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Analysts still have concerns



BY TIM HIGGINS and KATIE MERX • FREE PRESS BUSINESS WRITERS • October 18, 2008


As General Motors Corp. executives work on what a possible merger with Chrysler LLC would look like, they apparently are not discouraged by the idea of adding more brands or dealers to the automaker's business, key factors that analysts have been criticizing.

If a merger is consummated, Chrysler's brands would become just like Chevrolet, Pontiac and Buick, people familiar with the situation tell the Free Press.

Conflicting brands could be dealt with in a few years after this industry turmoil has passed, one of these people added.

Another concern raised by analysts and other observers regards the addition of 3,500 Chrysler dealers into GM's already over-dealered network.

One person told the Free Press that those "excess dealers" would cost GM nothing in the short-term and that some -- if not many -- will fail on their own anyway.

Article continues at link....

http://www.freep.com/article/20081018/BUSINESS01/810180305/1014
 

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Pffttt... They are really going ahead with this. Dont make no sense no how.
 

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How can they be confident they can manage Chrysler when they can't manage Saturn, Pontiac, and Cadillac?
I was just about to say that.


Jeep pretty much manages itself, just axe the Compass and Commander and bring out the next-generation Grand Cherokee (which would effectively replace the Trailblazer et al.), and put the whole operation on cruise control.

Chrysler and Dodge would actually take some effort. Outside of the soon-to-be-released next-gen RWD cars and the just-introduced minivans & Ram, everything else is in bad shape.
 

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Good Lord! I almost thought I was reading an article on the Onion.

If GM goes ahead with this madness, it DESERVES to fail. This kind of stupidity must be punished. Unfortunately, while its the management that deserves to take it in the ass, they're the ones who'll be leaving with millions in their pockets and all they'll leave behind is nothing.

I'm filled with disgust for this management and its total lack of discipline, vision and rational thought. They're utterly misguided. The company made it through 3 decades of horrible leadership only to be faced with even worse leadership at the end. Many huge companies have failed as a result of poor decisions. Don't think it won't happen. It's a miracle that GM has made it this far. Richard Wagoner and Co.........YOU GUYS SUCK!

I don't know what to say or think anymore....
 

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*sigh* I am a big GM fan, and I'm just getting tired of their hair brained decision making process.

*Mgr 1* "Man, our overhead is out of control. Our expansion is getting to the point where we can no longer manage it."

*Mgr 2* "If we increase our size, then we will have more money and our overhead will no longer be such a burden."

*Mgr 1* "But sir, while we will be taking in more money.... the new brands aren't free..... They have their own cost structure..."

*Mgr 2* "You're fired."

*New Mgr 3* "That is an excellent idea sir. Lets get bigger so that we have even more out of control costs. Bigger is better, and the only way to control these costs is to get bigger and sell more cars total and bring in more money."

*Mgr 2* "Yes, lets proceed."

_____________

Instead of addressing their awful cost structure, they are trying to absorb it by getting bigger. This isn't a *****. Bigger is not better. How about we stop being self conscious about the fact that our manhood isn't big enough and start making good business decisions.... rather than compensating for the other.
 

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Is GM seriously wanting to buy/trade Chrysler?

I mean I can understand wanting to get rid of GMAC but this is just changing dead weight for dead weight.
 

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I go back and forth on this deal ... I guess the $11B in cash rules over any common sense. Originally, I was for merging it with GM but, after further review, if they are going to do it, then stick all the products under a seperate division then slim down the product line so you don't compete with other GM brands. I could see a Jeep / Minivan / Dodge truck division and what the heck keep the Challanger because it is such a slap in the face to the must get 40+ MPG crowd. Trim down the Jeep models to G Cherokee, Liberty and Wrangler, can everything else - the cars suck.

PS Trim down the product lines fast - don't let crappy products linger in this market - just do it. Gone should read Compass (maybe keep this for fuel economy), Commander, Patriot, Avenger. Caliber, Charger, Nitro, Durango, Aspen, Crossfire, Pacifica, PT Cruiser, and Sebring. Make the 300 a niche RWD premium sedan. Keep the minivans. All others are poor cars or overlapp current / future products.
 

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This really makes no sense at all other than they are desperate for money or some sort of life line. This gets them Chrysler cash and gives them better opportunities for government money apparently. Looks like a last ditch effort to me to survive. Too bad they didn't figure out until just this last product cycle they they can't make cars that are "pretty good" but actually need to make cars that are class leading. They still seem to be either confused about the importance of small cars or are just too broke to make happen what needs to happen. I think a lot of their issues seem to be cash related now, at least that is the optimistic side of me. Or they are still being idiots.
 

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Is GM seriously wanting to buy/trade Chrysler?

I mean I can understand wanting to get rid of GMAC but this is just changing dead weight for dead weight.

DON'T YOU SEE??? THERE IS NO PLAN HERE. THESE GUYS ("MANAGEMENT") ARE FLYING BLIND AND EVERYONE IS HOPING THEY KNOW WHAT THEY'RE DOING.

This is not the way a well managed company operates. These guys are clueless and jumping around from one grand plan to another to shore things up for a little longer. But all they're doing is delaying the inevitable.

I said it 2-3 YEARS ago and EVERYONE attacked me on this forum. I hope SOME of you can see it now after me screaming the exact same thing a 1000 times over. GM's brand structure will not allow it to continue in the NA market.

This -

"to provide a product for every purse and purpose."

does not exist. There are TWO broad purses - Economy and Premium. And within those, you develop products to fit every purpose. That's it. You don't need 8 brands for that.

Now we're going from 8 brands to 11..........3 of which are going to require HUGE HUGE HUGE HUGE amounts of effort and money to integrate into what already exists. The cash crazy nutjobs at GM are eyeing the $11 billion. What they can't see is that when they're through with this, they'll have maybe $2B left at the end which will tide them over another 2-3 months max.

Instead of focusing on what needs to be done (LIKE FORD), GM is utterly lost. Sadly for Ford, their product is still not there and it'll be a few years before they can start regaining any traction. By then, it may be too late for them. GM, on the other hand, is just engaged in more and more stupidity.
 

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GM confident it can manage Chrysler brands?

What a crock!

It couldn't manage Oldsmobile and it was one of the most recognizable brands out there with over half a century of name recognition and product development.

GM couldn't manage Suzuki or Isuzu.

GM still doesn't know what a Saab is.

GM has been trying to figure out what to do with Saturn and has gutted its marketing so as not to make other divisions jealous.

GM can't make GMC different from Chevrolet trucks yet.

GM can't figure out if Pontiac is a performance division for men or for transvestites.

GM has figured out that Cadillac will offer cheaply made luxury at eye-brow raising prices and will wrap all of it in the ugliest sheetmetal since the Aztek (a Pontiac!)

GM knew what a Hummer was but unfortunately it was selling horse and buggies during the time of self-propelled transportation was all the rage.

GM knows Chevrolet is the catch-all brand of boring vehicles without a hit of styling know-how. And its trucks are whatever it takes to get by and no more.

And GM can add Dodge, Chrysler, and Jeep to their mix and manage them?

History with the Yutz and the Hair Piece regime tells us that management isn't one of the things either men have a clue about. Unless they each commit suicide or are recalled by God, there is no evidence that the Chrysler brands will be managed even as well as they are now.

This was a profoundly funny headline. GM and manage! OMG!
 

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I go back and forth on this deal ... I guess the $11B in cash rules over any common sense. Originally, I was for merging it with GM but, after further review, if they are going to do it, then stick all the products under a seperate division then slim down the product line so you don't compete with other GM brands. I could see a Jeep / Minivan / Dodge truck division and what the heck keep the Challanger because it is such a slap in the face to the must get 40+ MPG crowd. Trim down the Jeep models to G Cherokee, Liberty and Wrangler, can everything else - the cars suck.

PS Trim down the product lines fast - don't let crappy products linger in this market - just do it. Gone should read Compass (maybe keep this for fuel economy), Commander, Patriot, Avenger. Caliber, Charger, Nitro, Durango, Aspen, Crossfire, Pacifica, PT Cruiser, and Sebring. Make the 300 a niche RWD premium sedan. Keep the minivans. All others are poor cars or overlapp current / future products.
Product alone will go nowhere. People won't buy from a brand they don't know. That's why Toyota and Honda and BMW and MB are growing bigger by the day. They're well managed brands with good products across the entire line. Consistency over several decades along with consistency in the brand and product. People KNOW the brand and the product and they know what they're getting.

Those are efficient brands working to eliminate waste and get leaner and stronger. American auto brands (minus Ford now) on the other hand resemble modern America - total lack of discipline, instant gratification, always jumping to the next big thing, no organic long term growth or plans.
 

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This really makes no sense at all other than they are desperate for money or some sort of life line. This gets them Chrysler cash and gives them better opportunities for government money apparently. Looks like a last ditch effort to me to survive. Too bad they didn't figure out until just this last product cycle they they can't make cars that are "pretty good" but actually need to make cars that are class leading. They still seem to be either confused about the importance of small cars or are just too broke to make happen what needs to happen. I think a lot of their issues seem to be cash related now, at least that is the optimistic side of me. Or they are still being idiots.
I'll take "Still being idiots" for $200, Alex".

Where's the money going to come from after the "merger" to manage all these brands ?

BTW: the " A car for every pruse and purpose " the Sloan business model of the 20s stopped having any meaning in the 60s when the GM started adopting that mantra for each of the brands within themselves. Not sustainable.

Everyone knows what a Toyota is. Chevrolet has been a Toyota, an Isuzu, a Daewoo, a Suzuki, an Opel or dressed up and sold as a Pontiac. It's very clear GM has no clue how to manage a brand. And Chevrolet is just one example. Now they'll have 3 more ? This is sick.
 

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It may not be such a bad deal. Chrysler has a good amount of cash, a good rear wheel drive platform, and popular minivans a segment that GM has not had a lot of luck with. It will also be a new outlet for Delphi products, which has been struggling since GM spun them off.

When you look at the development cost of vehicle platforms and the amount of time that's involved, it's a win win for GM.

Chrysler employees will be the big losers here. Chrysler corporate office gone, and eventually car lines will disappear with a re-branding of GM products except minivans and rear wheel drive platforms.
 

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How can they be confident they can manage Chrysler when they can't manage Saturn, Pontiac, and Cadillac?
Yes, I was also about to type the same thing. It is just amazing to watch. For you younger members, GM has been going downhill for a long time. I interviewed for a job at Oldsmobile back in the arly 1980s, and the guy I spoke with was ****y as could be, thinking that Oldsmobile was on top of the world, just because people had been snapping up the Cutlass, as far more of them liked the styling than liked the styling of the Pontiac, Buick, and Chevrolet versions of the same car.
 

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- Cash, Cash, Cash
- Make Deal Contingent on Closing unprofitable plants, models, dealers.
- Leverage for a bigger chunk of the bailout
- Defensive move against other OEM's with momentum attempting to break into NA
- There is a contingent that are "Chrysler diehard". This would be increased market share.
- Caliber, PT Cruiser, Minivan, 300, Durango, Ram define the new "Chrysler & Dodge" brand keeping most of the volume in 1 set of dealers
- Combine Jeep & Hummer for a full product line spinoff (Or 3rd brand)
- Overall, for the NA market it would be a de-proliferation effort with less models & brands enabling massive component sharing across significant volume which would drive Ford to join the party(component wise) to capture the same savings.

- Need to look at the big picture, not the current GM picture.
- Appreciate the potential for higher market share and the allowances for converged products in the future thereby improving the business case for a bigger, stronger GM in 2010 and beyond.
 

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Chrysler has ...a good rear wheel drive platform,
Have you forgotten that GM has the superior Zeta platform? They do not need the LX platform. As for the minivans and off-road JEEP, what are those worth? If they throw away everything else and just keep the minivans and off-road Jeep, and get rid of the remainder of GMAC, it might be a good idea.
 

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How can they be confident they can manage Chrysler when they can't manage Saturn, Pontiac, and Cadillac?
...and don't forget about Buick (NA, at least).

I agree with your statement so much, that it hurts. GM is looking desperately at the short term $11Billion in cash and that is it.

Otherwise, I cannot for the life of me, figure out why we are even having this discussion - let alone the growing possibility of it coming to fruition.
 

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GM only wants Chrysler's $11 Billion in cash that they have, and it would also insure them a great amount of that $25 Billion bailout/loan/giveaway/whatever...
 
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