Business News
Report says Chrysler-GM link to be alliance, not merger
Feb 17, 2007, 11:19 GMT
Munich - The link under discussion between big-two US automakers Chrysler and General Motors (GM) would be an alliance rather than a merger, a German newspaper report said Saturday as DaimlerChrysler stock rose on speculation of a takeover.
The Sueddeutsche Zeitung said such an alliance would be modelled on that between Renault of France and Nissan of Japan. The French company owns about one third of Nissan. The newspaper said exploratory talks between Chrysler and GM had begun.
Quoting automotive-industry sources, it said it was unlikely that GM, the world's biggest carmaker, would take over the US subsidiary of DaimlerChrysler outright. Both companies have declined comment on the speculation.
An alliance would mean they remain separate companies, but possibly with a cross-shareholding, while acting as a single company in product development, production and sales, the paper said.
The initiative for the talks had come from Chrysler. Sources familiar with the talks said that if a link-up were to be to GM's advantage, the US group would contemplate such an arrangement.
Speculation since mid-week has driven DaimlerChrysler stock higher this week, making it the top stock in Frankfurt's DAX index for three straight days. Despite profit taking Friday, it closed 1.3 per cent higher at 54.12 euros.
Chrysler is struggling with a slump in profitability as Americans turn away from its range of big cars and favour imports. The German arm of DaimlerChrysler, Mercedes, is in relatively healthy condition.
Automotive News Europe had earlier reported top-level talks on an outright merger.
Sueddeutsche Zeitung said GM had too many problems of its own and would not want to bring another struggling company on board.
© 2007 dpa - Deutsche Presse-AgenturCOMMENT
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Older Talkback
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Yes I agree with the last comment Ford need to step to the plate and try some crossover partnership they need it there car I think are still behind the curve when it comes to design
Norm Morse, above, said, 'Think of a product that combines all of their best features, what better cars and trucks could be found anywhere in the world?'
Knowing first hand the junk that over the decades Chrysler and GM palmed off as automobiles, it's more likely any 'marriage' would produce squalling spawn whose father is the Vega and mother the Volare. Any union between them would be sure to bring a sequel to the horror movie Christine.
The so-called Big Three (Ford is no better, and perhaps a great deal worse) are the authors of their own demise. When executives decide to allow people to roast alive rather than fix their exploding death traps because it's cheaper to do so, any defense of these manufacturers collapses like a house of cards.
If their cars weren't junk, imports would not have taken over the market, much less become the new and better 'domestic' auto builders.
I enjoy watching GM, Chrysler and Ford twist in the wind. Less power to them.
Can GM afford to let a Japanese (or Chinese) company buy Chrysler? Imagine a Toyota or Nissan dealership in every small town in America. Then the same with Ford. GM must prevent that at all cost. If a combined GM-Chrylser could negotiate with the UAW to reduce the retirement liability for both the GM portion and the Chrysler portion, then GM gets a free car company and staves off having an Asian competitor in every small town throughout America. The cost of the UAW deal would pay for Chrysler multiple times over. In 1998 then Daimler-Benz bought Chrysler for $32 billion. Rumors are that today's DaimlerChrysler might unload Chrysler for much less than that, perhaps for single-digit billions, perhaps as low as $5 billion just to rid itself of Chrysler's UAW retirement liability. A GM-Chrysler could negotiate with the UAW to convert the $100 billion liability that will collapse the American car manufacturers with 100% certainty (causing the retirees to never get much of any of that money) into some smaller amount, say, $20 billion that is better-funded and 100% to be distributed to retirees.
Imagine Cadillacs with Hemi engines. Imagine a simplification of a combined GM-Chrysler product line: combine GMC and Dodge trucks; combine the Opel and Mercedes German technology in future designs; combine Saturn/Saab/Opel/Vauxhall/Mercedes-based-Chrysler products into one set of dealerships worldwide. This dog could hunt!
Also there is growing evidence that Toyota will pole-vault from 3rd-largest automobile manufacturer in the world in 2006 to the absolute largest in 2007. GM has been the largest automotive company in the world since, what, World War I or so. GM's psychology cannot take being #2. This alone might be enough for GM's top brass to buy Chrysler just for 'not on my watch' reasons would they let GM slip to #2.
Regarding the quality of American cars being so-called junk, I personally have driven two Saturns (one for me and one for my wife) to 200,000 miles. Perhaps that can be done with a Toyota, but that just cannot be done at all with a Honda! With Opel and Saab co-designing all of GM's non-truck/non-SUV cars now, the good results are now showing quite clearly. Look at the 2007 Motortrend Car of the Year: the new Saturn Aura. What is it? It is purely a Opel-Saab design straight from Europe. Europe is the future of GM. GM knows this. GM turned over all non-truck/non-SUV car designs to Opel/Saab several years ago, because, quite honestly, Europe does a better job. Likewise, all of the successful new look of Chrysler cars are straight from Europe. Inheriting some older-generation Daimler-Benz technology from a GM merger or alliance with Chrysler furthers this Euro-GM future by a big leap.
I suspect that anyone who thinks that GM or Chrysler cars are junk, hasn't owned a Saturn since 1990 or the larger GM/Chrysler since 2000. The junk era is over (unless you buy an Asian-made/3rd-world-made Chevy that has been rebranded---low-end Asian and 3rd-world cars are still the junk that they have always been.)
It is patriotic to buy an American car. Don't be un-American! Don't bash America(n cars) for no good reason. Our cars are top quality now.
There is precious little 'American' in a domestic car, and most of any car is built with outsourced parts made in China, Japan, South Korea, Mexico, Canada, Brazil, Spain. . . .
Over 40 years I've bought cars and motorcycles made in the U.S., Canada, Mexico and Japan, so I know of what I speak. I've owned various brands made by Ford, GM, Chrysler, Honda, Yamaha and even Renault, 26 in all. The worst — the absolute worst — were made by Chrylser and Renault, so I wouldn't touch a Nissan with a barge pole. Chrysler barely edges out Ford at the bottom of this disease-ridden pack of Glad-bagged garbage, but if my 'ranking' makes GM the best, it's faint praise, indeed.
I'm not bashing the domestics for no reason. I have plenty of reasons.
Not good.
The last thing the US needs is for the domestic auto companies to merge and become a monopoly.
THIS goes out to JOHN.I am an employee of the so called junk cars I work for GM and the only thing i can guarantee is that the one thing that we stress about on a daily basis is the fact of QUALITY.Every panel we put out all the inspections that we go thru one the daily basis is part of who we are.I take extreme pride in the work that i do and unless you have purchased or even drove in a GM VEHICLE RECENTLY I feel you have no right to be so bias.If people would only realize to buy americian made automobiles instead of foreign vehicles We would not be in danger of losing our jobs.And me being a single mother i know how important that is All i know is im proud to be an american and buy american.So next time your on a car lot looking at the toyotas jus think how many lives young,old,and children you could possibly be affecting.
The reason that the big three are in trouble isn't the factory quality it is the mamagement at those companies. Being the biggest company in the world does not mean being the best. Ask the guys from Sears and IBM what happens when your thinking is outdated. I am as patriotic as the next guy (Chevy owner thank you very much) and all due respect to the assembly line workers, but management has to sell the right product. The big three executives are stuck thinking like they live in the nineteen fifties. Where you, 'build it and they will come.' Thats not the way to survive. Sure they spend millions on research and advertising but do they pay attention to all the information they are given? Soccer moms want room in their SUV but do they want to spend $100 bucks a tank? Working men want big pick up trucks but do they want to have return for a recall every other month? Quality can be job one but it has to be there from the top to the bottom. The assembly person has to say this glue doesn't work, or better yet the engineer has to recommend the right glue the first time and the manager has to take the leap of faith that the people who work for him know what they are talking about and that the American people are willing to pay just a tiny bit more for the added quality. Otherwise, how can a Toyota plant in the US build the same car as a Toyota plant in Japan and still charge the same price for both cars? Shouldn't the price of the imported car be more? Why is the customer willing to pay more when they know the Japanese car is built in the US? Because the customer knows that they are paying for quality. Think outside the box for once managers and get in the fight or the Japanese (and the Chinese given enough time) will put you out of your misery.
And yes the Europeans know about style. Chrysler cars are ten times better looking than before the merger with DaimlerBenz. But is the quality of product there? Are the American executives still cutting corners with quality? They aren't doing something right if they have to consider an alliance with archrival GM, that's for sure.
Hey John, tell us how you Really feel? I do agree with you,though. The big 3 do not care about their customers, only their customers money. I laugh at some of the adolescents who are willing to actually physically fight over which of these 3 vehicles are 'better' than the next. Why would anyone have loyalty to an auto maker? They are all junk. Buy what You like and get over it. See what your favorite dealer tells you when you are off-roading in one of these off-road packaged pick up trucks and something breaks, only because you were enjoying it like they show you in their commercials? 'Sorry, we will not cover the repair because you were off-roading. 10-4 on the Z71 off road sticker. (I have a Z71-an 03)
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Norm MorseFeb 17th, 2007 - 12:58:03
A merger of GM and Chrysler would be great news for millions of autoworkers.
All that is needed now is to get Ford involved. Think of a product that combines all of their best features, what better cars and trucks could be found
anywhere in the world?
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