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]