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MiscellaneousGM to Purchase Chrysler to Eliminate Them (Minus the Jeep Brand)?
Posted by mike on 2008/10/16 22:26:21 (2269) reads

The Detriot News has an interesting article that postulates that GM may be thinking about purchasing Chrysler just to eliminate them, sparing the Jeep brand:

Analysts say a deal along the lines of Chrysler's purchase of AMC, which eliminated Detroit's No. 4 automaker as an entity and all its brands except Jeep, would make sense for GM.

...snip...

Besides the Jeep brand and Chrysler's minivans, the company has few assets of value to its bigger rival, he said.

"For GM, the only reason to absorb Chrysler would be to eliminate a competitor," he said.

Many industry experts believe GM's interest in Chrysler, both now and in 2007, when DaimlerChrysler AG put the American unit up for sale, reflected its goal to reduce the excess capacity in the U.S. auto industry that has hurt all of Detroit's carmakers.

"The others (automakers) will be delighted to have Chrysler just die and take 1.5 million units out of the industry, which is about what the excess is," said Gerald Meyers, former chairman of AMC and now a professor at the University of Michigan.

So, is GM owning Jeep a good thing or a bad thing? Let us know what you think in the reader comments.

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cristoph
Posted: 2009/4/26 15:27  Updated: 2009/4/26 15:27
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 Re: GM to Purchase Chrysler to Eliminate Them (Minus the ...
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Brian_R
Posted: 2008/10/20 18:18  Updated: 2008/10/20 18:18
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 Re: GM to Purchase Chrysler to Eliminate Them (Minus the ...
Tell me who would loan a company with only enough cash in reserves to operate currently for only 7 more quarters to buy out a competitor? Probably the same genius that hyped up the subprime market.

who knows, perhaps this might be a line swap transaction where Cerebrus would buy Saab / Saturn / Hummer and sell off it's share of GMAC or pick up the other half of GMAC in exchange for brands / plants.

The only way GM could make this happen is to give up physical assets / collateral in a trade of some sort. With the current financial climate, they just don't have the cash / bank backing to to a full on purchase.

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BillyG
Posted: 2008/10/20 2:35  Updated: 2008/10/20 2:45
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 Re: GM to Purchase Chrysler to Eliminate Them (Minus the ...
I think its a bad deal, like K-Mart & Sears combining two huge companies in big trouble doesn't help in the long run if they're doing the same thing and have the same problems. Both need to make major cutbacks and build smaller cars (Dodge made a huge mistake getting rid of the Neon - even a facelifted model would have sold better than the Caliber.)

GM just wants Chrysler for one thing - that 11.7 million cash reserve they're sitting on to keep them running for another year... and maybe Jeep. To hell with the Dodge and Chrysler brands. I bet the boys at Ford and Toyota are happy this is happening.

We'd Jeep and Chrysler fans better pray that the Gov't cancels this deal, the economy gets better ASAP with a new president who cares about Detroit, and Jeep eventfully winds up in secure hands.

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myhotwheels22981
Posted: 2008/10/19 10:37  Updated: 2008/10/19 10:37
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 Re: GM to Purchase Chrysler to Eliminate Them (Minus the ...
Another aspect to consider is that if Cerebus can get a price for what is basically minivans and Jeeps, then they could break up the company and sell minivans and Jeeps to GM, trucks and performance cars to Nissan, and the Viper line to some company like Lambroghini, and get a higher profit for the same deal.

I'm still not entirely sure that a merger will happen anyway, The Gov't still may not approve the merger for antitrust and unemployment reasons, and may make both companies take a bailout loan and reorganize in to more fuel efficient companies.

In our current economic crisis, the Government is stepping in to prevent market chaos, which would include all this merger mess.

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myhotwheels22981
Posted: 2008/10/18 17:32  Updated: 2008/10/18 17:32
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While I see Loner's point, since HUMMER is on it's way out anyway, wouldn't it just be easier for GM to drop THEIR crappy archecture in favor of the JEEP? They are already paying for it anyway.

If a GM takeover occurs, I think the Wrangler will stay just as it is (this is all hypothetical anyway), the Liberty will be renamed the Cherokee, and the GC will dissappear, sort of, as GM and Chrysler are sharing the Tahoe/Cherokee/Durango platform anyway.

H2 will dissappear, and H3 will be merged with the Liberty in the next generation, and then mabye GC will re-emerge as a re-badge of the Tahoe, which is what was going to happen in 2010 anyway.

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loner
Posted: 2008/10/19 20:46  Updated: 2008/10/19 20:46
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I would hope GM would do that but I can't think of any car maker doing anything I have hoped for in years:)

The Hummers share too much with current GM vehicles. In these days where 10 vehicles have to be based from one platform I don't see them making GM stuff and Jeep stuff and I think the chance of them keeping the Jeep platforms and basing GM vehicles off of those are slim.:(

I think Jeep dies in if a US company acquires them. Unless maybe Ford ditches the Ranger and Explorer and keeps the whole range intact and adds a Jeep pickup...never mind back to pessimistic thoughts of Doom.

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loner
Posted: 2008/10/18 13:22  Updated: 2008/10/18 13:22
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Just curious but why wouldn't GM just port all the Jeep models over to versions based on their crappy architecture and keep the Jeep name only? All this talk about GM engines in Jeep chassis seems silly to me. They would just kill it and keep their own manufacturing operations going I think.

5 Years after a merger I think I would be more likely to buy a Jeep from an Indian company than whatever GM is selling.

I hope I am wrong.

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myhotwheels22981
Posted: 2008/10/18 8:28  Updated: 2008/10/18 8:28
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"I HATE Illinois Nazi's"---Elwood Blues

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myhotwheels22981
Posted: 2008/10/17 20:45  Updated: 2008/10/18 1:03
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The question is who owns the intelluctual property of the engines..Does Chrysler have the exclusive right to the engines, or does Daimler have some interest in them that would prevent GM from carrying them over.

The 2.0, 2.4, 3.7, 4.7 and 5.7 L were all developed during the DC era, I would think that the HEMI was the only engine engineered with minimal Daimler influence...

No wait, I correct myself....The HEMI MDS system is based on the Mercedes MDS system, and for that matter, if GM acquires Chrysler, and Chrysler has the Hemi with Mercedes MDS, and now Variable Valve timing, and for that matter the World Engine with one version that uses Direct Injection, then does that mean that GM can reverse-engineer the HEMI MDS, VVT and the 2.4 L Direct Injection into the LS-7? Bring back the Big Block Chevy with MDS/VVT/GDI and get 25 M.P.G.?

Who owns the MDS design? the Direct Injection? the VVT?

Hey, another Idea!!!! Chrysler!!! Build the World Engine V-8---MDS/VVT/GDI/4.8L=30 M.P.G.

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MarkH
Posted: 2008/10/17 22:15  Updated: 2008/10/17 22:17
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 Re: GM to Purchase Chrysler to Eliminate Them (Minus the ...
Understood.
Lawyers can iron out the details, but generally the law says if you put nothing in, you have no claim out... except for marriage...

Some of these powerplants (excuse the pun...) had long runs prior to the Nazi invasion...

Sorry, had to say it...

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myhotwheels22981
Posted: 2008/10/17 9:11  Updated: 2008/10/17 9:11
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LS-7 Wrangler
4.5L Duratec Wrangler

One thing to consider is that the JEEP engines (except HEMI) are all Mercedes-Based. I dont think that partnership would continue under a GM aquisition of Chrysler. It would look like a total re-engining of the Jeep Line.

Or mabye the HEMI engine may be exclusive to the JEEP line, available in multiple displacements (I've often wondered how a 300 hp, 300 Ci HEMI would perform.

Or mabye a small displacement Chevy V-8 (4.9 or 5.2L) that can run E-85

The Duratec 4.5 L is the hot upcoming diesel engine---paired with a 6 speed trans, it would get 28 mpg that the government wants for SUV's

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MarkH
Posted: 2008/10/17 10:31  Updated: 2008/10/17 10:45
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One thing to consider is that the JEEP engines (except HEMI) are all Mercedes-Based.
Ummmmmm, better check your sources on that. I can't think of one domestic JEEP engine that's Mercedes-based... other than the BlueTec diesel...

The 2.0L & 2.4L are a joint Chrysler/Mitsu/Hyundai design.
The 3.7L & 3.8L V6s are Chrysler designed.
The 4.7L V8 is Chrysler designed.

Two notable examples of Mercedes engineered powertrains for Chrysler/Dodge are the Crossfire & Sprinter.

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trevorj
Posted: 2008/10/17 22:08  Updated: 2008/10/17 22:08
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 Re: GM to Purchase Chrysler to Eliminate Them (Minus the ...
uhhh... correct me if I'm wrong, but isn't the HIGH price of fuel what started this problem in the first place? So you figure they should put bigger, less efficient engines in the entire Jeep lineup? Ok, that sounds brilliant. It's reasoning like that which got us in this sore spot in the first place.

Not that I don't love a Hemi.

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MarkH
Posted: 2008/10/17 22:13  Updated: 2008/10/18 9:46
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Wha-wha-whaaaat?

Don't get myhotwheels going! He doesn't just like the big engines, he's a hydraulic electric hybrid plug-in solar wind diesel steam hydrogen fusion flux capacitor kindaguy!

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MarkH
Posted: 2008/10/17 6:18  Updated: 2008/10/17 6:18
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Interesting theory... I guess GM could chop it up piece by piece over several years...all in the name of "consolidating" the segments, so it's not so noticeable that they're gutting a competitor & the UAW.

If this is what it takes for JEEP to weather the (domestic auto) storm, so be it. I'll miss the Challenger, Viper & Ram, though...

Look on the bright side: at least GM might finally put some gnarly (OK, 80s word... ) V6s in the JK!

In the longer term, the plan will likely backfire, though... I'm guessing Toyota, Honda, Nissan, and all the Korean automakers would be clicking their heels, too! GM won't simply be absorbing all Chrysler's customers.

Somewhere, Walter is spinning in his grave...

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myhotwheels22981
Posted: 2008/10/17 1:26  Updated: 2008/10/17 1:26
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While a deal like this may make for a good news clip, the fact is that the U.S government would never approve such a deal that would generate such a large number of unemployed workers by eliminating entire divisions, especially in this economic climate.

The Chrysler/AMC deal went through because AMC was basically the Jeep CJ, the XJ Cherokee, and the Grand Wagoneer. Car production was limited to a contract with Chrysler to build Dodge Diplomats for the Police and Cab Fleet.

Chrysler will either be required to sell its divisions in whole (I.e. the Jeep Division) in deals that guarantee minimal layoffs, or will probably get the same type of bailout deal it got in the early 80's, and will emerge a leaner and leaner Chrysler Corporation...

Buy out the most senior employees, cut upper and middle management, cut older car lines and lines that compete with each other, and probably be required to set a timeline for raising it's C.A.F.E. standards on a voluntary basis, Read HYBRID.

I have said that Chrysler should convert it's entire line to Hybrid, even if it is a minimal start-stop Hybrid system.

If this happened, Chrysler would probably consist of the Jeep line, the Challenger (as a Halo car), 300 or Charger (Flip a coin, you only get one) Avenger/Journey, a pared down minivan line, and the Durango/Ram only available as a Hybrid (Bye-Bye Dakota).

This is only my prediction, but that is what it would look like to me.

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loner
Posted: 2008/10/18 13:29  Updated: 2008/10/18 13:29
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 Re: GM to Purchase Chrysler to Eliminate Them (Minus the ...
I think there is MORE of a chance of this happening in this economic climate not less. The threat of Chrysler just closing it's doors and going belly up is more possible in these times than ever before, at least the perception of that is there.

If one of the big three is gonna go down a merger would be better than nothing could be they way it would be spun.
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