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Putting little effort towards compact and midsize cars. The Neon was made too long, the Caliber is uncompetitive, and the Sebring/Stratus/Avenger are the cess pools of the Hertz garages.
 

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Merge with them without a real strategy and then demerge only to find either remainder uncompetitive.
X2 this is one of the biggest problem facing most of Corporate America TODAY... We have too many executive who think that it is their job to "wheel and deal" and create mergers that make ZERO sense RATHER then focus on making and selling a good product.

It made no sense for MB to "merge" with Chrysler
It made no sense for GM to try and buy Fiat
It made no sense for HP to buy Compaq
It made no sense for GE to buy NBC
It made no sense for Sprint and Nextel to merge
It make no sense for Time Warner and AOL to take over each other.

The WSJ estimates that between 74% and 83% of large corporate mergers go bad or outright collapse. And in just about every case the pieces are worth less after the merger then going in.

Why do CEO's keep doing this?

We will soon be adding Microsoft and Yahoo to this list of "WTF" mergers.
 

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X2 this is one of the biggest problem facing most of Corporate America TODAY... We have too many executive who think that it is their job to "wheel and deal" and create mergers that make ZERO sense RATHER then focus on making and selling a good product.

It made no sense for MB to "merge" with Chrysler
It made no sense for GM to try and buy Fiat
It made no sense for HP to buy Compaq
It made no sense for GE to buy NBC
It made no sense for Sprint and Nextel to merge
It make no sense for Time Warner and AOL to take over each other.

The WSJ estimates that between 74% and 83% of large corporate mergers go bad or outright collapse. And in just about every case the pieces are worth less after the merger then going in.

Why do CEO's keep doing this?

We will soon be adding Microsoft and Yahoo to this list of "WTF" mergers.
Because my evil investment banking cohorts whisper in their ear and lead them down the path that leads to corporate ruin and fees for the bankers' beach house, Ferrari, and boat funds.

Truth be told, Daimler and Chrysler could have been a great match, had they merged their operations and development correctly. However, due to the arrogance of the Germans, this never happened, and they ended up being two independant companies operating under one roof, without taking ANY advantage of the myriad of synergies they had available.

The problem was, during the merger, way too much faith was put into the corporations to do the right thing once the merger was complete.
 

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A couple of years ago, before Daimler dumped Chrysler, I jotted down some notes about how to reorganize the company to actually exploit the synergies.

Step one would be to buy Mitsubishi Automotive.

Then, reorganize the company's global product development as follows:

I4 development: Mitsu

V6/V8/diesel development: Benz

A/B/C/D FWD car development: Mitsu

C/D RWD car development: Benz

Truck/SUV/crossover development: Chrysler

Each division is responsible for its own top hat design.

Retail channels are broken down into Mercedes-Benz, Chrysler-Jeep, Mitsubishi-Dodge.

Mitsubishis and Dodges are the same, only difference being style. Sporty mainstream, and Dodge also sells trucks.

Chrysler is a mix of gussied-up Dodges and rebadged Mercedes models.

Jeep is upcontented Dodge trucks and the Wrangler.

MB remains as-is, but needs to share its product line with the rest of the company.

I didn't get much further than this. Some thought it had potential, but Cerberus snatched up Chrysler before anything could be done.
 

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Step one would be to buy Mitsubishi Automotive.
They actually did, but then backed off. They've had some German guy sent to run Mitsubishi, but apparently he didn't know where the ignition was...

In a twist of irony, Mercedes is about to dump the unique "sandwich" platform for A- and B-Klasse and is looking for just about any partner with a FWD platform for those. Geez, as if they couldn't have built a COMPETENT platform with Mitsu and Chrysler! Not to mention, the aborted Smart Forfour would've made a great Dodge/Chrysler/Plymouth small car, let alone the Colt (the latter relationship has some tradition going for it, actually), and the sandwich platform could've yielded innovative Dodges, Mitsubishis or Chryslers rather than further tarnish Mercedes' distressed image...
 

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When Daimler bought Chrysler, Chrysler had the following problems:
- Poor reliability.
- A reputation for poor reliability.
- Weak warranties.
- A weak lineup of midsize sedans and economy cars.
- A relatively low crash test rating for most models in their respective vehicle classes.
- Poor resale and high fleet sales.
- An out of date selection of V6 engines and transmissions.

You would think that a company spending $30 billion to buy another company might want to, you know, actually shore up some of their weaknesses. But Daimler was obviously quite satisfied to let every single one of those problems sit for far too long.

It's ten years later. Chrysler reliability is up, but not great. The Avenger and Sebring finally have excellent crash safety, but it's about the only major redeeming feature besides low price. The new minivans have excellent crash safety, four years after most of the import competition got it. A few Chrysler models now offer six speed automatics. A good warranty finally arrived. The Phoenix V6 engine family is under development - but still years away. The very popular PT Cruiser is dead.

Game over. Chrysler is dead. I hope to heaven I'm wrong, but I think Cerberus will liquidate them within a few years.
 

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They actually did, but then backed off. They've had some German guy sent to run Mitsubishi, but apparently he didn't know where the ignition was...

In a twist of irony, Mercedes is about to dump the unique "sandwich" platform for A- and B-Klasse and is looking for just about any partner with a FWD platform for those. Geez, as if they couldn't have built a COMPETENT platform with Mitsu and Chrysler! Not to mention, the aborted Smart Forfour would've made a great Dodge/Chrysler/Plymouth small car, let alone the Colt (the latter relationship has some tradition going for it, actually), and the sandwich platform could've yielded innovative Dodges, Mitsubishis or Chryslers rather than further tarnish Mercedes' distressed image...
I know... I meant more so to buy completely, then fully integrate into the new global company.

It was pure arrogance on the part of the Germans that brought the company down. Several years ago, I chatted with some DCX suits from Germany, and asked why Daimler hadn't done much to integrate with Chrysler. Their answer was that they didn't want to risk devaluing the Mercedes-Benz brand name by being mechanically associated with a lowly brand like Chrysler.

This went both ways... they didn't want any Chrysler-developed tech in MB cars, and they didn't want any MB tech in Chrysler cars. Although top management had intended to go further with integration, the political power of the Mercedes group blocked any attempts.

I was floored.
 

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I definitely don't want to see it happen but Chrysler may go under, almost taking Cerberus with it
 

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This went both ways... they didn't want any Chrysler-developed tech in MB cars, and they didn't want any MB tech in Chrysler cars. Although top management had intended to go further with integration, the political power of the Mercedes group blocked any attempts.
This was the same thinking that kept kneecapping GM for so long. "Don't you dare make a good Oldsmobile! It might steal Cadillac sales!" "Don't you dare make a good Buick, it might steal Oldsmobile sales!" "Don't you dare make a good Chevrolet, it might steal Buick sales!"

"Yes sir. We have mediocre Cadillacs, bad Oldsmobiles, worse Buicks, and awful Chevrolets exactly like you wanted. It's clear which brands are better than the others, and who cares if a nicely optioned pair of Converse is better than any of them!"
 

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Buying Chrysler in the first place. Luxury brands are incapable of making affordable, profitable mainstream cars. BMW had the same issue with Rover. It is much easier to go from building mainstream vehicles to luxury cars. Acura, Infiniti, Lexus show how this can be done. Mini is an example of what a luxury brand is capable of. Building premium small cars. There was no way to profitably merge MB and Chrysler. I think Schrempp envisioned Mitsu and Chrysler on the low end but Mitsu faired even worse than Chrysler under MB leadership.
 

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This was the same thinking that kept kneecapping GM for so long. "Don't you dare make a good Oldsmobile! It might steal Cadillac sales!" "Don't you dare make a good Buick, it might steal Oldsmobile sales!" "Don't you dare make a good Chevrolet, it might steal Buick sales!"

"Yes sir. We have mediocre Cadillacs, bad Oldsmobiles, worse Buicks, and awful Chevrolets exactly like you wanted. It's clear which brands are better than the others, and who cares if a nicely optioned pair of Converse is better than any of them!"
I thought that Buick's were supposed to be higher up on the food chain then Oldsmobiles. Buick never got a N-Body like Oldmobile to my knowledge.
 
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