If GM does this, I lose all respect for GM....
10-16-2008, 02:00 PM
#1
Registered User
Thread Starter
Join Date: Mar 2001
Location: The Golden State
Posts: 13,711
If GM does this, I lose all respect for GM....
It's come out rtecently that GM not only went to Ford looking to merge but also is currently in talks with Cerberus about aquiring Chrysler. Big news, but it's up to the companies to find for themselves the benefits or disadvantages of a merger and make a decision based on that. Fair enough. Even if it's a decision I disagree with, I certainly am not privy to every single factor or important enough to make a difference even if I was.
Today in the Detroit News there is an article about one option that's being discussed between GM and Cerberus that honestly turns my stomach:
GM trading GMAC for Chrysler...... then shutting them down..... for Chrysler's 11 billion dollars!
http://www.detnews.com/apps/pbcs.dll...TO01/810160399
To me this is wrong and repulsive on so many levels.
First:
GM got themselves into this train wreck. Overreliance on SUVs and trucks, giving up on and forfeiting to Honda and Toyota the US car market.
Second:
GM's biggest problem is it's decision making culture. It's STILL sluggish, it STILL can't seem to make bold product decisions, and it STILL can't seem to get it's arms around the idea that by killing cars based on grossly flawed dealer feedback*, spending marketing dollars multiple times to sell basically a single model through multiple divisions, and not engineering cars to be easily and quickly adapted to US markets or not actually planning to sell the cars they debut in the US IN the US, is all and all pretty terrible ideas.
Third:
GM's history is buying a car company then incorperating that brand into the GM family. Today's GM or marketplace isn't what it was 80 & 90 years ago, but this would be the first time that not only GM, but likely any US automaker bought up a competitor to shut them down and take their money to avert their own financial collaspse.
When Chrysler bought AMC, Chrysler was essentially a money machine and AMC was barely more than a Renault distributor that made Jeeps. When Studebaker bought Packard, the idea that both companies could pool their resources and save on development costs (it was later discovered that Packard had misrepresented their finances and Studebaker never really recovered).
Walter P. Chrysler, after (ironically) reorganizing and saving the ****** car company (eventially the creator of today's Jeep) he was hired to save the Maxwell Car Company. By the time he finished, it was called Chrysler. Chrysler has a history of being innovative and risk taking. They also have a knack of pulling off Pittsburgh Steeler-like last minute turn-arounds. They've done it more or less in every single decade they've been in existence.
Chrysler has also shown a knack for stockpiling cash.
In the 1980s, Chrysler was pretty much America's most profitable car company. In the second half of 1990s, Chrysler had far more cash than GM and was a money making machine (till they got into a deal with DaimlerBenz who then proceeded to use the money to create Smart, redo and expand the Mercedes Benz line, and give huge bonuses to ever Daimler worker in Europe).
At least when Daimler took over, they at least pretended they were intrested in Chrysler's best intrest while they starved Chrysler off. It's no small miracle that Dieter Zetsche was able to get funded and made the Chrysler 300 and the rest of the LX cars. Looking at the cars Chrysler's bought out since then, today the LX cars seem like a very good car that was snuck through a system that was set up to produce cars whose sole purpose was to look ugly, feel cheap, and tarnish the brand.
Cerberus' intention for buying Chrysler seems to be coming into focus. Taking some extra cash that was laying around and plant it in an company whose assets were worth more than the investment & have the seller pay off any liabilities. Then set up a few partnerships for a few new models that don't require alot of commitment or money, find ways to utilize it's resources, and cool their heels till something came along that Chrysler could be traded or sold for that was worth significantly bmore than what they spent.
Ford was in worse shape than GM not more than 3 years ago. Even just over a year ago, Ford was looking and smelling alot like a corpse. However, Ford actually got a grip of what was really happening, got their management act together, looked at options, made some decisions even if it broke with past habits, & empowered people to make it happen. Ford will be doing bi-annual facelifts in the future, make many cars available here that are available in Europe, and even sold off divisions (which at the time I hated, but I now see as pretty wise and very smart in retrospect).
Point is, the Ford Motor Company in the good old American tradition is using their wits, resourcefulness, and common sense in order to turn themselves around. Today, you'd be hard pressed to find anyone in the know that actually doesn't think Ford's going to stage a major turn around as long as the economy doesn't cave in. Most all believe that of all 3 US manufacturers, Ford is the most likely to survive.
GM, meanwhile, seems to be lurching from one idea to another, determined not to realize that the old way of doing business isn't working, depending on government grants (and seemingly merges) to get the cash simply to keep operating till UAW deals kick in. Hate to say this, but I don't see the $1 billion per month burn rate turning into a profit simply based on UAW givebacks.
But aquiring an American icon such as the Chrysler Corperation only to take it's cash (and Jeep and minivans) and shut down the rest of the company to me is repulsive and represents the bad side of American business practices. Not to mention the number of people it will throw out of waor, as well as the effect it will have on the state of Michigan, not to the Brampton plant (home of the 300, Charger, and Challenger... IMHO true modern American cars).
If GM merges with Chrysler and incorperates them into the GM family, I won't be happy because I like the idea of competition between the US makers (without the success of the LX cars, we wouldn't have the Zeta here in the US, and by association not only the G8 but the Camaro wouldn't have come into being). But at least I could understand it.
But if GM gets Chrysler simply to raid their cash dismantle the company, and keep Jeep & minivans, instead of fixing what's actually wrong with themselves, I'd lose all respect for General Motors.
Today in the Detroit News there is an article about one option that's being discussed between GM and Cerberus that honestly turns my stomach:
GM trading GMAC for Chrysler...... then shutting them down..... for Chrysler's 11 billion dollars!
http://www.detnews.com/apps/pbcs.dll...TO01/810160399
To me this is wrong and repulsive on so many levels.
First:
GM got themselves into this train wreck. Overreliance on SUVs and trucks, giving up on and forfeiting to Honda and Toyota the US car market.
Second:
GM's biggest problem is it's decision making culture. It's STILL sluggish, it STILL can't seem to make bold product decisions, and it STILL can't seem to get it's arms around the idea that by killing cars based on grossly flawed dealer feedback*, spending marketing dollars multiple times to sell basically a single model through multiple divisions, and not engineering cars to be easily and quickly adapted to US markets or not actually planning to sell the cars they debut in the US IN the US, is all and all pretty terrible ideas.
Third:
GM's history is buying a car company then incorperating that brand into the GM family. Today's GM or marketplace isn't what it was 80 & 90 years ago, but this would be the first time that not only GM, but likely any US automaker bought up a competitor to shut them down and take their money to avert their own financial collaspse.
When Chrysler bought AMC, Chrysler was essentially a money machine and AMC was barely more than a Renault distributor that made Jeeps. When Studebaker bought Packard, the idea that both companies could pool their resources and save on development costs (it was later discovered that Packard had misrepresented their finances and Studebaker never really recovered).
Walter P. Chrysler, after (ironically) reorganizing and saving the ****** car company (eventially the creator of today's Jeep) he was hired to save the Maxwell Car Company. By the time he finished, it was called Chrysler. Chrysler has a history of being innovative and risk taking. They also have a knack of pulling off Pittsburgh Steeler-like last minute turn-arounds. They've done it more or less in every single decade they've been in existence.
Chrysler has also shown a knack for stockpiling cash.
In the 1980s, Chrysler was pretty much America's most profitable car company. In the second half of 1990s, Chrysler had far more cash than GM and was a money making machine (till they got into a deal with DaimlerBenz who then proceeded to use the money to create Smart, redo and expand the Mercedes Benz line, and give huge bonuses to ever Daimler worker in Europe).
At least when Daimler took over, they at least pretended they were intrested in Chrysler's best intrest while they starved Chrysler off. It's no small miracle that Dieter Zetsche was able to get funded and made the Chrysler 300 and the rest of the LX cars. Looking at the cars Chrysler's bought out since then, today the LX cars seem like a very good car that was snuck through a system that was set up to produce cars whose sole purpose was to look ugly, feel cheap, and tarnish the brand.
Cerberus' intention for buying Chrysler seems to be coming into focus. Taking some extra cash that was laying around and plant it in an company whose assets were worth more than the investment & have the seller pay off any liabilities. Then set up a few partnerships for a few new models that don't require alot of commitment or money, find ways to utilize it's resources, and cool their heels till something came along that Chrysler could be traded or sold for that was worth significantly bmore than what they spent.
Ford was in worse shape than GM not more than 3 years ago. Even just over a year ago, Ford was looking and smelling alot like a corpse. However, Ford actually got a grip of what was really happening, got their management act together, looked at options, made some decisions even if it broke with past habits, & empowered people to make it happen. Ford will be doing bi-annual facelifts in the future, make many cars available here that are available in Europe, and even sold off divisions (which at the time I hated, but I now see as pretty wise and very smart in retrospect).
Point is, the Ford Motor Company in the good old American tradition is using their wits, resourcefulness, and common sense in order to turn themselves around. Today, you'd be hard pressed to find anyone in the know that actually doesn't think Ford's going to stage a major turn around as long as the economy doesn't cave in. Most all believe that of all 3 US manufacturers, Ford is the most likely to survive.
GM, meanwhile, seems to be lurching from one idea to another, determined not to realize that the old way of doing business isn't working, depending on government grants (and seemingly merges) to get the cash simply to keep operating till UAW deals kick in. Hate to say this, but I don't see the $1 billion per month burn rate turning into a profit simply based on UAW givebacks.
But aquiring an American icon such as the Chrysler Corperation only to take it's cash (and Jeep and minivans) and shut down the rest of the company to me is repulsive and represents the bad side of American business practices. Not to mention the number of people it will throw out of waor, as well as the effect it will have on the state of Michigan, not to the Brampton plant (home of the 300, Charger, and Challenger... IMHO true modern American cars).
If GM merges with Chrysler and incorperates them into the GM family, I won't be happy because I like the idea of competition between the US makers (without the success of the LX cars, we wouldn't have the Zeta here in the US, and by association not only the G8 but the Camaro wouldn't have come into being). But at least I could understand it.
But if GM gets Chrysler simply to raid their cash dismantle the company, and keep Jeep & minivans, instead of fixing what's actually wrong with themselves, I'd lose all respect for General Motors.
10-16-2008, 02:08 PM
#2
Registered User
Join Date: Feb 2002
Location: Confederate States of America
Posts: 1,049
I was telling people back in 99 that GM was in for big problems if they had to rely on their car platforms for survival. They were raking in huge profits off of SUV's and Trucks and basically said FU to the car side of the bussiness. Now they're having to play catch up with the japanese. They kind of got what they deserve for acting like pigs.
10-16-2008, 02:47 PM
#3
Registered User
Join Date: Apr 2002
Location: All around
Posts: 2,154
I am against any big 3 merger as well - though mostly because the cultures will never mix and it'd end up an even bigger mess. The idea of another pillage of Chrysler turns my stomache.
The hardest question I ask people is: "If you, as an automotive enthusiast, a fan of the product, the history, the culture, and the ideas... could pick one of the big 3 to close to save the other two - which one would you pick?"
10-16-2008, 03:05 PM
#4
Registered User
Join Date: Jun 2004
Location: USA
Posts: 456
Makes sense, I mean what does Chrysler/dodge really have? The aging 300 and its many clones, the hideous pacifica, the nitro and journey are just odd.
Theres a lot of stuff that overlaps with GM vehicles already, a merger between the 2 would never work out with keeping all the vehicles.
Theres a lot of stuff that overlaps with GM vehicles already, a merger between the 2 would never work out with keeping all the vehicles.
10-16-2008, 03:54 PM
#7
Registered User
Join Date: Nov 2000
Location: Kansas City, MO
Posts: 1,958
Makes sense, I mean what does Chrysler/dodge really have? The aging 300 and its many clones, the hideous pacifica, the nitro and journey are just odd.
Theres a lot of stuff that overlaps with GM vehicles already, a merger between the 2 would never work out with keeping all the vehicles.
Theres a lot of stuff that overlaps with GM vehicles already, a merger between the 2 would never work out with keeping all the vehicles.
Pacifica is already cancelled.
10-16-2008, 04:25 PM
#8
Registered User
Join Date: Jul 2006
Location: Minneapolis
Posts: 270
I'd rather see Chrysler go than Ford or GM. But I also don't want to see GM pillage Chrysler to live another year and still die a painful, bloated death. Then we lose both. The burn rate gives them less than a year under this plan....I don't like those odds.
10-16-2008, 04:39 PM
#9
Registered User
Join Date: May 2001
Posts: 1,023
If they had to merge, I'd want GM to be in charge. That's my only serious admission in this post.
I'm trying to put a humorous spin on what that would mean for me. Well, I'd have to keep and cherish a new '10 Camaro as the last American car that I ever loved from GM.
Since the word "****" makes some pretty good jokes when it preceeds Ford model names (**** Probe, **** Fusion, **** Expedition), there would be a whole host of new jokes. (**** Avalanche, **** Canyon, **** Cruze, **** Torrent).
But I think it would be status quo up here in the Northwest. There would be Chrysler/Dodge/Jeep/Ford/Chevrolet/Cadillac/Hummer/Pontiac dealerships as a single business that sells nothing but used foreign cars.
Sync and Onstar in the same vehicle could lead to a meltdown yet to be encountered by mankind. Not to mention, Sirius and XM would be fighting until the dirty end. And there would be rebadged Mercedes parts everywhere.
Not to mention, GM is already in bed with Isuzu and Daewoo. Chrysler is in bed with Volkswagen.
I'll officially call it "clusterf*ck to the end of the automotive industry."
I'm trying to put a humorous spin on what that would mean for me. Well, I'd have to keep and cherish a new '10 Camaro as the last American car that I ever loved from GM.
Since the word "****" makes some pretty good jokes when it preceeds Ford model names (**** Probe, **** Fusion, **** Expedition), there would be a whole host of new jokes. (**** Avalanche, **** Canyon, **** Cruze, **** Torrent).
But I think it would be status quo up here in the Northwest. There would be Chrysler/Dodge/Jeep/Ford/Chevrolet/Cadillac/Hummer/Pontiac dealerships as a single business that sells nothing but used foreign cars.
Sync and Onstar in the same vehicle could lead to a meltdown yet to be encountered by mankind. Not to mention, Sirius and XM would be fighting until the dirty end. And there would be rebadged Mercedes parts everywhere.
Not to mention, GM is already in bed with Isuzu and Daewoo. Chrysler is in bed with Volkswagen.
I'll officially call it "clusterf*ck to the end of the automotive industry."
10-16-2008, 04:46 PM
#10
Registered User
Join Date: Jun 2000
Location: SoCal
Posts: 3,463
For as many rumors as there are about this merger I don't ever see it materializing. It's too big and ugly with far too much negative and potential to fail for both companies to really go ahead with it. I know it's interesting and sells newspapers but this would be on of the worst business decisions in American history and I think they both know it. This isn't like Daimler coming in to buy Chrysler to get more American market share and this certainly isn't the late 90's.
Besides the next administration will likely help any of the big three under a new "share the wealth" program!
Besides the next administration will likely help any of the big three under a new "share the wealth" program!
10-16-2008, 05:20 PM
#11
Registered User
Join Date: Mar 2005
Location: Melbourne, Australia
Posts: 3,123
I actually have a few co-workers around here that feel Ford will be the first to kick the bucket to an almost painfully ignorant level. Anything can still happen, no matter what the signs look like at any given moment. I try not to make judgement myself, but atleast some of Ford has been honest with itself about what was wrong, and Chrysler hasnt had some of the control its needed (to a degree it hasnt been their fault) and then there's GM with a bureaucracy so bloated it should blow many more minds than it does.
I am against any big 3 merger as well - though mostly because the cultures will never mix and it'd end up an even bigger mess. The idea of another pillage of Chrysler turns my stomache.
The hardest question I ask people is: "If you, as an automotive enthusiast, a fan of the product, the history, the culture, and the ideas... could pick one of the big 3 to close to save the other two - which one would you pick?"
I am against any big 3 merger as well - though mostly because the cultures will never mix and it'd end up an even bigger mess. The idea of another pillage of Chrysler turns my stomache.
The hardest question I ask people is: "If you, as an automotive enthusiast, a fan of the product, the history, the culture, and the ideas... could pick one of the big 3 to close to save the other two - which one would you pick?"
Honestly, I'm not too sure what to make of all this. If GM buy Chrysler then I hope the traditionally strong Chrysler brands can be retained. I'd definitely eliminate some of GM's current non-performing brands.
10-16-2008, 05:25 PM
#12
Registered User
Join Date: Mar 2005
Location: Melbourne, Australia
Posts: 3,123
"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.
The market is just not big enough anymore for the number automakers out there. The Detroit 3 are no longer able to keep pace with their competitors. It might make sense after all?
10-16-2008, 05:36 PM
#13
Registered User
Join Date: Dec 2005
Location: Annapolis MD
Posts: 2,802
didnt read all of it, but on the surface it sounds like a good idea to me. Not sure I understand how you could buy a company for less what its assets and cash are worth though...
EDIT Willeys did NOT invent the Jeep we know today, nor did Ford with the GPW... Bantum did putting the first what is now known as the "Jeep" but actually a BRC together from junked parts. The first Jeep which was called the BRC or Bantum Reconasance Car not the jeep! Ford and Willeys stole the design as the Military allowed their engineers to watch Bantum refine the car when they won the contract. The military then gave Bantum the contract of the trailers for the vehicle Willeys stole from them and gave the 4WD military vehicle contract to Ford and Willeys.
http://en.wikipedia.org/wiki/Willys_MB
EDIT Willeys did NOT invent the Jeep we know today, nor did Ford with the GPW... Bantum did putting the first what is now known as the "Jeep" but actually a BRC together from junked parts. The first Jeep which was called the BRC or Bantum Reconasance Car not the jeep! Ford and Willeys stole the design as the Military allowed their engineers to watch Bantum refine the car when they won the contract. The military then gave Bantum the contract of the trailers for the vehicle Willeys stole from them and gave the 4WD military vehicle contract to Ford and Willeys.
http://en.wikipedia.org/wiki/Willys_MB
Last edited by 5thgen69camaro; 10-16-2008 at 05:49 PM.
10-16-2008, 06:10 PM
#15
Registered User
Join Date: Jan 1999
Location: Panhandle of West Virginia
Posts: 1,548
G.M. would also get Chrysler's share of the 25 billion bailout would they not? As for Ford, they are looking to sell their stake in Mazda.
NEW YORK (CNNMoney.com) -- Merger talks between ailing automakers General Motors Corp. and Chrysler LLC. are reportedly picking up amid increased interest from lenders eager to close a deal.
A report in the Wall Street Journal said banking giant JP Morgan Chase & Co. (JPM, Fortune 500) and Cerberus Capital Management, a private equity fund, are the "major players driving the deal."
JP Morgan is advising Chrysler in the talks while Cerberus would like a stake in a combined GM-Chrysler, the Journal said, citing people familiar with the situation.
But a deal is far from certain. The report said certain members of GM's (GM, Fortune 500) board gave the deal "a cool reception." And it is unclear whether the parties will agree to swapping Chrysler for GM's 49% stake in GMAC LLC, according to the Journal.
Despite the uncertainty, some top-level executives remain "bullish" on the prospects of a merger, the report said.
NEW YORK (CNNMoney.com) -- Merger talks between ailing automakers General Motors Corp. and Chrysler LLC. are reportedly picking up amid increased interest from lenders eager to close a deal.
A report in the Wall Street Journal said banking giant JP Morgan Chase & Co. (JPM, Fortune 500) and Cerberus Capital Management, a private equity fund, are the "major players driving the deal."
JP Morgan is advising Chrysler in the talks while Cerberus would like a stake in a combined GM-Chrysler, the Journal said, citing people familiar with the situation.
But a deal is far from certain. The report said certain members of GM's (GM, Fortune 500) board gave the deal "a cool reception." And it is unclear whether the parties will agree to swapping Chrysler for GM's 49% stake in GMAC LLC, according to the Journal.
Despite the uncertainty, some top-level executives remain "bullish" on the prospects of a merger, the report said.
Last edited by scott9050; 10-16-2008 at 06:18 PM.