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Not all the Germans want to dump Chrysler
Some German DaimlerChrysler shareholders may be moving to rename the company back to Daimler-Benz, but not everyone from the Stuttgart side is ready to abandon Chrysler yet. Helmut Lense is one of the union representatives on the company Supervisory Board, the equivalent of a US board of directors. Lense spoke to the Detroit News and indicated that the employee representatives on the board would oppose any selloff that resulted in the dismantling of the Chrysler Group. If a sale must be made, then he would prefer to see another manufacturing company buy the group as opposed to a private equity fund like the Blackstone Group.
Currently, DaimlerChrysler management is in talks with manufacturers like General Motors and supplier Magna International in addition to equity funds Blackstone and Cerberus Capital. Lense feels that a big part of Chrysler's difficulty is an over-reliance on truck sales, which have been particularly hard-hit the past two years. He feels that a revamp of Chrysler's passenger car lineup is what's really needed. As GM has learned in the last few years, cuts can only take you so far, without revenue you can't be consistently profitable. The key to revenue in the auto industry is creating a string of products people actually want to pay for, and that has been Chrysler's real downfall.
While selling to a manufacturer with experience running a large industrial company might be preferable, finding one that is a good fit without significant overlap in product won't be easy. That's why Lense doesn't see GM as a good buyer. For Chrysler to be successful in the long run, the best option could be for Daimler to keep them and make a commitment to the company. They should then follow GM's pattern and design some desirable small and mid-sized models that will appeal to drivers. For that to work, Daimler must be willing to commit to sharing resources with the Auburn Hills group, and perhaps let Chrysler market vehicles like the A and B-Class. Mercedes could then re-focus on more premium vehicles. This would help reduce the brand dilution that Mercedes has experienced, while giving Chrysler a more well rounded lineup. Unfortunately, that doesn't seem likely to happen.
[Source: Detroit News]
Reader Comments (Page 1 of 2)
Ryan 2:59PM (3/18/2007)
Sounds to me as if this Helmut Lense has the right idea and I believe DCX may be starting to do just that. The eventual elimination of the Commander and doing a massive slow down on the Durrango/Aspen is a step in the right direction. The Ram/Dakota also need redesigns and improvements like what Chevrolet did when they redid the Silverado.
DCX does have three things for it in it's truck department that no other company can touch: The Jeep brand, the Wrangler, and the MB/Dodge Sprinter.
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iQuack 3:29PM (3/18/2007)
Chrysler cars are a disappointment IMO. There's nothing Mercedes about them except for a few parts in the Chrysler 300.
The Caliber, Sebring, and Avenger cars are little more than weird-looking Mitsubishi variants with cheap interiors.
If DCX can't make a more compelling line of vehicles, they'd be best off selling it and remaining a German, luxury car company as before.
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AMcA 3:29PM (3/18/2007)
Looks like the unions on the two sides of the Atlantic are getting together. It's the UAW's worst nightmare that some merciless bunch of private equity types would take over a major automaker. None othem wants to see that.
But sadly, it's what needs to happen.
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dakota 5:22PM (3/18/2007)
"Chrysler cars are a disappointment IMO. There's nothing Mercedes about them except for a few parts in the Chrysler 300.
The Caliber, Sebring, and Avenger cars are little more than weird-looking Mitsubishi variants with cheap interiors.
If DCX can't make a more compelling line of vehicles, they'd be best off selling it and remaining a German, luxury car company as before."
1. There shouldn't be any Mercedes in Chrysler cars, period. All MB does is to force their garbage down Chryslers throat and have the Chrysler engineers on a short string to save money to place back in Mercedes. Ever wonder where the piggy bank of Chrysler went when Daimler Benz came around??
2. There is very little of Mitsu in the Caliber, Avenger, ect. What they do share is the basic platform, and that's about it.
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Jit 5:33PM (3/18/2007)
What piggy bank? I remember they had some money but I also remember DC taking the losses over the years (and what little profit). On top of that the contracts which they have already bought and the contracts which have to be brought.
So basing the argument that Daimler brought Chrysler to get their hands on the piggy bank is plain stupid when you consider they paid around $38 billion and are willing to sell for $13 billion. Thats a $25 BILLION LOSS for the sake of $8 billion.
With a new management and thinking Chrysler/Mercedes have the potential now more then ever since the merger to work together and part share.
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GrindingAxis 5:50PM (3/18/2007)
They paid $38 Bil and selling for $13 bil. Who said? And who knows what exactly selling for $13 bil. The point is that they have run this company into the ground, this is all speculation and the execs of this company will come out smelling just fine after they pocket their take. Most German and French companies are just pissed off that the US went in and smacked their beloved Saddam, who was doing business under the table when he wasn't supposed to be. Everyone is all anti-american over Iraq, but Saddam was Germany and France's biggest business partner despite the UN (fraud). Anyway.
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Nick 5:55PM (3/18/2007)
Jit: Chrysler made serious profit for years while Mercedes kept taking losses, so I have no idea what you're talking about. Chrysler has had one year of ass, and Mercedes is ready to dump them.
Meanwhile, Smart has never made a profit..
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dakota 6:12PM (3/18/2007)
"What piggy bank? I remember they had some money but I also remember DC taking the losses over the years (and what little profit). On top of that the contracts which they have already bought and the contracts which have to be brought"
You mean to tell me that between 5 and 12 billion dollars just magically floated away when Daimler came along? Please.
And I never said that Daimler bought Chrysler for their cash, they bought Chrysler to extend their company more, but in the process fired all the Chrysler people, and put their own in, who in turn ran the company into the ground.
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Barney 8:45PM (3/18/2007)
How bloody stupid to think a company buys another for it's cash reserve. Daimler bought Chrysler because Chrysler was for sale. That sale included assets as well as deficits. If Daimler makes a profit, then it was a good deal. Assets have more value then cash. You don't buy money you buy assets.
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Richard 9:13PM (3/18/2007)
Barney wrote (No. 9) "How bloody stupid to think a company buys another for it's cash reserve. Daimler bought Chrysler because Chrysler was for sale. ..."
No. The Daimler-Benz/Chrysler combine was not a buyout. It was a merger of equals. This means that Daimler-Benz was no less in need than Chrysler. As others have said, the Germans kicked out the Americans and drove the company into the ground.
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David 9:57PM (3/18/2007)
Richard I have to say your comment sounds utterly ridiculous. First you try to claim a "Merger of Equals" and then in the same paragraph you point out that the germans kicked out the Americans. You can't have it both ways. If the Americans were on an equal footing then it would have been impossible to remove them. Any person with minimal brain power knows that this was not a merger of equals.
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airport krishna 10:05PM (3/18/2007)
Chrysler hasn't been able to figure out how to appeal to young people with small cars for many many years. Making something equivalent to a Honda Civic is beyond them. Kudos for their minivans and for stewarding the Jeep brand for about a dozen years before getting far off track with it as they are now.
Making a small car that young people love and keep buying has never been a focal point for Chrysler. Even their Mitsu products were a bust for the most part (Eagle brand, please).
Small cars are the gateway to the brands and Chrysler just doesn't get it. Neons and Calibers aren't even close. Their poor, abysmal quality over the years has come to roost in the car side of their business and at this point they should probably give it up. Focus on what they know how to do -- trucks -- and leave the cars to someone else. Their short-term thinking about making a profit on every small car has lead them to make lackluster cars no one really desires.
Too much formidible competition among brands who make cars for young people of high quality and decent service -- basics for the car business.
Besides the cars themselves you don't see hybrids in Chrysler cars, and they don't seem like innovators with new technologies, except big gas engines.
Gas prices will keep going up and that's Chrysler's achilles heel.
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iQuack 10:16PM (3/18/2007)
I laugh when hearing the term "merger of equals" because it's really a "merger of egos" and there's not enough room for 2 sets of typically strong egos in any company.
These consolidations are takeovers, not mergers of any equals, and the strongest ego wins.
This is true of any business combination including Bank of America and NationsBank, Citibank and Traveler's, etc.
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slk32amg 10:35PM (3/18/2007)
I like what I hear, but I doubt it will happen. Chrysler has some good ideas, like making the hornet or a Chery small car, and they need to stop with all the F***in SUVs. But the last thing they should do is split from Diamler. At this point, they are in with each other too far, and if they do split, I'd like to see how long Diamler could last. But hopefully this gossip of splitting will soon just fizzle out. Chrysler had a bad year; everyone just needs to get over it and focus on how to make 2007 a good year.
BTW, why in the hell does everyone use the old, time tested "it's got a cheap interior" comment? Seriously people, have you even seen the interiors in the new Calibers/Avengers/Sebrings? They are no better or worse than an Accord or Civic. Just what DO you people define as a good interior?
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Gerry 6:19PM (3/19/2007)
What is Chrysler at this point anyway? German owned, Mercedes influenced, Mitsubishi blooded, and more and more Mexican made. All sources point to virtual extinction of US based assembly plants in the near future. As far as I'm concerned it's high time for Plymouth to move over and let the rest of the family RIP. As an American I never thought I'd see the day that EVERY Hemi engine would be made in Mexico. They sure as hell don't make that fact clear at any of the Chrysler dealerships I've ever been too. Heck, most car buyers think Chrysler is still an American company while WW2 veterans are still rolling over in their graves knowing that Jeep was sold out to the Germans!
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iQuack 11:02PM (3/18/2007)
The hard plastic, silvery boom-box stuff used on many Chrysler and Dodge dashboards looks cheap to me compared with the Honda Accord's dash and electroluminescent gauges.
This is a matter of opinion, of course, but a rented Charger in which I rode, even with leather seats, had a much lower class interior than a corresponding Accord.
The Charger's interior door panels were ugly, hard plastic, too. The leather-faced seats had a strange, mesh fabric on their sides instead of leather-like, matching vinyl.
The Charger's interior wasn't horrible--just of obvious lower quality than Honda, Toyota, or Mazda cars I've seen.
Just compare those cars and see for yourself.
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LMAO 11:31PM (3/18/2007)
First, a rental car is rarely top of the line. They're cheap because they are meant to be cheap. Simple hard plastics last longer. Which is why imports are rarely used for things like patrol cars, taxis, and rentals; they aren't made to last under hard conditions. Secondly, other than the "electroluminescent gauges" (oooohhhh, bright flashy gauges, simple minded fools), the interiors aren't that different. Both imports and domestics use the same plastics. It seems like most buyers tend to ignore the plastics in imports (maybe because they are attracted to the "electroluminescent gauges" like flies to the zapper???)
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A&W 12:18AM (3/19/2007)
What happened to the talk about a Chinese company buying Chrysler?
Platform sharing between Benz and Chrysler would make sense if it were not Benz and Chrysler.
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iQuack 12:31AM (3/19/2007)
Again, look at the damn cars!
The Charger with leather seats had to be somewhat upscale or the seats would have been cloth instead of leather. That car wasn't a bottom of the line cheapie--it was a weak attempt to be more upscale.
The inside of that Charger was substandard compared to corresponding Hondas, Toyotas, etc. And the Accord's gauges are clearer and easier to read than the pale green dials on the Charger. Drive them and see for yourself.
Face it: Chrysler cars aren't as good as they should be or the company wouldn't have them piled up in dealers' lots instead of standing proudly in buyer's garages.
The only reason to consider one of these Chrysler dogs is if it's cheap relative to competitors. And even then they'll be a lousy deal because resale/trade-in value will be among the worst so the net cost of ownership will be higher.
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Joe 1:38AM (3/19/2007)
I have 2 Chrysler vans and they are the two finest vehicles Ive owned, very nicely done.
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