The General Motors conundrum
According to the London Times, a fairly reputable paper, the CEOs of GM and DCX have indeed met over the possible $13 billion sale of Chrysler Group.
Why would GM be interested?
- GM would be devastated if a Chinese company bought Chrysler. That would give a Chinese manufacturer access to state of the art automotive technology - despite what Mercedes loyalists claim, Chrysler is at the state of the art of computer design, flexible manufacturing, transmission engineering, and certain other key technologies. It would also give them recognizable brand names and a huge dealer base. Consider the impact on the American economy. Now consider how hard it would be for GM to compete with people who can rely on assembly plants with no pensions, no health care costs, and wages that no illegal immigrants would work for.
- GM would remain the world’s largest automaker for a while longer, despite Toyota’s expansion, and despite cutting back on fleet sales.
- GM would save a lot of money by being able to merge HR, finance, and other departments; and by getting bigger economies of scale in areas where GM’s sales are not especially large. Because there IS a lot of duplication between the companies, GM could eliminate quite a bit of Chrysler’s costs (or its own), without any visible changes to the buyers. It’s not unlike the plan to standard Chrysler and Mercedes on common engines, except that it makes more sense, because Mercedes will have to make a bunch of changes to pretend they aren’t sharing anything.
- GM would, for less than the cost of engineering two new vehicles, get four new vehicles that they do not directly compete with: the Jeep Wrangler, Liberty, and Grand Cherokee, and the minivans. All are perennial good sellers, and would sell better if made by an American company that supported them in word and deed, rather than a German company that denigrated them as inferior to real German vehicles.
- GM might just want to buy Chrysler out of a desire to see it back in American hands.
- Bob Lutz might want to save Chrysler either to work on it himself - he was, after all, the best choice to lead Chrylser back in the 1990s, and the #2 man during the rennaissance.
- GM could get a load of technologies that complement their own, such as a better MDS, six-speed automatics they wouldn’t have to share with Ford, automated-manual transmissions, flexible manufacturing techniques, and more.
- It might give GM’s culture a quick kick in the pants that could save the corporation.
- GM’s reach in international markets could really help increase sales of Dodge, Jeep, and even Chrysler vehicles.
- Once the sneaky accounting tricks are eliminated, as well as the foolish “make ourselves look good” moves like the sales bank, Chrysler will probably be a profit powerhouse again.
Now, why might GM not want to do this?
- It would be even harder to maintain the General’s many brands.
- That’s $13 billion that could be spent elsewhere. That kind of capital isn’t free even for the world’s largest automaker.
- Lutz just said minivans were passé.
- Someone else might out-bid them.
- It would bring leadership and management issues, cultural and process, financial and otherwise, that would be hard to deal with while still bringing the great ship around.
- Nobody in their right mind would trust Daimler to treat them fairly in a deal like this.
Of course, Bombardier did win quite a bit of cash after the AdTranz deal, so a company with a battery of smart lawyers might be able to take advantage of Daimler’s greed and alleged dishonesty.
As for duplication of product lines, there really isn’t as much as people have suggested. Jeep and Hummer occupy different turf; and there’s no GM equivalent for the Caliber/Compass/Patriot, or Chrysler equivalent of the Cobalt. The mid-size cars are an issue, but they can be eliminated - or kept for a few years if sales merit it. The rear-drive cars are also an issue, but again, they can be eliminated - or kept, since sales are high enough to justify having two rear-drive platforms, until they can be merged. Minivans are at Chrysler, not GM; CUVs are currently at GM, not Chrysler, except Pacifica. PT’s days are numbered, so that’s not an issue; that really leaves pickups, where the Ram sells enough to be kept on as a separate line (with slow sharing with Silverado over time), the Dakota has no direct GM counterpart, and the Durango is due to be axed anyway.
It would work, and frankly, I’d rather see Chrysler under GM than under Mercedes any day. At least they’d be run from the nation they serve, and there would be less room under American accounting laws for the kind of trickery Mercedes has been repeatedly accused of.
Thank you Dave. I think this is exactly what needed to be said. There are too many people (especially GM fans) that just assume that there is Nothing in it for GM. Now the facts are out. Even I didn’t realize how little overlap there really is.
Well Dave, I am kind of worried about the mercedes-Chrysler technology. No one can say the sprinter isn’t a good idea. How about the diesel? the new V6 engines? I know GM engines are very very reliable but not very efficient. Those technologies need to be kept for Chrysler. So, I think they should still have some kind of technolgy sharing between them and Mercedes.
As for the merging, wouldn’t BMW be a better partner? I am not very well informed with the state of BMW but I know GM’s pontiac would be a direct competitor to Dodge. How about Buick-Chrysler? certain GMC-Jeep?
Also, there’s the reputation. Some people buy Chrysler products because they don’t want GM products, (or the opposite). So, they should really act as if they weren’t associates. My 2 cents, could be far from the truth though. And since when does GM have 13 billions$?
Of course the GM-Chrysler merger is risky. The timing on this is awful, because GM, ideally, needs a few more years to get its restructuring plan in place. However, there is also a potential upside for GM, and not just from a market share standpoint.
BMW certainly showed more respect for Chrysler than Mercedes, and htey have worked together, but I don’t think it would work. BMW has learned that it needs to stay alone and focus on what it does best, and if it needs help with specific components, BMW buys them - a more intelligent approach in many ways than Mercedes’ because it allows them to focus clearly.
Patate, if I remember correctly, it was said that the Mercedes diesels are over-priced junk compared to other options out there that are also cheaper than the Mercedes diesel. As for the situation at hand, I will not add to the hysteria and rhetoric being spewed from every crevice.
Certainly that’s engineer Bob’s view, to put it mildly. Given how few Sprinters are sold and the fact that they are not even assembled by Chrysler, I don’t think losing the Sprinter would make a difference at all; GM has full size vans. The new V6 was developed by Chrysler, not Mercedes, and I’d hope it would go with Chrysler, and GM would probably love to have a cheap, efficient V6 (assuming it’s both). The Hemi is pure Chrysler. The four-cylinder World Engine is not Mercedes. Not much in Chrysler other htan the electronic architecture, as far as I know, is proprietary Mercedes (well, and the not-particularly-great five-speed automatics in some vehicles, but GM makes equivalents).
I wouldn’t worry about brands competing if there are no individual models competing. The trick for GM will be to continue what they are already doing, namely, not having each vehicle in each brand. What Dodges compete with Pontiacs? What Buicks really compete with Chryslers? How does GMC compete with Jeep, exactly?
Arrrggghhhh, I’d rather eat worms then drive a chevy! Has anyone been watching or reading, Chrysler/Dodge and Jeep are churning out as always innovative looking, forward thinking “New Models” not to mention Mercedes/Jeep hybrids (GL450) Apparently they know now to tweak a Grand Cherokee, into a very refined niche market SUV , Add a pentastar, Opp’s I mean Mercedes Emblem Onto it and it sells for $64,000 to $74,000, gets a whooping average 16MPG, Anyone know If someone would be willing to compare it to an Aspen with MDS. The Parts are there, the pieces are there, Why imitate someone else’s design, when you can Imitate yourself, I guess really this may be the “Great Experiment” There can be the base model, the sport model, the touring model, the performance model, (Chrysler,Dodge,Jeep), Then the German Badged ones( See that’s where the quality begins) Luxury, Ultra Luxury, Insane Luxury.
I wouldn’t doubt it If all of this Is either revenge for winning WWII, An in your face(well we could sell it to you, but your credit rating Isn’t so good, add a percent here and there, do some German Math and WHOA, He,he,he, looks like your in worst shape then we are), You can’t have it, PSYCH, were just messin with ya! (the old saying: Know thy enemy and know thy self, and you will always be victorious)
Maybe all they really need to do Is finally Create An Imperial Line, The perverbal bridge between a Chrysler and a Mercedes, A new AG venture group, Go public raise some cash and things might just look sunny again
If GM bought Chrysler, wouldn’t that cause them to basically cancel everything Chrysler has except the Jeeps and minivans?…which basically means death to Chrysler?
Hummm, Who has that kind of $$$? Who could simply with the stroke of a pen, come up with 13 billion bucks, and not even sweat it?
Just a thought mind you, Whats the name of that company that got those contracts to rebuild Iraq? How much have they spent thus far, and to what end, towards Jobs, and rebuilding the local ecomony? OR Perhaps the inheritor of chrysler defense, That one I think is Raytheon Corp
Isn’t there something that says, US military vehicles must be produced domestically.
I was thinking about what someone wrote here, about ponying up something like 5K each over a Million Mopar faithful or more, very likely much much more, then a simple million fans/patrons.
Wouldn’t saving an Historic,Innovative, American Institution, From the clutchess of Evil Be a huge Legacy to be remembered.
I mean really, Maybe You can’t get Iran, Iraq, Syria,and other player’s to the Table to accomplish something meaningful!
But I bet If someone could Oh say Get Raytheon,or a former Chrysler subsidiary, The Defense Dept and a minor investment into the growth of American jobs, and Benefits, Turn around cuts in Labor And build up the enconomies of area’s in Our country, With something other then just buiding more houses and condo’s hoping to grow. Why that Person whomever He or She was, would have the gratitude of several million customer’s,& workers and thier families, wouldn’t they? How Many dealerships, with how many employees, and thier families.
Heck I think the last time a company was (bailed out by the Government, they paid it back ahead of time, made a profit, and prospered!)
Maybe If thinking is truly circular, Someone whom perhaps believed, that you can go back to a country and try to do what you should have done the first time, Might consider the possibility that If you undo a deal that shouldn’t have been done the first time, perhaps you can help all the people harmed by it.
Some could said GM still have too many brands, but there was a time where they have more brands like LaSalle, a “junior companion” to Cadillac http://en.wikipedia.org/wiki/LaSalle Viking http://en.wikipedia.org/wiki/Viking_automobile and Marquette http://en.wikipedia.org/wiki/Marquette_automobile
It’s really doubtful then Chrysler could be market as a “junior companion” to Cadillac but however I suggest to push Cadillac upmarket against Jaguar or even Bentley, Rolls-Royce and Chrysler takes the former position then Cadillac taked. Or using the way of specialized niche markets Buick market only all FWD high-luxury cars while Chrysler takes only RWD high-luxury cars. For the mid-priced cars, Pontiac will be the BMW fighter while Dodge will keep a more american style.
I guess someone might have more better ideas then me ^_^;;
And I hope someone at GM follow the ideas of Bob Lutz not the ones of Roger B. Smith >_
“If GM bought Chrysler, wouldn’t that cause them to basically cancel everything Chrysler has except the Jeeps and minivans?…which basically means death to Chrysler?”
Chrysler’s already dead as far as I can tell. That said, no, the point of the weblog entry was to note how LITTLE would probably be eliminated. Analysts talk about another 100,000 job cuts, but I just don’t see that. Would Chrysler suddenly stop making vehicles? Would GM not need any of the engineering and testing done by Chrysler? There would be cuts, but given that Mercedes’ only methods of “fixing” Chrysler are job cuts, factory closures, Chinese production, and advertising German engineering, I don’t see that GM’s ownership would be any worse.
Let me say first that I am 110% for CG being once again an all American company. If this were a small to med. sized business I would know how to make it happen, but given the scope of DCX/Chrysler Corp, I am out of my depths. Mark has mentioned some possible partners, but in my option, if Chryco [CJD] were free from Diemler/M-D it would be in their interest to not be owned by another car company, but be a part of two or more similiar sized companies that were owned by a holding company. I’m not sure how that would work with businesses of Chryco’s size but with small/med. size businesses it works quite well most of the time. As for potential partners I would suggest Cummins Diesel, Navistar,Honda or H/K as examples and as investers I think that the UAW should be willing to invest a good chunk of their money, since it would be helping to insure their continued employment in good paying jobs. It might even help the union leadership to relate their demands to the what it takes as a mfg to meets mkt demands and be competitive.
This is a plan that would work if the right people put it together and had a passion to keep American industry strong. Oh, and foreign investers would be limited to the size of their holding that would insure American control.At the risk of being censered for getting into political areas, the American govt has IMO taken a hands off,” let what happens, happens” approach in the name of “free trade”. IMHO, things have gotten out of hand and the security of the nation that you and I love [I hope]and all of NA for that matter, not necessarily via military conquest but by attacking our economy and taking advantage of well meaning laws and siphoning off money, taxes[not collected] industry, jobs, standard of living while taking advantage of social programs to which they contribute nothing. America is and should be a nation of all people’s working together for the collective good of this nation and not some other nation. Citizenship in America is a privalige to not be taken lightly. If you benefit, then contribute!
Now I get political [ if this is inappriotate please delete it], if I were a political canidate, such as presidential, I would jump on this issue in general and the behavior of Diemler/ M-D in particular. If the powers that be would only open their eyes and back up their claim of loving and serving America and the American people they would see that the security of our nation has been comprimised. The attack on Chrysler Corp, was as much a terrorist action as the attack on the twin towers and the Pentagon, at least, IMO.The difference being, immediate loss of lives vs the weakening of our economy and the long range effects thereof.
If I am off base, I challenge you to set me straight.
Anyone out there that really believes that there would be anything left of Chrysler after, say, five years or so is sadly mistaken. Yes, they would make use a lot of the gained engineering but it would become GM enhgineering in name. The ram would be gone in a Detroit instant, 2 years max. Viper, we’d never see the 600 hp Viper. I’d rather see them stay DCX and hope. I really think Hyundai would be a better choice. Maybe one of the frog companies but they carry a lot of baggage and France is not about to be a big supporter of the good old US of A. Hyundai is stricly business in it’s appraoch and will continue support and developement of Rams, Chargers, 300’s maybe one or the other of the Avenger or Sebring, etc. They need the engines, trucks, cars that tend more toward the premium level, all wheel drive, etc. GM has all this and WILL kill off their competition. This is the U.S. automobile business and it IS ruthless. GM = General Massacre.
Yes, the Ram would disappear. The Viper I think would stay with the Corvette dropping back to its old place - no need for supremacy if they own both brands.
If you think Koreans will be more supporitve of America than French, I have to wonder about your experience. French people have run American companies and divisions before - often over the long term and with success. Despite recent American anti-France propaganda, the French have not forgotten who saved them in World War II, and I personally see no reason to have France because they didn’t want to be involved in Iraq - a position now held by most Americans - and because they desire some degree of independence, and correctly recognize our culture as a threat to their own. I also frankly see a lot of problems with France but I’m not about to say Korea’s preferable.
The General is at this point one of the best options. I don’t think the Ram would disappear immediately but over time either the GM trucks would be engineered by the current Dodge truck team instead of Isuzu, or, yes, they’d be consolidated. Integration into GM would be little different from integration into Daimler or Hyundai, except it would be all domestic, and there wouldn’t be the snooty Mercedes attitude helping to kill business and morale.
The only thing that matters to me is that I would like to see Chrysler American again, where it belongs.
Chrysler as we knew it is gone and always will be. The question is - what’s best for customers, workers (including engineers and managers), and North Americans?
That’s a good statement dave, I agree.
Hear Hear!!! Joe….Dave u might be right, how ever in this world anything, even a death Chrsyler can reborn from the Ashes…Phoenix, ring`s you any bell`s.
I forgot this one:
No one of you are talking about this just being a move by DCX to speculate with their stock, and get an extra buck, Thoughts anyone?
I agree with you in regards to your statements in Post 16. Chrysler as we knew it is gone. The question now becomes, what will become of the employees of this once great company?
I will say right now that I would prefer an independent Chrysler, but if that is not the case, I would have no problem with GM buying Chrysler and asorbing it into the huge organization that is GM. It is a risky move on GM’s part, but I think GM will need to do it for protection. It would make me sick to see Chrysler making money for a foreign national like it currently is for Daimler. I’d rather see Chrysler’s talents used to improve an American company - one that has the best chance of surviving throughout the next decades and beyond.
Dave’s Weblog of January 16, 2007 “taking Chrysler public … using a less confusing name, such as American Motors”
Actually let’s look at a complete merger rather than a buyout. As someone has said GM doesn’t really have the bucks for this
acquistion. So make it an employee/GM/Chrysler/?? funded merger. Remember that GM basically started with Billy Durant
(with finacial backing by DuPont) and Buick, then added Oldsmobile, Cadillac, Oakland(Pontiac) & Chevrolet and then Rapid
& Reliance(?) Trucks.
I too shudder at driving a GM, after 38 years of owning & driving only Chrysler products. Some of the duplicating car lines will
probably have to disappear or at least trim the divisions - Cadillac (move upscale),Chrysler/Buick, Pontiac/Dodge, Chevrolet/Saturn,
Jeep & the Truck division.
I would really like to see CG back as an American company. I do however hate the thought that it would be GM. I would rather have an independent buy CG and get back to 100% CG engineering. I would also like to see CG start designing vehicles that have great styling again. Yes we do have the 300, the Charger, Viper, Ram and Jeep Grand Cherokee, Wrangler, Commander that look good. However I truely think the Caliber, Dakota, Durango, Patriot, Compass and new Sebring look like crap… I think that someone could truly turn CG into a great American Company again. I do see CG being sold for way more than $13Billion…. CG has a lot of things going for it. Maybe a group of American investors will purchase CG… I can only hope because if CG get purchased by any other car company I personally feel it will be the complete destuction of CG. Just my 2 cents….
Frankly, I don’t see that any carlines would have to be dropped; just trimmed. Buick or Chrysler might be too close; but then, Buick could be more “staid” and Chrysler more “athletic” in the same basic category, with Caddy on top (pushed up by Buick and Chrysler) and Dodge alongside Pontiac and Chevy. It would take more imagination but if they did what they used to do and had intentional duplication, they could save lots of cash with under-the-hood sharing while maintaining unique identities. You know, like the future LX and E Class, or ML and Grand Cherokee.
If General Massacre were to buy the CG and keep the Chrysler along side the Buick and the Dodge along side the Pontiacs and Chevys all this discussion is moot. Within a few years, possibly very few, GM, including CG, will be gone. One of the reasons the American auto industry is in shambles is the incessant model duplication that has been going on for many years. Why did the Plymouth disappear? Because DCX wanted to get rid of it? Even the head honchos at DCX aren’t dumb enough to dump a viable line. If Plymouth was making money for the father land to syphon off it would still be around. Plymouths doom was sealed in 1960 when Dodge came out with the original Dart. They were more direct competition for the Plymouth than Ford or Chevrolet because they the same car. The Dodge Dart and Plymouth shared the same drivelines, suspensions, bodies, etc. Ford and Chevrolet each had a design philosophy different from Chrysler’s and each other. And their cars looked and drove different, unlike Dart and Plymouth. The fact that Chrysler Corp. didn’t dump Plymouth many years ago is amazing. Sure, it gave the Chrysler dealers additional, and probably needed, sales but most likely hurt them in the long run. Maybe hurt the US auto industry overall. It was the early 60’s when GM and Ford started their model duplication frenzy. Chrysler Corp. was just started it.
Someone like Hyundai (or Renault or Puegeot) would be able to use several Chrysler/Dodge vehicles to extend their product line (you know, like a real merger), some thing that GM can’t do. Everything CG makes is duplication of their current line.
I would personally love to see a group of American investors buy Chrysler but they would have to be very, very patient. And frankly, investors these days want good return on their dollar and they want it NOW! I just don’t see it happening
I worked at Daimler-Benz(Chrysler) just 2 years after the merger–and it was at that time, after speaking to some of the engineers and product planners there that the merger would never work–they treated and acted as if Chrysler was the unwanted child from a mis-matched marriage. The arrogance from some of the Germans I worked with in this regard was nothing short of appalling. (I worked at Werk Sindelfingen, Mercedes’ largest plant just outside of Stuttgart.)
Anyway, I hope someone takes over Chrysler that’s American, and we need a leader like Lee, or Lutz and get things back on track. Even though I worked for Mercedes, I was proud to work for DaimlerChrysler because of Chrysler–not Mercedes.
Have you been reading this column? There’s not that much duplication on an individual model level. Ram trucks, yes; perhaps mid-sized cars. Maybe even the LX. But there’s a lot more to Chrysler than that.
As for DCX getting rid of Plymouth, I’d argue that was misunderstanding of the market, cheapskating, sheer foolishness, not a real business decision. Rationality has not been the lead cause of decisions lately. Or hadn’t you noticed yet another German Engineering ad campaign on its way?
I come from an interesting point of view on this. I grew up in a Chevy/Pontiac family. Took vacations in a Chevy Wagon, learned to drive in Mom’s Camaro and Dad’s Leman’s and Impala. My first car was a Camaro that I still have and love. When I go to work at the local Chrysler, Jeep and Dodge dealer it is in a Ram Pickup, and my wife drops my son off at school in a Jeep Commander. I love all of these cars and don’t think any are better than the others. If it were a possible FORD deal, then I might be upset, but GM is a good company that other than god awful ugly designs, make a good product. I think the only real difference is it took GM too long to get out of the “cookie cutter” crap that was every American automobile in the 1980’s and Chrysler broke out with a vengence. So maybe a merge would be good not only for GM’s ugly factor but for world opinion of America’s ability to make cool cars again. We had it all in the 50’s and 60’s but we gave up near the middle 70’s and have just begun to look back. An independent Chrysler is a dream, but making it American is not far from that. By the way, Can we keep Dr Z?
GM will probably sell off most of Chrysler. Maybe it’s better they do it than Daimler. Basically they want Jeep and the engineering facilities. Personally, I like the Raytheon idea.
Plymouth remained a viable brand right up until the end. Plymouth Breeze had top quality ratings in 2000, right when Daimler was pulling the plug. I thought then, and still do that it was a shame to end production at that point. That quality could have been exploited a great deal more; they had a car with quality to match Honda and Toyota. Plymouth could have been turned into a stong import-fighter division. Sure, it was a “damaged” brand at that point, to steal a phrase from Bob Lutz, but there was no good reason to kill it. I can only speculate how many Plymouth buyers went over to Kia and Hyundai (both of which enjoyed tremendous sales growth after 2000). Kia’s advertising, emphasizing value, stole a page right out of Plymouth’s playbook. DCX missed a great opportunity.
Plymouth could be viable again. It will be essential if Chrysler should become independent. I think it’s part of the reason that Chrysler has struggled. Investors will demand a plan to go forward. Why not plan to expand sales, like the Koreans did, and before the Chinese companies start doing that very thing on our shores? I just read that Chrysler is considering building an 09 “Chrysler Cuda.” Why not build it as the flagship of the new Plymouth brand, to include a new PT on the existing platform, a new PT-based Duster sedan (civic / spectra size), and stretched, PT-based Valiant sedan (Optima size), and a value-oriented Voyager? Maybe give the Hornet to Plymouth as a Mini or Scion-fighter? I suggest the PT frame because quality will remain high. Chrysler can use the factory space left behind by the Aspen and Durango.
Give the new small CUV to Dodge alone. Dodge will be the Toyota-fighter at least in mid sized sedans and SUV’s. Then Chrysler would be free to go after Mercedes (and Lexus), besting them at every level. How’s that for poetic justice? Eventually a new 300 (sedan and coupe) with more curves (a la Chronos), Imperial (S class level of luxury for $40,000 less, WAY better styling than Lexus), an MDX-size CUV with three rows of fold flat seats and a Hemi, a reskinned Sebring that will put the CLK to shame). Advertising would rely on heritage like the 300M ads, and would tout the cars superiority to much more expensive Mercedes cars. I don’t know why Chrysler would want to build a version of GM’s big body on frame SUV at this point, but that’s what they’re talking about.
What about the new press release by Mr. Lasorda? after i red it, i realized that MB and Chrysler are to atached in order to split. if GM is interested in Chrysler they would buy the hole package, not just brands, include factories, and the rights of the technology developed by Chrysler, and MB would end up worst by having to pay royalties to GM cuz now they own the rights of current technology used in MB-Cars.
Call me Crazy, but i think this is just especulation.
Basically, for me it comes down to this. If GM purchases Chrysler, I will no longer be loyal to Chrysler. I do not like GM products. It is just my personal preference. I dislike Ford products also, so that’s out. So, for me that means I will be purchasing a vehicle outside of the “Big 3″, which means outside the states. I never thought I would say that, I just hope I don’t ever have to act on it. I like the direction that Chrysler has been going down on the design and performance side. Nice newer models, improving on older ones. My only complaint is that most Chrysler engines have poor fuel mileage compared to GM. When is it acceptable for an 06 Dodge Ram with the 5.7 Hemi, with MDS to get 13mpg? Anyway, those are my thoughts. And yes, I prefer Daimler over GM, so I say “leave it alone”.
Speculation, true. Perhaps we are jumping at it so readily because any alternative seems better than what we have now.
Must say I concur with everything that Chad said (post #30), except better fuel mileage in GM vs Dodge. A friend stopped by this
afternoon. He has a Ram 1500 Daytona, he says he is averaging 16.1 mpg (converted to US gallon). And he has chipped his Hemi to 405 HP. His wife’s Denali(?)barely gets 9.5 mpg.
I was in the doctor’s office this morning when I noticed a recent issue of “Consumer’s Report” lying on the table. In it they had a comparison of 4 mid sized sedans. Chrysler Sebring, Kia Optima, Pontiac G6, and the Nissan Altima. Of that bunch the Nissan came in first, the Kia was second, the Pontiac was third, and the Chrysler was a very distant fourth. They said the Sebring was very dissapointing. Some of their comments were that the vehicle was very noisey in both 4 and 6 cylinder layouts. Poor panel fit and finish with several large gaps. Hard flat seats contributed to a uncomfortable seating position.
In the front of the same issue they had a first look at Dodge Nitro. They also ripped it apart. Barely capable engine, poor leg room on the driver’s side because of the narrow footwell, cheap interior look with poor fit and finish. About the only things they liked were the exterior styling and the pullout rear floor panel.
These are similar views to what I’ve seen elsewhere from the motoring press about these “latest and greatest” Chrysler products. With such overwhelmingly negative press like this, how is Chrysler ever going to succeed? Who along the lines of development of these models said “that’s acceptable”?
Whoever ends up with the CG has their work cut out for them. It’s going to take several years for them to overhaul this lineup and come up with competitive vehicles and powertrains and overcome this negative image. In the meantime CG is still going to have to offer huge incentives and rebates just to try and move these vehicles.
Any Alternative? i know that Us, The good old boy’s kind dont like any kind of foreing hands, how ever, at least for now, we still have Chrysler engeneering all over, if GM takes over, will use chrysler nameplates on epsylon platforms, GIAK
I say lets draft roger penske he alone could turn chrysler into a dominant co. he’s American and a michigan man. but he has world wide respect, the connections, the money, and most of all patience. he and his team would keep Chrysler focused and fix any quality issues, he would not accept things like its just as good as a honda or toyota, he would demand that chrysler outperform the best toyota and honda GM,FORD and the rest had to offer. i love chrysler and GM would only be trying to buy market share first, then eliminate most of chrysler next. can you really see them letting the viper exist, outperforming the vet? or the 300C outperforming mostly everything GM makes.or even the ram. GM Arrogance wouldn’t allow this. these cars and trucks along with others would be eliminated. please please Roger penske come to our rescue!
America’s troubles today in the auto business is, in my opinion, not due to product overlap. It’s due to the American auto companies getting complacent and taking their customers for granted. They felt they didn’t need to make, the best product… just A product. And for a while they were right. But sooner or later the foreign companies, after years of just gradual normal upgrades, caught up in sales. Why? BECAUSE THEY WERE TRYING!… and we weren’t. It’s not something to get mad about… just a fact. So then the American companies look at the situation and say “Oh no, the imports are beating us.. how could this be?! It must be their BLAND car designs and affordable prices.. lets copy them!” and so they play a game of copy-cat and it turns out, we’re no good at their game. So the American companies realize this and find their advantage. “Lets make Nostalgic cars… that’s all we can do to compete with these imports.” So they go about making cars that resemble cars of the past, and for a while it works, but the interiors are not up to snuff. We still don’t get it. We still don’t get the fact that we have to ability to make better cars with better quality and more eficiency and EMOTION than any import… we just aren’t trying. We’re stuck in company structures still built in a time when complacency was the name of the game. I loved hearing what Lutz had to say about it. He said when he came to GM, the structure of the company was such that the vice president of design was no longer able to veto a design if he didn’t like it. He reported to a Vehicle Line Executive and if the VLE said that design was “good enough,” it was. This is the first thing he changed once he got there, putting design FIRST, and we are just now seeing the fruits of his labor in the beautiful interiors of the Aura, Malibu, etc. Now that GM “gets it”, all it needs is an identity. One which they have lost in all their copying and penny pinching to compete with imports.
Enter Chrysler. Chrysler more than any other company, imo, is at the head of passionate design. But they are very limited in the amount they are allowed to venture out and just create. They want Dodge to be BOLD ‘merican Muscle, but they also need volume sales to stay alive. The Chrysler brand, I’m sure would love to have the identity of the 300 (call it “gangsta” if you will) in which somehow even the PT cruiser fits in (although the Pronto Cruiser fits better). But again, CG needs that “volume” so when it comes time to make a mid-sizer, they stray from the identity of the 300 and make something blander for the masses. Because that’s who they feel they need to please… the masses. So what if all of the sudden, all the volume sales are fulfilled in other means (Chevy, Saturn), soaking up all the bland preferenced people leaving only those who require something with more emotional weight. Then Chrysler could be a gangsta-mobile company, Dodge could be Bold American Muscle, and Jeep (minus the Compass) could again just be… Jeep. With a clearer identity, more consumers will relate with the brands and start entering showrooms just to see that which pulls at their heart.
I personally think that if GM were to buy CG, no brands would be cut, CG’s brands would finally have the freedom to be what they truly want and need to be, and with massive savings due to the economy of scale, be absolutely profitable. GM benefits as well, finally having that extra revenue-umph to push them out of the trough and into profitablilty. An American car company would at last be prosperous and we consumers get the ultimate prize… great products.
Of course historically there HAS been another solution. Plymouth made cars for the masses and Chrysler and Dodge were…Chrysler and Dodge.
… though I agree with you about the penny pinching and lack of customer service, 110%! But the penny pinching has gotten worse since Daimler took over. The original PT interior wasn’t bad at all.
What about the new post at the new´s page? I dont know what to think about the new candidates to own Chrysler, i wouldnt like to see Lou Gerstner turning Chrysler in to an engeneering company and let the Japanese and Chinese brands the only one´s building cars like it did to IBM, inknow it was good for the organization, how ever at the sentimental side, i would hate to see Chrysler nameplates to desapear, and jut know that Chrysler ex guys developed the new Corolla or Civic.
An independent Chrysler is at my wish list any time i do my praing
Yeah, I almost forgot about Plymouth ;p And if Chrysler were to be spun off (yeah right) or bought by equity firms, or somehow made independent, then yes Plymouth would absolutely be necessary. But I see none of those things happening, in fact GM is the only company who hasn’t said their NOT interested. It just so happens that GM is perfectly suited to take on this engagement. God knows Daimler isn’t. They are just too damn stubborn and prideful. I wish is wasn’t that way, but it is. So either Chrysler goes to GM, or it stays with Daimler and has to tread the water on its own with no economies of scale and with bloodsucking parasites attached to their neck. My hope is the prior.
Correct me if I am wrong, but didn’t General Motors help bail Chrysler out some years ago? I remember seeing an article where it was indicated that the final payment to G.M. had been Made. I believe the government had assisted as well.
I recall some mention of Roger Penske wanting to, or commiting to a dealership for smart cars, I believe I had read that here.
While smart isn’t Plymouth, It could spin off into a smaller hybrid/electric, or compact design, Take for instance Jeep, I believe I have an article here about a body style (body kit) For CJ5’s & 7’s that would bolt right up, to the existing frame. If someone where to design a basic frame (Like a kit car), and garner the support of SEMA with a host of after market supplies, SMART could realise a grass roots appeal If the base form is affordable and economical. I have often thought about the problems associated with power cells and recharge rates, Something that could be driven say 100 miles, and you would have to plug it in to your home, or have a diesel or gas motor for assistance!
But then I notice something like a cell phone/power tool charger, and ZIP in no time it recharges, The line of thinking with the charge at home theory, has never captured the interest of the public, most hybrid electric’s has run times ( recharge cycles) that last perhaps 3 years, and then after the basic warranty is up, !!Surprise!!! they must be replaced, EPA surcharges, labor etc what 3-4 K and your hybrid is up and running again.
As I think along the lines of A fast recharge system, I recall My fascination with the Chrysler Turbines, the RPM ranges, The ability to startup when needed, and (The Problem that killed them, running at idle which burned more fuel then running full out) Since these were designed for military use, I believe there are a large # of different fuels that can burned in a turbine!, I think Perhaps to little to late, The even with the research conducted what 20yrs ago, and current technology, That a hybrid with an ultra fast,High rpm rapid recharge turbine engine, about 1/4 the size of the original ( I believe that weighted only 120 lbs) Could spool up to 17,000 rpm for rapid recharge of the power cells
several times whenever needed, since all the patents and protections are existing Chrysler intellectual propeties??? It seems to me That a system like that could fair better then what has been proposed for hybrid powerplants, and the power storage systems could be much lighter then what is currently being used.
Perhaps it’s far fetched, but where there is a will there is a way! I sure would like to see them riding high again on thier own terms, and watching the rest of the industry try to play catch up!
a New Phenix Engien Plant? in the middle of a sale offer?, one of those new’s have to be fake or mistaken.
first thing is that 70% of the so called engineering that Chrysler has is nothing new under the sun. The clutchless gearbox is obsolite as I write this. But on the other hand when your under the thumb of the Diamler Group you can’t do too much, or you make big brother look even dumber. So I wouldn’t get too wild about engineering projects just yet. But there are some pluses and a few minuses in this deal:
* G.M. has not got the credit rating to buy anything let alone start some wild new project. They have 19 billion dollars cash on hand, and believe me the stock holders ain’t gonna let that happen with a junk bond status. But then who really has the money?
** Believe it or not Ford has. Last time I heard the were at 35 billion dollars in
petty cash, and drawing double digit interest on it daily.
** Forget the Japs. They don’t have the time or money either. Honda and Toyota set
warranty cost records last year. And it would destroy an image they are after.
** How about G.E.? They have the cash on hand.
** Then of course there’s companys like Exon Mobile (look for the SEC to stop this)
** A long shot might be someone like General Dynamics.
** Ever think about Catapillar? Yes they got the bucks.
** Maybe Mitsubishi as a long shot, but as I said they may not have the cash on hand.
Now there has been talk about machine operations here. That’s just talk. Both companys pretty much do it in similar fashion. Maybe G.M. is a little more effiecent, but wont go there. Engineering wise G.M. looks to be the real winner here, but they’re not! After spending tons of money tooling up said new drive train parts they are not going to stop. It’s no secret that G.M. is wanting to sell of it’s heavy duty transmission business (4 to 5 billion), and Mercedes is one of the big tire kickers. Should Mercedes buy Allison the Dodge truck would be the real winner, as they are lacking there. Before you ask, Mercedes builds about 80% of the big trucks sold in North America, and about 85% of the class A RV chassis built in N.A. By the way one of the other big names is Catapillar.
So what’s the deal with Mercedes anyway? It’s called Germans still being pissed of about WWII. And if you thing Mercedes dosn’t like us over here wait to you pay a visit to Volkswagon! They still have Hitler’s picture hanging on the wall in there. The Diamler stock holders wanted nothing to do with a U.S. company of anykind from the get go. Even though the REIT on the dollar was much greater in the USA (in the end that’s what counts). So in the end I would not be at all surprised to just see Diamler “spin off” Chrysler. G.M. can’t buy it without going broke. Remember they have but two product lines making the corporate mandated REIT, and one of them is for sale.
gary
Sorry that you have not done any research.
1) The clutchless gearbox is not the AutoStick. It is an automated dual-clutch manual transmission that is not just state of the art, but probably the most advanced transmission in the world.
2) GM has $19 billion cash on hand as you say.
3) Ford has a lot of money because they took out a huge mortgage in order to survive.
4) Japanese have tons of cash. I am shocked you have not seen how much profit Toyota makes. It is simply insane. And as for image, Toyota has purchased before. Still, I would not expect or want Toy or Honda to buy Chrylser. I respect Toyota and Chrysler too much, and I don’t respect Honda enough.
5) Obviously companies with lots of cash could buy chrysler, could they run it? Bill Gates could buy it himself.
6) Mitsu is concentrating on its own issues.
GM has some amazing technology even if you aren’t aware of it.
I somehow doubt Volkswagen has Hitler’s picture showing on their wall.
I Kinda like the idea of GE or their former associate Penske as owners of Chrysler Group
GM and Chrysler together a good stablity ideaology, think of foreign auto makers as theif of North American identication, is it about money? or is it fifty years from now and your children dont even know what General Motors stands for, Next do we do start selling provinces and its heritage,cause we don’t fit corprate idealogies
next motor design , V 6 rotor drive motor , instead of stopping a motor from torguing in the motor mounts, let it spin ,to stage bell housing to transfer the energy, or a magnetic fly wheel
woah! GM and Chrysler? dont think that will work… i grew up in a mopar faimly my dad came from a GM failmy…he hates those things, thats why we have mopars! and mom dosnt like breaking down on the side of the road so she dosnt want anything to do with GM especialy after waiting 2 months to get her Daewoo serviced!(she no longer owns it was replaced with a mopar. Mopars are tough to the frame! my older sister has a ‘98 Neon Sport R/T with 175,000 or more on it… she hot rods it and every thing… and it still runs like it did when she bought it wit 43,000 on it in 03. Why get rid of a good thing with the new “Phenoix” v-6 engines? the chrysler v-6s are durable! 95 dodge gr caravan with 125,000 on the odo is still runing strong! and after my sisters got trought with it its fine! and all i can say about my friends with GM cars is that they hate them! they are junk… and i will never drive them.. and if this were to happen… wich it wont because Cerberus has them… i would buy a use per DAIMLERchrysler Chrysler!
Small Town Boy