GM in talks to buy.....CHRYSLER!!!!

[Reatta Man]

Here's the story link:

http://money.cnn.com/2007/02/16/news/companies/chrysler_gm/index.htm?cnn=yes

It makes me wonder if Buick or Pontiac would be in danger if GM buys MOPAR?

Anyone from GM have any other news on this?

Joe

[Aaron65]

Why would GM, who may just now be turning the corner, take on such dead weight? I don't think it will happen...

[Guest my3buicks]

hhmm, a GM badge on the front lower fenders of a Chrysler, wouldn't that shut the Mopar guys up fast.

[NTX5467]

I haven't read the linked article, but there has been "talk" of spinning off Chrysler from the DaimlerChrysler group for some time. From what I've read, this orientation is being "floated" by German investor groups rather than on this side of the water. Many of these groups liked the added profits that helped pay for many of the troubles at Mercedes (what I called "Chrysler's Golden Eggs", or profits from the first gen of LH cars and other breakthrough vehicles they had in the 1990s, when ALL of their assembly plant were running full blast and corporate profits and employee profit-sharing bonuses were at all-time industry high levels), but when a few strategic decisions went awry (after many of the Chrysler people responsible for their earlier victories had exited the "merged" company) and the "golden eggs" had somewhat mysteriously disappeared, then the investors turned against then-current DC operative Jurgen Schrempp (sp?) and resulted in Dr.Z coming on board as the new head leader of DC. Many Germans questioned the original decision for the "merger" in the first place, until the profits from the Chrysler side of things made their securities more valuable, but when things started going the other direction, they became unhappy (as you might expect) as they perceived the Chrysler Group was the only negative issue there. Many of Mercedes' quality control problems back then were not widely reported outside of Europe, but that does not mean they did not happen (as automotive historian Ed Wallace reported back then).

On the surface of "the merger", Chrysler had much to offer in vendor relations and getting good products to market quicker at that time. When you reduce what it takes to get a vehicle to the end of the assembly line, profits happen quicker (I remember reading that the whole R&D and such for the LH cars was paid for in 3 years, as Lutz put some definite limits on what those things should cost, relative to the prior K-cars). Remember when Kerkorian tried to make a few end-runs to get Chrysler to pay more dividends? I highly suspect that one of those deals led to the first thoughts of a pairing of Chrysler with a larger global entity (in the first Iacocca book, from the early 1980s, there was a later chapter that mentioned just such a pairing . . . with a vehicle entity back then, which was not Mercedes-Benz). Prior to that time, Chrysler had had agreements with Simca and other world-wide brands for captive imports in particular markets.

When the Lutz-era Chrysler was "merging", much of that prior talent ended up at GM and Ford. This tended to fast-track the careers of many younger employees (at The Chrysler Group) from those earlier times, which might have been a good situation in some cases, but a deteriorating situation in others. Not to mention the HUGE cultural issues! I initially perceived that if BOTH Chrysler and Mercedes could equally contribute to the situation, some great things might happen. Many people were of the orientation that having Mercedes involved would magically lift Chrysler's status in the process, but I didn't see anything come of that situation which could not have been done independently by Chrysler on their own (from my perspective) if they had decided to do them (or expand the quality system from the Viper plant's orientations). It did give Chrysler inside availability to many things (which were possibly over-reported over here and not really liked over there), but some of these things tended to have variable consequences as USA consumers and German consumers don't always like the same things (like the cruise control stalk on the current Chrysler 300/Dodge Charger vehicles, which is a pretty strong piece of metal as it can get confused as the turn signal lever sometimes!). Putting an older person in a vehicle with the right hand steering column stalk running the windshield wipers usually results in the wipers becoming operative as the driver desires to put the transmission in "Park", by observation, rather than use the "stick shift" on the floor (which they associate with a "cheap car" rather than a "sporty-oriented car", with all due respect.

Now, be that as it may . . . the end result of the "merger", as reported in the more recent time frame after Dr. Z returned to Germany to run DaimlerChrysler, has been "The Chryslerization of Mercedes". While here, he and his associate Bernhard pretty much were the "kids in the candy store" as they were freed of the traditional Mercedes framework of doing things. What resulted has seemed to be a pretty decent combination of strategies, policies, and orientations. Not sacrificing the beloved Mercedes precision in doing things, but knocking down the walls to let them happen faster and more cost-effectively. It was such a thing that Jurgen Schrempp allegedly saw as the ultimate DaimlerChrysler result, just that it took Dr. Z to make it happen as it has.

I always got amused at the comments from German investors (as reported in the USA press) as to why Mercedes needed Chrysler in the first place as Chrysler built "stodgy" vehicles. It made me wonder what they considered the squarish-styled Mercedes vehicles to be? If you look at more recent Mercedes styling, it's become much more aerodynamic and "swoooopppppyyyyyy" with laid-back grilles and frontal areas. Only thing is that on some, you could put a Hyundai "H" and other ornamentation on them and it might look appropriate as other makes got to that styling shape just before Mercedes did. Under that swooopy Mercedes styling still rests some of the best engineering in the world . . . but it's interesting to look at the Mercedes 3.5L V-6 with all of its nicely-ribbed cylinder block castings and overhead camshafts and such (as in the early Crossfire), but only puts out less than 250 horsepower . . . when the original Chrysler 3.5L OHC V-6, in the LH cars in the early 1990s (and especially the later versions witih more power and fuel economy), put out equivalent power and longevity with a lot less "mechanism" and assembly cost. They might not have talked about that in their product meetings over there. OR the sudden (and unknown-about to Dr. Z and Bernhard at the time) appearance of a Chrysler Pacifica-type vehicle at the Detroit auto show one year.

Sometimes, I think the automotive press gets a little creative on slow news days, which has led to the allegedly renewed speculation of Chrysler being spun-off from DC. Similar with particular brands of FoMoCo and GM not being needed any more!!!! To their credit, these (apparently) newer reporters do their homework and see (on the surface) eroding market shares and such which would be "weights" on corporate profitability, therefore, "somebody" makes the intial statement as to why these brands need to be pared-down so the investors' equity is not diminished in the companies. On the surface, these look like viable conclusions, but it also indicates a certain lack of knowledge about how the marketplace works!!!!

As we've all observed over the past decades, the import brands have increased their market shares (of the total new vehicles sold) as they've plugged holes left in the marketplace as domestic brands have exited (or not added newer versions of then-existing product) certain market segments. When the Regal Coupes (and other similar market segment vehicles) were not replaced in production, suddenly . . . we got Toyota Solara and similar Mitsubishi coupes, seemingly "on cue". As Camaros and Firebirds decreased in numbers (and obvious less product investment from their corporate parent!), suddenly there were Mitsubishi coupes and convertibles to catch the fancy of a newly-emerging pre-driver's license group of future consumers! The Detroit makers had allegedly determined that those particular market segments were "not profitable", so they left those holes for the import brands to drive right into.

Similarly, in the last full year of Oldsmobile production, there were about 250,000 vehicles sold under that nameplate. How many smaller import brands would it take to sell that many vehicles (with an existing dealer network in place to do so, shared with other GM brands) in the USA?? There were several. In their wildest dreams, the operatives which "sold" the demise of Oldsmobile to corporate operatives as "good for the corporation" did not realize that those people bought Oldsmobiles because they were "Oldsmobiles" and not "GM vehicles" per se, therefore, those prior Olds customers/owners did not readily trade into other GM vehicle brands, but went elsewhere (it has been observed that they stayed with their existing dealer who typically also had another import brand they had been selling) than GM. If those Olds owners had been wanting a Buick or Cadillac or Pontiac, they would have been driving THOSE cars already rather than an Oldsmobile--a fact that some seem to have not understood.

The more "modern" orientation has been toward "price points" rather than product orientation and content. The more modern operative seems to see no real reason to have a $28K Chevrolet and a $28K Pontiac and a $28K Buick sitting on the same lot on the same GM platform, as they perceive that the same buyer would buy either of them as a commodity rather than a "purchase with character". They look at price duplicity rather than viewing each of GM's (and Ford's and Chrysler's) brands as unique entities that fill a particular niche in the total vehicle marketplace, even if they all cost the same to the customer. They believe the "Vehicle for every purse" orientation is outdated . . . but they also FAIL TO NOTICE just how Toyota and Hyundai and Kia have built their product lines over the past decades and where those product lines have evolved into!

There also seems to be a lack of understanding of how many vehicles it takes to make a production plant facility pay for itself. When the GM market was booming in prior times, it was fine to have a plant with one or two products in it, but it now seems to take three products to do the same thing. Therefore, if the plants are to be kept running at near-optimum levels of production (AND EMPLOYMENT), decreasing GM's model offerings and sales divisions in NOT an option. Some prior operatives seem to now have their wish that Saturn has now seemed to take the place of Oldsmobile in the total scheme of things, be that as it may. Still, the same plant that does the Pontiac Solstice also does the Saturn SKY and Open GT, with similar things in almost every other GM plant in North America. Several side issues to consider as "fall-out" if any more of GM's brands might be deleted in the future, side issues which many have not even considered as "third" or "fourth" level side issues in that situation!!!!!

When it was seemingly popular to diminish product offerings in the "delete Oldsmobile" era, Plymouth also was finally deleted from the Chrysler-Plymouth product pairings. Interesting thing (as reported on AllPar.com) is that when Plymouth was gone, existing and prior Plymouth owners came into the dealerships wanting a new Plymouth minivan (just as similar Olds owners went in looking for a new Olds with a bench seat and a column shift). When they were told there were none, but they had this "Chrysler" van for the same money, they allegedly replied "I don't want a Chrysler, that's too expensive for me" and left (just as the Olds owners did not want to look at Buicks or Pontiacs, for similar reasons . . . the "Buick is too expensive" and the "Pontiac is too sporty for me" . . . or the image I might desire to reflect to others orientations). Interestingly, the amount DC corporate sales decreased tended to mirror the numbers which Plymouth sold the prior year. As Toyota's SCION brand was becoming established, there was talk within DC about a similar "entry level brand"--just what Plymouth was for Chrysler Corporation, but not bringing back "Plymouth" as a brand.

A few years later, Buick was still leading their market segment in sales, but that segment's sales were off from the prior year. Therefore, those earlier "Buick must go", "Mercury must go" comments were read and speculated about in the media. Again, good research which was positioned poorly in the total scheme of things!!!! As I recall, the Ford/Mercury operatives were somewhat badgered at press conferences about the demise of Mercury for sometime . . . until a high level operative flatly stated that Mercury was not going away in the (then-near) future. Then, that "breaking news" item of Mercury's demise did not happen.

It's seemingly always easy to find simple answers to highly complex solutions, which tend to gain credibility as they are parroted-back by other news outlets and such, but when the more in-depth issues are considered, what's on the surface suddenly becomes more marginal than "the parrots" would like for it to be. The same thing happened in the Ford/Firestone situation with "underinflated tires".

When we were growing up, the normal tire pressure for "regular" driving with nothing in the trunk was 24psi. That worked well as long as the tires were big enough to start with. If higher speed driving was to be done, then you put them to 28psi, with a max of 32psi being needed for "max" vehicle loading and/or speeds below 75mph (sometimes with a specified front/rear bias in where the higher tire inflation pressures were needed). The higher pressures were there for added weight-carrying capacity and also for less heat build-up at those speeds/conditions. Of course, that was also in a era where there were real "service stations" everywhere with a generally caring owner/operator that took care of such things and looked after their customers!!! So, if the tires are sized adequately for the vehicle, if Firestone wanted 30psi and Ford wanted 29psi, that's not enough real difference to make a real difference in much of anything, by prior orientations, but that suddenly became "underinflation" and "dangerous" as those hearings progressed. But it did serve a good purpose in getting the general consumer to be concerned with something other than if the vehicle has gas or motor oil (with instrument cluster lights for that "check") in it, with all due respect.

Although many might not agree, Chrysler has had some great products since the early 1990s and the pre-"That thing got a HEMI?" days. With some pretty good marketing, too. These things further cemented the Chrysler enthusiasts as they tended to embrace what was new and different (from the earlier times) and in-demand at the dealerships (some of the demand which was created by the enthusiasts themselves for their daily drivers!). Before the "Chrysler Bailout" federal loans were approved (in the 1980 time frame), there was general speculation that Chrysler enthusiasts would turn to Ford for their new vehicles rather than GM, though--yet if GM gets their 2009+ vehicles out (which we've seen hints of!), that could change.

Personally, I believe that Chrysler might be spun-off if the German investors keep pushing for it (allegedly leaving a "healthy" Mercedes behind!) and that it could survive with the correct input and funding, but I don't really see GM as a potential suitor (although GM has a much larger number of former Chrysler employees now than in prior decades--Chrysler employees with an observed resiliency and opportunistic orientation toward products and how things can work, quickly).

A downside to these news articles is that it hurts the USA car market when the news media repeatedly sends out sound bytes about "_______ could be closed as a Brand by ___" when that same brand is still healthy with many existing and loyal customers out on the roads of the world. It seems that the news media would rather have their ratings rather than have any concern of potential damage they might be doing to a huge segment of the USA economy!!!! Perhaps this is one reason that many of the problems at Mercedes (back then) have not been reported in the USA or were possibly kept quiet outside of German borders, by observation? It seems that the USA brands can do little "right", but the imports (even in their most segment-trailing vehicles) are doing all of the good--according to media sources and "experts".

ON THE OTHER HAND . . . if GM is considering a deal with The Chrysler Group, they MUST see some upside to this deal and future opportunities which the Mercedes-oriented operatives have been blind to. Not to mention an "enlarged empire" to possibly maintain their status (as always reported at the end of most press articles about GM) "The World's Largest . . . . "? Might be some interesting side issues to such a deal . . . provided they continue to let Chrysler be Chrysler (product innovation and exploration of market niches, being smaller and somewhat more responsive to customer desires in the marketplace, and continue to learn from Chrysler's prior victories in prior decades.

To me, it's time for the USA brands to BUILD rather than cut-back. It's always easy to cut things and generate short-term profits with decreased overhead and have these things turn up quickly on the balance sheet and profit/loss statements, but it take guts and determination to BUILD as "experts" claim you should do otherwise and IF we dont' get our side of things BUILT and made even BETTER soon, there might not be very many more chances to do so. Chrysler's 1990s-era profits were from building vehicles that were innovative and imaginative (with solid market research behind them, but not "years" as some had been doing) that gave the consumers something that had been lacking from other manufacturers. In each market segment their new vehicles were introduced into, they might not have had the production capacity to be a real threat, but they INFLUENCED every market segment they were in as they had "the product buzzzz" and they were what people were talking about--even influencing several aspects of GM light duty trucks too, influences which are also apparent in the new Toyota Tundra pickup truck. At the same time, also being highly successful in certain market segments which GM has recently exited (or tried to re-enter) . . . and helping to force the rise of diesel-powered light duty trucks in the USA market.

Just some thoughts and observations,

NTX5467

[Dave@Moon]

There is almost no advantage to GM if it bought out Chrysler. The only thing they have to offer GM is a strong product line in the currently weakening mini-van market, which frankly has great growth potential as gas prices climb.

This is (IMHO) being hyped under the table ( and naturally officially denied ) to prop-up the bids from potential real buyers for Chrysler, which will almost certainly be overseas. (Best guess-China)

GM-Chrysler merger: Just a bigger mess?

GM-Chrysler deal? Investors skeptical

[Rawja]

Good post NTX.

I don't agree with absolutely every point, but it certainly was a cogent, thoughtful piece of prose. I really appreciated it.

That said, I'm more with the Moon on this one, it'll be another foreign company if there is be be anyone.

In order of likelyhood (IMO)

Japan (Toyota)

Europe (Renault or PSA/Citroen)

China (? I guess in the end it's all just "China")

[Reatta Man]

As I see it, there are several things GM can benefit from now, and a few more in the future.

1. JEEP. No matter who has owned that brand, they have not been able to screw it up. The Jeep buyers

must be some of the most loyal owners in the world. GM gets a solid, untarnished brand right out of the

box. Quite frankly, I'm surprised "Dime-ler" didn't do more to upscale Jeep here in the U.S. and around the

world to position it as the premier luxury off-road vehicle, away from Land Rover, one of the lowest

ranked vehicles in quality yet still has a premium price and cache.

2. Chrysler and Dodge minivans. Fix the $%^^&*()!@ transmissions in those things so they don't self-destruct between 70K-90K miles and they blow everyone else out of the water. GM and Ford have never been able to come close to their

minivans, and Ford even announced recently that they are getting out of the minivan business.

3. Crossfire and Sebring. Crossfire is a Mercedes at a bargain basement price with a ton of great technology. If the Crossfire look is a sucess in the new Stratus model just coming out, Chrysler could even rejuvinate the sedan business and take some sales away from the incredibly boring looking sedans from Toyota and Honda--if Hyundai doesn't do it first. Sebring took the prize of best-selling convertible away from the Lebaron back in '96 and has continued to own that market.

4. Dodge trucks. With GM owning Dodge (and their Cummings diesel engines) when combined with the GM Duramax diesel engine, GM would have the #1 and #3 best selling truck lines in the country. (Yeah, I know Ford claims they are #1, but add the sales of the twins, Silverado and Sierra and GM is #1)

As for the rest of the Chrysler lineup, gradually reduce the slow-selling Chrysler SUV models and GM could be on solid financial footing years ahead of where anyone expected them to be. This could include merging any liabilities they have for retired GM and Chrysler employee benefits into one pool, and negotiating one UAW contract to cover the combined companies and suddenly Toyota's assumed dominance and predicted #1 ranking as the world's largest car company isn't such a sure bet anymore.

[Guest fourholer]

I am a Jeep owner and I will tell you that the one big screw up was discontinuing the Cherokee. The Cherokee was the perfecrt fit for people who could not afford the Grand Cherokee or simply did not want the bells and whistles associated with the Grand. I live in Colorado and I see Cherokees around all the time and I don't think they have been made since 2001. The Liberty doesn't come close to the room in Cherokee. The 4.0 inline is bullet proof. I would buy a new one in a heartbeat and I bet I'm not the only one.

[Guest COMPACTBC]

Good BLOG NXT5467. A lot of interesting insight to the International Auto industry. I for one think the merger that formed DaimlerChrysler group was a good one, especially for Chrysler. I have been a Buick fan since 1962 and totally lost my interest in them in the middle of the 70's. <img src="http://forums.aaca.org/images/graemlins/frown.gif" alt="" /> I had been waiting patiently for Buick to come out with something exciting since then, but I got tired of waiting in 2006 and went looking for something that wasn't shaped like a jelly bean or a slice of cheese, had performance and rear wheel drive. <img src="http://forums.aaca.org/images/graemlins/smirk.gif" alt="" /> I found what I was looking for in a 2006 Dodge Charger R/T. It has fantastic looks, rocket ship performance, rear wheel drive, lots of Mercedes engineering and more "whistles and bells" than I can remember. I fell in love with it at first sight and test drive! <img src="http://forums.aaca.org/images/graemlins/cool.gif" alt="" /> I have company from another long time Buick fan, because after he saw my Midnight Blue Charger he went out a bought a "Go-Mango-Go" (Orange)Daytona Chager. We are both very happy with our new Chargers. <img src="http://forums.aaca.org/images/graemlins/smile.gif" alt="" />

[Guest elk93001]

The one possiblity that I thought of could be that if Chrysler is spun off they may be looking for another European/Asian partner. Since the GM Renault Nissan talks went nowhere, perhaps Chrylser group is looking for some type of inside track to see what Carlos Ghosn was looking for. GM and Chrysler have several joint ventures, where GM may be able to benefit should such a merger occur.

The Oldsmobile/Plymouth "nameplate theories" seem to hold true as both GM and Chrysler found out, perhaps GM and Chrysler would be looking to market minivans using GM powertrains. Ford seems to be re-inroducing the Taurus/Sable nameplate for very similar reasons.

Chrysler may seem like deadweight to GM at this point (as Moon pointed out) it does have some jewels (minivans, Jeeps, full size trucks, innovative design) that could benefit another partner like Nissan and Renault (the Nissan full size truck is floundering compared to The GM Ford Dodge offerings and is being overshadowed by the new Tundra)

My take on this would be partnering with GM on certain projects not a full fledge merger, however it would make more sense for a Chrysler Dodge Jeep Renault Nissan merger, where GM may benefit as a supplier for some of the technology they were working on with Chrysler.

[NTX5467]

From what I read, Carlos Goshn was looking for some of GM's shuttered plants to use to expand his manufacturing base into the North American Continent. And do it at "bargain" prices. Nissan already has a couple of plants in North America where they build several of their car lines and possibly the Titan pickup truck.

Over the decades, there have been several joint ventures among the "Big 3". HD 4-speed manual transmissions is one and 4-wheel drive transfer cases is another one. Not to forget the new 6-speed automatic transaxles either!

To me, the "Taurus" rebadging of the Ford 500 is an ill-fated and questionable move. When I first saw the 500 at a Ford Innovation Drive event, it struck me as a great family car . . . lots of interior room and a good trunk. For the generic family use (which also includes some of the lower-powered versions of other brands of cars!), the engine power was "ballpark", as was the performance. It did nothing really wrong, but the press hammered it for "no power". As with many newer vehicles, there is not much low-end torque in the high-tech OHC motors . . . and the CVT they tried to use didn't help much. Still, it had a "Ford family car" look and should have done better than it did. I also like the "500" name as that draws on the Fords of prior decades (where the "500" was added to the base model name to mean it was the "top model" of that range . . . i.e., Galaxie 500, Fairlane 500).

I'm not sure why Ford's powertrain program seems to be lagging behind the others or for what "inside" reason. The Taurus/Sable ran decently, but I suspect the 500 is heavier and that will slow things down some. I haven't driven one in the real world, but the ones I drove that day were sluggish off-the-line (with either transmission). Otherwise, the 500 and the smilar Mercury came in at great price points for their equipment levels and were nicely trimmed. Must have not had some of the best marketing in the segment or something?

I was surprised when MOTOR TREND positioned it against the Chrysler 300 (before the Dodge Charger was released), especially a 300 Hemi V-8, but it seems like I recall it doing pretty well, even with the lower-power engine and fwd. The problem I see with the "Taurus" is that they only changed the nameplates on the car. No real different styling or ornamentation to make it look better and differentiate it from the prior 500s (which look the same). I think I could have built a marketing plan to position the 500 against the Impala and Charger that would have worked. Unfortunately, a mediocre marketing plan will not sell a great car, but it can happen vice versa.

Just some thoughts,

NTX5467

[lrlforfun]

I remember when GM was thinking about matching a Chevrolet with a Toyota. The late Herb Caen called it a "Toyolett" Mitch

[NTX5467]

The GM "joint venture", NUMMI (New United Motors Manufacturing Inc. . . . if I recall correctly what the parts of the acronym were), which generated the last Chevy Nova (fwd) in North America, was with Toyota. The vehicle was, from what an operative that was supposed to know these things noted, a "home market" Corolla (home market = Japan, rather than the Corolla that was imported into the USA at that time) in sheet metal and such. I recall they had Firestone tires, a Delco battery, and a Delco radio, and everything past that was Toyota.

Enjoy!

NTX5467

[BUICK RACER]

Today they build the Pontiac Vibe and the Toyota version, I can't think of the name, prior to that the Chevrolet Prism, my sister has 2 of them, one for her and one for my niece!

[NTX5467]

Yep, the Pontiac Vibe and the Toyota Matrix. Not to forget the Geo Tracker (i.e., Suzuki) in the company of other GEO vehicles.

NTX5467

[Guest Skyking]

Refreshing Article For A Change

By Jerry Flint, Feb 19, 2007 in The Car Connection

Chrysler is in play. That's the Wall Street term meaning that a company is up for sale and its stock will get lively. DaimlerChrysler stock was up by $6 a share the day after the game began.

The Germans running DaimlerChrysler's board of supervisors want out. And if they can't get out all the way, they would accept a partner to share the risk. Why? Chrysler is losing money, $1.5 billion last year.

Heck, that's chump change in today's world. Well, guess what: smart - you know smart, the tiny European car they make - has lost lots more than that over the years and they aren't dumping smart. And Chrysler prospects are a lot brighter than smart prospects, even when they sell them Stateside.

I suspect the snotty Germans just don't think Chrysler is good enough to associate with their three-pointed Mercedes star. And half of that German supervisory board is made up of representatives of labor, including unions - that's German law. Unions don't like money they consider theirs going outside the country to support other operations. It was the French unions that pressured Renault long ago to sell off American Motors - later bought by Chrysler - just as the company was turning the corner thanks to a booming Jeep business.

Maybe I'm prejudiced here, but I'll remind you that Chrysler was doing just fine without Daimler. The profit was $3.5 billion in 1996. In fact, in four years from 1994 to 1997 Chrysler had net income of $12 billion, more than Daimler's.

Blame Germany!

I blame the Germans for the beginning of Chrysler's troubles.

When the Germans took over they froze the product development, got rid of all the executives that had led Chrysler to victory - remember their names, Lutz, Stallkamp, Gale, Pawley - and the $7 billion Chrysler had saved disappeared just as Daimler bought into Mitsubishi and Hyundai. Worse, they pushed Chrysler into accepting Mitsubishi platforms and engine designs for its future cars, a big mistake. And they pushed the decision to kill Plymouth. All good reasons why Chrysler got into trouble after the DaimlerChrysler deal.

Of course, later Dieter Zetsche and Wolfgang Bernhard (Bernhard just quit a high post at Volkswagen) came from Germany, took over Chrysler, and did a super job putting it back on its feet.

But back to what's happening now: Chrysler's in play but that doesn't mean anyone else is in the game. Personally, I don't think anything is going to happen. I can be wrong. The bankers have big commissions to earn if they can broker a deal. But I don't see it, not right now.

We can invent candidates as purchasers or partners: GM, Renault/Nissan, Shanghai Automotive, hedge funds, Bill Gates, or someone like him. But none of these make much sense.

GM is just getting its production capacity down and the last thing GM needs are more factories and workers with pension and health care rights.

Nissan actually has plenty of North American capacity right now and needs more sales, not more factories. There's also the question of whether Germans would actually admit that the French, meaning Carlos Ghosn of Renault, could do better with Chrysler than they, the Germans, did.

The Chinese would have a problem because our Congress would go bananas with the thought of American car factories being shut and production shifted to China, especially factories that the Congress once saved with loan guarantees.

Hedge funds are rich but they like to make lots of money very fast. Actually running an auto company is something else, and there are huge risks: the pension and healthcare benefits and layoff pay for all those workers if it doesn't work out. And there isn't any capital to be made selling off old auto plants.

Certainly a private takeover by a rich American sounds ideal - someone who has all the money in the world and wants an auto company instead of a football team. Has the Man from Microsoft ever dreamed of the Gates V-8? Maybe he has but he hasn't told anyone about it yet.

Talk is cheap - is Chrysler ?

There's often lots of talk without action. Remember the Nissan/General Motors deal talk last year. And there are many secret talks. I personally know that Chrysler once tried to sell itself to Ford, and another time looked into a tie-in with Fiat, and that Fiat once proposed amalgamation with Ford, Nothing happened from all these look-sees. And most recent deals ended in failure: BMW and Rover, Daimler and Mitsubishi, GM and Fiat.

This is why I believe nothing will come of the Daimler talk of a bailout, especially if Chrysler's recovery plan shows signs of working. Again, it's easy to be wrong. But we'll see.

The point is that Chrysler doesn't need Daimler to be successful. The recovery plan outlined Wednesday seems reasonable. There are lots of new Chrysler vehicles coming on market: the Sebring and Dodge Avenger sedans, the Sebring convertible, the four-door Jeep Wrangler, the Aspen and Dodge Nitro SUVs. January sales were actually ahead of a year ago. February sales will be closer to the year-before month than at GM and Ford.

Chrysler's North American production about matches last year while GM is down 16 percent and Ford is down 15 percent. Add this: Chrysler and Dodge vehicles traditionally are the third bestsellers in the U.S. They fell to fourth last year behind Toyota, but could be back in third place this year, ahead by passing Ford. This is not for certain, but it's possible. DaimlerChrysler might, just might, challenge Toyota for the number-two spot behind GM. I'm not saying it's going to happen, but it's not impossible.

The point is that Chrysler, American Chrysler, isn't doing that badly right now. Of course, word that German Daimler wants to dump it won't help sales, or morale at the Auburn Heights headquarters.

But I've lived through a lot of Chrysler bouncebacks. And I expect to live through another one, too

[NTX5467]

Yes, a refreshing article! Thanks for posting it!

Mr. Flint has been watching the auto business for nearly 50 years, so he's seen lots of things happen and predicted others (which industry execs did NOT want to hear him do, even some GM people several years ago). He's usually much more "on track" than many other similar reporters.

Thanks, again.

NTX5467

[Philippe Racicot]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">I am a Jeep owner and I will tell you that the one big screw up was discontinuing the Cherokee. The Cherokee was the perfecrt fit for people who could not afford the Grand Cherokee or simply did not want the bells and whistles associated with the Grand. I live in Colorado and I see Cherokees around all the time and I don't think they have been made since 2001. The Liberty doesn't come close to the room in Cherokee. The 4.0 inline is bullet proof. I would buy a new one in a heartbeat and I bet I'm not the only one. </div></div>

I agree with you, I have two old Cherokees (a 1988 Limited and a 1989 Laredo) and I love them. The Liberty sells very well here but I also prefer the old XJ with the AMC 242 inline 6 and the Aisin Warner AW4 transmission.

[Reatta Man]

The latest edition of the Kiplinger newsletter says the GM-Chrysler merger won't happen; Chrysler is using this selloff discussion as a tool for upcoming UAW contract talks. Kip also says Daimler NEEDS Chrysler to help get new models to market faster, and Chrysler's expected profits late this year will help offset D-B losses.

Kiplinger's track record is pretty good, so I would think their information is likely to happen.

[Guest El_Diablo]

Here is an article I read on the most import and most reliable source of German journalism:

(http://boerse.ard.de/content.jsp?key=dokument_215050)

Neues zu Chrysler

Am Tag der Veröffentlichung des Geschäftsberichts kündigte der Konzern in Stuttgart ferner an, dass der DaimlerChrysler-Aufsichtsrat der Kooperation der US-Tochter Chrysler mit dem chinesischen Fahrzeughersteller Chery zugestimmt hat. Mit der notwendigen Zustimmung durch die chinesische Regierung und dem endgültigen Abschluss des Vertrags rechnet der Konzern bis Ende März. Chery soll für Chrysler Kleinwagen bauen, die unter Chrysler-Marken in Nordamerika und Europa verkauft werden sollen.

News about Chrysler

On the day of publication their annual report the DaimlerChrysler group announces that the board of directors have agreed to the cooperation between Chrysler and the Chinese car manufacturer Chery. The necessary agreement of the Chinese government and the final completion of the contract are expected until end of March. Chery should build small cars for Chrysler that should be sold under Chrysler trademarks in North America and Europe.

The annual report of DaimlerChrysler can be read here (sorry, its German): http://www.daimlerchrysler.com/Projects/c2c/channel/documents/1003904_DCX_2006_Geschaeftsbericht.pdf

The operating profit of the group is 5,5 billion euro (=6 billion dollar). This sum include the losses of chrysler. They would earn a lot more money without Chrysler. But money isn't everything. The difference: In America 13,000 people are losing their jobs, in Germany every worker gets a 2,000 euro (=2,500 dollar) bonus for the profit of Mercedes-Benz.

Sorry...