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Old 10-19-2008, 07:16 PM   #1
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What a GM/Chrysler merger may mean to you?

Been reading some of the rag sheets on the possible merger of GM and Chrysler, which as you know also brings with it the Dodge truck lines.

The most interesting part I found however was this blurb:

If GM were to merge with Chrysler, drastic cuts will take place, likely decimating Chrysler’s workforce and production facilities. The only vehicles expected to survive are the Jeep line, the Minivan, and the Chrysler 300.

If true, I know a lot of Dodge fans who will be VERY unhappy. I recall the Lee Iacocca days, then the Germans tried to absorb Chrysler, then it went to a private equity firm, Cerberus. I guess what GM really wants is Jeep and access to Chrysler’s $11 billion in capital. Given that Cerberus owns a good stake of the GMAC credit arm, GM might see a cash infusion from Cerberus in exchange for more stake in GMAC.

The worst part if this merger were to happen is that Chrysler's workforce would be totally gutted, which also may not be such a hot thing for current Chrysler/Dodge owners long term.

When I first heard the possibility of this, I shrugged it off as just speculation, but it appears a lot of folks are behind this on both sides. Renault was wanting back into the US market and would love to have it's hands in Chrysler, but it looks like GM is going to get it and to the victor may go the spoils....

I would have thought Ford would have been a better fit for GM as IMHO they do have a better line of vehicles and loyal customers, and have done some decent work....but could you imagine what GM and Ford folks would have to find to argue about if that happened.
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Old 10-20-2008, 01:34 AM   #2
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I too am old enough to remember the various episodes with Chrysler. I owned a 1970 Dodge Challenger; when it turned 50,000 miles, you could not fix it fast enough to keep it on the road. Then years later, I read Lee Iacocca's first book and bought a 1990 Plymouth. Guess what, the 1990 was no better than the 1970.

GM is totally losing focus on what is wrong in their industry. The time they spend on Chrysler will not help them one bit to produce a highly engineered, quality product, at a competitive price that in turn will generate profits for them.

I have a 2003 GMC 2500 HD and at 48,000 miles, it is a good truck so far. They have come a long way back from my 1978 Buick that was not a very good car.

However, if all GM does is produce reasonably good cars & trucks but, at the end of the year, there is no money left over for R&D, product refinement, quality improvements, and last but, not least, shareholder profits, then they are only managing their own demise.

They cannot continue to pay $70 per hour wage & fringe, 3-$5,000,000 to the chairman, $250,000 to directors, $150,000 to engineers, etc. and have anything left over at the end of the year for profits.

I could have bought GM bonds a year or so ago and at the time if held to maturity they were paying 14%. It just did not make sense to do so because I think they will be unable to bring all the stake holders to the party and get back to a relationship between materials, labor, overhead, capital, & profits that will allow them to survive.

It kind of irritated me that Washington gave them 25B to pay for what they should be doing on their own if the stakeholders would come to the party. Next, they will want us to take on their medical costs.

It is really sad that such an old name in the auto business should succumb to such a fate but, it does appear irreversable.
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Old 10-20-2008, 07:24 AM   #3
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Looks to me like they don't want the brand per se....looks like they really just want Jeep and of course 11 billion in capital. This will be Jeep's 4th owner if you look at the Daimler stake (AMC, Chrysler, Diamler/Chrysler, and now maybe GM).

It is still far from a done deal, but after reading the rag sheets and news wires, seems everyone wants this....the only not so warm reception is the GM board.

I agree about the Chrysler/Dodge cars. I have friends that mirror your comments. The truck line (Dodge, not Jeep) seemed pretty solid compared to the car line. I have yet to see a Jeep that has not had some sort of electrical problem. My bros have had three various years and model Jeeps and each has had their share of issues. Folks I speak with that own them seem to say similar things....so maybe it's just the 11 billion and taking a competitor out of the market.
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Old 10-20-2008, 11:01 AM   #4
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Quote:
Originally Posted by Silvertwinkie View Post
Looks to me like they don't want the brand per se....looks like they really just want Jeep and of course 11 billion in capital. This will be Jeep's 4th owner if you look at the Daimler stake (AMC, Chrysler, Diamler/Chrysler, and now maybe GM).
Didn't Kaiser have them for a while too after Willys Overland?
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It is still far from a done deal, but after reading the rag sheets and news wires, seems everyone wants this....the only not so warm reception is the GM board.

I agree about the Chrysler/Dodge cars. I have friends that mirror your comments. The truck line (Dodge, not Jeep) seemed pretty solid compared to the car line. I have yet to see a Jeep that has not had some sort of electrical problem. My bros have had three various years and model Jeeps and each has had their share of issues. Folks I speak with that own them seem to say similar things....so maybe it's just the 11 billion and taking a competitor out of the market.
Man, I wanted a GLH for a while back when they were shiny. The perfect sleeper.

But on topic, what I'm reading (all public sources) is that Renault-Nissan may have some role in this as well. Renault is known to want back in the US market, and some of the dealers & the brand name(s) might be spun off (or even gifted?) to them, avoiding entirely the question about what to do with the dealers. "You were a Pontiac dealer last week, and you still are, just because the 2010 G-8 looks like a Kangoo is no cause for alarm."

Of the many sharp pointy things about this, the redefining of relationship between the proposed new company and the UAW is going to be quite the event to watch.
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Old 10-20-2008, 12:27 PM   #5
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I'm really looking forward to the Buick Town and Country.
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Old 10-20-2008, 12:27 PM   #6
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I just heard on the news that they want the deal done by the end of October. This is not good news for the Dodge/Jeep fans especially since I am one of them.
I see GM just wanting the cash and selling off the brands to the lowest bidders. Heaven forbid that Renault tries to buy Jeep. Rumor has it that they want back into the American auto market.
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Old 10-20-2008, 01:06 PM   #7
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Wee Wee! The French Jeep. Lord save us.
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Old 10-20-2008, 01:23 PM   #8
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Interesting...

AMC bought Jeep, ending Willys.

Chrysler bought, and then dismantled American Motors to get Jeep. They did use AMC's rugged 258 ci six for quite some time.

Now GM wants to acquire and dismantle Chrysler to get Jeep, along with some needed cash.

Must be the name "Jeep". Remember the slogan "Jeep wrote the book on four wheel drive"?

This acquisition would also eliminate some of GM's competition.

Could this mean the end of Dodge trucks? That would be too bad. We do enjoy our Chevy Silverado, but know folks who like their Rams just as much.
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Old 10-20-2008, 01:44 PM   #9
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Jim,
Kaiser actually purchased "Jeep" from Willy's Overland that was mentioned earlier. AMC purchased "Jeep" from Kaiser around 1970-72 timeframe. Actually Renault owned part of AMC in the early 1980's leading to it's demise.
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Old 10-20-2008, 01:57 PM   #10
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We love our Ram truck...Babe the Big Blue Ox (our beloved TV) has been a primo vehicle for us. No issues whatsoever...

Not a GM or Ford fan...This scares me.

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Old 10-20-2008, 02:22 PM   #11
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Quote:
Originally Posted by crispyboy View Post
Jim,
Kaiser actually purchased "Jeep" from Willy's Overland that was mentioned earlier. AMC purchased "Jeep" from Kaiser around 1970-72 timeframe. Actually Renault owned part of AMC in the early 1980's leading to it's demise.
Just found some very interesting history of AMC AMC - The Spirit Still Lives (history of American Motors)
including this from 1987.

"About that time, Lee Iacoca was making an under-the-table deal with Renault to purchase their stake in AMC. At the beginning of August, the deal was finalized, and 2% more was purchased on the open market to give Chrysler controlling interest in AMC. The payments totaled $1.1 billion in all."

The whole history of AMC is very interesting. My dad was a Hudson dealer in Van Nuys, Ca, at the time of the Hudson/Nash merger, which formed AMC. Naturally, my first car was a 1953 Hudson Hornet. The mechanics used it as their "lab car". It hauled A$$. Sure wish I had that car today.
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Old 10-20-2008, 06:13 PM   #12
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Sprinters..

I wonder what would happen to the Sprinter van import? My guess is that is why Mercedes kept the20% of Chrysler for the joint venture products, like the Crossfire, Sprinter and the licensing of diesel engines used in the CRD Jeeps.

Maybe we will end up with Chevrolet sprinters!! Seriously, as sick as the merger may be for the common man from GM's standpoint it appears to make real sense.

(I have wondered why we dont have the ford version here in the states they have in Europe, the Ford Transport)
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Old 10-20-2008, 08:07 PM   #13
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Naturally, my first car was a 1953 Hudson Hornet. The mechanics used it as their "lab car". It hauled A$$. Sure wish I had that car today.
Jim, I am familiar with the racing history of the Hornet. That was one hot vehicle in it's day. My 3rd car was an AMC Gremlin stick on the floor and the next a 1970 AMX with a factory Hurst 4 speed. Both spent time at the Toronto drag strip and did well.
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Old 10-20-2008, 08:09 PM   #14
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Consolidation in inevitable in an industry as cash-intensive as the automobile manufacturing industry.

If the Big Three US automakers hadn't given up the quality race to Honda and Toyota, there wouldn't be any talk of them becoming the Big Two.

The industry will most certainly survive, just that the names we now consider "foreign" will continue to put plants in North America until they supplant Ford, GM and Chrysler, or any combination of those three names.

Then we can hand $25 Billion to Honda, Toyota, and Hyundai to save their bacon, once they become complacent and lazy.
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