Homewreckin' Shareholders want to split DaimlerChrysler
The "merger" at DaimlerChrysler never really came off as a good idea. We put "merger" in quotation marks because no one ever really bought it as a marriage of equals, but saw it for what it always was: Daimler-Benz taking over Chrysler. Whatever way you spin it, though, it was never a match made in heaven. Lagging sales from Chrysler Group brands are a drain on the parent company's bottom line, and the US lost one of its Big 3 independent domestic carmakers.
Now the company's biggest stockholders are asking that the American half be spun-off as a separate company. Why not sell it off? Apparently, according leading investment experts at least, Chrysler wouldn't find a buyer. In fact, they say, with billions in unfunded pensions and other workers' benefits, DaimlerChyrsler would have to pay someone to take it. Ouch.
The bottom line is that none of the DaimlerChrysler brands have much expertise in the growing small-car market. Nissan/Renault does, though, and after failed talks with GM and Ford, some financial experts have suggested that DCX should ink the deal. That'd make for one very large auto conglomerate, based in the US, Japan, France and Germany. Think they might need a shorter name, though.
[Source: Reuters via Motor Authority]
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Reader Comments (Page 1 of 1)
Frank 10:57AM (12/03/2006)
They should be spun off as independant company. They were not in trouble when they were "merged" with Daimler, they can function as independant again, especially if they can get back some of the executive talent they had in the "old" days (Gale, Castaing, Stallkamp, etc.).
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Gardiner Westbound 12:19PM (12/03/2006)
Holy crap! Chrysler and Renault would really be a merger of equals. They both make sometimes interesting but poor quality cars.
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youth driver 12:32PM (12/03/2006)
Wow Gardiner you took the words right out of my mouth. Maybe then they can start putting hemi's in the sentra.
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Bigbootie 12:37PM (12/03/2006)
Time will show that the purchase of Chrysler by Daimler-Benz was a brilliant move by the German company.
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rem83 1:19PM (12/03/2006)
I'd buy a Dodge branded Clio
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DustinTarditi 2:16PM (12/03/2006)
Old joke:
Do you know how to pronounce "Daimler-Chrysler" in German?
The "Chrysler" is silent!!!
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jamie 2:39PM (12/03/2006)
I'd buy Chrysler without hesitation. GM or Ford included.
Yeah, they all got management and financial issues, but one thing is certain...they can make money! Take GM, for instance. Almost everybody wrote them off, but Rick Wagoner turned that sucker around with just a few deft moves. Ford is following that scenario, so their prospects are just as good.
Chrysler (the silent partner at DC) would do a whole lot better without German interference. Not that the German input hasn't been great because it has. However Chysler was spurting along quite nicely without the Daimler guys.
Chryco can still make big bucks for whoever owns it and if the B of A (who is now saddled with Cap'n Kirk's shares) wants someone to lead that charge then look no further. Give me 90 days and watch the turnaround happen!
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Simone 4:06PM (12/03/2006)
Chrysler was fine before the merger?! What warped reality are you guys living in? Before the merger, Chrysler was always teetering on the edge of bankruptcy, asking for bailouts. They had to axe the Eagle line, AMC line, DSM line, Plymouth line, and Jeep was going to be next if the Germans didn't step in. Admit it, not only were the Germans responsible for saving an American icon and thousands of jobs, but they are also responsible for the most profitable models that led to the revival of RWD platforms. That success has in part spurred other manufacturers to reconsider RWD, like GM's Zeta platform on which the new Camaro will be built. Give credit where it's due, gentlemen. Otherwise, you just sound like a bunch of ignorant cry babies.
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dom 4:03PM (12/03/2006)
No Audi !!!!! I can't believe it !!!!!
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What?! 4:39PM (12/03/2006)
Well, I believe that the Jeep brand will be further trashed when there's a huge flood of models that few (maybe five people) were asking for.
As far as solutions, just make DCX bring back the Jeep Cherokee/2500 by importing it from China - oh wait, that's too expensive, and shareholders won't like that.
Maybe instead of asking Dr. Z, shareholders should tell Dr. Z what to do. Oh, that won't go too well, either.
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Craig Cote 9:41PM (12/05/2006)
Chrysler? That's the company that had to get bailed out with tax payers money, who's executives years ago were convicted of setting back odometers on new vehicles they's used and selling them as never used, who still touts itself as an American company yet is owned by the Germans, loves Mitsubishi, and builds every single "American Muscle Motor Hemi" south of the border in Mexico along with Ram Pickups and every PT Cruiser. Resale value on their vehicles is no where near Toyota or Honda, and if you type in "Chrysler Sucks" on Google-get ready to see totally unacceptable problems experienced by Chrysler/Dodge owners on model after model that this company simply ignors. Consumer Reports findings? OUCH. Leave it to Chrysler to sell Jeep to the Germans!
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Frank 10:49PM (12/03/2006)
#9 Check your history. Chrysler was at the top when Daimler "merged" with it. They were the lowest cost producer IN THE WORLD, thanks to adopting Honda's platform team approach (read the book Comeback, can't remember the author's name). They developed cars for one third of the $ that Ford did (which always seems to spend more than anyone). I'm not saying their factories were the most efficient. That's Toyota's title. Heck Ford's factories were more efficient in the 90's. But Chysler was developing cars so fast and therefore they were not chewing up precious dollars during developement paying engineers and designers to redo things because they didn't coordinate with marketing, etc. from the beginning. This is what they learned from Honda.
If you care to look into it they were winning awards in the 90's left and right - MT car of the year 95, 96, 99 - MT truck of the year 92, 94, 97, Automobile Mag auto of the year 93, 94, C&D top 10's numerous times, awards from JD power, Stategic Vision, 4 Wheeler mag, etc., etc.
They were making huge profits. My neighbor across the street who drove a forklift at the local assembly plant got profit sharing checks of serveral thousand dollars more than once.
They went ffrom alost nowhere to selling over 200,000 cars and trucks in Europe and opened a factory in Austria.
They had joint venture with BMW to develope a small engine for export markets that led to the Mini Coopers engine. Yep it's basically a Chrylser design. If you don't believe me I can give you the link that has the details.
They also had 10 billion in cash to tide them thru the next downturn in sales so they could keep right on developing product to sell when the economy rebounded. After Daimler took over the money disappeared.
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Frank 10:58PM (12/03/2006)
# 11, You can find hate sites about any automaker, that proves NOTHING. You should see the stuff I found on the web about Toyota engine sludge (a problem that Toyota took a loooong time to own up to).
Also I know it's an accepted myth, but the truth is that NO taxpayers money went to "bail out" Chrysler. They were loan guarantees with money loaned from private banks. And they were all paid back - ahead of schedule - with interest. Anymore gripes?
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Bill Maher is an Idiot 2:00AM (12/04/2006)
Well, Mercedes is listed as one of the most unreliable brands in the world, and Chrysler is stuck with its big car/big truck image. At least Mercedes will come out of this with Maybach...oh wait. That's not a good thing.
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Tiago do Vale 3:21AM (12/04/2006)
#14
Why don't you just say it is the ultimate most unreliable brand in the world? :)
It had a few reliability issues, it it still is very far ahead of any american marque, and many european marques.
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dakota 4:44AM (12/04/2006)
"but they are also responsible for the most profitable models that led to the revival of RWD platforms."
That's an incorrect statement. The RWD platform was developed way back when the first LH ever rolled off the assembly line (1993, try checking developments), but with the success of the LH the LX was never needed (ever notice how the LH engine was mounted "correctly"??), so Chrysler did infact have in the works the RWD LX car before the Germans took over. Also the Plymouth line was axed under the Germans, as was the DSM, which if you actually checked your facts, the Stratus Coupe and Sebring Coupe were infact Mitsu clones which their production ended in 2005 long after the 1998 "merger".
Also Jeep was never even considered to be on any type of "chopping block" especially with the sales of the Grand Cherokee?? Please.
"Chrysler? That's the company that had to get bailed out with tax payers money"
Get your facts straight. Those were "loan guarantees" by the government, not one penny of taxpayer money ever went to Chrysler, if the company would have failed then yes. Also Chrysler paid off all the federally backed loans it had received--seven years ahead of schedule with a few hundred million dollar profit for the feds. Try again Junior.
GM imports engines from China and uses Honda motors also. So what are people complaining about where the HEMI is made at? Some Ram trucks are in fact made in Mexico, and others are made in St. Louis, and also in Michigan. GM's Avalanche and Escalade EXT, Yukon XL and Suburbans are made in Mexico. Ford F-Series trucks, along with the Fusion, Milan, and MKZ models come from Mexico also. So if your going to trash automakers based on where they produced, do your homework.
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Howard Kerr 6:50AM (12/04/2006)
IF Chrysler was spun-off from DCX, a merger with Nissan-Renault would be a pretty good thing as each manufacturer has a base in a different part of the world. Chrysler, as has been pointed out, has never been very successful at really small cars so this would be another reason for a new merger.
However, would the resulting company be a bit damaged by Chrysler's previous (not too successful) associations? Tie-ups with Simca-Talbot then with Mitsubishi and finally with Daimler-Benz might make Chrysler look like "damaged goods".
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Foo 8:49PM (12/08/2006)
I have to agree that Chrysler did come back from the dead once, but so what - it survived, it didn't enjoy renowned prosperity.
Thanks to corrupt UAW unions supported by a lazy American workforce we have overpaid front line workers that produce less value for more money than any other car company in the world, and locked into unfunded pensions. If you have an honest talk with anyone in these unions, they all tell you the same story. You can’t fire the slackers, and you can’t promote people for performance over seniority. Anytime you take away the incentive to work harder, you kill your company slowly.
Ford is doing the only thing it can: Cut your losses. Tease these slackers out of a job with a lump sum cost cut and redesign the compensation model that can flex with the industry, and tie incentives to success.
Not only that, they're betting the company on it.
Chrysler would be in the same situation, but thanks to their Daimler counterpart, they can absorb the tough times while riding on Mercedes' profits while Ford and GM wither on the vine into bankruptcy.
What happens to this DaimlerChrysler sell off/spin off thing will be more of a result of what happens to Ford/GM over the next five years.
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Pettyfan43 9:34PM (1/06/2007)
#11, Frank, has the REAL story DEAD on, My Mother worked for Chrysler for 26 years.
I KNOW the real story. Anybody who thinks Chrysler needed saving by a german company that had a severe cash flow problem at the time, has NO CLUE what they are talking about. Their main prize WAS that 10 billion dollar cash surplus. The hourly employees were scheduled to get a profit sharing check before the germans showed up. The employees got screwed out of that!
The germans never intended for the Chrysler side of the company to survive. The Hemi, the LX platform adn the current truck platform were already in the works when the germans showed up.Chrysler was BY FAR the healthiest American automaker there was.
Here is a GOOD example of how the germans work, the plant my Mother worked in was in a joiunt venture with the Daimler engineers in germany (It was a body controller for a Jeep if I remember correctly) If the American plant needed to speak to the german side, the American side had to pay for all expenses incurred, IF the germans needed help from the American side, THE AMERICANS STILL HAD TO FORK OVER The EXPENSE MONEY!!
The germans consider the Chrysler a 2nd class ciitizen, NEVER MIND that the CHRYSLER side is the STRONGEST American manufacturer and makes the lions share of profits for the whole company, which naturally are siphoned off by the germans!
As far as Chrysler's reliability, I am driving my SIXTH Dodge truck because they have ALL been ROCK SOLID reliable since I bought my first one in 1991!
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