only wanted to buy certain stores (the money makers, obviously....), but Fleming said it was pretty much an all or nothing deal. So Kroger bought all the stores here in town and gradually closed down the ones they didn't want in the first place.

I can see GM doing the same kind of thing. If they're really serious about buying Chrysler, it seems like their only option (as dictated by Cerberus) would be to buy the whole corporation outright and then either sell off or close down the divisions/units/whatever that they didn't want.

 

[Clownzilla]

So Gm buys it and sells the truck portion to Nissan and the car portion to... Isuzu, or Suziki, or something (hopefully not Chery) and keeps Jeep and the cash, what's the hold up?

I agree. As long as Cerberus dishes out some green to take care of all the crap (and costs) to get rid of the parts GM doesn't want then I have nothing wrong with this. I also see this as a great opportunity to get some sweet assets at some low prices (Jeep, battery tech, real estate, engineers, designers).

 

[megeebee]

At leat that's good news. I'd hate to see Chrysler gutted and eventually disappear.

Well, it may happen anyway depending on who buys it. There's nothing to stop GM from doing just this if they buy Chrysler.

 

[Avalanche13]

I agree. As long as Cerberus dishes out some green to take care of all the crap (and costs) to get rid of the parts GM doesn't want then I have nothing wrong with this. I also see this as a great opportunity to get some sweet assets at some low prices (Jeep, battery tech, real estate, engineers, designers).

The only worthless thing Chrysler has is Chrysler.

Jeep is a good asset as is Dodge. An injection of product in the form of an Epsilon and Delta vehicle would really help Dodge out.


If GM bought Chrysler I'd like to see
Chevrolet - lineup exists as today plus a minivan
Cadillac - I'll go with MG's lineup as I like it
Pontiac - eliminated, replaced with Dodge
GMC - eliminated for the USDM (still lives in Canada), replaced with Dodge
Dodge -
Cobalt/Cruse based Neon with SRT4 version
Epsilon/ep2 based Avenger
LY Charger
LY Challenger
C3XX Ram
Caravan
Journey
Buick -
Enclave
EPII LaCrosse
LY 300 based Roadmaster
Alpha Regal
Chrysler - eliminated
Jeep - everything except Grand Cherokee, Wrangler and liberty are eliminated
Hummer - sold
Saturn - eliminated, can't live with new, excellent product, don't deserve to live

Not sure what to do with Saturn/Saab.

BPG channels sell rebadged Pontiac product until GM can work out a deal to unite and Dodge dealers. In the end you have solid brands.

Chevrolet -- Bread n butter sedans, cuvs, vans, truck, suvs, you name it Chevy has it
Dodge -- performance, Americana brand. Big RWD muscle.
Buick -- traditional American luxury. Big comfortable and reliable, but not TOO expensive
Cadillac -- the standard of the world
Jeep -- jeep already has a very clear identity, preserve it

That's 5 brands with minimal product overlap.

 

[bmwboy2007]

I hope that the big 3.. ok, big 2.5, are able to survive the current economic crisis. The effect of these jobs leaving our shores will be devastating to the working class. Perhaps a single payer universal health care plan would give US Automakers parity with the competition.

 

[gardnet1]

I'll bid $57 plus a subway token.

Will GM go for the Blizkrieg approach and kill Chrysler right away and pare back Dodge/Dealer network, gut and sell Auburn hills and other R&D facilities, massive white collar layoffs?

Or will they have the go slow approach and let the economy sort out the gluted dealer situation, wait for models to come up for upgrades.

Also will they try and sell off Ram production, assembly and other related facilities to Nissan. Will the deal with VW stand (probably), Dodge Versa/Hornet still a go? What about Cummins?

 

[ne_one]

I've yet to see this mentioned elsewhere: does anyone know if Daimler has any controlling interest in what happens to the other 81% of Chrysler?

It would be interesting to see how the Cerberus acquisition was formalized when it comes to things like technology and production.

 

[johnnyl321]

So Gm buys it and sells the truck portion to Nissan and the car portion to... Isuzu, or Suziki, or something (hopefully not Chery) and keeps Jeep and the cash, what's the hold up?

Last I'd read, GM's having trouble obtaining financing for this deal.

 

[genjy]

I think GM will keep everything.

The bigger the better.

 

[Orbit]

Cerberus, good luck with that.

 

[doh]

Cerberus,(using your investments) is not the A Hole that cost 30,000+ jobs. New owner GM, that cost the American's 30,000+ jobs.

If you were in the driver's seat, which would you choose?

 

[steve333]

>Dodge -
Cobalt/Cruse based Neon<

Hey, I could go for that, as long as I can use my GM Points. Unless GM decides not to use the Cruze name, otherwise I woulod just buy that.

 

[steve333]

The only worthless thing Chrysler has is Chrysler.

Jeep is a good asset as is Dodge. An injection of product in the form of an Epsilon and Delta vehicle would really help Dodge out.


If GM bought Chrysler I'd like to see
Chevrolet - lineup exists as today plus a minivan
Cadillac - I'll go with MG's lineup as I like it
Pontiac - eliminated, replaced with Dodge
GMC - eliminated for the USDM (still lives in Canada), replaced with Dodge
Dodge -
Cobalt/Cruse based Neon with SRT4 version
Epsilon/ep2 based Avenger
LY Charger
LY Challenger
C3XX Ram
Caravan
Journey
Buick -
Enclave
EPII LaCrosse
LY 300 based Roadmaster
Alpha Regal
Chrysler - eliminated
Jeep - everything except Grand Cherokee, Wrangler and liberty are eliminated
Hummer - sold
Saturn - eliminated, can't live with new, excellent product, don't deserve to live

Not sure what to do with Saturn/Saab.

BPG channels sell rebadged Pontiac product until GM can work out a deal to unite and Dodge dealers. In the end you have solid brands.

Chevrolet -- Bread n butter sedans, cuvs, vans, truck, suvs, you name it Chevy has it
Dodge -- performance, Americana brand. Big RWD muscle.
Buick -- traditional American luxury. Big comfortable and reliable, but not TOO expensive
Cadillac -- the standard of the world
Jeep -- jeep already has a very clear identity, preserve it

That's 5 brands with minimal product overlap.

Sounds like a plan to me, they could bundle Dodge and Jeep together.
I would bundle Buick and Cadillac together but barring that Buick can join Dodge and Jeep.
Saturn, Saab, Hummer gone. Pontiac gone.Chrysler gone.
GMC can just make Professional grade trucks.

 

[hpatrick]

I hope GM gets Chrysler and does what it need to do. The North American GM lineup should be Chevy, Dodge will take GMC spot, Chrysler will be gone as will pontiac, Buick, and Saturn. They will need to keep Jeep and apply it's offroad know how to the Hummer technology and create one Bad A$$ Jeep product. And of course Caddy stays and use some of the Mercedes technology for there own. Oh yea can you imagine a Cummins mated to an Allison tranny. OH good God!!!!!!!!!!!!!!!!

 

[stevecmh]

good bye Nissan HEllo GM

 

[SierraGS]

The only worthless thing Chrysler has is Chrysler.

Jeep is a good asset as is Dodge. An injection of product in the form of an Epsilon and Delta vehicle would really help Dodge out.


If GM bought Chrysler I'd like to see
Chevrolet - lineup exists as today plus a minivan
Cadillac - I'll go with MG's lineup as I like it
Pontiac - eliminated, replaced with Dodge
GMC - eliminated for the USDM (still lives in Canada), replaced with Dodge
Dodge -
Cobalt/Cruse based Neon with SRT4 version
Epsilon/ep2 based Avenger
LY Charger
LY Challenger
C3XX Ram
Caravan
Journey
Buick -
Enclave
EPII LaCrosse
LY 300 based Roadmaster
Alpha Regal
Chrysler - eliminated
Jeep - everything except Grand Cherokee, Wrangler and liberty are eliminated
Hummer - sold
Saturn - eliminated, can't live with new, excellent product, don't deserve to live

Not sure what to do with Saturn/Saab.

BPG channels sell rebadged Pontiac product until GM can work out a deal to unite and Dodge dealers. In the end you have solid brands.

Chevrolet -- Bread n butter sedans, cuvs, vans, truck, suvs, you name it Chevy has it
Dodge -- performance, Americana brand. Big RWD muscle.
Buick -- traditional American luxury. Big comfortable and reliable, but not TOO expensive
Cadillac -- the standard of the world
Jeep -- jeep already has a very clear identity, preserve it

That's 5 brands with minimal product overlap.

Some good ideas, but your proposal will not deliver the gain in market share GM-C must realize and will end up with the same sales as GM has now which is unacceptable.

GM-C can build market share by keeping Chevrolet, B-P-G and Cadillac-Saab; selling Hummer (in progress) and dropping Saturn (overdue).

To answer your question of Saturn/Saab - they become one; Saturn and Saab lineups are copies of each other and are focused on the same "import buyer" market making Saturn redundant and as you correctly point out if Saturn is not making it now with the lineup they have along with an new ad campaign they need to go.

GM cannot afford to fund two brands for the same market and this practice has diluted the Saab brand to the point it is in a "no man's land" and holds all other GM brands from moving up market.

GM needs to align Opel with Buick-Pontiac-GMC maintaining their global market position between Chevrolet and Cadillac-Saab and allowing GMC to be GM's global truck brand, freeing Saab to take Audi on directly and Cadillac to focus on Mercedes and Bentley. It should be noted that the GMC Sierra (11%) has lower fleet exposure than the Ram (14%) with more of them to Commercial buyers and Rentel fleet sales are lower than even the Toyota Tundra, actually GMC trucks in general have higher retail sales percentages than most of their competitors with the Acadia and Yukon/XL over 94% retail, even the Envoy is 80% retail close to the Sierra's 89%.

Sharing the new Opel car lineup with Buick-Pontiac will attract "import buyers" to B-P-G dealers and redefine Buick and Pontiac's image in the U.S. market as more "European" complimenting GMC trucks acceptance from import buyers boosting sales/profits for GM from the B-P-G channel.

Dodge can retain the market position it has and as you have them a "performance, Americana brand. Big RWD muscle" which matches up well with Jeep's image, Chrysler is a problem brand with just the 300C and Town and Country Minivan with good retail sales, the Sebring Convertible would give GM a volume seller in that niche market so at least the convertible could be retained. The problem is what to do with the 300C and Town and Country, both have higher retail sales percentages than their Dodge counterparts 300C (57%) vs. Charger (48%) and T & C (70%) vs. G. Caravan (48%) so it is tempting to keep these as Chrysler models so I would suggest GM "wait and see" before dropping the Chrysler name entirely.

GM-C would be able to maximize profits on the Ram with the Nissan Titan deal and can offer a new GMC Canyon to compliment the Dakota as well as an Envoy shared with the Grand Cherokee and think of what the new 4.5L Turbo Diesel would be like in a Wrangler Rubicon as well as the next Liberty/H3/(Trailblazer?) and Commander/H2.

To maximize market share gains with increased profits and cost savings from higher volume/platform sharing the GM-C lineup should be:

Chevrolet - same as you describe
Buick-Pontiac-GMC - European luxury-performance
Cadillac-Saab - Prestige luxury and European AWD luxury/performance
Dodge-Jeep - as you describe

This gives GM the same 8 brands it has today but with better market focus, lower overlap with higher overall sales (market share) with better profit potential.

 

[Uzzy]

Last I'd read, GM's having trouble obtaining financing for this deal.

Can't they get an interest only loan, or an A.R.M. maybe?

How about hitting up GMAC for a loan?