Chrysler corporation selling to GM?

[taxspeaker]

Yesterday's Wall STreet Journal had a follow up on this article from 2 weeks ago that makes it sound like the GM deal is back on.
http://www.thecarconnection.com/news/1098454_fiat-chryslers-sergio-marchionne-wanted-to-merge-with-gm-but-got-shot-down-by-mary-barra

[stripedelete]

I was reading about a speech he gave to some group, where he said they would have to partner to make it.
Which, interestingly, is what was said immediately following the Chrysler - Diamler "merger".

His basic drivetrain philosophy is interesting.  When it comes to 4 cyl econo engines no one cares what's under the hood, so why not everyone use the same one.

I think he's a little ahead of his time - but not much.

[Mike DC]

   
If they merged GM & Mopar, it would produce one single mega-company with a dozen brands . . .

  . . . and a few years later after the dust settles . . .  they would decide they have about 4-5 brands too many.


Mopar hasn't been able to survive for very long on its own for decades.  There's a reason for that.  The whole industry has too many brands, period.  Everyone's math would look better if they had fewer competitors.  EVERYONE would be a little more profitable, there would be fewer redundant boring commuter cars, and the remaining brands would have more room for the fun stuff that Mopar is known for. 

[bakerhillpins]

His basic drivetrain philosophy is interesting.  When it comes to 4 cyl econo engines no one cares what's under the hood, so why not everyone use the same one.

I think he's a little ahead of his time - but not much.

Well, as much as I might agree with this from a manufacturability and a "nobody cares" standpoint I think it's not the silver bullet it sounds like. As far as I am concerned the only thing that drives innovation, reliability, and the economy is open competition and you don't get that with monster corporations and monolithic product offerings.   

[ODZKing]

I agree with Baker.  And it doesn't just pertain to the auto industry but many. Broadcasting has gotten completely out of hand.  These big companies own 7 or 8 stations in one market and their attitude is , they have to watch or listen to one of them so why spend money on good programming. Lets run 30 minute paid advertising or commercials and fill with music.
Being in the industry it is sad to see what has happened. I'm sure automotive people who have spend time trying to build a brand and a quality product feel the same way.
I don't think I want to drive the same thing as everyone else, but that is me.

[Ghoste]

They thought it was a good idea at GM to have a corporate drivetrain and lost a few Pontiac, Buick and Olds diehards with that idea.  Badge engineering did marvelous things for Plymouth sales, Mercury sales, Pontiac and Oldsmobile so yeah, great idea.   

[Mike DC]

   
IMO "badge engineering" really became a problem when it applied to the bodies & interiors & option lists.  Two cars sharing a motor isn't the same issue. 

[Paul G]

It will hurt both company's in my opinion. What are they going to do with two truck brands, both being very good products. Compete against themselves? Same goes for every model in both brands line ups, except Jeep. I cant see GM buying the entire brand just for jeep. The merger makes no sense.

[tan top]

 wonder if the  aftermarket  mopar parts , crate motors  , blocks  heads  etc will be as cheap as GM stuff if this happens  

[myk]

Yeah maybe, until GM finishes bleeding off what's left of the brand and then killing most of the Mopar products off.

The merger makes no sense, unless GM's just trying to squeeze money from the merger and then dump the non-essentials when the time is right...

[Ghoste]

It isn't GM buying Chrysler, it's Fiat buying GM and adding them to the mix.  I would imagine both domestics will see a Fiatization in drivetrain and styling before many years.  Chevrolet, Cadillac, Chrysler?, Ram?, Jeep and Dodge may survive as brands but global vehicle platforms could well be in the future.

[stripedelete]

  Chevrolet, Cadillac, Chrysler?, Ram?, Jeep and Dodge may survive as brands but global vehicle platforms could well be in the future.

That's the thing, except for Jeep and little Fiats, it has too many redundancies.

Honda is a better choice, but then the whole Fiat line is redundant.

How about Jeep, Ram, Harley? Or Jeep, Ram, IH?  I guess that ship has sailed.  It probably would not have provided necessary economy of scale anyway.

[rt green]

so........it'll be GM =General Mopar?   I don't know if I could take that.

[ws23rt]

The names --Chevrolet, Cadillac, Chrysler, Plymouth, Dodge, and even Ford's   with their recognizable names mean something real and valuable to those that lived in days past.

What made those names in those days and what I remember is not what they are today. As an example is the current charger. It is a nice car by many measures but brings little or nothing from the ones we know as chargers. The current Challenger is a bit of an exception because it does bring back (in style) much of what it was as a name.

When the ownership/leadership of a corporation changes hands it doesn't necessarily mean a change in the product. When leadership within a company changes hands it's not much different.

We are looking through a cloudy window when trying to understand what  the current or tomorrows owners of a corporation have in mind for the car making ability they buy/absorb.

I don't worry about the freeways being flooded with Fiat's (for example) because the buying public will tell that tale. If GM becomes part of Fiat and they make a car called a Camaro it will sell if the public want's it. If they chose to use the name "Camaro" for a car it will be a marketing decision.

I do miss the days when I looked forward to the model change for a particular brand. The buyers today have a different product to buy and different reasons for their choices.

[Mike DC]

              
I pointed out above that if GM swallowed Mopar then it would soon decide it had too many brands.  

I wasn't meaning this as a GM problem.  I was meaning this as a problem for pretty much any corp that swallows Mopar.  Nobody wants to swallow Mopar because nobody needs more brands.  The whole industry's balance sheet would look better if a bunch of brands worldwide simply disappeared.  



The point is not that Mopar doesn't contribute anything worthwhile.  The point is that those contributions (and sales, and jobs, etc) could be going to other healthier brands instead.  

When there are too many brands it forces everyone to focus on the highest earning models at the expense of the rest.  We get a world full of companies all making redundant copies of econoboxes.  Nobody has enough money/resources left over for the fun & oddball stuff.  And in spite of all these compromises the companies still struggle to make money & keep providing the jobs.

[ws23rt]

             
I pointed out above that if GM swallowed Mopar then it would soon decide it had too many brands.  

I wasn't meaning this as a GM problem.  I was meaning this as a problem for pretty much any corp that swallows Mopar.  Nobody wants to swallow Mopar because nobody needs more brands.  The whole industry's balance sheet would look better if a bunch of brands worldwide simply disappeared.  



The point is not that Mopar doesn't contribute anything worthwhile.  The point is that those contributions (and sales, and jobs, etc) could be going to other healthier brands instead.  

When there are too many brands it forces everyone to focus on the highest earning models at the expense of the rest.  We get a world full of companies all making redundant copies of econoboxes.  Nobody has enough money/resources left over for the fun & oddball stuff.  And in spite of all these compromises the companies still struggle to make money & keep providing the jobs.

I agree.    The decision makers in the new company's are going to build what they think the public will buy. They have a task that can be risky (if they chose to stray from the norm) or they can stamp out what most people need/want.--reliable transport.--- The market for those of us that enjoy the coolness of cool cars (mass produced) is not big enough to invest in it in a big way.
However I am encouraged by the public's enthusiasm for the hellcat challenger and charger. It shows a real market is out there for a product that pushes the norm if the price can be reached.

[VegasCharger]

so........it'll be GM =General Mopar?   I don't know if I could take that.

Along time ago I said to myself, GM = Get Mopar.

I'm not saying for sure if I made that up at that time in entered my brain, but I never heard anyone say it before or when I ask people if they have ever heard it before and they always replied "no".

[ODZKing]

I've been a loyal Mopar guy since day 1. Even my daily cars have been Mopars over the years. But I have to say I have owned 3 Mitsu/Mopars, 2 Avengers and a Stratus RT. And my son had a Eagle Talon. And they were and have been dependable transportation, especially the RT bought new in 2003. Still going strong.
The one thing that would make me change allegiance is being under the GM umbrella. If that were the case I believe it would be Mitsubishi for me as I think Diamond Star has a great product.

[Ghoste]

To me it doesn't read like GM is buying Mopar though, it sounds like Fiat wanted a merger but GM aren't interested?  Is there a different article I'm missing?

[freddyd02]

Seems like the FIAT guy is just fishing for someone to merge with, he even tried Volkswagen. GM said no way. I wouldn't worry to much about it.

[Ghoste]

Yeah thats what i thought, this isn't GM trying to buy Chrysler.   

[LaOtto70Charger]

I agree GM isn't trying to buy Mopar.  I can see what the FIAT guy is thinking.  The costs to develop new powertrains and computer can be huge.  Especially when it seems to be for only a couple of years.  Billions in capital must be interesting to deal with.  Than add up how few cars you can use it in the developed world while trying to break into the China and India markets.  Who are trying to copy what they make you for in their own companies.  Oh joy.

[Ghoste]

It kind of makes you think sometimes the enviro crowd have nothing to worry about, it almost seems like the evil auto industry is doomed to make itself extinct.

[Mike DC]

           
A major multi-brand auto corporation is saying it cannot afford to develop new drivetrains for its bread & butter vehicle lines.  This is a roundabout way of saying they cannot stay in business. 

[redmist]

Ugh.... To big to fail round three?

[stripedelete]

           
A major multi-brand auto corporation is saying it cannot afford to develop new drivetrains for its bread & butter vehicle lines.  This is a roundabout way of saying they cannot stay in business. 

Bingo!

[Ghoste]

It could also be a roundabout way of saying we intend to stay in business so we are looking for as many ways to be profitable as we can.

[LaOtto70Charger]

I agree it can easily be how to cut costs the most and stay competitive.   Especially when you have wall street hounding you for less capital on the books with as much revenue as possible and constant growth even in developed markets.  Add in customers wanting next great thing used to computers and ipads constantly issuing new software changes yearly and codevelopment can make sense. Especially if competing against large vertically integrated companies.

[Mike DC]

  
I agree engines are less crucial to a brand than they used to be.  

But still, we're talking about something that is pretty crucial to the company's bottom line.  It's not supposed to be something they can't afford to develop.  



Imagine if Mopar was publicly saying it was cost-prohibitive to develop a fresh 5-6 liter V8 for the Ram trucks.  

[1974dodgecharger]

It will be that way for many industries.....in the future their will be 2 companies that stand as a whole U can't have one unless we let a monopoly happen then again having one and then subsidies might be 2.

   
If they merged GM & Mopar, it would produce one single mega-company with a dozen brands . . .

  . . . and a few years later after the dust settles . . .  they would decide they have about 4-5 brands too many.


Mopar hasn't been able to survive for very long on its own for decades.  There's a reason for that.  The whole industry has too many brands, period.  Everyone's math would look better if they had fewer competitors.  EVERYONE would be a little more profitable, there would be fewer redundant boring commuter cars, and the remaining brands would have more room for the fun stuff that Mopar is known for. 

[Ghoste]

That's how it works in Japan, a few mega-corps own it all.

[RallyeMike]

The other day, somebody told me that the corporation was pretty much giving up on the Mopar Performance line. They pulled out of Nascar. The truck line is separated. Frankly, what remains of Chrysler has given up on us. The two new Mopar's I bought in my lifetime were both lemons. Toyota and Honda each are soon (or already have) to employ more US workers than Chrysler. If they are gobbled up by GM could it be any worse? 

[Fitz73Chrgr]

Chrysler has been circling the drain for a long time.  New Fords are the way to go. 

[Paul G]

And it continues.

http://finance.yahoo.com/news/gm-asking-advisors-help-rekindles-fca-merger-talk-122607368--finance.html

[stripedelete]

Its hard to miss the irony.  Had he only said, "no thanks Mr Obama", there would be no need to leverage economies of scale and it could be argued GM and Ford would be stronger. 

[Mike DC]

Its hard to miss the irony.  Had he only said, "no thanks Mr Obama", there would be no need to leverage economies of scale and it could be argued GM and Ford would be stronger.

Probably true.  


But the people in charge of dying companies don't normally go around declining free govt bailouts.  We would have absolutely crucified him for that.  


And if Obama had offered GM & Ford a bailout but forced Mopar alone to go under, we would have absolutely crucified Obama for that.

And if Obama had refused to spend a very small fraction of the total bailout money to save anyone in Detroit, we would have crucified him for that too.  

And if Obama had refused to bail out any industries back then, period . . . . well, I won't even tackle that one.

[stripedelete]

Its hard to miss the irony.  Had he only said, "no thanks Mr Obama", there would be no need to leverage economies of scale and it could be argued GM and Ford would be stronger.

Probably true.  


But the people in charge of dying companies don't normally go around declining free govt bailouts.  We would have absolutely crucified him for that.  


And if Obama had offered GM & Ford a bailout but forced Mopar alone to go under, we would have absolutely crucified Obama for that.

And if Obama had refused to spend a very small fraction of the total bailout money to save anyone in Detroit, we would have crucified him for that too.  

And if Obama had refused to bail out any industries back then, period . . . . well, I won't even tackle that one.

We knew it was a union bail-out / payback at the time.   Remember, the elections was only a few months before.
But, had he only just said no, " Chrysler will not provide us any more than $6 billion in cash" he wouldn't have to br throwing proposals over the security fence at GM right now.

The extent of his efforts makes me wonder if Chrsyler is ending anothe cycle. ie 1979, 1988, 1997, 2007.

[Mike DC]

I basically agree.

[Ghoste]

A union bailout?  So all white collar workers (esp execs) were excluded somehow from benefiting?  (which makes sense after all because they were innocent of any mistakes getting them where they were)

[wingcar]

Could the Hellcat be the last great grasp of breath before the death of Chrysler?   

[stripedelete]

A union bailout?  So all white collar workers (esp execs) were excluded somehow from benefiting?  (which makes sense after all because they were innocent of any mistakes getting them where they were)

Sure, white collar  benifited, however, if there were no union, Chrysler was done.   They were not international,  the southern states, democratic and republican, and the rest of the republicans, were against any bailouts, and since the 79 bailout they had run out of gas every ten years.

The unions were huge in his first and second elections.  He owed them and he needed them for the next round.

disclaimer:   this is not a personal inditement of the president, unions, or anything else.  Just history - the way it played out.

[Mike DC]

 
The same argument can be made that GM (and maybe Ford) should have gone under in 2008 too. 

They aren't going broke again every 10 years . . . yet.  Legend has it that GM was a few minutes away from bankruptcy in the past at least once already.

[Ghoste]

Don't misunderstand me either because I am no fan of unions.  And I think I misunderstood what you were saying as well.  You weren't talking about specific households where each dollar went, if I understand you now you are referring to where political favors were owed.  (or maybe I still dont get it)

[ACUDANUT]

Don't misunderstand me either because I am no fan of unions.  And I think I misunderstood what you were saying as well.  You weren't talking about specific households where each dollar went, if I understand you now you are referring to where political favors were owed.  (or maybe I still dont get it)

Back in the 30's unions were good. Now they control everything.  Bad idea. If you don't like it there quit. They only drive the prices up.

[Pete in NH]

At the end of the Lee Iacocca era in the early 90's Chrysler was in excellent financial shape with a ton of money in the bank. That was one of the reasons Daimler launched their hostile take over. The Germans looted the company  in every way they could. What was left was sold at a fire sale price to a group of investment bankers whose intent was probably to break up what was left and sell the pieces.  When the 2008 crisis hit there was no one to buy the pieces. Jeep was probably the only thing worth any real money. First the Germans now the Italians, seems like the old WW II axis powers are getting their revenge on Chrysler for all the WW II tanks and guns Chrysler built.

It was the Germans looting the company that set it on the road to ruin. Why the federal government ever allowed foreign control of such a large number of American jobs and manufacturing capability should have never happened.  

[Ghoste]

I'm not sure if the German were a hostile takeover or not but in either case its worth noting that prior to Daimler, the executive board at Chrysler were trying to fend off a hostile takeover by Kirkorian and...            Lee Iaccoca.

[stripedelete]

 
The same argument can be made that GM (and maybe Ford) should have gone under in 2008 too. 

They aren't going broke again every 10 years . . . yet.  Legend has it that GM was a few minutes away from bankruptcy in the past at least once already.

Agreed.  Uncle same short circuited capitalism.   "Private Profit - Public Loss".   But, this last time the music stopped, Chrysler was the guy with out a Chair.

[stripedelete]

At the end of the Lee Iacocca era in the early 90's Chrysler was in excellent financial shape with a ton of money   

Better take another look at that.   Chrysler was more broke in 1989 than 1979.  They "skinied" through to cab forward and the pick-up and were rescued by low interest rates and relaxed financing.  The 1990s was the start of "if you can fog a mirror, you can buy a car or a house". 

In addition, in the early 90's, the first generation of buyers that didn't remember Detroit's steaming turds of the 70's and 80's entered the market.  This demographic helped all the U.S. Automobile manufactures. 

[Mike DC]

The minivan-->truck/SUV boom helped as much as anything.  First the minivans replaced station wagons in the 80s, and then SUVs & trucks replaced minivans.  Between Dodge & Plymouth & Jeep & Ram they benefited through that whole stretch. 

The trucks/SUVs also have much larger profit margins than cars.  If all of Detroit didn't have the truck lines they would have all been broke by the 1990s.  They haven't been able to make very profitable car lines in decades. 

[ACUDANUT]

At the end of the Lee Iacocca era in the early 90's Chrysler was in excellent financial shape with a ton of money   

Better take another look at that.   Chrysler was more broke in 1989 than 1979.  They "skinied" through to cab forward and the pick-up and were rescued by low interest rates and relaxed financing.  The 1990s was the start of "if you can fog a mirror, you can buy a car or a house". 

In addition, in the early 90's, the first generation of buyers that didn't remember Detroit's steaming turds of the 70's and 80's entered the market.  This demographic helped all the U.S. Automobile manufactures. 

I hope you mean the late 70's.. 

[stripedelete]

At the end of the Lee Iacocca era in the early 90's Chrysler was in excellent financial shape with a ton of money   

Better take another look at that.   Chrysler was more broke in 1989 than 1979.  They "skinied" through to cab forward and the pick-up and were rescued by low interest rates and relaxed financing.  The 1990s was the start of "if you can fog a mirror, you can buy a car or a house". 

In addition, in the early 90's, the first generation of buyers that didn't remember Detroit's steaming turds of the 70's and 80's entered the market.  This demographic helped all the U.S. Automobile manufactures. 

I hope you mean the late 70's.. 

If you have to ask, you are a youngster.

[myk]

I don't get it.  How do you fog a mirror?

[Ghoste]

By breathing on it.

[stripedelete]

Test to see if your on the correct side of grass.

[ws23rt]

It is a sick shame that even some that are on the brown side of the grass are used to compile statistics. Who ever asks the tough real questions anymore?

[Ghoste]

Does the general public really want the answers to the tough ones anyway?