• Feb 16th 2007 at 3:55PM
  • 43
Automotive News has filed yet another report that insists DaimlerChrysler is in talks with General Motors about the latter purchasing the Chrysler Group. This time the trade pub claims that sources from Germany, where the rumor originated, and the United States have confirmed that GM is interested in picking up the struggling U.S. division of DCX. The New York Times has already confirmed from inside sources that the two companies are talking, but the topic of conversation is sharing the GMT900 full-size SUV platform.

We've already talked about why GM purchasing the Chrysler Group would be the biggest bone-head move of all time. To recap, the two automakers have many products that compete directly with each other, the Chrysler Group's product portfolio is farther behind GM's with less to be optimistic about in the pipeline, the last thing GM needs is more production capacity in the U.S., and absorbing legacy costs and additional UAW workers would be a nightmare. As a point of fact, automakers talk to each other all the time. It's time media outlets quit screaming "Buy out!" every time Rick Wagoner says hello to someone.

[Source: Automotive News]

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    • 1 Second Ago
      • 8 Years Ago
      ...there is no logical reason to have a full line company at all.

      Posted at 10:23AM on Feb 17th 2007 by StickShift

      I bet that's what they said about Nissan before Renault and Ghosn got a hold of it.
      • 8 Years Ago
      DCX has the power and money to fix the Chrysler group. The problem is Mercedes. While Chrysler is open to help from Mercedes, Mercedes doesn't want anything to do with Chrysler. That is why selling the Chrysler group might be the only choice for DCX.
      • 8 Years Ago
      Damn look at that little dood!
      Robert Van
      • 8 Years Ago
      The germans want to dump chrysler . because they can't steal any more money out of it.and blame it on union Labor.
      • 8 Years Ago
      The staff of AN is infatuated with every dump someone takes at DCX.. Always has been. Annoying.
      • 8 Years Ago
      The speech bubbles in your posts remind me of YouTube sensation Liam A.K.A. Kelly: http://www.betchslap.com/?page_id=38
      David Lee
      • 8 Years Ago
      GM buys Chrysler? Not happening. How short sighted can Daimler get? Chrysler redoes its entire line (trucks included under the skin) and makes decent money for two years, then whole U.S. industry gets sacked by energy costs and tanks big time for a year, and they can't wait to sell. Chumps! Shoulda left us alone in the first place, if this is all they got. GM can't afford a ham sandwhich. Their whole problem (aside from BEING GM, that is) is cashflow. This is supposed to make that better? In what universe? Pay Daimer for Chrysler? As if!
      Forget the sale, bring on the SuperStock wars pt deux; Challenger v. Camaro v. Mustang!
      • 8 Years Ago
      I strongly suspect that this, if it happens, is mostly a preemptive move on GM's part to prevent a Chery or another Chinese company from buying Chrysler and get a foothold in the American market.

      To any Chinese company, Chrysler would be a godsend, despite any legacy/union/overcapacity issues. It gives them three well-known brands, some with a loyal following (Jeep, Dodge Ram) and a nationwide dealership network already in place. Most (non-car buffs) still consider Chrysler 'American' despite the German ownership, and it would probably be the same for the foreseeable future should a Chinese company buy it.

      This would also give Chrysler ready-made access to the huge Chinese market. Build a couple plants in China to build vehicles for their market with current Chrysler designs, and its only a matter of time before they've caught up to GM in China. And of course they will gradually increase imports of Chrysler-branded Chinese-built cars, starting with small cars, and working their way through the lineup and underselling GM in every segment.

      With funding from the Chinese government, the acquisition itself, as well as any losses due to the aforementioned issues would not be a problem, and will probably only be short-term anyways before they start raking in profits.

      This would be GM's nightmare - a well-funded, China-based Chrysler could quickly erode away a huge chunk of GM's market share, much like Toyota did, only faster. By purchasing Chrysler, even if they keep the brands mostly intact, they could delay this by a decade or so. That would give GM time to sort out their own issues not only with the current restructuring but with the merging of the two companies as well. Unless, of course, the Chinese buy Ford. However at that point, Toyota or Honda may step in, to prevent their own market share from being eaten up.
      • 8 Years Ago
      #37 makes an excellent point
      • 8 Years Ago
      "Is Daimler ready to sell Chrysler?" the Detroit Free Press breathlessly asks in today's above-the-fold headline. DaimlerChrysler "has hired JPMorgan as a strategic adviser, people with knowledge of the move said," The New York Times reports. Some German media outlets and Automotive News take it a step further, reporting that General Motors is talking to DaimlerChrysler about buying Chrysler (sure – you could position Dodge between Chevy and Pontiac on the GM hierarchy, place Chrysler between Buick and Cadillac, and have Hummer and Jeep share grille suppliers).

      It’s hooey, of course. I’m going to rely on a person with knowledge to tell you what’s really going on between Chrysler and GM.

      Chrysler is in talks to buy small B-cars, or designs or platforms for the same, from GM’s Daewoo Automotive Technologies. Daewoo is the South Korean affiliate in charge of designing, engineering and building small cars for GM. The Daewoo-designed and built Chevy Aveo could also become a Dodge. Dodge had trotted out a Hornet concept, pictured above, as a potential design for the car.

      True, Chrysler has already signed a deal with China’s Chery for potential production of a small, B-Class world car from the Dodge or Chrysler brand, but GM’s South Korean affiliate looks more reliable and has a proven ability to supply technology to an automaker like DaimlerChrysler. Chery basically produces other companies’ designs.

      Ironically, GM has accused Chery of copying its Chinese-market Chevrolet Spark, which is a version of the Daewoo Matiz. So a deal could indirectly connect Chery to GM’s Daewoo via Chrysler, a case of strange bedfellows. But it won’t get as strange as a GM-Chrysler hookup.

      Chairman Dieter Zetsche said at DaimlerChrysler’s February 14 annual report press conference that the automaker is “looking into further strategic options with partners beyond the business cooperation partners mentioned. In this regard, we do not exclude any option.”

      Sure, Daimler would sell Chrysler for the right price. But who would buy it for the right price? You’re likely to see a GM/Daewoo-designed, Chery-built Dodge before you see a viable buyer for Chrysler.
      • 8 Years Ago
      I think scottr makes a good point about the wisdom of GM at least engaging in a dialogue on this - if only to keep their options open. If, at the end of the day, DCX does put Chrysler up for sale, somebody'll end up with its problems - and its assets, including an established distribution and sales network. The big question for GM, is if, Chrysler in the hands of somebody else could do more damage to GM than it would in GM's hands.

      The timing's not the best for GM but I can see some advantages of a merger - if only to keep Chrysler as a separate entity for a few years and to increasingly share research and engineering along the way. Still, I don't see too many synergies or strategic assets that would be to GM's favour.

      A question could be whether or not GM could use the Chrysler marque and sale/distribution network to address future incursions from the Chinese marques...
      • 8 Years Ago
      the way i look at it, the only way the Chrysler brand could survive to be profitible is if it stops being a full line brand. Chrysler proper could use old MB platforms as #17 said and be sold as a niche brand--near luxury rear drive cars and minivans. dodge and jeep would be combined as the truck/SUV arm as they do that market reasonably well and have a strong following. however, dodge's cars (which, apart from the LX platformers, are entirely forgetable) would be discontinued.

      face it, Chrysler can't seem to get mainstream cars and crossovers right and the market is crowded enough as it is. there is no tolerance for anything less than a hit. niche products such as the 300/Charger/Magnum can't carry a full line company so there is no logical reason to have a full line company at all.
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