Filed under: Chrysler, LLC., Hyundai, Earnings/Financials
Hyundai officially denies interest in Chrysler LLC
Despite Reuters reports of Hyundai's interest in Chrysler and specifically the Jeep brand, Hyundai has gone on record denying it. We've grown accustomed to automakers giving the arbitrary "no comment" response when the rumormill swirls with corporate takeover talk, but Hyundai has flat-out denied any interest at all. Almost in the same sentence, though, officials from the Korean automaker state that the company is interested in constructing new plants overseas, so we wonder if there's any fire behind the smokescreen, possibly outside the United States. Perhaps not.
There still remains the chance that Chrysler's automotive operations will be parted out and sold to the highest bidder, regardless of who that party may be. At the very least, Cerberus could decide to sell manufacturing plants to various automakers like Hyundai or the Nissan/Renault alliance, whose offer for 20% of the ailing American automaker may not seem so bad after all.
[Source: Trading Markets]
Reader Comments (Page 1 of 1)
nydave 9:21AM (11/11/2008)
My Idea:
Cerberus, here's a thought. Instead of trying to dump Chrysler on someone else, roll up your sleeves, break out some of the billions that you have made ripping apart other companies in the past, and actually try to fix Chrysler.
Develop those electric cars, work on interiors. Build cars that people will want to drive and buy.
I know it's a little harder then gutting the company and selling it off for parts. It may be hard for you to understand the value of actually building something, but give it a try. Who knows it might work.
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Majarvis 10:41AM (11/11/2008)
Just let Chrysler die already. Nobody in their right mind would want to buy them. They have nothing of value, except for maybe the Jeep brand, and that's pushing it. Let them die.
Flashpoint 10:51AM (11/11/2008)
This is a perfect chance for President Obama to create American jobs.
I say bailout the automakers under terms that they will produce their cars HERE IN AMERICA to sell around the world (Buicks for China for example)
Obama has a perfect chance to create jobs and jump start the green economy. With the energy and financial crisis, he has a chance to force the automakers to do it under his terms rather than allowing their greed to get in the way.
I see opportunity here.
hypermiler 11:20AM (11/11/2008)
> I say bailout the automakers under terms that they will produce their cars HERE IN AMERICA to sell around the world (Buicks for China for example)
Like foreigners actually want to buy American cars.
The only place you can sell American cars is Middle East where you can fill up the tank for $5.
American cars in Europe - Nope
American cars in Japan - Nope
American cars in China - Nope
Lar 2:40PM (11/11/2008)
"Develop those electric cars, work on interiors. Build cars that people will want to drive and buy."
+1 nydave
SimbaDogg 2:59PM (11/11/2008)
@hypermiler
shuttup with your ignorance. you'd be awfully surprised to find out that Buick is one of the most popular youth brands in china right now wouldn't you?
MajorGeek 9:29AM (11/11/2008)
True, if they could put half the thought into marketing some of their good vehicles, while killing off the known failures, as they did making the Hemi a household name, it could work. I think it was on Autoblog yesterday that an employee of one of the big three mentioned that they had gone to execs numerous times about bringing Euro vehicles here and other ideas all of us consumers want and they were ignored. Unless they pull their heads completely out of their asses and start building cars we want, the big 3 are all but done. This really sucks.
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Tourian 9:50AM (11/11/2008)
I think the bottom line is, no automaker has the cash laying around to absorb a troubled automaker. Market cap means nothing compared to legacy costs and debt. This downturn is just to steep and nobody knows when its going to end. And probably nobody wants a sucker's deal or getting strong armed by Cerebrus either, so I guess I'm not surprised. Most likely they'll wait until Cerebrus is broken and begging people to take Chrysler and somebody will come back to the table when the terms are a lot better.
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BigWill 10:31AM (11/11/2008)
I can't imagine Hyundai would want to buy any of Chrysler's factories and have to deal with the UAW baggage that would likely come with it.
Practically speaking though, considering how close the Hyundai Alabama plant and the Kia Georgia plant are, I can't imagine a new Hyundai facility would be far from either of those places. Plus, considering the state of the economy governors will likely hand Hyundai even bigger incentives than Hyundai got the first two times.
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Joe 1:17PM (11/11/2008)
"I can't imagine Hyundai would want to buy any of Chrysler's factories and have to deal with the UAW baggage that would likely come with it."
>> right. Hyundai/Kia don't need Chrysler technology, factories, labors.
It is only they need is "brand". but santafe, Entourage and veracruz is already better enginiered car than Chrysler Jeep or Minian.
hypermiler 10:36AM (11/11/2008)
Based on the content of rumor, I will say this is true.
Hyundai/Kia is essentially a one-man company, with its CEO running it like a pop&mom shop. When the CEO was sent to prison to face embezzlement charges, he had to run the company from the prison cell. You expect this sort of thing from a mob boss, but it was the CEO of 5th largest auto company in the world doing this.
The upside of this tight control is that decisions are made quickly and executed in the matter of hours, not weeks. So it is true that Hyundai, like any other automakers, evaluated Jeep assets and is simply waiting for the right time to make a bid, when Chrysler files for chapter 11 and Hyundai could bid on it at a rock bottom price.
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Cliff 11:37AM (11/11/2008)
Ain't no way, no how, anyone is going to buy a UAW plant. Either the union gives up or they go out of business, it's as simple as that.
Not even a bailout will fix this for the long term. If the government hands out cash, we'll just be here again in about two years with the same problem.
Here in this thread someone will respond to me with all the moronic "defend the union" arguments, about how we'd all be paid minimum wage if there were no union. This is all nonsense. You are paid what you are worth, pure and simple. If you're worth minimum wage, well, that's your opinion. I'm worth much more than minimum wage, thank you very much.
Meanwhile, Asian nameplates are setting up shop all over the USA and paying their workers fine. They get health care benefits similar to all sorts of non-union workers for corporations, professional and non-professional alike. Their workers save for their own retirement.
I'm an engineer with 20 years of experience, but my total compensation doesn't come anywhere near that of an unskilled auto worker for the UAW. Yet I make a decent living, have health care benefits, and save for my own retirement. What's so bad about that?
The bottom line is, you have to compete or you go out of business. It's pretty hard to compete when your labor costs are 52% higher than your competition.
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Torrent 1:29PM (11/11/2008)
boom. headshot.
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Patrick 8:42PM (11/11/2008)
Chrysler has nothing Hyundai needs other than the Jeep brand name and perhaps some IP.
But factories? Hyundai/Kia is operating or building some the most modern auto plants, stuffed with new technology and new ideas designed and deployed exactly how they want them to be done. They are models of modern process engineering and assembly.
Why would they spend a dime for Chrysler's old factories stuffed with old ways and old tech? Why bother trying to adapt to the old way of doing something when you can just build a new plant -or add a new model using flexible production- and do it exactly the way you want?
I could see Mahindra going for Jeep and maybe Dodge trucks too. They want into the US market big time and that would be a fast way to do it.
Some of the Chinese brands might also want a nibble.
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66coronet 9:36PM (11/11/2008)
Chrysler LLC shares the I-4 motors with Hyundia and sold in Mexico the dodge attitude / Hyundai Accent & dodge/Hyundai Atos.
Maybe Chrysler LLC can share something else like the pheonix MDS motors and the 2 mode hybrid system and mild hybrid stop motor system with Hyundai and maybe a mid size car can be co made with pheonix motor & 2 mode hybrid.
Chrysler LLC shares with Nissan on the dodge tranzo/Nissan versa (sold in South america) and soon ram 1500. Chrysler LLC shares with VW on the minivan. Mitsubishi Raider on the dakota platform.
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hypermiler 10:12PM (11/11/2008)
Here is a summary of what exactly went on from various sources.
Hyundai Mobis, the auto parts supplier which is technically the parent of Hyundai Motors but also supplies Nissan and Chrysler, recent met with Chrysler management over renegotiation of an existing supply contract. During the meeting, Chrysler offered to sell Jeep to Hyundai but Hyundai rejected the terms of offer put on the table.
Hyundai insider confirms the talk off the record, but says Jeep acquisition is out of question until the UAW problem is resolved. In other word, Hyundai won't bid on Jeep as long as UAW is around the Jeep plant, and would wait until the bankruptcy of Chrysler to pick up Jeep assets without UAW attached.
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