Interesting theory: Daimler decided Dodge death
This was a comment from “Patfromigh” which I found interesting enough to make into its own entry. Keep in mind, I did NOT write it and am not necessarily saying I believe it. But it IS interesting.
Was Cerberus just a middleman to get what Daimler really wanted in the first place?
Remember the Valentines Day Massacre? GM wanted Chrysler then. Cerberus had completed the purchase of half of GMAC. So they were in contact with GM also.
If Daimler simply sold Chrysler to GM it risked a public outcry. The pundits who praised Daimler for “saving” Chrysler a decade ago now acknowledge that Chrysler was bled to death by Mercedes’ thievery. Unfortunately it is mentioned in their eulogies for the American auto industry and Chrysler in particular.
If we look at the activities under Daimler’s stewardship of Chrysler we find evidence for a coverup. Shortly after Mitsubishi was kicked to the side of the road, serious small car development was stopped. Talks were started with Chery and other Chinese manufactures. Jeep engineering was turned into a front man for the Mercedes SUV operations in Alabama. The resulting Jeep and Dodge products, the Grand Cherokee, Liberty and Nitro started tanking in the marketplace before fuel prices took off like a rocket. Dodge trucks became more of a consumer toy in the showrooms while Daimler directed the engineering resources into soon to be gone Sterling.
Somewhere in all this has to be the realization that Plymouth customers were not coming back. My guess is that sometime in 2006 with the Dollar’s slide the celebrated LX sedans started getting pricey to build. The restyled Rams lost some of their edge and the styling on other vehicles exterior and interior was careless. No real money was put into updating the PT Cruiser. The Neon went away and the much loved midsized cars were going away. The platform which was used in the replacement for all these products was a hack job. Final development was again left to the customer.
In 2006, anyone who was paying attention could see the shift in the market. SUV sales had peaked. Truck sales looked OK, but crossover sales masked the consumer shift toward smaller vehicles.
Here comes General Motors. They will help with the disposal of the body. A dead Chrysler will put fear in the ranks of the UAW. The watchdogs at the Justice Department and SEC were neutered by the current regime in Washington, but the union would raise hell. The media would amplify any hell the UAW elevated.
When the odd bidding process began and Cerberus “won” [a buyout offer from Kerkorian involving employee ownership was not even considered], immediately there were promises: “we won’t strip and flip Chrysler” and “we are in it for the long run.” Now the body is beginning to smell. GM was willing to bury it before. The guilty parties apparently didn’t see the financial collapse coming [though Chrysler's own economists did]. The party insiders working for Cerberus certainly didn’t see an overnight shift in voter concerns from defense to the economy. GM is being blackmailed to finish the dirty deed before the new sheriff arrives in town. It was supposed to be quick and easy. There is collusion and a conspiracy to cover it up.
This has got to be true because everyone could see the shift to small cars and everything else, yet Chrysler did the opposite of the norm. There has been someone pulling their strings since Daimler took over and it is sad how they did this. I am glad that President Bush said no to the Merger and hopefully McCain or Obama will too. It truly will be better if Chrysler files for bankruptcy and asks the government for a bailout then to let some other competitor tear them apart and sap all their resources. If the government had any sense, then they would put a $10,000 tarrif on any car that wasn’t manufactured by UAW workers to level the playing field. Every other country limits their imports and places tarrifs on them. Japan only allows 2% of their cars to be imported. Our government is so corrupt and in bed with all the CEO’s that it just makes me sick. Look at former Vice President Quayle who is part of Cerberus. What a coincidence. I bet he doesn’t drive a Chrysler product. How long will the American public put up with this corruption that destroys so many hard working individuals lives?
UAW workers only? That would backfire badly………….many of our Detroit Three cars/trucks are built in either Canada or Mexico.
I would have less problem with a modest tariff of maybe 10% on vehicles built overseas be they D-3, Asian or European.
Truth is stranger than fiction and anything, really, is possible. This makes so much sense and the corruption among all these varied board members is becoming more obvious with each passing day. In this context the hiring of Bob “Laughing Boy” Nardelli was perfect…except that Dan Quayle is supposed to be the village idiot.
It will be very interesting to see if this theory turns out to be what really did…and DOES happen. If this level of conspiracy and corruption does turn out to be true?…we all are doomed. Greed truly will prove to be the end of civilization.
This is too much of a conspiracy theory for me, but it is some entertaining reading. Remember, Daimler paid $37 billion for Chrysler. I doubt that Daimler purchased Chrysler with aim of putting elimating the group. Daimler was simply incompetent when it came to managing a low margin, high volume manufacturer. Daimler gave away the first 80% and has written off the last 20%.
This turned out poorly for both Daimler and Chrysler.
GM, Standard Oil, and Goodyear formed National City Lines for the purpose of purchasing and dismantling streetcar lines. That ultimately forced the purchase of busses or private automobiles, either of which was acceptable to the founders. By the time it was discovered the founders’ goals were effectively on their way to fruition. Whether streetcars or another manufacturer, both have been competitors to GM.
I for one never believed Dan Quayle was a fool; just a poorly educated man whose family wealth made it unnecessary for him to be any more than he was. Personally I found it hard to believe he was one step away from the presidency.
” Remember, Daimler paid $37 billion for Chrysler. I doubt that Daimler purchased Chrysler with aim of putting elimating the group.”
I wonder how much benefit Daimler got. First, of course, they didn’t REALLY pay anything. Second, they got cash - estimates range between $12 billion (reasonable) and $20 billion (probably rather high). Third, they got all sorts of patents and such which were of great use - they immediately started to realize cost savings on their own production lines (that’s documented from 1999-2000 or so, after which it became unfashionable). Fourth, I personally find it hard to believe that Chrysler’s massive profits disappeared suddenly for no real reason - and German accounting standards alleged;y make it easier to “hide” things.
Anyhow… I paid $1,200 for a computer once. After seven years, it wasn’t worth anything…
I do not believe Daimler spent 37 Billion (or whatever they actually ended up spending) just to kill Chrysler off. I think they wanted Dodge Trucks and Jeep along with some of their technologies. In addition, Daimler had visions of making Chrysler an American Mercedes. Unfortunately, they were in all probability ten years too late as the gilding had long left the quality tarnished Mercedes lily.
Daimler ended up using Chrysler as a dumping ground for outdated technologies and bleeding it out. Technologies, by the way, for which they extracted payments far beyond their value to any other manufacturer. This could only have happened with a subordinate over whom they had total control. And, yes, the sale to Cerberus could likely have been a ploy to shift the blame for the near obliteration (at the time, now virtually total) of the once proud automotive force they so severely violated.
Below is a quote from the International Business page of the Economic Times’ web site regarding the current GM/Chrysler “merger”. This story was posed this evening..
“Much of the pressure to cut a deal seems to be coming from banks which stand to lose billions should Cerberus fail to meet its obligations.
J P Morgan and Citibank were part of a consortium which advanced Cerberus more than seven billion dollars to purchase Chrysler from Daimler AG in August 2007, just before financial markets started to sputter from the first tremors of the housing and credit crisis and demand for automobiles fell sharply.
Additionally, pressure comes from GM’s financial arm, GMAC, which will have to raise an additional one billion dollars to cover bonds that will mature in January. Cerberus owns a controlling stake in GMAC.
Several analysts and executives from other automakers have expressed skepticism about whether a GM-Chrysler merger would deliver any kind of benefits.”
Pretty well says it all. There is no interest on the part of the financial parties involved here to assist Chrysler, GM,or the American automobile industry, its workers, suppliers or dealers. No one, per the last paragraph, who is not directly vested in this debacle, feels it will help anyone other than Cerberus and its bankers.
For the first time in years, I can be proud of something the Bush administration did when it declined to be a part of this proposed debauchery on the citizens of the Untied States. I can only pray that whoever wins on Tuesday will recognize this gambit to be an irresponsible act to line the pockets of very people that both candidates blame for our current economic quagmire.
I think a buyout by the auto workers, goverment, and public would be the best thing.
They should bring the Neon back online, and eliminate the problems with quality.
The problem is that the boat has already left the dock, and there will be no quick fix for chrysler unless they have a product everyone would want? I don’t see that happening.
Chrysler needs to build quality, reasonable price, and not expect miracles. I would like to buy more chrysler products, but won’t if they aren’t going to be in business for very long.
That in and of itself is going to hurt chrysler.
I don’t care for chrysler being bought by another company, stripped, and thrown out for a quick buck. However I can’t say I want to invest my hard earned money unless the company is going to be in business.
I knew something was wrong when they offered a lifetime warranty on their drivetrain.
Usually when it sounds too good to be true there is a problem.
I’ve owned many chryslers, never had any problems with engines, transmissions, except for the occasional $200 buy, with a bad headgasket, or 250,000 mile transmission never had the oil changed.
Once Chrysler has sound management, I think they can get through this, however I don’t see anyone on the horizon that has chrysler’s interest at heart, its all about the buck.
Get rid of Cerebus, Tell GM to stick it, let the Engineers do their job, and the employees build the best cars in the business at a reasonable price. Keep the Powertrain warranty since they have it implemented, and have someone who loves the company run it.
This is my chrysler, 74 New Yorker, 68 GTX, 95 Neon, 89 Dynasty, 96 Intrepid, several 88, 89, 90, 91 Mini-vans, 74 Dodge pickup, and 95 stratus. The 74 New Yorker, 95 Neon, 89 Dynasty still run, and the 68 is in resto mode. All good vehicles. Long Live Chrysler!
Well said 68 Plymouth. Let someone run the company who has a passion for it..get rid of Cerebus (Nardelli) How about Iacocca? This whole thing makes me sick, my whole family works at the transmission plant. Greed is the name of the game. Cerebus should have know they would have to put some money in it. I thought they had deep pockets, why did they take a loan?
Let’s just remember two things:
1) NOTHING official has been announced. For all we know, it will be the “Cerberus buys GM” scenario.
2) This is speculation — a theory — there’s a reason it’s not on the news page!
Dan Quayle, it might be said, was the Spiro Agnew of his time.
You may remember that Nixon’s re-election team in ‘72 wanted to dump Agnew. Nixon didn’t really care either way, but it is said that he told H.R. Haldeman, if Agnew was around, “No assassin in his right mind would kill me.”
I can’t help but think Bush 41 was thinking along the same lines …
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Much as I hate to say it, Chrysler is dead. Done for. Finished. Between the machinations of Daimler and Cerberus, all the way back to Bob Eaton and Jurgen Schrempp, it’s all over but the funeral.
I don’t like the rumors I’ve read and heard about this so-called “merger,” but I am afraid we may as well hook up to the probability that it will happen in some form or fashion. Hopefully some good will come of it (survival of the Ram, minivans, and Jeep), but I’m not encouraged.
None of this surprises me one bit. Chrysler has been in limp home mode for a long time.
It all started way back in 1975. Under the leadership of Lynn A. Townsend, Chrysler corp had sold off and closed a lot of outdated plants and such to cut costs. Townsend was a firm beliver in the big car big engine american car. He failed to notice that gas shortages and the price of gas had left these big old American icons, 300s, new Yorkers, and furys dead on the dealership lot. They made more then they could give away.
Under pressure from the board Townsend stepped down and gave it up to his second in command John Riccardo. Riccardo also had the big car mentality with a big engine gulping away at 8 mpg on the highway. He kept insisting the big car market would rebound. It never did recover. Chrysler, Dodge, and Plymouth were making cars that dealers could not sell. Then in the late 77′, 78′ recalls and poor construction hit the Chrysler brand hard. This was the end of the mighty 440 engine and the 400. The ever funny looking slant 6 and 318/360 engines would power ever larger and heavier cars. Resulting in even worse fuel milage. By the winter of 1978 Chrysler corp lots were full of unpopular and undesirable cars and trucks. This made matters worse as new for 1979 models hit the lots. Which were carry overs of the 1977 thru 78 models. At one point in 78 Chrysler was paying a million dollars a day to store the cars, that the factories kept churning out.
Chrysler was the third largest car company in the world, the storage cost combined with raising labor costs and undersiable models started to take its toll on the company. By the end 1979 Chrysler was faced with filing for bankruptcy. There was no way out now. The money was not there and domestic sales were down heavly. Around this time Chrysler board of Directors voted to bring in Fired Ford VP Lee Iaccoca to save the company. And many wanted to see Chrysler go away, mostly the GM and Ford folks as they know they would get the customers into there dealers.
Thru goverment backed loans, Lee working for a dollar a year, they pulled it off and returned Chrysler to being profitable again. Gone were the big cars, in with the new future style front wheel drive platforms, the mini vans, k-cars, more user friendly lite trucks.
Well fast forward to 1995, Lee is retiring and handing over his beloved car company to a close firend, Robert James Eaton. Robert was a very clever man. He knew the fun years at Chrysler was winding down as the new savior models, some entering there decade cycle was old and out dated. In his mind Chrysler corp would not make it thru another down turn like the late 70’s. It had to be sold to survive. He was saying this from day one as CEO, he spent the next three years secertly looking for a buyer. Then he was approached by a friend who was in good standing with Diamer AG. After several meetings with them, without the board knowing he was meting them. Robert did what he was best at, talking his way out of trouble and throwing dollar signs at the board of directors. The board took his proposal hook line and sinker.
Chrysler corp had roughly 57 billion dollars stashed away for a rainy day. Promises were made to the Chrysler corp board that most if not all would keep there jobs with this new Diamler Chrysler corp merger. Chrysler, thinking it was the right thing lobbied Congress hard to approve the merger as did Diamler, with its merger of eguals speeches. For the amount of 37 billion dollars Diamler picked up Chrysler and became DiamlerChrysler ag. Chrysler investors were left outside in the rain. There stockin Chrysler Corp now worthless and given a fraction of the new DiamlerChrysler ag stock. Which on it’s first day of trading started at 1.24 a share, Diamler Ag sharholders had there pockets lined from radeing Chrysler Corp.
It was problems from the start, Diamler quickly learned they knew nothing about runing a high paced, high volume American car company. What worked for Mercedes did not work for the old Chrysler Corp. In there minds Americans wanted less for more, they missed the parade on the first new model. And every other model they churned out. There answer was cheap plastic parts everywhere. They did it witht he new rams, 300s and charger. It was across the board. They looked good were selling fast, however cheapness finally ran off price savy cunsumers. And sells lagged, and it started to pull down Mercedes with it.
It was time to cut Chrysler loose. They had raided the patent office on several Chrysler corp patents, such as the HEMI name and R/T. And to this day they still recieve royalities off the name being used. They raided the Walter P. Chrysler museum for ideas as well. They thought since it sold good in the 60’s and 70’s it would sell good today. Some did and some did not, myself a lot of the car model names they dug up from the grave should have been left there. I like the new Challenger, but it must have been a slap in the face for the team to rehash an old car. Or as i say, ” Steal a fresh ideal”.
But Ford and GM both want to see Chrysler, in what ever form, go away for good. GM would do away witht he Ram pickup, the Charger and 300 would likely be left in place as it feels a mid car size void. The Sebring would be left alone and the Jeep brand would also be left alone. ALL others would fall under the Axe. John Snow and Quale wanted Chrysler for bargining for GMAC, a dead vision that they see as alive and well. So what would become of CHrysler Fininical? It would be renamed under there GMAC.
I have been inside of Chrysler for a long time and know the people i have talked about in this comment section. Chrysler needs to be Chrysler Corp again. I personally think the Goverment should purchase it from Cerebus. Not to long ago they took a bunch of bankrupt north eastern railroad companines and made them into CONRAIL Corp. Consolidated rail corp went from 1976 to 1999 under federal protection and financing. It was split up and sold in 99 between rivals North Folfk Southern Corp and CSX Corp. But Conrail still lives today, though in a much smaller form, and with its selling the Goverment made it crystal clear to the sellers, we will take it back if you think about messing it up again.
I agree with 68 Plymouth, let somebody who loves the company run it.
My wife works for HD, and when Nardelli left there, she said the employees were jubulant about his departure. I did’nt know much about this guy until my wife told me how he almost destroyed HD. Next thing I know, (and what a heart beat/skip it was), I am reading Cerberus has hired this guy as CEO of Chrysler! It was then I asked myself, (A.) Either they are hiring this guy as a bigwig favor to somebody and actually using him just as a figurehead and not actually letting him pull and strings, or (B.) man, are we in big trouble. I mean seriously, lets think about it here? This guy can’t even run a home improvement chain, and he knows nothing about the automotive industry. Do you think Lee would hire this man? This is really when the fear set in, and man, oh, man, I knew it was comming.
I would absolutely hate to see this great company treated as garbage by those money grubbing SOB’s.
I really do now see that it was all a ploy for Cerberus to gain leverage to obtain GMAC in whole.
Chrysler has built IMO, the best vehicles you can get out there. Try to match the engineering with Ford or GM. Anybody can see, and it always has been, that they only wait for Chrysler to release products, only to try and scam a copy for themselves. Its so obvious it sickening sometimes. My wife can even spot the clones now. Yet Chrysler are the ones in trouble here? How does anybody think the Japanese figured out how to make it work in the first place? Where did they get the technology? You guessed it. From a company such as Chrysler. There should be tariffs in place for foreign sales. We have to protect our/your economy first. Feed your family/city/state/country first. Its simple. The Japenese are doing it. I think the government should help Chrysler. Its their fault this is playing out like it is, they were told and lobbied many times over many years, “They did’nt listen”.
I know there is alot of hype right now about this, but I hope Chrysler pulls out of it unscathed,
and in its own entity.
I too, believe a tax should be put on all foreign items that come into this country. At least 20% or 25%. I have requested this of my local officials here in Tennessee and of Federal.. Call it an import tax or an unemployment tax. I also feel if you are paid by the government, state or federal you should be required to buy US made cars or other big ticket items. I do not want my tax dollars to be spread around the world. People do not relize WAR is coming and beside putting our own people out of work… let me ask you…. HOW MANY steel companies do we still have running… AGAIN WAR IS COMING… how long do you think it will take to get these factories up and running and the people retrained…. remember all these other countries factories are going full blast now… we are sealing our own fate…. “DEMISE & Death of America”
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