GM-Chrysler: A Lemon Of A Deal

This merger may be the worst idea since the Edsel.

 
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  • Posted By: whatdoidonow @ 11/02/2008 8:55:10 AM

    Comment: comment; I don't think its good for our government to give the money to GM to buy chrysler, if our government would give them the money then it tells me that our government is so stupid. That would make my mind up to move overseas. i wouldn't want to live in a country that a government cares if you live or not. I work at chrysler and i have given 110 % on my job. we have won two awards two years back to back. And now they say that GM wants to buy us. when Cerberus bought us they knew of the gas prices , why didn't they think and start making smaller cars to compete with the others. I know why, its because on trucks and suvs its more money in there pockets . Bigger bucks. now the ceo's and the other big boys have lined there pockets with cash and now they want to run.. what about us working people that helped them fill there pockets.. Doesn't anyone care about us....?????????? AND NOW WHAT WILL OUR GOVERNMENT DO ???????? Does our government care??????? We will see....

  • Posted By: whatdoidonow @ 11/02/2008 8:53:59 AM

    Comment: comment; I don't think its good for our government to give the money to GM to buy chrysler, if our government would give them the money then it tells me that our government is so stupid. That would make my mind up to move overseas. i wouldn't want to live in a country that a government cares if you live or not. I work at chrysler and i have given 110 % on my job. we have won two awards two years back to back. And now they say that GM wants to buy us. when Cerberus bought us they knew of the gas prices , why didn't they think and start making smaller cars to compete with the others. I know why, its because on trucks and suvs its more money in there pockets . Bigger bucks. now the ceo's and the other big boys have lined there pockets with cash and now they want to run.. what about us working people that helped them fill there pockets.. Doesn't anyone care about us....?????????? AND NOW WHAT WILL OUR GOVERNMENT DO ???????? Does our government care??????? We will see....

  • Posted By: cpgne @ 10/23/2008 8:15:57 PM

    Comment: I don't see a future for Detroit in the U.S.. They should just hang it up here, and continue their more profitable overseas business. Maybe they can keep a couple of plants open here, in case some day they come up with some winning designs and can import them here from overseas, doing final assembly here to avoid the "chicken" tax. They have fallen way too far behind here to catch up. By the time the GM Volt comes out, there will be three competitors that outperform it for less money. The U.S. passed laws many years ago that will keep GM, Ford and Chrysler from ever being competitive on a worldwide basis if they continue manufacturing in the U.S.. Better cut it short and stem the flow of blood now, before they sink it completely.

  • Posted By: ss1980 @ 10/14/2008 1:30:53 PM

    Comment: Keith, if what the editors kept in the article is what you really think, then I must say you're quite shortsighted. This merger at the times of an economic downturn is the best time to acquire additional assets since they're underpriced. The merger will possibly create the biggest world automaker that could really rival Toyota.

    As to too many SUVs, etc., if common management is inserted, then doubling models could be cancelled out and put out of production. As to credit crunch that everyone seems to believe in, there not any. Good projects gets financed anyway and the money is readily available with the government support of banks.

    You also seem to forget that German Daimler keeps a stake at Chrysler and can use its good credit history with Deutschebank and Hypo to provide the cash, if needed. Europe is in much healthier financial state than the U.S. right now.

    In addition to the positive effect and more jobs for the American market, the merger is also good for Tier 1 through Tier 3 suppliers. Both the car manufacturer and its suppliers will feel the economies of scale.

    As to the economic downturn, it will last two years and will revitalize the economy by cleaning itself out of the weak and unhealthy. The fittest will survive. Don't forget that economic downturns are cyclical and happen every so often.

    Best regards,

    Alexandre Povolotski
    apovolotski@aim.com

  • Posted By: ss1980 @ 10/14/2008 1:30:04 PM

    Comment: Keith, if what the editors kept in the article is what you really think, then I must say you're quite shortsighted. This merger at the times of an economic downturn is the best time to acquire additional assets since they're underpriced. The merger will possibly create the biggest world automaker that could really rival Toyota.

    As to too many SUVs, etc., if common management is inserted, then doubling models could be cancelled out and put out of production. As to credit crunch that everyone seems to believe in, there not any. Good projects gets financed anyway and the money is readily available with the government support of banks.

    You also seem to forget that German Daimler keeps a stake at Chrysler and can use its good credit history with Deutschebank and Hypo to provide the cash, if needed. Europe is in much healthier financial state than the U.S. right now.

    In addition to the positive effect and more jobs for the American market, the merger is also good for Tier 1 through Tier 3 suppliers. Both the car manufacturer and its suppliers will feel the economies of scale.

    As to the economic downturn, it will last two years and will revitalize the economy by cleaning itself out of the weak and unhealthy. The fittest will survive. Don't forget that economic downturns are cyclical and happen every so often.

    Best regards,

    Alexandre Povolotski
    apovolotski@aim.com

  • Posted By: The Bawhb @ 10/13/2008 11:20:48 PM

    Comment: Hey ! here's a novel idea...Why don't a GREEN ENERGY company BAIL THEM OUT...then they could produce the EV-1 , the Volt, and TRUE HYBRIDS (HHO ,NG or LP and Electric ).
    If GM and Chrysler could produce vehicles for the WORLD market ,made in the U.S.A. , PRICED for the middle class and rising middle class of the world, and , ECO FRIENDLY. They would not only be saved but would FLOURISH !

  • Posted By: The Bawhb @ 10/13/2008 11:07:00 PM

    Comment: Hey! here's a novel idea ....Why don' the GREEN ENERGY companies..BAIL THEM OUT!....and MAKE them produce the EV-! ( again), Volt, and TRUE hybrids..(NG or HHO/Elect.)!
    If GM and Chrysler can put it in gear (no pun intended) and start to produce vehicles in the U.S.A. that can be sold on the WORLD market, that are ECO FRIENDLY and PRICED for middle class and rising middle class people of the WORLD, they not only would survive ; but, they would flourish!

  • Posted By: poisonmedia @ 10/13/2008 5:14:41 PM

    Comment: PLEASE google Toyota engine sludge if I hear another idiot say Honda Toyota blah blah blah I want to suck on a barrel. Last I checked only one maker has a Lifetime warranty and they are local. Chrysler just said they have 3 electric cars, one will be here next year, and I bet not one of you import lovers will bother to buy one because of some lame reason you have to dream up. The great ship America is floundering and all Keith Naughton can come up is the same old drivel that the media throws up any time they over eat at the import bar. Your father would be ashamed.

  • Posted By: poisonmedia @ 10/13/2008 5:06:22 PM

    Comment: PLEASE google toyota engine sludge if I hear one more Toyota Honda blah blah blah blah I'll go suck on a barrel,and I think one stupid company has the guts to offer a lifetime warranty???? this ship is sinking and all Keith Naughton is scream from the bridge how great import are. What a rube.

  • Posted By: NickCC @ 10/13/2008 4:23:53 PM

    Comment: This supposed merger would have its plus and minuses. In the long run though it would be one of the worst blunders in automobile history. It would be different if Dodge was shedding away from Chrysler and was attaching itself to GM. Then GM would have a real muscle-bound car company on its side. And for those of you who blame this financial blunder on McCain...OPEN YOUR EYES. Its everyone, Democrats pushed mortgages on those who couldn't afford them (Obama was one of them); Republicans pushed for more lax lending laws (McCain was one of them); all these banking and lending companies gave loans to anyone who had a heartbeat; oh yeah...there are also the idiots in America who think they need 500k to 1 million dollar homes right out of college, then the max out on half a dozen credit cards, and then they can't pay anything. So before you point fingers, find the facts. This whole statement comes from a 17 year old, high schools senior. So if I can get all that on my own... the rest of America should follow suit.

  • Posted By: NickCC @ 10/13/2008 4:23:05 PM

    Comment: This supposed merger would have its plus and minuses. In the long run though it would be one of the worst blunders in automobile history. It would be different if Dodge was shedding away from Chrysler and was attaching itself to GM. Then GM would have a real muscle-bound car company on its side. And for those of you who blame this financial blunder on McCain...OPEN YOUR EYES. Its everyone, Democrats pushed mortgages on those who couldn't afford them (Obama was one of them); Republicans pushed for more lax lending laws (McCain was one of them); all these banking and lending companies gave loans to anyone who had a heartbeat; oh yeah...there are also the idiots in America who think they need 500k to 1 million dollar homes right out of college, then the max out on half a dozen credit cards, and then they can't pay anything. So before you point fingers, find the facts. This whole statement comes from a 17 year old, high schools senior. So if I can get all that on my own... the rest of America should follow suit.

  • Posted By: bikebrains @ 10/13/2008 2:50:38 PM

    Comment: I own a GM car and the quality of it is great. If GM and Chrysler merged I would have to think twice about buying a GM car because of Chrysler's very poor reputation for quality. I would not want to buy a GM-Chrysler blend. GM could get more for its money by starting an operation "from scratch" than whatever GM would get by buying Chrysler. Here is the proof. Go to a used car lot. Look a the prices of comperable Ford, GM and Chrysler products. The prices of the Ford and GM products will be similar while the Chrysler product will be much less. Remember, quality is enjoyed long after price is forgotten.

  • Posted By: Omnius @ 10/13/2008 2:26:07 PM

    Comment: The Big Three become the Big Two and then I'm sure Ford will be found dead on the road and have to become part of the Big One. So much for competition giving us more choices and lower prices. This is all the fault of McCain and the repugnant ones for voting down every mileage efficiency increase since the last gas shortage in the 70's. It was McCain that voted for the accelerated tax depreciation of SUV's to help keep Detroit from facing the reality to build smaller more fuel efficient cars and hybrids or CNG cars. Now Detroit has to come begging us taxpayers for a $25 billion bailout because they would not face reality back when it could have mattered.

  • Posted By: hyperlexis@hotmail.com @ 10/13/2008 1:13:19 PM

    Comment: The worst mistake made by GM was to drop its stake in FIAT several years ago. Had they stuck with it, GM would have had access to wonderful, efficient, fun to drive small cars that Americans are now demanding. Instead, they chose to devote almost all their energies in North America to their SUVs. I agree that taking Chrysler would be a disaster. Chrysler's small cars are as atrocious as GM's and neither company even offers a full-hybrid sedan model or small-block diesel in North America (although they do in Europe!). I worry that both companies may end up going the way of Packard, Studebaker and the rest. Such a shame for our country, to see our automakers reduced to blind, crippled beggars....

    • Posted By: lasvegasdesign @ 10/13/2008 2:02:53 PM

      Comment: The worst mistake made by GM was to drop the EV1 Electric car!!! Try watching "Who Killed The Electric Car" on DVD and you will see how GM destroyed all of the EV1's and replaced them with the "Hummer" because they were built to good and did not need even brake pads in over 9 years on the roads. Ask any EV1 Leaser. You will see the Truth!!!!

      • Posted By: ferrarimanf355 @ 10/13/2008 3:48:54 PM

        Comment: It never fails. Everytime GM's in the news, someone HAS to bring up that crockumentary. Godwin's Law must be amended to take this into account. Oh, and the director of that crockumentary was won over by the Chevy Volt. Pwned!

  • Posted By: bartsimpson2008 @ 10/13/2008 11:25:54 AM

    Comment: The problem with these two auto makers is quality. If we want to compete in the global car market we need to build higher quality goods. Why is Toyota/Lexus out performing us? Quality! You pay a little more up front for a Toyota but you save a lot of money over the life of the car because it costs less in repairs and the vehicle can go many more miles before you have to replace it.

  • Posted By: Abots22 @ 10/13/2008 10:44:08 AM

    Comment: Don't we already have an oligopoly on our hands in the car industry?? I think there is more competition in the oil industry than there is in the car industry, and I think it's pretty obvious we have price fixing going on there already. The worst thing that happens in an oligopolistic or monopolistic market is the lack of incentive for innovation (alternative fuels) and a sluggishly slow response to consumer demand (fuel economy). I realize I am taking a relatively high-level view of this, but how would this not be a violation of the anti-trust laws?

  • Posted By: studebaker8 @ 10/13/2008 9:37:26 AM

    Comment: This same sort of merger happened before; in 1968. It was the combining of British Motor Corporation and Triumph-Leyland that created the huge albatross called British-Leyland. Anyone who is interested in cars knows all too well what happened within a few years when the British government had to nationalize the company in 1975 to keep it from sinking, although it ultimately did thirty years later in 2005 (called MG-Rover by then) with a meager .02% of the market. Perhaps we can take this example and learn what a stupid idea it is!!

  • Posted By: kaywa @ 10/13/2008 9:27:25 AM

    Comment: The fall of the American auto makers has been so predictable especially from the viewpoint of my generation (gen y). Its the baby boomers running these companies that are still holding on to these old notions of what a car should be and what americans wants, that are driving these companies to the brink of extinction. Yes the prius is ugly and droky, but it makes so much sense. And why can't america build a solid compact like the civic that is reliable with an incerdible resale value? Remember the cavalier, now cobalt? What piece of junk! Whatever GM does now will be too little to late to make up ground in the market.

  • Posted By: kaywa @ 10/13/2008 9:21:17 AM

    Comment: The fall of the american auto maker has been so obvious especially from the viewpoint of my generation (gen y). Its the boomers that are haning on to these old ideals of what is a car and what america wants that has driven these companines into the ground. Yes the prius is ugly and dorky but it makes so much sense. And has GM ever made a decent compact that could compete with the reliabliity of a honda? Remember the cavalier, now cobalt? What a piece of junk.

    • Posted By: NickCC @ 10/13/2008 5:16:42 PM

      Comment: Sorry but the Cobalt is outperforming every other car in its class. The Yaris - a tiny joke, The Sentra - a tin can, The Focus - barely improved over the last model, and the SS version is just as fast as the Mustang and is $3000 cheaper.

  • Posted By: incredulously @ 10/13/2008 6:32:29 AM

    Comment: Did you attend any journalism or writing classes while in college? Or did you just write this article in about 5 minutes while downing a few cosmos? Please learn not to string cliches together and call it writing. It makes one lose all credibility in your grasp of the subject.

    • Posted By: poisonmedia @ 10/13/2008 5:37:56 PM

      Comment: your condescending entry serves no other purpose than to confirm what the rest of us know about you. please remove yourself from the sandbox and stand in the corner

  • Posted By: john898989 @ 10/13/2008 2:12:28 AM

    Comment: The word 'albatross' springs to mind.

    GM has just managed to get rid of - expensively - the cross around its neck that was FIAT, dropped its expensive associations with Toyota and Suzuki (you know them ? where GM built cars for other companies and then paid them to sell them under their own names) and now they want to take on this Grade A Turkey that hasn't turned a profit since the early 60s.

    Give it up, just stick with Adam Opel and Daewoo.

  • Posted By: azfalcon55 @ 10/13/2008 12:13:32 AM

    Comment: Isn't it amazing how those who succeed do so in the face of the experts - they buy when the experts are selling, and they sell when the experts are buying. Maybe this is the same. Or maybe not. We'll all know a few years down the road, I guess.

  • Posted By: bighappy @ 10/13/2008 12:12:30 AM

    Comment: They may survive only if the merger would help them to get rid completely of unions, and may be from their pension obligations. If it does not happen now - unions will be gone soon nyway through bancruptcies, and even Obama will not help. Only after that US automakers get competive.

  • Posted By: BillsCatz @ 10/12/2008 11:05:23 PM

    Comment: Chrysler has been in toght shape for fifteen years and this merger makes as much sense as tossing a bag of rocks to a drowning man... . "Hey, lets take a major auto maker that's struggling and tie it onto one that's been struggling for a decade!"

  • Posted By: Robert White @ 10/12/2008 11:04:44 PM

    Comment: GM and Chrysler would be able to leverage an incredible amount of economies of scale with not only their own manufacturing operations, but will be able to extract more for less money from their suppliers. I agree with you, aremee, the author displays a stunning lack of knowledge on the subject matter...Just another Newsweek article hell-bent on deriding US industry... GO GM / CHRYSLER/CERBERUS!!!

  • Posted By: jphyundai @ 10/12/2008 10:31:49 PM

    Comment: It is very possible that the 11.1 Billion that Chrysler has supposedly socked away may be a myth supported by creative accounting. If the whole reason for the merger is this money, then serious second thoughts should be brought to the fore.
    The chickens are all coming home to roost. It seems that unequalled Japanese quality and service will eventually win the day. So many consumers have been gypped by big Detroit dealerships, both in sales and service. Many more have had to deal with inferior products made so not by engineers, but by the bean counters in Detroit. Now that everything is in a downward spiral, Detroit has finally managed to make quality cars, and give better service. Is this now too little, too late? I hope not, but it may be so.

  • Posted By: aremee @ 10/12/2008 9:43:38 PM

    Comment: If you read the authors bio, you learn he has never earned a business degree. Instead his journalism degree is dictating what he thinks is best for two massive multi national complex companies. This may be the authors opinion, but it lacks any credibility, quantitative facts and is nothing more than journalistic fodder. Since Cerebus has taken over Chrysler, their market share has declined, true. But anyone who rules them out of the game or even thinks they have "met their match" is a fool. They are a private company therefore, they don't have to publish anything that is happening. Sales, product development, etc. How can someone make any assumptions based on information that has to come from a company (Cerebus) when the company is historically secretive? Look Cerebus is run by MBA and PHD's. They study things like book value, stock valuations, and asset values of a company. GM;s stock is at the lowest levels since the 1950's. About 3 Billion buys the entire company. This is what Cerebus is looking at. They spend 3 billion, they start selling off assets of GM which probably at this point have a higher value individually as the company as a whole. Daimler bought Chrysler for 30 billion, Cerebus paid them 7.5 Billion, not they can pick up GM for 3 billion, own two car companies and dominate US car sales for a third of what Daimler paid for one 8 years ago. I think it makes sense, for Cerebus to do this. Don't count them out of the game.

    • Posted By: Braes @ 10/13/2008 9:06:39 PM

      Comment: Every automaker is having a hard time selling anything, and the oil majors have smashed them.
      I think the GM/Chrysler merger can work.

  • Posted By: Nowforthetruth @ 10/12/2008 8:30:00 PM

    Comment: This link of a CSPAN video clip may help set the context, as these hearings were at the time of McCains attempt at S.190.

    http://www.youtube.com/watch?v=_MGT_cSi7Rs

    "Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis"

  • Posted By: jpooch00 @ 10/12/2008 6:35:22 PM

    Comment: Yeah, that makes a lotta sense. Chrysler has never made any money to speak of, so why wouldn't another car company that's already in trouble want it? With that kind of logic, it's no wonder that this country is in the shape it's in! Its business leaders are total idiots!

  • Posted By: mgw@abmac.com @ 10/12/2008 5:25:17 PM

    Comment: The problem with keeping Buick around as a Acura, Lexus and Infiniti competitor, is that you have to remember that those 3 Asian makes were created with BMW and Mercedes aspirations. They don't want to be considered the next viable tier below the German makes... they want to be considered on the same level as the German makes. Buick has nothing to aspire to because it is articially constrained by the presence of Cadillac above it. So where Lexus may try to offer technology that competes with a feature in a certain Mercedes, Buick will never offer that feature if it pushes that model above the place held by a Cadillac model.

    Secondly, as an American, I resent an American make such as Buick designing and releasing their latest design concepts in China. I do understand that China is their best market now, but if that's the case, then sell Buick to the Chinese because it can't be everything it wants to be in America with Cadillac above it.

    A fully equipped Honda Accord tops $30,000 these days. An entry level Mercedes Benz C Class starts slightly higher. There is no room in the market for mid tier makes anymore. Too many players trying to offer similar features for less money. In today's US market, I don't see where a Buick or Lincoln fits anymore. In fact, Ford would do better to drop Lincoln and concentrate on the Ford and Volvo brands.

  • Posted By: jsnowbordr47 @ 10/12/2008 3:25:45 PM

    Comment: Well, Depending on what GM does with the Chrysler assets it can potentially be a really good thing.

    Chrysler has 100% overlap with GM product development, and frankly, GM products are more reliable, more efficient, and much easier to maintain. I'm hoping that GM does complete this merger and after that, they should kill or sell all of the Chrysler brands. GM's current lineup is good enough, they don't need to add another brand to their lineup.

    Chrysler = Buick
    Dodge = Chevy Trucks, GMC
    Jeep = GMC, Hummer

    Now, if GM does gain all of Chryslers assets here's what they need to do, Sell all of the Dodge pickup and Jeep factories as well as the factories building the Hemi and Magnum V-8 motors. Retool all of the Chrysler and Dodge car factories to build the Malibu, CTS, Aura, Aveo, Volt, etc. Then with the money they gain from selling.

    Now, hopefully they will have gained a nice sum from selling the Dodge Truck and Jeep factories as well as the engine factories. With this money they need to do at least 1 of several things, 1. Convert existing truck factories to passenger car factories. 2. Divert cashflow to quicker development of the Volt and or Hydrogen Fuel Cell, where they currently have years advantages over other manufacturers. 3. Keep the money to increase their bottom line for the next few years.

    A merger between Chrysler and GM will only benefit GM in any situation.

    As for the notion that they need to kill some of their current brands, in my book, the only ones that really need to go are Saturn, GMC or Chevy pickups. These are the products that have 100% overlap within GM. Lets face it, Chevrolet is the import fighting brand that GM wants, Saturn just isn't performing and chevrolet has the most passenger cars with EPA estimated 30mpg+, so Saturn can go away.

    As for GMC or Chevy pickups, this is a hard one, Chevy Trucks are much more sellable to the mass market/families or regular folks. GMC is more sellable for professionals in the construction or any industry with towing or hauling needs. To kill one would alienate there target audience, though I would hope each audience would be smart enough to simply switch to the other brand rather than switching to another manufacturer. If I had to make a choice, I'd definitely cut GMC vs Chevy Trucks.

    Those who say Buick needs to go don't realize that it's the number 1 selling brand in developing countries like China, also Buick is marketed to fight Japanese luxury brands like Lexus, Acura, and Infinit, while Cadillac is marketed to fight European luxury brands like BMW, Mercedes, Porsche, etc.

    • Posted By: azfalcon55 @ 10/13/2008 12:28:39 AM

      Comment: Wow... I'm having a tough time figuring out if you just hate Chrysler - or if you just don't know much.

  • Posted By: mgw@abmac.com @ 10/12/2008 3:01:00 PM

    Comment: I totally agree. It's a really bad idea. I like one idea that I've seen floated around. Let GM use this economic downturn to file bankruptcy. While under protection, ditch the redundant brands. Saab, Hummer, Saturn and Buick can go. Chevy can tend the mainstream car and truck buyers. Cadillac can concentrate on luxury sales. Pontiac can concentrate on RWD performance cars. And GMC can concentrate on specialty trucks that differentiate themselves from mainstream Chevy truck offerings. Close down dealerships for the jettisoned brands, and force the remaining dealers to upgrade their sales and service centers, with the goal of providing Lexus-like customer service. Design and build the cars here in America. Shoot for best in class, rather than matching class leaders.

 
 
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