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Rumor of the Day: GM may buy Chrysler Group
Take this for what it is, a rumor about which General Motors and DaimlerChrysler have refused to comment. According to a report today in German magazine Manager Magazin, DaimlerChrysler is in talks to sell its Chrysler Group division to GM. The magazine cites sources within DaimlerChrysler as saying that talks are in full swing but at an early stage. Dieter Zietsche, CEO of DaimlerChrysler, refused to comment on the report when asked at this morning's press conference where the company's Recovery and Transformation plan, a.k.a. Project X, was announced.
So neither side is talking about whether such talks exist, which leads one to speculate that there's some truth to these rumors. GM, however, would not seem to be in a position to purchase a rival domestic automaker with numerous competing products considering that it's just beginning to emerge from its own turnaround and restructuring plan. What's more, we can't imagine the complexities GM would encounter trying to absorb Chrysler's union workforce.
We bet DaimlerChrysler and GM are talking about something, but wouldn't put money on the subject being the wholesale purchase of the Chrysler Group.
Thanks to all who tipped on this!
[Source: Yahoo.biz]
Reader Comments (Page 1 of 3)
RamSport47 4:01PM (2/14/2007)
If i'm not mistaken...GM and DCX are in ajoint veture on a Hybrid powertrain...could they have been talking about that?...More likely than a purchase of Chrysler Group by GM
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NoNameDenton 4:03PM (2/14/2007)
Wow, a non-aftermarket Camaro with a Hemi, guess we will have the Big 2 for the USA instead on the Big 3, This would make the market place very interesting
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SSBR 4:03PM (2/14/2007)
Great, 2 train wreaks combining forces.
http://www.rolesor.com
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Jim 4:05PM (2/14/2007)
This would be as silly as Macy's buying Marshall Fields. Why buy a competitor that has similar products, similar customers, and similar problems. It just makes no sense, so it's probably true. GM would be better off with a company that had something to offer that GM doesn't already have, like... Subaru.
Oh, wait.
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Howard Kerr 4:08PM (2/14/2007)
In just the last week I have read/seen several news stories that say the board of DCX are being STRONGLY urged to dump Chrysler. ALL the stories cite the DCX board as being quite concerned about the (recent) downturn in Chrysler's financial health. My feeling is that those folks who want to split apart DCX have been waiting for any excuse to get Daimler back to being a completely German company and have seized on the poor financial health of Ford, GM, and now Chrysler as proof that the American part of DCX is, and most likely will continue to be a drag on company/shareholder value.
I can't imagine WHY GM would want Chrysler, or where they would manage to get the cash, unless DCX does a BMW-Rover like deal. That is, "you can have the company for a token sum of money".
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RamSport47 4:21PM (2/14/2007)
It wasn't too long ago that the then healthy Chrysler arm of DCX was supporting the very weak Mercedes side...no one was clammoring to dump Mercedes
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Ferrara 5:11PM (2/14/2007)
It's going to happen. And its been in the works since July 2006.
The business case is that it will allow GM to make deeper cuts in what they are calling internally a "re-rationalization" of the business, which will allow them to radically cut unprofitable products, divisions and dealers/channels in what is tantamount to the deepest structural change of the auto industry since the 1950's.
The acquisition of the Chrysler Group will allow GM to write off billions of dollars because the purchase price will be priced accordingly. So, in effect, the acquisition allows GM to do its dirty work while cherry-picking the best of GM and Chrysler AND maintaining its claim to being the world's largest automaker AND being seen as the Saviour of the domestic auto business.
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Elliott 4:26PM (2/14/2007)
How are Sears and K-mart doing?
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Michael Karesh 4:29PM (2/14/2007)
I can't see how this makes any sense, either. With the possible exception of the minivans, which aren't in a profitable segment, I can't see what Chrysler would add to GM now that the zetas are on the way.
This would keep Toyota out of the #1 spot for a few more years, though.
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Juan 4:29PM (2/14/2007)
Don't think GM has money to burn on buying Chrysler.
Toyota does though...
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NoNameDenton 4:35PM (2/14/2007)
Honda would not want the baggage that comes with buying Chrysler, I doubt Honda would want to spend the mone when they should be using the money to make Acura a better luxury brand (maybe a rwd and awd cars finally). Toyota does not need the lag on their profits, and Daimler's old partner for engines and platforms Mitsubishi has their own issues (namely shrinking North American sales). Renault-Nissan is having their own issues, since Nissans boost has slowed. VW does not need the extra baggage that would come with Chrysler. That would leave the Chinese or the Korean, and maybe the Indians.
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dakota 4:36PM (2/14/2007)
Won't happen.
Too many conflicting brands, with GM trying to downsize their lineup.
I say VW is going to go for it.
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EnviroBob 4:40PM (2/14/2007)
Maybe Toyota should have bought Chrysler last year, that way they could have added the Pentastar's 2,142,505 units sold to their own sales of 2,542,525 and then GM wouldn't have outsold them by over a million and a half units for 2006.
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Lithous 4:42PM (2/14/2007)
"Toyota does though..."
How many new factories would Toyota build in the U.S. if they knew that each one would go union right away? Probably zippy. And I don't think Toyota is going to "buy into the union", literally.
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NoNameDenton 4:44PM (2/14/2007)
Dakota, VW has its own issues in Europe with labor unions or whatever they call them in Europe, they do not need the same issues with American workers
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rrr 4:47PM (2/14/2007)
#4 "GM would be better off with a company that had something to offer that GM doesn't already have, like... Subaru."
Well GM had a car like Subaru...SAAB. GM was unable to keep that car cool and unique. What makes you think that if GM buys Subaru in 5-6 years Subaru will not have an SUV that looks A LOT like Trail Blazer.
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carlos 4:49PM (2/14/2007)
They should sell SAAB to Mercedes, maybe they'll know what to do with it. Maybe HUMMER too, they can sell it while its still hot.
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pat 4:51PM (2/14/2007)
who would have thought some many people here would be expert in M&A analysis.
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Hondacura 4:56PM (2/14/2007)
We don't have to worry about Toyo buying Chrysler. Toyo is too smart to buy them. GM still doesn't have any cash to burn to buy anyone! Honda will not ever buy another car manufacturer. Chrysler will have to sell off Jeep to surive. They won't sell off Dodge because the Chrysler share almost 100% from design to mechanics. I doubt GM can buy a twinkie at the local pony keg.
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Paul Murray 4:59PM (2/14/2007)
"who would have thought some many people here would be expert in M&A analysis."
Didn't you know, people here are experts on everything.
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