What’s missing from the GM-Chrysler coverage
I remember when the analysts desperately wanted Apple to die… because they’d been predicting it so long. You couldn’t open up a mainstream mag or paper without seeing the weekly or monthly “Apple to disappear” or “Apple to merge” or “Apple to be bought by ___ and disbanded” article not unlike the current “GM will buy Chrysler to eliminate a competitor” nonsense. (Incidentally, despite Apple’s insanely large cash hoard, which I believe would buy both Chrysler and GM, I’ve already read two recent speculative articles that Apple will die because of the bad economic times.)
No article I have seen mentions the CTC - except those who assume it will be shut down. They don’t have a clue. (They also don’t have Bob Sheaves and others to give them a clue, apparently.)
No article I have seen suggests that maybe, because the Dodge trucks are clearly superior (especially in Class 3-5), that GM might shift over to Dodge’s designs. Only one mentioned the Dodge trucks in any way other than “to be canned” at all, and that was to point out the bad timing of their launch. Ford’s big, trucklike Flex, Toyota’s Tundra (with one factory already being converted to other uses), and Ford’s upcoming F-series were apparently examples of good timing.
No article I’ve seen mentions the Hemi except disparagingly, as in “dummies make V8s when people don’t want them any more.” (Four years ago.) Never mind that trucks still need V8s and the Hemi is best in class, especially in variable cam form.
No article I’ve seen mentions the Phoenix engines or the dual-clutch transmission technology. The latter, to be fair, appears to be dead at the moment, as Chrysler chose to cancel their launch by picking a fight with Getrag and abruptly canceling all talks.
No article I’ve seen mentions the possibility that maybe GM would keep the Dodge and Jeep brands alive, and drop Pontiac and/or Buick. I really don’t think the Chinese will care if Buick disappears from the United States, honestly. Nor do Americans still seem to think of Pontiac as the sporty brand, despite the G8, which could live on as the Dodge Charger. Or not.
To be fair I have not yet seen coverage from Fortune, whose main auto guy is a real thinker. Pete DeLorenzo is very bright but also very angry and that, I think, colors his thinking to the point where he can’t imagine any scenario other than Cerberus trying to back out as quickly as possible. (And to be fair to Pete, I suggested the “Cerberus just wants all of GMAC because they have the political connections to get all its lousy loans converted into government-backed assets, at no cost and with no conditions” scenario last week. I was shot down because the articles said that GM/Chrysler negotiations had been dropped due to bad economic times. Apparently, though, the latter rumor was untrue; they’re pushing to have it all done before the next election. I wonder if that’s so GMAC can get bailed out before the new president takes over in January; the public won’t associate McCain or Obama with Bush’s administration’s actions.)
DeLorenzo, incidentally, implied that GM itself might have to be taken over. This theme was also taken up by a friend within the industry, who is very well connected. He suggested, as noted in a prior weblog entry, that
The fact that the news writers - or armchair speculators, your choice - have not brought any of these things up greatly diminishes my respect for them. It should also make you think twice the next time you see a rumor printed as fact, a bunch of denigrating comments thrown in for no journalistic reason, or a quick sarcastic blow-off closing line from a popular weblog. The truth is out there, but as the Pew Foundation noted, you won’t get it if you stick to one media source - no matter what that source is. Like scientists, informed citizens need a variety of opinions and perspectives to triangulate on reality.
So don’t assume GM will swallow Chrysler, dump Dodge, and then disappear itself. Even if it’s pitched as GM taking over Chrysler (so they can keep some executives as figureheads, or so they can more easily shut down Chrysler factories and vehicles and the Chrysler brand itself — which might be the least valuable brand in the entire GM and Chrysler franchise, given how much it has been associated with bailouts, Daimler, and takeovers), it might not be that way. Cerberus owns Chrysler and it may soon control a large enough chunk of GM to call the shots, even as its spokesmen profess helplessness - or, as they prefer to do, remain silent, and allow pundits to cover the wrong game.