Likely buyers for Chrysler
Now that Chrysler has been all but demolished by the tender hands of Daimler-Benz, the management board is looking for a buyer. Those with memories may think of AdTranz, which was eventually dropped into Bombardier’s lap.
Here are our thoughts. Ready?
Renault. These guys would be great in terms of irony, since they used to own AMC before Chrysler bought it from them. They still really want to sell cars in the United States, and Chrysler would be an almost perfect fit. The two make mutually exclusive product lines for the most part, and they could use each others’ expertise. Most Americans would, I think, also rather buy small cars engineered in Europe and built in Canada than built in China. Renault was reportedly working on a deal with GM; Chrysler would be a natural second place.
Hyundai. This up and coming company has already found ways to shoot to the top of the quality heap, but they are terrible at engineering engines. Chrysler, on the other hand, needs some help making light, comfortable, luxurious-looking bodies, but is great at engines and suspensions. The two would be a terrific combination, practically unbeatable on the world market. Hyundai could finally give Chrysler access to world markets in a way the snobs at Mercedes never could - namely, without bribery - and Chrysler could give Hyundai the last pieces it needs to demolish half of the Japanese auto industry.
Peugeot. They bailed out Chrysler once, buying its European divisions - admittedly it was a great deal for Peugeot as well as Chrysler. As with Renault, they used to sell in America and don’t now, and have mutually exclusive product lines.
China. A Chinese company could do a Lenovo/IBM sort of deal, immediately pushing Chinese auto manufacturing into the 21st Century and eventually demolishing the American auto industry pretty much completely. However, capital to buy Chrysler might be an issue, and we don’t think they could run Chrysler all that well, either. Cultural differences would be huge and Americans might reject a Chinese Chrylser even more than they rejected a German Chrysler. As factories moved to China costs would go down and cars would get cheaper, but Americans wouldn’t be able to buy them after a while because the auto industry’s death would take much of the rest of the economy with it. This is not as likely as the others.
Fiat is big in small cars and as I recall, commercial trucks, and their last linkup with GM didn’t end up giving them entrance into the US, which they have mentioned a few times. At the moment Fiat has little credibility due to the quality of the Spyder and such.
Honda could be far worse than Mercedes, because the same arrogance is in place, but their line almost completely duplicates Chrysler - the only unique Hondas are Fit and Civic - and Chrysler would end up being Dodge Truck and Jeep.
GM is near-total duplication and wouldn’t make any sense — why would they want ANOTHER set of undesirable brands and ANOTHER huge inventory problem? They’re also still trying to figure out how to get themselves working right. They might want to reunite Jeep and Hummer; they might even want some components and the minivan line, though they’d look silly making minivans after Lutz said nobody wanted minivans any more. But there’s nothing they can’t contract with Chrysler or others for. The Chrysler and Dodge brands have negative equity now, in terms of needing extra incentives for buyers. On the other hand, GM could do wonders for the brands - partly just by not talking all the time about how they’re going to rescue, fix, or improve them. But GM’s been rationalizing its own offerings, and adding more lines doesn’t seem like a recipe for success. Unless they want to make good and sure they stay the #1 automaker in the world. Crazy as it seems, being #1 does count for something. (And if they added Dodge trucks, they could claim supremacy over Ford.)
Kirk Kerkorian. Yes, he started all the trouble by threatening to take over Chrysler and raid the cash stockpile, but to be fair he had reasons to think new (or old) management was needed. He still wants an automaker, and has lots of cash. He could probably make Chrysler work as an independent again, at least for a while, assuming he wants to be a Durant and not an Icahn.
Problems. Any merger would be fraught with problems as Mercedes relies heavily on Chrysler for its revenue. There’s the consulting fees, the royalties, Chrysler Financial, and the engineering work done in Auburn Hills (presumably at no cost) for Mercedes. Daimler would collapse without Chrysler, regardless of what the Germans and analysts like to say, because it survives by sucking cash out of its American industries, and Freightliner is drying up fast. Mercedes’ thirst for ill-gotten dollars could be quenched pretty quickly, though, with another “merger,” and a deal could include some provision for a cash flow to Stuttgart via royalties for a certain number of years, as well as the use of DAIMLERchrysler Financial for a certain number of years, to allow the Daimler parasite time to find another host.
Obviously there will be problems at Chrysler for a long time. The current issues started, as Bob noted, before the takeover, when Bob Eaton fattened up the company at the same time he stopped investing in it. The Neon was a perfect example of a car that should be selling 500,000 worldwide units a year, but ended up at under 150,000 due to foreseen and avoidable quality glitches. After that a succession of incompetent brown-nosers presided as those who could leave, did leave. Through the ranks, those who were not dedicated enthusiasts (and many who were) left and ended up with Toyota, Ford, GM, and other companies, helping to build the Tundra, GT, and other vehicles. Chrysler management will require a lot of work to whip back into shape. Dealers are going belly-up, and the entire dealer relations department might need to be replaced by people who have the right priorities, who will be hard to find (hint: hire away the staff of TARP). Demoralization will take time to heal, too. And the customers… well, many of us have been bittered and have left the fold. (We own three Chryslers, all with the wrong badges - a Plymouth PT Cruiser, Valiant by Chrysler, and Eagle 300M, to be faithful to the original intent. All three were purchased used, though.)
Splitting Chrysler off and selling it? Well, it could mean disaster, but we have disaster now, too. The only road ahead is for Chrysler to get smaller and smaller, and more and more integrated, until it’s a truck and small car subdivision of Mercedes, which was the original intent. Eventually, when all that’s left are two American truck assembly plants and a bunch of facilities in China and Germany, Juergen Schrempp’s plan will have been fulfilled.
Or Daimler can listen to its customers and investors, and jettison Chrysler, now that it’s broke and broken. Thank you, guys.
[Overview: http://dialoginternational.typepad.com/dialog_international/2007/02/daimlerchrysler.html]
Daimler should never have retired the Plymouth name, but they have a great opportunity to bring it back with a car that they try to pretend doesn’t exist: the A series! I vote for a Plymouth Smartcar — and this would spare the Mercedes dealers who don’t want to sell it for fear it would dilute their product line. A mini-car like the Plymouth Hornet ( can a Hybrid be far off?)would be a great second car in the line-up — and might actually make money. Freightliner could have helped assemble the cars locally–probably too late now. Japanese car manufacturers have an edge right now because they still have enthusiasm about what a car should be — and it shows. If Daimler does decide to sell, I would like to see Peugeot get the company — just imagine what Chrysler and Citroen could do together!!
They’re some others players to consider: Fiat, Honda (someone at Autoblog mentionned this idea http://www.autoblog.com/2007/02/14/chrysler-group-announces-recovery-and-transformation-plan/#comments ), GM (probably for an eye on Jeep, the rest can be to another group as someone mentionned)
oups, I forgot to add India to the list, who wants a piece of the cake as well. Mittal, an Indian stell produced buyed the French company Arcelor http://en.wikipedia.org/wiki/Arcelor-Mittal (and currently hold the Canadian stell manufacturer Dofasco http://en.wikipedia.org/wiki/Dofasco ). And India got also a car industry (Maruti, although owned at 54% by Suzuki http://en.wikipedia.org/wiki/Maruti_Udyog Mahindra (who built the old Jeep CJ-3A under licence), Hindustan (still manufacturing the Ambassador, a mid-1950s Morris Oxford still built under licence http://en.wikipedia.org/wiki/Hindustan_Ambassador ).
Fiat would certainly be a good match as well - they’re big in small cars and as I recall, commercial trucks. Honda - would be even worse, I think. The line almost completely duplicates Chrysler - the only unique Hondas are Fit and Civic - and Chrysler would end up being Dodge Truck and Jeep. Which many may find acceptable! The attitude at Honda would probably be just as bad, if not worse than, that of Mercedes, though at least Honda knows how to mass produce cars at a profit.
GM… is total duplication and wouldn’t make any sense — why would they want ANOTHER set of undesirable brands and ANOTHER huge inventory problem? They’re also still trying to figure out how to get themselves working right. They even duplicate Jeep with Hummer.
The latest Hyundai V6s aren’t bad at all. Hyundai’s weakness in engines is largely past tense now. I also don’t see Chrysler’s expertise in this area. Only the Hemi is above average in its class–and GM’s V8s now roughly match it in power and beat it in fuel economy.
Renault-Nissan seems the obvious fit. Though I agree, this would be ironic.
I guess, there could be some others possibilities, like grabbing only Jeep and sold Dodge and Chrysler brands to another group. I wonder what Bearhawke might think of this possibility?
I disagree on engines. The V6 series is quite well for such an old lineup; Hyundai’s engines have poor mileage for their horsepower and the car weight; and the 2.0 and 2.4 were quite good for their time. The Phoenix V6 will show what Chrysler can do, if Mercedes doesn’t totally screw it up (by making it too expensive). The 4.7 is now quite good too with 290 hp.
I agree with dave about the engines, how ever Dodge took to long to update the 4.7, probably due a cash makeing issue, how ever today at 2007 no one wants to hear about the 235hp 4.7 cuz a “simple” 4.6 can do a lot lot better, we all know that the world engine sounds like a jap engine, feels like a jap engine, but untill now it sells as good as a jap engine, so i claim, what the hell, if it sales, and is reliable, put some exaust if u want the racing sporty sound.
I beleave the Phoenix Engine will be dropped or put on hold untill DCX makes up its mind about what to do with CG and if they sell CG or tear-it apart what ever they pleased the Phoenix Engine will be Mercedes exclusive with no royalties for the leftovers of CG cuz they developed it in Auburn Hills but with Mercedes Cash and Leadership. “Yeah Right”
We are faceing a 21st Century K platform Dissaster, but this time with the “mesias over seas” becoming “the actal enemy”.
Chrysler might not be strong enough to survive this one.
In that case, i`ll be in line to buy the last Chrysler ever built and keep it for my grand children.
R.I.P. Chrysler
“In that case, i`ll be in line to buy the last Chrysler ever built and keep it for my grand children.”
You’re a bit late. The last Chrysler ever built was, as far as I can tell, the PT Cruiser’s first generation.
The World Engine doesn’t sound like a Japanese engine at all. Japanese engines are quiet, this thing is loud especially under a bit of throttle. Ever had a Honda or Toyota drive past you while walking through a parking lot? What do you hear? Nearly nothing.
I have already spoken my piece earlier:
That GM may very well pick up Chrysler Group and keep Jeep in situ aisde from rolling Hummer into it, and probably several Chrysler and Dodge models/platforms will live on————–but, the latter two nameplates will likely disappear.
“Trickledown” has made its way to the dealers so completely that I’ve gone over to “the enemy:” GM. I am still in love with my wife’s Stratus and would have popped for something to replace our old Dodge B250 Wagon, but I sure wouldn’t buy that monstrosity of Diamler’s 10-foot-tall critter they call a van. And I’ve never been much of a fan of the Ford or GM vans, so I picked up a used D-body Cadillac to tow our PopUp RV. Of course the lousy dealer service was icing on the cake. Must have been the Teutonic “We’re Mercedes and you’re just trash” kind of attitude. So I’ll be spending my $$$ elsewhere. I just hope Chrysler can break free. Maybe Kerkorian will be the savior. Maybe somebody or something else, but God knows, D-B has destroyed an American Icon. Is this something the S.E.C. should have overseen?
God forbid that GM buys Chrysler. But if they do, they’d have to rename the company American Motors and it would have to be a true
merger. Dump their trucks in favor of Dodge Trucks. Merge Jeep & Hummer back together again and keep the Jeep name. Then the NA lineup could be Cadillac, Chrysler, Buick, Dodge, Pontiac, Chevrolet, Saturn, Jeep & Dodge Trucks. Keep a lot of the Chrysler Engines & Transmissions. A merger with GM would be more acceptable than one with Ford.
However, if it was on a foreign front, then I’d look at Hyundai being the favored choice with maybe Mitsubishi added to the mix.
Rest assured the dumb public will be fed the crap That the Chrysler brand almost killed the mighty M-B. Lets see since 98 the total M-B input was a retired 5 speed Tranny desighn and assist of a rear suspension desighn. Oh and piling of US cash into a wheelbarrow bound for the Fatherland. It is really too bad the talks with BMW and others were shelved for the opportunity to be screwed by this gang. If CG is turned loose with no cash, no new engines or trannys after almost 9 years, the only company stupid enough to buy is GM.
As for Jeep, the New Liberty and Comander(landrover look alike per M-B requirements)has the spare tire under the car, so does the Patriot. Better plan on reduced sales in the mountain states, Ever try to get the spare out from under a 4 X 4 on a single track on a cliff? The Jeep loyals have got to be pissed, I am. May replace the 2004 Liberty before the change.
Re a GM buyout, I doubt very much they’d keep the Chrysler name. I wouldn’t if I wasn’t emotionally attached. I might THINK aobut Plymouth. Not Chrysler.
A couple of comments;
1) Selling off one or two of the three DCCI brands would be very difficult as 3000-4000
approved dealers(with an average of 100-150 American employees each) with binding written agreements giving them rights to sell Chrysler Jeep and Dodge may have a problem with that. Most have made major investments in their operations based on the volumes they currently have. Taking a brand away would be be a legal nightmare for Daimler. Can you spell CLASS ACTION.
2) The Chrysler Group as well as Daimler as a whole are getting smaller as are many companies. There is not a day go by
when you do not hear about a merger/buyout/downsizing. They are never good for those who loose their jobs as I have experienced twice. They can however be good for the company’s survival and growth. I do not see a spin-off of the Chrysler Group as it would seriously hurt their leverage positions and finance income and leave Daimler more exposed to long term market cycles. When they note last years losses keep in mind that 90% came in a single quarter primarily due to BAD senior management decisions. Also note that the Chrysler Group 3rd quarter loss was more than offset by the Chrysler Financial profit from selling those cars. Chrysler reports profits separately from its financial group even though they
are one in the same. It would be like Macdonalds separating the income from fries and soft drinks from the rest of the operation. If they did they would also most likely report a loss. Its just slight of hand accounting. Make NO MISTAKE the Chrysler Group in its previous form (with financial numbers in) is very profitable. It is an industry fact that 65-70% of income from the auto industry comes from its financial division. The sad thing is that Daimler is using this slight of hand business model to make the hard working members of the Chrysler Group look inefficient. It is not. Agreed,
production cuts are necessary based on current volumes but they are not in trouble and Daimler knowS it well enough not to even think about a spin-off. They would also not want to risk any American backlash and the trash-a-benz campaign that would follow. They need to be in north america with a major presence to exist worldwide in the long term.
Not all companies are contracting. 3M is not, and Toyota, which is said to be planting 14 factories on American soil, certainly is not. Production cuts ARE needed based on current volumes, but flex manufacturing was supposed to fix that.
I will agree that there are some real product line problems, but as those came due to Mercedes meddling, I don’t see why Chrysler is blamed. They had a chance to do a small car, to spread the PT line, to finish burnishing Plymouth, to move Chrylser upscale, to make their cars more efficient, to use five-speed automatics across the line like everyone else, etc. The Stuttgart know-it-alls made the cars pricier to build, then cut back on the necessities like, well, competitive automatics and weight-saving.
Every time Mercedes “fixes” Chrysler, it gets worse. I am truly pissed at the press for almost unanimously forgetting that and repeating their dictum that Chrylser is broken and only Mercedes can fix it.
Re: a GM buyout (of MB),I doubt very much they’d keep the Chrysler name.
History being what it is, GM has a good relationship with that Chrysler name. Isn’t that why GM still has a Buick to sell.
On the other hand it may be better to have a real shakeup and trim the # of car lines. Maybe ditch Cadillac and Chrysler and
bring back some great car names like Packard, Cord, Dusenburg (?). Cut Buick, Pontiac & Chevrolet.
The NA lineup would be Packard, Dodge, Saturn/Chevrolet/Plymouth, Jeep & Dodge Trucks. LOL
Packard and Studebaker are still owned by others, but they could easily use Nash, Hudson, Kaiser, and Willys.
“We shouldn’t be looking at Toyota as No. 1. I don’t like being second fiddle to anybody, and we’re not even second fiddle. We’re more like third or fourth or fifth. … I think we can do something if we set out to do it.” — Robert Cooke, 52, an electrician who has worked at the Newark Assembly Plant (about to be closed) for 12 years.
If only Zetsche would listen to loyal employees such as this. Mr. Cooke, and many others like him, has not doubt what Chrysler was and could be. I hope Americans will pay attention to all of this, and buy American products. Wake up! Every Toyota we purchase is another nail in our coffin. The automobile worker and the automobile industry must not be sold down the river (completely). Our goverment put Enron managers in prsion, but we’re letting DCX get away with this! The Japanese have at least a $1000 advantage per vehicle becasue of the artificial yen valuation. Chrysler is about to become DCX’s Daewoo–it will engineer alot of Daimler-Benz vehicles, but it will have few American employees, and will be merely a shadow of what it once was. Is America so sedated by prozac that we are going to let this happen?
I hope Chrysler is sold–if it is worth nothing, as some German banks have said, by all means, Mr. Zetsche, get rid of it. It is clear DCX’s leaders don’t care about the workers or Chrysler’s future.
Quote from article below:
http://www.chicagotribune.com/news/local/michigan/chi-ap-mi-chrysler-plantclo,1,5672222.story
GM can’t afford to buy a 300C on sale let alone the Chrysler Group. Also can’t imagine anyone wanting to take over the legacy costs associated with Chrysler, especially GM. If GM did buy Chrysler they would have to expand the Chrysler headquarters building in order fit Lutz’s ego. Anyone talking about Chrysler being sold has no business accument whatsoever. It just sells more newspapers than a boring old restructure but it will not happen. What will happen is more joint ventures and shared platforms with other manufacturers. A key factor to this whole thing, that no seems to mention is the Chrysler retail dealer network. This isn’t just about plants and production. Chrysler stock is a great buy right now.
actually, it occurs to me that Chrysler does have one big asset GM would LOVE to have - the CTC, as you pointed out. It’s huge and state of the art, probably the best in the world.
I do agree that Chrysler probably won’t be sold. And the retail network… how much IS that worth?
You can have have the best and most cost effective product on the planet but without a distribution network you are going nowhere.The DCX dealer network is worth more than all of the assets of Chrysler combined and guess what; IT is NOT FOR SALE. Next to product and possibly equivalent it it the most valuble factor in the automotive business. The 1000’s of dealers and their half million employees may have something to say in all this.
On the other hand, a brand new organization can dump the sleazebag portion of the dealer network (and don’t tell me there isn’t one!), and start fresh with a new contract for high service levels and minimum physical plant standards. That’s also worth something. Chrysler’s dealer network is an asset, but with average sales of about one vehicle per day per dealer, it’s not a HUGE asset.
If there was a way to abrogate the contracts with the UAW and the Dealers, perhaps Chrysler could survive. But with its enormous legacy costs of retiree health care and pensions, and way too many dealers, the cost structure will not support the business at a profitable level.
If they cannot sell it, I’ll bet it is liquidated.
Say what you want about Mr. Lutz, he has gotten results at GM. They took their cuts and swallowed their medicine, but they’ve also invested like crazy in ever-improving new product.
Solstice, Lambda CUV’s, Aura, new full size trucks, CTS, Malibu and G8 coming soon. Their interiors look good because Lutz said no to the cheap materials. What does DCX have in the product pipeline for Chrysler? Kill the Commander, no Pacifica replacement, only a small CUV for Chrysler (to compete with Dodge when they shold be competing with Acura and BMW and Cadillac). Lutz cares about the product, not just the price tag on everything. Stuttgart cares only about the pricetag and pleasing the investors.
Chrysler should have partnered with VW to begin with: overlap would have been less of a problem. Chrysler would be free to move upmarket and build plenty of hot RWD cars because VW and Audi are frontdrive and AWD. None of us would care if the 300 and Passat shared the same AC compressor. But the danger of Chrysler’s becoming a decontented Mercedes would not have existed. Plymouth would compete with Kia and Hyundai and Toyota, not with VW and Audi (or Chrysler). Probably they could use some VW parts, they’d be cheaper than Mercedes ones, and we’ve got plenty of factory space in the good ol USA (at least for now). Jeep would be Jeep, that means no more Compass, none of this badge-engineering that is going to make Jeep the same as Dodge adn Chrysler SUV’s.
“The DCX dealer network is worth more than all of the assets of Chrysler combined”.
The problem Paul is the creation of mega dealerships. While I buy my Dodge at our local Chrysler dealership that just celebrated 50 years in business, how much longer will it be here. The company dictates the terms not the dealer (well mostly). GM forced 3 dealerships (within 50 miles of us) to close their doors (basically by demanding $1/2 million upgrades to keep their dealership). The dealer in our Town took on 2 of them (one was his sons and the other was his old partner). You go to the bigger centre 125 miles to the West and there is the Mega Dealership, spanning several carlines. They started out as a Ford dealership, they currently have (and advertise in a 2 page spread in the paper) Ford, Jaguar, Mercedes, BMW, Mitsubishi, Audi (that I can recall sitting here at my computer, I am sure there are at least one more carline in that mix).
So the car buyer goes to that dealer and not only can look at his usual car retailer, but a lot of competing lines too without leaving the same dealership.
Well, if it is spun off, that’s when Chrysler will need cash more than ever; ergo, that is the time to buy a car. Unfortunately, I don’t think it will really be spun off, just allowed to die slowly…or worse (and more probable) Chrysler/Dodge will be sold or spun off, sans Jeep and DCX financial. Jeep is recognizable in more places than almost any other brand on the market.
I hope someone calls Mr. Kerkorian, surely he could put enough investors together to buy Chrysler back from the krauts. Maybe he could rehire Bob Lutz to run the company right again. That would poke a stick in daimlers eye, wouldn’t it? It makes me sick watching those arrogant pigs ruin a tremendous company.
GM buying Chrysler could work if GM would put Jeep with Saturn and drop HUMMER whose sales have hit a wall anyway.
There is no product overlap between the brands and their customers need to be treated differently than mainstream buyers.
GM seems to be thinking of a way to get a new brand in the entry segment and the “old” Plymouth brand would be perfect
and the Smart, Hornet, Matiz, Meriva, Combo, along with the Corsa and Rampage pickups would work. The Plymouth brand could be sold at Chrysler dealers alongside a new PT Cruiser, Pacifica, Sebring Convertible, Town & Country and 300C.
GM should add the wagon version of the 300C and give it an interior it deserves. Dodge would continue as is except
with updated interiors and new front styling - make cars look like cars, think how well the Magnum would sell if the front looked more like a ‘69 Charger.
Yes there would be some overlap with the Challenger and Charger with the Camaro and G8 but I think the HEMI engine and diehard MOPAR fans (who won’t buy a Camaro anyway) will buy plenty for Dodge to survive. Dodge does have the Dakota that finally looks good again (the 2008) and slipping a 5.3L LS1 in it would open up sales. Too bad DCX never made the
Dakota capable of handling the HEMI. Dodge has the world class Caravan and GM says they are getting out of the minivan business so what better one to have and of course the Town & Country is there for luxury buyers. The Caliber is a great little car with no real GM competitor and could benefit from GM’s line of 4-cylinder diesels. The new Avenger will stand on it’s own with aggressive styling. The RAM truck has it’s own following and offers the Mega Cab and new 6.7-liter Cummins turbodiesel which would mate up to an ALLISON transmission nicely. The new 4500 and 5500 HD Models also differ enough from the Kodiak to sell well and GM could market them like Ford’s SuperDuty (which make up about 40% of F-150 sales).
I know it goes against standard merger thinking but if GM wants to stay number one buying Chrysler and keeping all of the 2,142,505 sales from 2006 will be required not just the 460,052 Jeep portion of them. It will be tricky and have it’s share of problems but it can’t be much worse than the DCX merger. And why not keep the brands as they are the dealerships are not tied to any company and sale competing brands and one of this areas most sucessful dealerships is a GMC-Jeep
one - figure that out. Buyer loyalty is still out there as GM learned when it dropped Oldsmobile, very few bought other GM brands and if that happened “internally” what do you think will happen to “external” Chrysler buyers? Don’t think they will run to the nearest Buick dealer.
Quick thoughts on GM…I can only see them as an investor or deeper cooperation a la the large SUV they’ve been discussing. Maybe that’s how Dodge would re-enter the small car market. GM is righting their ship right now, but taking on CG isn’t the answer for them - it’d be taking their eyes off the ball.
Renault/Nissan would seem the best fit, to me.
After reading tons of opinions and sleeping on it, this is where I currently am:
1. DCX is certainly entertaining the idea of complete divestiture of Chrysler. Sure, high level suits talk “what ifs” all the time, but now it’s more than just conjecture.
2. That doesn’t mean it [completely bailing out of Chrysler] is the primary mission of D-B (Daimler-Benz; can’t call it DCX if we’re talking splitting Chrysler off, can we?), just that it’s on the table if the right deal comes along. It’s entirely likely that a “partner” who will invest deeply is the result rather than Diemler(sic) just washing their hands of the whole thing. Possibly a ‘planned retreat’ by D-B with the third party investor becoming a majority owner and D-B maintaining a minority ownership. Maybe it’ll just end up with full Chrysler/Mercedes integration on ‘in house’ product and the rest produced in concert with a third party. Obviously the farther away from a complete ownership change the wider the pool of ‘partners’ becomes.
3. I do not think this is purely smoke and mirrors, though with UAW negotiations coming due it may be an intended side effect.
4.The only things I’m sure of: “Chrysler” as it exists today is a dead company walking just as the Chrysler that existed in 1998 was the day the takeover was announced. Massive change beyond the layoffs and closings is on the way, whether or not Diemler (sic) is behind the wheel. The Dodge Truck and Jeep brands aren’t going anywhere; everything else is in play.
It is a dark time for the rebel alliance….
Dave i thought the purist´s see the PT first or second generation as a Plymounth not a Chrysler?
any ways i ment the las car with Chrysler badgage, i dont see the 2007 Chryslers as bad devil´s cars, i know there are alot of MB claws on them but they are still branded and adverticed as Chrysler, and as long as they are Bult in the US, Canada or even Mexico, they are Chrysler´s to me, is like not calling a GM car like their brand becouse its realy DELPHI tecnology, and claming that its a DELPHI car or a BOSH car.
Dont u think?
One thing that has struck me is the lack of extreme hostility towards a GM bid for Chrysler Group………..and, Hyundai/Kia is likely to piss off few people either.
This sums up the current DCX management style
A Japanese company and an American company decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.
On the big day, the Japanese won by a mile. The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A
management team made up of senior management was formed to investigate and recommend appropriate action.
Their conclusion was the Japanese had 8 people rowing and 1 person steering,while the American team had 8 people steering and 1 person rowing.
Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not
enough people were rowing.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team’s management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1
assistant superintendent steering manager.
They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the “Rowing Team Quality First Program”, with meetings, dinners and free pens for the
rower. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses.
The next year the Japanese won by two miles.
Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year’s racing team was
outsourced to India.
That’s about right. You’ll notice they hired McKinsey at Chrysler to tell them how to save money. “What time is it,” I asked the consultant. “Give me your watch and I’ll tell you,” he said. (Version 2:) “What time is it,” I asked the consultant. “What time do you want it to be,” he asked?
More at http://www.toolpack.info/
It would be nice to get that German wing off Chryslers.
I currently see no Chrysler car to replace my ‘95 LH, but
I don’t want another LH; a Sebring wagon.
If sadly Chrysler were no more I wouldn’t feel like a traitor getting a Honda CR-V.
Is this what happens when outdated thinking, and crippling caution within a company 5-8 years behind the times, merges with a modern state of the art 2-3 years ahead Company, to become 1-3 years behind the Industry Company!
The last Chrysler commercials I remember were trying to convince me of the benefits of “German Engineering” and Superior thinking!
How Dr Z is going to lead us into a bold and bright future, with Green Technologies and JD Power Awards for every Chrysler Vehicle.
Now I see that they are a Cut it up and Run Company! Does any have something to ASK DR Z?
DR Z Why does my Mercedes engineered transmission leak? (2006) Magnum R/T
Just a side note to Mark. Your transmission is not the only one. At the time I left the business back in December, we were fixing about 5 transmission leaks per week. It’s two O rings, part numbers 68001278 & 68001279. (Be a long time before I forget those part numbers)
One cause of that was turned up by the employees on the line about a year or two ago - part of the assembly process. But now I know why one engineer called the Mercedes autoamtic “a poor (and expensive) copy of the ZF automatic.” FWIW, BMW simply buys the ZF automatics from ZF - and it shows in their performance.
I find it funny that the Camry and the E-Class get the same output out of their 3.5 V6 engines.
A good friend (who shall remain nameless to protect his job) is in I.T. for a huge company and services auto companies; the “hardware” end of the business. He is always astonished at how the bean counters spend tens of thousands of $$ to save 1/10 of a cent on a single part WITHOUT CONSIDERING HOW MANY OF THOSE PARTS WILL EVENTUALLY BE MANUFACTURED! This is right up Dave and Toolpack’s alley and we, here in the USA, wonder why the Japanese are eating our lunch!
Ford played this game with the Pinto some decades ago, gambling that a $15.00 gas tank shield would cost too much over a production run to be profitable! Yeah. Riiiight!
I hope Daimler and Stuttgart rot in Hell. never again will I purchase anything with German involvement
Now that we all know that Chrysler is for sale, how about we, the people who love Chrysler, put our money where our mouths are?
Some fast math; if there are one million of us and each person puts up $5,000.00 of capital, that becomes five billion dollars.
Now before you laugh and start saying, “That won’t work, there’s nothing that’s owned by a buch of everyday Joes,” I say the Green Bay Packers, which is owned by no one person, instead it is owned by all the shareholders, i.e., the everyday Tom, Dick and Joe’s who put their money into the only publicly owned professional football team in America. It worked for the Packers and it could work for the “Future Chrysler,” which might be a good name to call it! The charter would be a near carbon-copy of what the Packers — or any other like entity that is set up the same way — where it can never be sold off, can only be owned by the owners, who can sell their shares back to the compnay, to thereby be sold to another investor, subject to the rules governing ownership in the public interest, so on and so forth.
Now is the time for all good Mopar-persons to answer the call!
This may be a bit simplistic, but why not spin it off to the shareholders? Each share of DCX, currently worth about $72, gets swapped for one of DB, value, say, $45, and one of the “new” CC, at $27. The Kraut shareholders would dump their CC shares ASAP, and, if the share price went down a bit, many US institutional buyers would again snap it up (they had to dump back in 98-99 because many of their by-laws said “US corporations only” and DCX’s real HQ is in Stuttgart).
Appoint a new corporate board, hire a real pro to head the ship (get Lutz back?) and let’s rock!
Rick
This whole environment makes me sick to my stomach.
Can you imagine, a car company that makes Vipers, had
made Prowlers, PT’s, Hemi powered trucks and cars and
now happens to be in this position. At one time I thought
if Chrysler “HAD” to hook up with another company
then who better than a company like Daimler. It’s
plain to see they were only in it playing some kind
of manipulating game. The moment time’s got tight
Daimler’s tail goes beteen their legs and it’s time
to sell. And now our car company in taking it in
the you know where. I don’t want any other company
buying or merging with them. I want them back on their
own.
THATS……BETWEEN
Revenge. Thats what the Germans wanted and thats what they have acheived. The “Economic Miracle” is complete as one
BMW official stated when that company Bought out Rolls-Royce “We have accomplished with our checkbooks what our bombers failed to accomplish in 1940.” The victorious Allies, in their zeal to rebuild Germany and Japan after WWII failed to realize that they were sowing the seeds of thier own demise. During the 1970’s Detroit’s half-hearted attempts to build import fighters (I’m sure we all fondly remember the Ford Pinto and Chevy Vega - arguably two of the worst products ever to come out of any American factory.), the federal government’s failure to enact the kind of import duties comparable to what the Euros and Japs were using to keep our products out of their countries combined with the failure of the regulatory agencies to allow the auto makers to collaborate of government mandated safety and emissions equipment and Detroit’s own arrogant “screw the customer, nothing can happen to us” attitude caused a landslide of buyers to defect to foriegn products. Worse - Detroit’s pathetic quality control during the 1970’s and 1980’s sealed their fate. To be sure, the imports are not perfect. Anyone who has purchased an import knows well the unpleasantness of the buying experiance - dealers and their sales staffs are very arrogant and nasty, treating the customer like scum. However, their service departments cannot bend over backwards far enough in treating the customer like gold - a marked contrast to the typical American car dealer service department where the customer is all too often accused of misusing the product and getting ripped off for repairs not needed but which the service writer coerced (or scared) the customer into accepting.
Will the United States be hurt if Chrysler (or Ford) is allowed to die. No and yes. No - in that many foriegn manufacturers, especially Toyota, have extensive facilities in America. Yes - in that as we move further toward a pure consumer society we open ourselves to the control of others who do not share our views and values and we lose the skills and knowledge and will to manufacture the products we consume. In other words, the next time a US president wants to engage in a foray overseas it will be foriegn governments not the US government calling the tune and if we protest they will close their factories and squeeze our consumer-based society into submission.
Chrysler, the “weak sister” of the Big 3, has always been in a tenuous position. In the 1950’s a series of debilitating strikes and the misguided zeal to try to match the others in production quantity and to match GM in number of brands resulted in vehicles of poor quality. This is a legacy that the company has been saddled with ever since - even people who are unaware that Chrysler existed before Daimler believe they make a poor quality product. Unfortunately this quality image has reared its ugly head all too often (e.g. the 1977-80 Aspen/Volare and the first generation LH cars). Having said all that, the reader should know that I own a 2003 Chrysler Sebring sedan, the quality of which is the equal of any Honda or Volkswagen.
Many writers have comments upon the arrogance of the Germans and the terrible things they are doing to Chrysler despite all the good Chrysler has done for Daimler-Benz. But as I have said earlier, the Germans (and the Japanese) are out th avenge their military loss the the Allies and we have given them the means to do it.
Thank you,
Wesley Kemp
Wesley:
Our reasons, in part, to help rebuild Germany and Japan were not alltogether altruistic————–the alternative was to let those two countries fall into the hands of Joseph Stalin’s Soviet Union.
That: IMHO, was a masterstroke of diplomacy. Besides; those people who actually remember WW II let alone were adults then are fast dying off.
Who would want a dodge truck with a chevy motor in it??
Well, In the end Chery a Chinese car manufacturer is going for it - If Chery wins or for that matter any Chinese car manufacturer - The rest like GM, and Ford will tumble soon after.
Bye bye US car industry.
Your comments on revenge could be true the other way around as well. as private equity funds are buying German companies left and right, sucking them dry and spitting them out after the best is taken - revenge? - maybe