GM-Chrysler deal to be quietly announced on election night? (Updated)
“The GM executive told me the big announcement will be during election evening… and that it will be very bad indeed for Chrysler.”
This statement made by a source who wishes to remain anonymous reinforces my earlier opinion. To summarize that:
The deal will involve GM getting Federal aid to acquire and largely shut down Chrysler.
The deal will be announced on November 4 because the news media, and the nation’s attention, will be distracted.
Instead of being front page news, the taxpayer financed destruction of a large automaker with a strong history of patriotism and free services to the United States military will be on page B37.
They are counting on Americans not caring, and they are probably justified.
That is — if the rumors are true. We have no reason to believe they are not.
You can find more details on this scenario in my earlier opinion.
Update: It looks like the GM deal might fall through, as the Treasury said they wouldn’t give GM a loan to merge with Chrysler. That said, keep an ear out on November 4… because several people within Chrysler and GM have now been told to prepare for “the biggest event in company history” on November 5. It is possible that Cerberus will be acquiring a stake in – or all of – General Motors. They have the capital to do it… and it’s a lifetime opportunity for a few very wealthy men.
It is then, as we feared all along. Aided largely, of course, by the failing economy and buyer confidence. That said, the government may have said “no” on this one side that we see, however, Cerberus has made application to become a “holding” bank. Which, if approved, would entitle them to an infusion of free tax payer cash. All they need is a few billion…. maybe 50? Or perhaps less…. 20? Then, you could say that the government did say “no” to the financing of the takeover…. but, then Cerberus could then say that it did it all “in house” so to speak. All around, a disappointment for Chrysler customers, employees, related suppliers, and of course, the inevitable ripple effect that the shut down of plants, dealers, and garages will stun the nation. Except, it will be cleverly politically hidden by the election coverage. How failed IS our government?
Amen.
Joining with Nissan/Renault is Chrysler’s and the auto enthusiast’s best option. It will be bad for Chrysler and GM to merge as direct competitors. Not to mention all the jobs lost. They have nothing historically in common. And yes, I know about AM General and AMC.
Removing competition will not promote the improvement of uniquely “American” vehicles. It will dilute each company’s brands. For instance, the Challenger and Camaro will likely evolve into clones. Chevy LS V8’s (if any) will be used across the board from Chargers to Pontiacs. Mopar will cease to exist.
Chrysler would be far better aligned with Nissan and Renault. Chrysler has developed promising joint projects with Nissan and has a history with Renault via AMC/Eagle. With Nissan/Renault specializing in volume and smaller vehicles; Chrysler can reclaim its inspired designs and improve on the traditional American vehicle, fuel efficient Hemis and all. This could also help with marketing and sales internationally such as Asia and Europe.
The news that has been happening the past week has me extremely upset and angry with cerberus and general motors.Chrysler would be better off if they could remain independent. Let gm fall themselves and let Chrysler live. I can’t imagine what it would be without Chrysler and it has me half sick worrying about it. If cerberus goes through with this merger then I guess they never were concerned with anything but filling their own pockets with cash and not anything else. Maybe if we could get enough people to donate a few dollars each to Chrysler then they could become independent from Cerberus.Either way, I am praying that Chrysler will survive and continue building great cars for myself and my children.
I’m with you on that one Magnum. I’d donate a few bucks, which isn’t much, but if you add that to the many other die hard Mopar fans, then it could be enough.
Cerberus simply picked the wrong time to buy an automaker. The uncertainty in the economy, and erratic gas prices, really hit Cerberus hard. Additionally, Chrysler’s lack of fuel efficient vehicles did not help their bottom line. Both GM and Ford had more products that buyers could turn to when seeking a more efficient vehicle. Chrysler had the Caliber, the PT Cruiser, and the 4-cylinder Sebring and Avenger. Otherwise, Chrysler was saddled with inefficient vehicles (Durango, LX sedans, Jeeps, Rams, Minivans, Journey crossover, etc.) as well as niche vehicles like the Viper, Crossfire, and the Challenger. I know people that work for Chrysler, and bleed Mopar blood, that don’t like the current Chrysler products at all. That is very telling.
If GM buying Chrysler allows one of the Big 3 to remain in business, I am all for it. GM, Chrysler, and Ford are all in a bad position right now. While I hate to see tens of thousands of people potentially lose their jobs, it would be far more disastrous for the United States economy for BOTH GM and Chrysler to go out of business. GM and Chrysler are my preferred automakers, so I would like to see both survive. The reality is, that may not be possible.
If the rumors are true, and GM somehow finds a way to finance a deal for Chrysler, I would expect only a smattering of Chrysler vehicles to ultimately survive the merger. Look for Jeep to remain as a brand. Chrysler and Dodge will ultimately disappear over the next few years, with only the Chrysler designed minivans possibly remaining and being rebranded as GM products. I would also expect to see GM drop the hatchet on a few of their brands (Pontiac, GMC, and Saturn) as well as sell off Hummer and Saab.
GM and Chrysler each need billions of dollars to survive. If you had 1,000,000 people willing to donate money, each person would need to donate $5,000.00 just to raise $5B. Trust me, $5B is a drop in the bucket of what they need to survive. I am not willing to give ANY company $5,000.00 of my hard earned money. After all, they would not do the same for me. I already gave Chrysler $30,000 back in 2003 when I bought a Durango. I also gave GM $24,000 2 years ago when I traded the Durango for an Impala. I support them by purchasing their products. It is not the responsibility of the consumer to both buy their products AND donate to their bail-out when they fall on hard times (although the Government seems to think differently these days.)
Ask yourself this question. Would you rather see a United States auto industry where your only choices are Honda/Toyota/Hyundai/KIA/Suzuki/BMW/Mercedes/Lexus/Infiniti/Subaru/Mazda/Nissan? Or would you still at least like to have the option of purchasing a GM or Ford (and hopefully a Chrysler in some form or another)? In order to still have a domestic option, something needs to give.
I dont think they should merge because i have bought chryslersince i had my first car and still do my dad always bought dodge i own 22 dodge caravans for my company and they are the best some of them have 200,000 k and are 10 yrs old and run like new i also have a 2009 challanger sxt and a 2008 chrysler town and country. And i have my fathers 1982 new yorker and it runs like new if GM bought them it would be the death of chrysler because dodge is GMs strongest compentiton with its new challanger and new ram that is far superior in design and mielage to there sierra so if they buy chrysler and slowly get rid of it there only comp will be ford. So if they by dodge and get rid of it slowly i dont know wht to by. i dont want my son to be driving a FORD or a domestic car
Over the last 16 yrs since the debut of the LH platform and now the LX, Chrysler has for the most part been very profitable and with the recent downturn in the auto sector Chrysler’s losses are nowhere near the billions upon billions upon billions lost by Ford and GM. In fact with the 11 billion secured funds they will have enough to take them to the launch of the next 300C, Charger, Grand Cherokee, etc etc. Chrysler’s been down this road before and hasn’t used up it’s nine lives . In my eyes both Ford and Chrysler will survive but GM will not without considerable downsizing and you know that won’t happen until they acknowledge the fact they’re not #1 anymore. All the taxpayers money in the world can’t help them until they change their oldschool management ways. So why put over 100,000 people working for Chrysler and their suppliers out of work not to mention the loss of some very popular brands, just to eliminate the competition?
If you believe both GM and Chrysler will fail and they should merge to cut the losses, you’re obviously working for GM, Cerberus, or you’re a fool. How many past or current politicians are involved with Cerberus? They seem to be well connected.
The truely sad part in all this is it is almost irrelavent what happens next week. The public perseption of Chrysler is it is a flounding duck waiting to be put out of its misery. It may not be able to survive even given a partnership with Renault & Nissan. There was mood of optomism when Cerberus took over, not sure that could happen again given the events of the last month or so.
Ahhhh,this truly makes me sick.I guess ,NO I know I will never buy another new car if Chrysler does not exist,no overrated imports no gm no fords ever!!!and I will never buy a Dodge if it is only a name slapped on a gm product eg.chevy silverado with a Dodge logo on it…This is truly like a death in the family to some extent being a true car guy and especially a Mopar guy.It’s like a slap in the face,stab in the back,finally we have rear drive Hemi powered 400+ horse powered cars especially a 2 door that an average working Joe can buy a.k.a = Challenger,also a good looking Charger,300 and good really looking,award winning trucks and now we will have what, NOTHING..if gm is really that stupid to think die hard Mopar fans are going to buy a gm if Chrysler does not exist,dont they think we would of bought a stupid gm instead of our Mopars already..they know where they can go…I really hope there is a special place in Hell for the people at dailmer,gm,cerberus if the kill off Chrysler..a real special place for them….
Let’s not jump the gun here. Even if GM does acquire Chrysler, they’re still pretty likely to keep the Dodge trucks going – and maybe even drop their own designs! More likely they’d merge the engineering groups together and jointly engineer for the future, while producing separate vehicles in the present.
it will be the biggest injustice in the world if the chysler hemis are put out to pasture….gm has nothin to compete with the hemi nor has ford or anyone else..
DaveAdmin is right, folks, let’s not jump off the cliff yet. Mergers aren’t allowed if it’s the total destruction of the purchased. GM doesn’t see Chrysler as a competitor to vaporize, as if that would suddenly fix their cash-flow problems. I believe they saw a Chrysler merger as a “too big to fail” opportunity to grab our tax dollars to keep themselves afloat (and get the Jeep/Minivan/Truck/Hemi products as a bonus). Their gamble lost, so they have another trick up their sleeves, though it isn’t the annihilation of Chrysler. Fed says they might speed up the $25B they were going to give them for alt-fuel vehicles (so they can blow it on a merger. ).
How come it’s only the American car companies that are on the brink?
Dave, I know you mean well, but I share the sentiments expressed by Dexter. GM has been engineering TRASH for decades. I used to be a Fleet Manager for one of the largest companies in the US. It was the policy of the company to purchase from Chrysler, Ford and GM in fairly equal numbers because it was an American company. I can tell you from personal experience and statistical facts – GM builds TRASH. Ford is a close second and I only bought those two brands because I was forced by policy. I bought Chrysler in the largest percentage I could get away with and they always cost much less to maintain than either of the other two brands.
I will also recall for you one of the worst examples of corporate criminal behavior in the past 50 years: General Motors KNEW their pickup trucks posed a danger of exploding if hit broadside. Their engineering studies PRIOR to product release showed they were aware of the potential for fire, grave injury or death to occupants. They did a study and determined the “fix” would be a $20.00 rubber bladder inserted in to the gas tanks. They chose NOT to include the “fix” in the delivered trucks, preferring to “accept” the potential for injury or fatality. This one act by their corporate leadership should be enough to dissuade anyone from ever buying one of their products. Over 500 people died in fires of GM pickups of that generation. <<< Horrific and unconscionable given the facts.
I do not share your optimistic view of how many of the Chrysler products will be continued. I do not believe the long running feud between GM and Chrysler will result in anything but a total evisceration Chrysler. It is as Dexter said, “…like a death in the family.”.