GM still possible suitor for Chrysler, but not going to the prom yet
Not much has been heard about GM's acquisition of Chrysler recently, and with parts supplier Magna partnering with two private equity firms, the General has taken a back seat in the bidding. According to both Automotive News and the Detroit News, GM's proposal is still on the table, although at first, it was rejected by DCX's execs.The original bid, outlined by Fritz Henderson, GM's CFO, proposed that no money would be exchanged for Chrysler, however, DCX would receive a small amount of GM stock and DaimlerChrysler would actually pay General Motors $1 billion to help cover "unfunded health care liabilities." DCX felt that this bid was far too low to even consider.
Additionally, GM wants the unions in both the U.S. and Canada to make concessions for the General and Chrysler if such a purchase was to take place.
While GM's acquisition of Chrysler is still considered a long shot by many, the fact that the General Motors' bid is still being measured confirms Dr. Z's initial "all options" quote.
[Sources: Automotive News (Sub. Req.), Detroit News]
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Reader Comments (Page 1 of 1)
akintz 10:01AM (3/26/2007)
Haha... "how about we give you some stock, and you then pay us to take your company away?"
That's great.
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Tool 11:02AM (3/26/2007)
That was a ballsy move by GM. A Bold Move that even the BOLD MOVES people didn't think of.
Acquire your competitor,gain 12 points of market share, and recapture the #1 sales crown all for no money down.
Initially I thought GM would get Chrysler, but now I hope that one of the private equity firms comes in and does a major turn-around. Chrysler has such a great history and I think it deserves to be independent. Now it just needs consistent top-notch management.
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Ben 11:48AM (3/26/2007)
GM buying Chrysler would make about as much sense as Coke buying Pepsi. When two snowballs rolling down a hill come together, you don't get one big snowball, all you get is a big pile of slush.
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Richard 12:23PM (3/26/2007)
Ben wrote (No. 3) "GM buying Chrysler would make about as much sense as Coke buying Pepsi. ...."
Huh? A Coke buyout of Pepsi would make a lot of sense ... for Coca Cola. It just would not make sense for the consumer or for Pepsi employees. Also, its antitrust implications are too obvious even for the Bush Administration to let it go.
A GM buyout of Chrysler is a completely different animal. It is difficult to see the benefits to GM. Unlike Pepsi to Coke, Chrysler is a poor competitor to GM. Its strongest products are minivans, which GM no longer makes. Its strongest brand is Jeep, whose most desirable models have no GM competition.
As bad a fit as it is, however, Chrysler's best potential buyer is GM. Let us hope that GM has a plan to maximize its salvage of Chrysler and its brands.
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mr.ed 2:45PM (3/26/2007)
New Coke was a copy of Pepsi, and bombed in three weeks. If GM waits about three more weeks, Benz will give it to them free. Take our pensions and sales bank load, PLEASE!
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Donald Hindle 5:05PM (3/26/2007)
A private equity buyout would not mean a healthy Chrysler seeing glory days again. The obligations to workers and retirees would be dumped and product slashed to make a bite size morsel to sell off. Private Equity firms exist to extract wealth, not to create it. Mexican made Jeeps, minivans, and pickups and Chino-Chryslers would be about the extent of the product line.
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whofan 3:23AM (3/27/2007)
After test driving a 2006 Chevy Uplander as a possible replacement to our 1999 Plymouth Voyager. I`m not so sure GM would be good for Chrysler.
I like GM but how or why could they continue Chrysers` full line up?
Our Drive of the Uplander was a big disapointment. GM could do much better. I don`t know how to design cars. If I could I can do better.
A 99 Voyager beats an 06 Uplander all the way around.
This must be the vehicle the import guys drive and get their impression of GM.
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