  Jdkeepsmiling Member Username: Jdkeepsmiling Post Number: 203 Registered: 01-2006 |
Here is the link to an article on MSNBC. It states that GM has entered talks to buy The Chrysler Group outright. Anyone have thoughts or chances of this actually happening? I can see some synergies, but as far as how this would effect Detroit, I see positives and negatives. Positives for the city, but negatives for the region. http://www.msnbc.msn.com/id/17 186447/ | ||
Cambrian Member Username: Cambrian Post Number: 639 Registered: 08-2006 |
GM keeps complaining they have too much capacity all ready. I can't see much good in the future of Chrysler if GM buys them. It would be only to have access to popular brand names like Jeep and the assets. | ||
Iheartthed Member Username: Iheartthed Post Number: 400 Registered: 04-2006 |
I thought GM was trying to unload divisions? | ||
Johnnny5 Member Username: Johnnny5 Post Number: 435 Registered: 06-2005 |
Expect some enormous layoffs and plant closures if this goes through. I'm mixed on what the results would be for the two companies, but without a doubt this would be a horrible event for Michigan. | ||
Cambrian Member Username: Cambrian Post Number: 640 Registered: 08-2006 |
Bad for workers and our middle class for the interim yes, but I can see the rationale. GMs cars are perceived as boring and Ho Hum, Maybe Dump Chevy for Dodge, replace Buick with Chrysler, dump dodge truck, keep GMC. If they get Jeep, what's that do to Hummer though? Maybe create another Division at GM, just for Jeep and make the H1 2 and 3 products of that? Keep the Challenger concept coming, rebadge the 09 Camaro as a Pontiac Firebird. Done right, it could make them profitable 5 years along, now if they play nice and return the favor by creating more jobs in MI when they are profitable remains to be seen. Rich Wagoneer is not like that unfortunately. | ||
Jdkeepsmiling Member Username: Jdkeepsmiling Post Number: 204 Registered: 01-2006 |
Johnny, Would it be more or less horrible then a Chinese company buying Chrysler? | ||
Rjlj Member Username: Rjlj Post Number: 263 Registered: 11-2003 |
This is a much better scenario compared to private equity coming in and dismantling the company or a Japanese company coming in and purchasing it. | ||
Izzadore Member Username: Izzadore Post Number: 19 Registered: 11-2006 |
There may be a silver lining to a foreign company like Chery or Renault-Nissan buying Chrysler. I think they'd be more likely to keep many more staff and possibly move the North American HQ to a downtown site. I think a GM purchase of Chrysler would be devastating to most of Chrysler's employees. | ||
Planner_727 Member Username: Planner_727 Post Number: 82 Registered: 07-2006 |
Chevy is the #1 selling brand... If anything they'd dump GMC for Dodge trucks. What a mess! | ||
Rrl Member Username: Rrl Post Number: 740 Registered: 12-2003 |
Don't hold your breath on any of this...it won't happen. GM is in no position to lay out the kind of scratch it would take to purchase Chrysler. | ||
Iheartthed Member Username: Iheartthed Post Number: 402 Registered: 04-2006 |
I can't see why a Japanese company would be interested in buying Chrysler. | ||
B24liberator Member Username: B24liberator Post Number: 11 Registered: 01-2007 |
I've been there, Rjlj. Nothing is sadder and more disgusting than witnessing the auctioneer feeding the hoard of vulture-like buyers as he sells off bits and pieces of your past livlihood. This one oily character (must of been important- he had two cell phones, in the late 80's nonetheless!)well, he was efficient-- I'll give him that. As soon as it was clear he was the winning bidder, a team of disassembly workers and their tools and trucks descended on our then (late 80's) hi-tech Cincinnati Milacron injection-molding machines-- Just minutes after the auction was over. Next stop Goldulong (sp?) China, along with our jobs. | ||
Thejesus Member Username: Thejesus Post Number: 593 Registered: 06-2006 |
"Expect some enormous layoffs and plant closures if this goes through. I'm mixed on what the results would be for the two companies, but without a doubt this would be a horrible event for Michigan." Some of you are too shortsighted...there won't be ANY jobs to layoff if these two companies don't repair themselves soon... Sharing technology, R&D costs, etc. would result in a high benefit for the companies | ||
Rhymeswithrawk Member Username: Rhymeswithrawk Post Number: 244 Registered: 11-2005 |
I don't think GM has the cash to do that. It might have the stupidity to try it, though. Kerkorian would be livid if he were still invested.  | ||
Scottr Member Username: Scottr Post Number: 262 Registered: 07-2006 |
You don't necessarily need cash for such a transaction. While I'm no expert, a stock swap is probably what would happen. When Daimler-Benz and Chrysler merged, D-B shareholders got 1 share of the new company for each share they held, and Chrysler shareholders got .542 shares or something like that for each share. | ||
Alexei289 Member Username: Alexei289 Post Number: 1250 Registered: 11-2004 |
... isnt this just to prevent from droping to #2? | ||
Kfcoupe Member Username: Kfcoupe Post Number: 21 Registered: 02-2007 |
The approximate selling price of Chrysler is 42 billion dollars. It's major assets are the Jeep & Dodge Trucks. It can also offer someone from outside the USA access to an established, experienced dealer base. This dealer base could be used to gradually bring in product of the overseas purchasers, first as Chrysler-badged vehicles, and as the platforms become accepted the foreign name can be introduced...kind of like what Nissan did in the USA years ago when they rolled in Datsun. Once that brand was accepted it was phased out in favor of the home product line. Watch for more from International Motors, LLC | ||
Jt1 Member Username: Jt1 Post Number: 8337 Registered: 10-2003 |
quote: No. Being #1 doesn't make a company profitable | ||
Cambrian Member Username: Cambrian Post Number: 641 Registered: 08-2006 |
Another thing that makes sense is to drop the Isuzu Diesel and use the Cummins in the Chevy trucks. A marriage made in heaven. | ||
Scottr Member Username: Scottr Post Number: 263 Registered: 07-2006 |
kfcoupe - you sure about that? i thought i saw somewhere it would be a $5 billion dollar deal... (perhaps Daimler retaining a stake?) but i've looked at so many news reports this morning who knows. i still think 42bil is high in any case. Going off of what you said, though, could this move be to prevent Chery or another Chinese company from doing just that? As much as GM has to fear from the Japanese manufacturers, China is far scarier in the long run. | ||
Sstashmoo Member Username: Sstashmoo Post Number: 9 Registered: 02-2007 |
Mergers to manipulate trade and who gets what, etc. Our politicians are at fault for giving these foreign companies such a warm welcome and free reign. Allowing the junk to be dumped here unabated, untaxed and rarely mentioned. The way I see it, it all goes back to campaign finance reform. These lobbyists buy our politicians and for the next four years, The crooks ship our manufacturing out as fast as they can get it loaded on ships(outsourcing, yeah right). The politicians allow it because they needed the 200 million to run a commercial on every network every 45 seconds for two years.. I always thought bribing politicians was illegal. Probably 180 out, but this is how I see it. | ||
Kfcoupe Member Username: Kfcoupe Post Number: 23 Registered: 02-2007 |
The total estimated value of Chrysler was pegged at around 42-44 billion last fall, based on total net worth, and assumption of all liabilities so D/C in Germany had an idea of a price tag. I think you might find that the GM deal involves the joint development work on the SUV project and a hope (by D/C) that things will grow from there. Chrysler and GM had some kind of joint development facility for drivetrains and other mechanical-based systems as far back as 1990 (I mis-dialed on the internal GM system and got the facility rather than the Wentzville MO car plant). | ||
B24liberator Member Username: B24liberator Post Number: 12 Registered: 01-2007 |
My concerns go out to the Chrysler workforce, other than that, I see it as a case of tit for tat coming back to haunt Chrysler-- They bought AMC to get their hands on Jeep, junking the rest of AMC rather quickly, I wonder how Kenosha Wisconsin is doing these days. However, Chrysler was just finishing what Renault started though. AMC was pretty much a bloody carcass before they got their grubbies on it... | ||
Kfcoupe Member Username: Kfcoupe Post Number: 24 Registered: 02-2007 |
In time, Kenosha has bounced back...most of the old AMC/Nash complex was torn down (as was Hudson, Studebaker, etc). As for the carcass, the plan (had Chrysler not come along) was to pressure the State of Wisconsin & others to cough up 155 million dollars (or so) to allow AMC to build a new state of the art facility west of the city of Kenosha (over by their car loading facility) or else they would vacate the USA for Bramela Ontario, and keep building jeeps in Toledo. Renault was going to take over AMC before the end of the 1980's and run it as its North American operation. Too bad...they had a rather nifty sports car ready for entry to the USA. You can see it in the presentation Lee Ioacocca recorded to welcome the AMC dealers into the Chrysler family ('but we'll have to break a few eggs' he told the dealers on the videodisk which I have). | ||
Scottr Member Username: Scottr Post Number: 264 Registered: 07-2006 |
I know I mentioned this a few posts up, but i posted a much more thought-out argument at another site, and thought i would share it here, with a few minor edits. I strongly suspect that this, if it happens, is mostly a preemptive move on GM's part to prevent a Chery or another Chinese company from buying Chrysler and getting a foothold in the American market. To any Chinese company, Chrysler would be a godsend, despite any legacy/union/overcapacity issues. It gives them three well-known brands, some with a loyal following (Jeep, Dodge Ram) and a nationwide dealership network already in place. Most (non-car buffs) still consider Chrysler 'American' despite the German ownership, and it would probably be the same for the foreseeable future should a Chinese company buy it. This would also give Chrysler ready-made access to the huge Chinese market, where GM is currently doing pretty well. If they put a couple plants in China to build vehicles for their market with current Chrysler designs, its only a matter of time before they could catch up to and overtake GM in China. And of course they would gradually increase imports of Chrysler-branded Chinese-built cars, starting with small cars, and working their way through the lineup and underselling GM in every segment. With funding from the Chinese government, the acquisition itself, as well as any losses due to the aforementioned issues would not be a problem, and will probably only be short-term anyways before they start raking in profits. This would be GM's nightmare - a well-funded, China-based Chrysler could quickly erode away a huge chunk of GM's market share, much like Toyota did, only faster. By purchasing Chrysler, even if they keep the brands mostly intact, they could delay this by a decade or so. That would give GM time to sort out their own issues not only with the current restructuring but with the merging of the two companies as well. Unless, of course, the Chinese buy Ford. However at that point, Toyota or Honda may step in, to prevent their own market share from being eaten up. Also worthy to note, is that after I posted this on the other site, Detroit News reported that Chrysler is introducing US brands in China, and will be building the Sebring in China for that market. http://detnews.com/apps/pbcs.d ll/article?AID=/20070217/AUTO0 1/702170329 | ||
3rdworldcity Member Username: 3rdworldcity Post Number: 458 Registered: 01-2005 |
$42 billion? Dream on. The total mkt cap of DCX is approx US$75 billion and virtually all of that is attributed to M-B. Chrysler is not so much an asset as it is a liability. However, because one of the immutable principles of business, the greater fool theory, is alive and well, someone may buy it for some amount of money (undoubtedly a hedge fund or two using some else's.). | ||
B24liberator Member Username: B24liberator Post Number: 17 Registered: 01-2007 |
Something akin to what Scottr posted, was this past summer's news about a Chinese concern trying to grab up Maytag appliances. Just a way to get their foot in the door, name-wise, for brand recognition Purposes-- Which unlike consumer electronics, they've had some trouble crashing the fridge/stove/washing machine market. | ||
Jimaz Member Username: Jimaz Post Number: 1571 Registered: 12-2005 |
Didn't Whirlpool buy out Maytag? I recently went searching for a toaster made in the USA. No luck. They're all made in China. I did however find some half-barrel planters made in Eugene, Oregon. Ironic that they're made by such a stereotypically obsolete profession as coopers. | ||
Korridorkid Member Username: Korridorkid Post Number: 46 Registered: 01-2005 |
Jimasz-I know where your coming from, and the irony, but!... Consider the Wine and Spirits Industries, most notably Bourbon and Whisky Distilleries as well as California Chardonnay. They demand alot of oak barrels! Don't have the figures but went on a Distillery tour in Kentucky for Maker's Mark (a moderately large corp.) and you should have seen the barrels...oh.my.God. Could only imagine Jim Beam! | ||
Kfcoupe Member Username: Kfcoupe Post Number: 25 Registered: 02-2007 |
Whirlpool did buy out Maytag last year. As for toasters, check to see if the Kitchen-Aid brand is still made in the USA or not..it was the last American made brand of toaster last time I checked the production disposition reports. Remember also that the price tag on a business includes all real estate held by it or direct subsiduaries. In the case of Chrysler, it would include all the dealership buildings (and land) that would be owned by the real estate holding company and leased to the dealers operating out of it, along with land (and facilities) values for the car plants, the Chelsea proving grounds and all those other places one might not at first think of. Add to this the market value of ALL production tooling, equipment, fixtures, etc and the numbers start adding up. | ||
56packman Member Username: 56packman Post Number: 1008 Registered: 12-2005 |
Don't buy a new toaster--go to an antique shop and get an old chrome GE or Westinghouse toaster. As long as it has a good, safe power cord it will work better than any chink toaster will. You will also pay about $4 | ||
Scottr Member Username: Scottr Post Number: 268 Registered: 07-2006 |
an analyst with bank of america puts the price tag at about $5 billion. http://freep.com/apps/pbcs.dll /article?AID=/20070217/BUSINES S01/702170319/1014 remember gm would also be taking on billions in liabilities as well, like potentially billions of dollars in future losses. legacy costs as well. buying a distressed company is nothing like buying a healthy one. for example, the recent purchase of Lear's interiors division by Wilbur Ross. Some actually said Lear was essentially paying Ross to take it off their hands, and that included machinery, land, etc too. | ||
Rhymeswithrawk Member Username: Rhymeswithrawk Post Number: 272 Registered: 11-2005 |
Do you think Hyundai is interested? | ||
Scottr Member Username: Scottr Post Number: 270 Registered: 07-2006 |
I see autoblog is wondering the same thing. It's definitely a possibility. I don't see it happening though, a GM link-up of some sort seems more likely in my opinion. I also saw a news article that a GM-Chrysler deal could be more along the lines of Nissan-Renaults relationship. each would have about 20% ownership of the other, they would share development, manufacturing, and sales, but would still remain technically separate companies. edit: okay, can answer that better now. No. they're not interested. http://www.charlotte.com/mld/charlotte/business/16730593.htm (Message edited by scottr on February 18, 2007) | ||
Supersport Member Username: Supersport Post Number: 11285 Registered: 10-2003 |
Sure would be nice to have Chrysler 'Merican again. | ||
B24liberator Member Username: B24liberator Post Number: 18 Registered: 01-2007 |
Well, the apple pie flows in my veins also. If for no other reason than pride-- I'd like to see Chrysler 'Merican again as well (too many relatives living and dead roamed Dodge Main, for me not too!). Oh, and by the way, that's what I get for posting all to briefly: Yes, Whirlpool got Maytag-- But a Chinese conglomerate was waving the most cash around, but there was a small ripple of protest about China trying to gobble up an American 'name'- Don't remember the particulars, but there was some heated commentary going on about this in various business oriented publications at the time... | ||
Opus Member Username: Opus Post Number: 33 Registered: 08-2005 |
Do they keep RenCen or do they keep Auburn Hills beacause they sure as all get out wouldn't need both. The whole Chinese argument is the only one that makes any sense. Otherwise this would be the dumbest thing GM has done since the Chevette. | ||
Scottr Member Username: Scottr Post Number: 278 Registered: 07-2006 |
IF they did get rid of one, it would be Auburn Hills. GM is much bigger than Chrysler, and wouldn't squeeze into that space any time soon. Plus GM has put a huge amount of investment into the RenCen and the surrounding area, and I don't think they would give up on that so quickly. I think they may keep both, at least for the first few years, maybe even a decade. They may not fill them to the brim, but at the same time, how many people are in the market for a huge building complex? not to mention the pentastar that i imagine would have to go. all the engineers would have to squeeze into the warren tech center too. Does the rencen itself have the room for those people? Even with certain mass layoffs, you will still have a lot of people you'll need to find offices for. Although I suppose they could kick out EDS and whoever else is in the 500/600 buildings. They may also keep the two fairly separate, until Chrysler is done with their turnaround and is no longer takeover fodder, then spin them off into their own company again. Whatever the case, I don't think either one will be vacant until at LEAST 2015, probably later. The newest rumor I heard, involves a Nissan-Renault style alliance between GM and Chrysler, in which they would remain separate companies, but would share development, manufacturing, and marketing. Each would have ~20% ownership of the other. That honestly makes more sense to me than anything else. | ||
Scottr Member Username: Scottr Post Number: 279 Registered: 07-2006 |
btw, opus, you forgot about the aztec. i don't particularly agree with your chevette statement either, but certainly the aztec was worse. oh, the fiat fiaso too. $2 billion to NOT buy a company, who then uses it to buy maserati to celebrate the split. good job, gm! | ||
Livernoisyard Member Username: Livernoisyard Post Number: 2570 Registered: 10-2004 |
Why would GM consider purchasing Chrysler and, thereby, inheriting their UAW workers? Especially after all the expense incurred while getting rid of their own. Maybe later, after DCX dumps their excess capacity and most of their UAW. | ||
Scottr Member Username: Scottr Post Number: 281 Registered: 07-2006 |
LY: You may want read my post further up the page regarding preventing a Chinese company from buying Chrysler. It's the only logical thinking I can see for an outright purchase. Chrysler could do far more harm to GM in the hands of a Chinese company than it could as part of GM itself. | ||
Livernoisyard Member Username: Livernoisyard Post Number: 2571 Registered: 10-2004 |
A security analyst was just (4 PM news) on WJR stating that both firms already had "too much on their plates" concerning excess capacity and excess people. GM's buying a DCX brand outright without any employees attached to it seems more doable. GM could use some of their excess buildings too for any such purchase, it need be. Few Chrysler plants would be safe under that scenario. | ||
_sj_ Member Username: _sj_ Post Number: 1730 Registered: 12-2003 |
Rumor : Chrysler to be placed on the auction block. | ||
Scottr Member Username: Scottr Post Number: 282 Registered: 07-2006 |
That's what most are saying, but i've seen few people looking at any reasoning why they ARE considering it - most of it is why they should NOT be. That's all fine and dandy, but when it boils down to it, these analysts are just observers sitting at a desk in new york staring at numbers on a computer screen all day, and usually only caring about next quarters earnings. GM is looking further ahead than that, looking past the restructuring, and considering what could throw the plan off. The last thing in the world they need is to be undercut by the Chinese within a couple years. Chryslers problems may look like no-brainers in comparison to that. And with Chrysler already making cuts, that could do a lot to improve that situation, at least to the point of being manageable. Understand I'm not saying this SHOULD happen, only that I can see the rationale. also be aware i'm doing little more than sitting in front of a computer screen looking at numbers, so i have no more claim at being right than anyone else. I just can't stand the know-it-all analysts. |
