flowmotion

At least Honda isn't buying other automakers just so they can shut them down and fire everyone.

flowmotion

I think Mulally "gets it" because he's pushing a globalized FORD product lineup and trying to cut back the extraneous parts. Adding brands and dealerships is just the opposite of what he's trying to accomplish.

mastrdrver

Reuters

Could GM be looking to off load Hummer to Cerberus in exchange for some more control in GMAC or cash?? Even if GM had 2% more control in GMAC, that could change things.

5thgen69camaro

That would be an interesting idea. Do you think Ford would be able to buy them? I would rather see Chrysler try to by Honda if at all possible. That to me would seem like a good Mesh of stregths that dont overlap as much. I was hoping GM would at some point. Hondas small car dominance with Chryslers off road jeeps and large cars Trucks and the like.


I was going to ask if you would become a Chevrolet/Jeep Dealer at that point but I guess not. The only thing Chrysler has that I have an emotional attachment to is the Wrangler, and Viper. I think that Freightliner Van competition has alot of promise too with diesel. If Chrysler is doing so well why do they keep changing hands? Why arent their products better? Im not trying to be nasty, Im just trying to understand.

mastrdrver

Just thinking, if GM is to build the Volt, how much better could it spread the loss than if it was building something along the same lines with someone else? Chrysler recently displayed 3 electric vehicles. One of which can go 40 miles on battery alone, sound familiar?

guionM

It IS a monopolistic move.

One company is taking over another to eliminate a competitor and gain it's cash.

THAT is a picturebook definition of monopolistic move, my friend.

And what?.... Buick made home appliences?

Only Chrysler will be killed, not turned into a division under GM.

I don't think you really know what you're talking about since most of the vehicles Chrysler sells are made in Canada or Mexico, and outside of the UAW.

So basically, you're saying you'd destroy a historic US automaker, wreak Michagan's economy, decimate those few remaining US based automotive suppliers, shut down 2 of the most high usaged auto assembly plants in North America, simply because you have your panties in a bunch regarding the UAW, who doesn't even make most (or even half) of the vehicles Chrysler makes?

As of your post today, I'm in agreement.

If this were true (and Pontiac got the Challenger) I would have very little objection to any of this. If it goes through, I hope this comes to pass.

But I don't believe it for a minute right now. I'd love to be wrong about all this, but GM's recent history and mindset doesn't support it IMO.

5thgen69camaro

With as many brands in the market as there are, I have a hard time thinking of it that way. I do see your point though.

guionM

Short answer: Robert Eaton.

Lee Iacocca views appointing him as his replacement as his biggest mistake.

Consider that when Eaton went to DaimlerBenz, Chrysler was one of the planet's most efficient automakers (not the US, the world!). Chrysler also had far more money than GM... tons of money. Even with all of this, Chrysler was still undervalued! To top it all off, Chrysler was significantly LARGER than Daimler Benz both in profit and vehicle production.

Eaton negotiated a deal with DB under the blanket that they would help improve quality and give Chrysler a global reach. What actually happened was that Eaton got a gastly amount for a retirement package, Daimler replaced as many executives as they could with people from the home office in Germany, they decimated Chrysler's product pipeline, raided Chrysler's cash stockpile to fund Smart, revise MB's product line, and give everyone at Daimler including assembly line workers huge bonuses.

Daimler's board forced Dieter Zetsche to spin off Chrysler, Cerberus bought it as a holding to trade or sell while preventing any cash losses (which despite a 25% drop in sales, they managed to do), and now they are looking to trade it for the rest of GMAC.

That's the short of it.

Lee Iacocca has an excellent book that goes into this.

The LX cars are actually very good. They aren't at the top of the class by today's standards (they came out nearly 5 years ago), but they did set the standard and have held up extremely well over the years. Ditto Dodge Rams, and to a smaller extent, Chrysler Minivans. Unfortunately, other Chrysler products took huge steps backwards as Daimler pressured Chrysler to cut costs.

One of the first things Naradelli did when he got to Chrysler under Cerberus was to immediately upgrade the materials of interiors in upcoming vehicles. the Journey and Challenger were the first vehicles to surface with these improvements. All other upcoming Chrysler's will have better materials as well.

What you and many others are seeming and conviently ignoring is that GM went to Cerberus to attempt to aquire Chrysler after Ford effectively told GM to "F*** Off" when GM went to them and attempted to merge.

It's GM that's having the problem NOT Chrysler.

Again, Chrysler makes less than half the cars globally as GM makes in the entire world, yet has well over half the cash that GM has and an estimated market value that's very close to the same (around $7 billion).

Chrysler's not exactly hurting. Chrysler simply has an private investment firm calling the shots, and they are highly intrested in getting the remainder of GMAC. A finance firm that makes money without the headache, labor force, and legal teams and engineers needed to run an automotive company.

scott9050

I dont claim to be an expert like you Guy. My thoughts was that it would send a signal to the UAW that G.M. was in much worse shape that they believe and they might be more willing to negotiate, and that might be part just a past of the reasoning behind this deal. So how about you stop putting words into my mouth?

guionM

I misread your post as more anti-union cheapshots, so being that wasn't your intent, appologies offered (doesn't happen often ).

The UAW and the CAW is very, very aware as to the shape of the US auto industry. The big difference is that the UAW has taken a commendably responsible and very compromising approach, while the CAW is still pretty militant, at least in rhetoric.

The UAW is still under the newly done contract and there is no need whatsoever to revisit or reopen. The UAW assumed the responsibilities of health care coverage with a fixed amount being given by the big 3, taking the burden off of them. Also, new wage scales are in place that while protects those that have given most of their working lives to an automotive company, starts new hires at a far lower grade and greatly revamps work rules and the ability to phase out job banks with buyouts. Basically, GM (as well as Ford & Chrysler) got just about everything they needed to be cost competitive (and even lower cost) with non union US plants owned by foreign makers.

The issue is no longer the union (and really hasn't been in some time). The issue is all GM now.

Unfortunately, while GM has led the way in rennovating cost out of the labor side, they seem to be having great difficulty in getting the management and product focus side in line.

The Camaro represents everything GM is capable of and what it needs to do. Create vehicles that are high quality, innovative, a bit risky, and steps outside the "safe" zone of the market. But instead of Camaro blazing a new trail, it seems that the opening was sealed up behind the Camaro, and GM reverted back to it's old ways almost immediately as demonstrated by the killing of the RWD Impala, the larger dealers of Buick's northeast region killing off the RWD Park Avenue, the proliferation of the Lambada crossovers despite a vow to end product overlap, even the RWD Zeta Cadillac DTS replacement which would seem as easy to sell as tea in China.

GM has absolutely amazing talent. GM has alot of great ideas (Remember the Kappa that was suppose to spawn a wide range of vehicles but never materialized?). GM has perhaps the world's greatest resources to create new vehicles (a small sedan based on the Camaro chassis is one idea GM's people have toyed around with) and they have the capability of getting new cars through development potentially at less cost than anyone else. But all of this seems to be bogged down with the old way of doing things.

If the tiny Chrysler division alone can have $11.7 billion in the bank(roughly 60% of GM's reserves), if Ford can come off life support with a plan and vehicles that have the potential to not just turn Ford around, but really make Ford blast off within a year, General Motors (with it's resources, talent, and scales of volume) should honestly be raping Toyota in the marketplace and have cash reserves that makes Ford's reserves look like a car's ashtray change fund.

Instead, GM is going around, hat in hand, to smaller US car makers (that happen to have alot of cash and even in Chrysler's case, a steady plan) seeking mergers and money.

Embarassing.

flowmotion

If GM has to go to the government for more help in 2009... I don't think the UAW has too much to worry about, because their guys will be in charge.

scott9050

G.M. is paying their dealers $250 to not finance through G.M.A.C.?

http://www.autolinedetroit.tv/journal/?p=963

1fastdog

My read, albeit quick, of the article does not come away with the conclusions being run with here.

I don't see the Cerebrus deal happening, although wants out of the car business in a major hurry. I'm of the opinion that this is a way for Cerebrus to announce to any and all interested parties that they want out NOW...

I didn't see anywhere in my quick read that anyone other then unnamed "analysts" are making the assuptions that this stuff is actually going on.

Maybe I need to read it again more closely to find the quotes from reliable sources...

Does the article mention these assumptions are coming from GM or Cerebrus? Strikes me it's some financial pundits musing.

guionM

What is known is this:

1. GM went to Cerberus with the intent to take Chrysler off it's hands.
2. One offer was to trade the remaining part of GMAC for it.
3. Cerberus views GMAC as an easier money maker than being a car manufacturer.
4. GM will increase their cash about 60% and will have even more assets to sell off (Chrysler's property & assets) to raise even more money, while gaining income from Jeep and Chrysler's minivans if the deal does go through.

GM's board, although said to be cool to the idea, isn't against it. Cerberus is intrested because they wouldn't have lost a dime and in fact will likely make money in the deal.

Problems?

* What is GM going to do with 10,000 dealers if they are already trying to cut as much as 50% of the dealers they already have?

* The UAW and the state of Michigan aren't exactly fans of this plan.

* With less taxes coming in and more money going out due to unemployment and Chrysler ceasing to be a tax paying entity, anyplace with a Chrysler presense is going to be hit hard at a time when everyone is hurting badly.

Finally, if you thought GM was a little distracted when they killed Oldsmobile? Wait till you see the distraction in incorperating and disposing a company bigger than Buick, Pontiac, and Saturn combined, that also has legal agreements and/or ties with Nissan & Mitsubishi, and factories in Europe as well as Canada and Mexico.

Caps94ZODG

So with that maybe they are not going to just burn the mopar bridge??
Part of the deal is they are getting is the way Chrysler does work as a company..what if and this is a big one..what if they take that mentality in with GM's planning and do in effect waht Chrysler has done for a long time..

The other thing is..Yea Chrysler has it going on now but what do they have comming out? They have the journy and the ram and the Challenger..what else? The LX fleet is old now and where is the replacement? To me it just looks like Chrysler was trimming the fat to make it look more appealing to be abosrbed by another company. Truthfully Chrysler as a devision could fold. They have nothing that Dodge could not have and Jeep is the corner stone to this. What if they got rid of Hummer and got Jeep, put Dodge where the Saturn brand is..maybe the saturn badge could be in the dodge lineup as a package or what not? I am sure Dodge sells way more than Saturn. And like said Chrysler well the ideas could be turned into Buick ideas..

and last thing is..nobody took a hissyfit to Benz when they effectivly cut off mopars ***** with what they did. I mean there could be some sort of antitrust thing going on on Chryslers side of what MB did to them..merger of equals that stripped them of everything..and left them with what is now a sub par rental car fleet..not much in the eyes of many..if you look at the way GM and more over Fords products are could you or would you say any of Chryslers new cars stack up in any shape? If not now when?

It just looks to me that this deal might of been talked about a long time ago..and now just getting finished with the cost cutting and the ideas that were all of a sudden shelved on both sides..