Magna confirms interest in Chrysler, visits Auburn Hills
The ups and downs of the rumored Chrysler sale are a better soap opera than NASCAR. Now, Magna International, one of the reported suitors, has confirmed that the supplier is interested in exploring the purchase of the Chrysler group and has recently met with officials at the automaker. The main reason for the small fish eating the big fish would be mutual preservation. By propping up Chrysler, Magna keeps one of their large customers humming, and the continuation of contracts will keep Magna employees busy.
Other companies are exploring the option of acquiring Chrysler, as well. Private capital firms the Blackstone Group and Cerberus Capital Management have paid visits to Auburn Hills recently, and General Motors has reportedly been examining the possibility of a lash-up, as well. We hope that GM has decided not to move forward, as there are seemingly more overlaps than synergies between the two automakers, and we worry for the future of jobs, platforms, plants and workers should the very strange marriage between two of the Big Three goes forward.
[Source: Detroit News]
Reader Comments (Page 1 of 1)
Jit 11:46AM (3/10/2007)
Expect to see the rest of the industry including Ford and GM drop any contract they have with Magna soon as the contract runs out. Would it be worth losing other contract on a rollacoster company like Chrysler, is the main question?
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TheMac 12:08PM (3/10/2007)
I still fail to see how Daimler selling Chrysler makes any sense to anyone, besides the domestic haters who populate this site. I think a simple rumor has spiraled out of control. Companies like Magna meet with top executives on a monthly basis.. seriously, wait until a a Honda rep stops by, and watch for "Chrysler possibly being sold to Honda?" all over Autoblog. This whole thing is a move from Daimler to upset the unions before contacts negotiantions and gain public sympathy.
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Michael Karesh 12:38PM (3/10/2007)
#1: if this were the case, then Delphi wouldn't have had non-GM business when it was still part of GM, but it did. Companies will buy from whomever can provide the best parts at the best price. Similarly, many companies buy their automatic transmissions from Aisin, which is part of the Toyota Group.
#2: We're clearly well beyond just a rumor here. Maybe DCX is trying to manipulate the union, but this is a costly way to go about it. So much uncertainty about Chrysler's future will depress sales.
I must say that a purchase by Magna is intriguing. Magna has wanted to get into vehicle assembly for years, and has been operating some small plants for Chrysler. This would fulfill this goal of theirs in a big way. And they have a proven record of good management. If anyone can maintain Chrysler as a viable independent, it's probably Magna.
Big question: would the resulting company be American, or Canadian? When's the last time there was an independent automaker based in Canada?
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KC 2:54PM (3/10/2007)
I doubt Magna would move Chrysler's corporate headquarters out of the USA, so Chrysler would be as American as it is now.
Of all the rumors that are out there of who is interested in purchasing Chrysler group from Diamler I think that Magna sounds like they would be the best fit. It would be the smoothest transition as well because Magna and Chrysler already work closely together in may aspects of their businesses.
I just hope they can come up with the cash to outbid GM without paying to much for the troubled automaker.
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Bumbaclut 3:09PM (3/10/2007)
Another reason is Chrysler saved Magna's ass in the 1990's crisis with them getting the Minivan seat contract. Now with Chrysler in the same boat, they want to help them and save their own ass as well.
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BVT 3:39PM (3/10/2007)
A Magna deal seems to have the most positives. GM has yet to prove that it can deal with its own problems, so acquiring all of Chrysler's would just be catching a falling knife. The private equity firms don't have the experience and would probably just end up chopping the company to bits. Magna has relevant experience and an interest in running Chrysler as a going concern. Magna would probably move a fair amount of work to Canada so they can offload some healthcare costs, but that's better than the work (and the know-how and the tooling) going to China. If GM bought Chrysler to put it out of business that would make sense only in the context of keeping it out of the hands of a Chinese company. DCX may be playing chicken with the UAW but it strikes me as both crude and liable to cause a backlash at home if management doesn't get major concessions or actually sell Chrysler.
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Jit 3:38PM (3/10/2007)
#3 Would you want to buy parts from your competition?
Magna makes the X3 for BMW. BMW in the past wasn't willing to share the Blue-tec system with Mercedes so how you would expect them to share suppliers with Chrysler is beyond me.
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Barney 3:39PM (3/10/2007)
Mend a sinking ship with rumours and sell it for more then it's worth. The price keeps going up with these rumours and the question is, who's paying whom to keep them going. Magna may have agreed, merely to keep the contract, rather then loose the customer.
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BOB 6:39PM (3/10/2007)
SORRY, I CAN'T SEE ANY REASON TO BUY IT WITHOUT A BANKRUPTCY TO GET RID OF OBLIGATIONS---
Not saying "screw those Union guys!" -- and I dont even know if the contracts are written to protect from that.
The department store industry in the US, at present, is built on a succession of bankruptcies and takeovers, until we ended up with, mostly, Macys all over. In that case, it was not the Japanese, but Target and Wal-Mart that forced it. (not to mention assorted management weaknesses)
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CAPT KAOS 7:04PM (3/10/2007)
I want who ever ends up with Chrysler to take action to correct the Jeep Grand Cherokee. I have had several of them including my current 2002 model. The current model WK is not superior to the WJ in way that I can see except possibly cornering on smooth roads. The current models lower sales figures are a reflection of it's failed redisgn.
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Thomas Perry 7:43PM (3/10/2007)
My personal opinion is that Chrysler's biggest issue is over-production. GM purchasing them would create enough of a buffer between GM and Toyota that they could properly lower production and maximize profit while merging the Buick line with Chrysler.
My only hope is that all the American companies are capable of holding on until the Democrats introduce health care reform and put the burden on the tax payers.
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