Platform engineering costs regularly run north of $1-2B... minus the powertrain (it's another $1-2B for an all-new engine and transmission). Now, if you're Nissan, you leverage those costs across multiple vehicles, because you don't have enough volume in any one model to absorb such costs. If you're GM or Ford, then a couple billion on a new full-frame truck platform isn't a huge deal, because you'll earn that back in the first year and ring the cash register long ever after. If you're Chrysler, and you haven't managed to leverage your full-frame pickup platform into a hot-selling SUV, and if you don't have a lot of volume in that one model, then you're kinda hurtin' for a while after every model refresh. And to add to the pain, if you find yourself placing $5-7K in incentives on the hood a couple of years after a major refresh, then it might be hard to every earn a true profit on a full-size truck.

Nissan may be profitable right now, and Chrysler may have been profitable last decade, but to say that either company rakes in the dough on truck sales is a highly questionable statement given the highly-competitive market, sky-high development costs, and the difficulties in achieving optimal economies of scale at less than 500,000 units/year. In other words, these two companies need each other, and given the financial positions of each company, I'm going to say once again that this is going to look less like a "manufacturing agreement" and a lot more like an acquisition by the time 2011 rolls around.

 

Yes whats wrong with Chrysler today is in direct effect to what MB did to them and it is public knowledge to what they did. but as the parent company that "owned" mopar..they sucked the funds dry.. That has all the bearing to todays problems with Chrysler..
you brought up the fact of profits Nissan has had for the last 7 yars as an example..so just throwing that in as a well its not be competition they got this way its the fast track of a company stealing profits away for pocket lining..its all over the place on the internet acticles galore especially in mopar forums on what happened..and true..I mean you need your head in the sand for 10 years if you don't see how Chrysler was till 2007 when they were bought by cerberus..you telling me that MB did not run them into the ground? They did..and took the profits and sold them for chump change..

and this whole thing about Titan vs. Ram for profit for the whole company is just that speculation and the problem..trucks are a profit for companies..even in a down market of selling..Rams 3rd in line to sales and yet it still pulls in profit to Cerberus..to add to that the rest of the lineups well both companies have good and bad selling cars and trucks..

and looking back at the problems now that mopar is having ..you really think a merger of two 3rd teir companies..behind GM, Toyota, Ford, Honda.
That any good will come out of this? Chrysler is hurting we know this and might not be around much longer..if so what advantage does Nissan have in picking them up in a merger? They would lose more in hooking up with them..I know what your saying volume vs. profit..exactly how Chrysler was 10 years ago..they had profit but not volume..so where would they stand if they want to merge and work off one anothers powers?
to me this sounds more like Cereberus passing the company off toe Nissan to fianlly put the nail in Mopars coffin..
Your going to have a real hard time convincing people that dodge is a good comany if they are going to be paassed around like day old meat..and nissan picking them up after MB dumps them?? nahh not buying it..and dont think anyone will if it happens..meaning sales will drop..

 

Once again, where's your proof that the Ram (or the Titan, for that matter) is profitable? We don't even know what Chrysler's balance sheet looks like right now, because it's a privately-held company. Chrysler has been putting a lot of cash on the hood of the Ram to move it through the showroom, and fewer are moving as of late.

You're making the assumption that Nissan would buy the Dodge brand. They might just pick up the full-frame assembly plants and intellectual property, and let the name go to whatever Chinese manufacturer picks up Chrysler's unibody lineup

 

1 Billion for ONE vehicle is kinda costly.
In All Corvettes Are Red, the Corvette went from a developmental budget of 28million down to 6 mill something by the early 90's. They talk about some creative money swapping things that had to take place for the car to move foward, but we got teh C5.

The whole VE/WM chassis took 1 Billion. Caddy spent 5 billion dollars on Sigma cars. Buick was given 5 billion for...something not to long ago.
GM gave Fiat over 2 billion to go away.

 

No your right Eric I do not have "proof" that they are making money..and yes we dont know what thier finacial situation is right now. Its all a guess.
A guess kinda like what were doing now with what is going to happen.
and that last one is very scary thought that a once geat company that was leading the profit game not more than 10 years ago might be gone in a short time..and if thats the plan Mr.Goshn has thats major suckage right there to do that..I actually was thinking something like that but did not think Nissan would buy up "chrysler" as a tool and throw the names out..if so .. is right..

 

From http://www.forbes.com/opinions/2008/...0416flint.html :

To the question of whether it will be a badge-engineered version of the Ram, looks like that's a yes:

 

so now it looks like its swining the other way...as far as info..but again its just papers talking..but that 2010 year is just what one year away?

 

In North America, it isn't even a question which badge has more potential. I know your Nissan ties often blur the lines for you, but this is pretty cut-and-dry. Chrysler not making a profit has nothing to do with the Ram itself, just like Nissan making a profit has nothing to do with Titan itself (when you're only moving 4-5k trucks a month and the original program goal was 100k/year, you're probably not making a lot of money on them....)

It would be program suicide, in North America, for the joint Dodge/Nissan truck to be branded as a Nissan Titan across the board. I am 1000% sure of this.

And $1B for an all-new, volume vehicle is pretty typical these days from everything I have heard.

 

 

I wonder if Nissan will make "their" Ram look a lot different than the Dodge version. Or more strange as Mitsu did with the Raider version of the Dakota.

 

To be fair the article you quote clearly states the 1 billion includes the plant cost. It is unfair to lump that in with platform development when it can be retooled for another product in the future.

 

Which is interesting...I'm not sure exactly what the article is lumping into it to come up with $1b to development the Titan since the investment in the Mississippi plant (the initial phase to build the Quest, Titan, Aamada and QX56) was just a bit over $1B.

 

 

New platforms almost always require revamping of the plant. It's not the building or property that's expensive; it's the capital and tooling under the roof that costs so much money. In other words, you can't really separate platform costs from plant costs, at least not until the auto industry gets a lot better with flexible equipment (and it's getting there; just not as fast as everyone would like).

 

All true.

What I don't understand about the article is where this guy came up with a $1B just for the Titan if he is including the plant as part of that toal since the whole plant only cost that much and was built to produce four different vehicles - he must be going thorugh some strange gyrations to get his figure.