Dodge Nitro Forum banner

1 - 1 of 1 Posts

·
Super Moderator
Joined
·
23,865 Posts
Discussion Starter #1
November 9, 2008

Chrysler looks for new buyer

What now for Chrysler?

When General Motors Chairman Rick Wagoner said Friday that GM had ended talks to take over Chrysler, it was hard to tell if the louder sigh of relief came from workers at Chrysler or GM.

Sometimes the best deal is the one you don't make, and GM-Chrysler looks like a prime example.

Both companies face daunting challenges and more lost jobs. A disruptive merger wouldn't benefit anybody but Cerberus Capital Management executives who want to unload Chrysler.

In fact, the final blow to the merger probably came when the federal government realized a week ago it was being asked to help fund what amounted to a bailout for Cerberus executives at the expense of both the U.S. taxpayer and the people who work for GM and Chrysler.

Now GM's engineers, designers and production workers can go back to focusing on what they can control: providing the company and its customers with good new vehicles.

The men and women who develop, design, build and sell Chrysler's vehicles go back to hoping for the best in the information vacuum their owners at Cerberus have created.

So what now for Chrysler?

GM was a bad match, not just because it would mean massive job loss, but because a merger might undo the progress GM has made through years of gut-wrenchingly hard work. A merged GM-Chrysler threatened to be less than the sum of its parts.

Some of Chrysler's parts have plenty of appeal, however.

The worst outcome, short of outright bankruptcy, is breaking the company up and selling it off piecemeal.

Most of Chrysler's operations -- engineering, manufacturing, sales -- cease to be viable if you separate them. Jeep, for instance, is frequently mentioned as a standalone brand another automaker might buy.

Without the rest of Chrysler, however, the popular Hemi V8 disappears from the Jeep lineup and the brand becomes less attractive. Similarly, the value of the remainder of Chrysler falls dramatically if you take Jeep out of the mix.

The same holds true for all of Chrysler's attractive products: minivans, the Ram pickup and Chrysler 300, Dodge Charger and Challenger. None of them has the critical mass to survive on its own, and all of them are dependent on other pieces of Chrysler.

Other Chrysler products, most notably its compact and midsize cars, have virtually no value to another automaker, with the possible exception of a Russian, Chinese or Indian company with zero experience in developed markets.

Finding a foreign buyer to provide advanced engineering for sophisticated small vehicles in exchange for access to Chrysler's U.S. dealer network and expertise in trucks, minivans and big cars is the best option.

Even in that best of all possible worlds, however, Chrysler will be a smaller company than it is today. It will have fewer plants and employees, but it can remain a major contributor to the U.S. economy and an important center of engineering and design expertise for a healthy global company.

We can hope Chrysler's next owners will value it more than the last two did.

LINK:Chrysler looks for new buyer | Freep.com | Detroit Free Press
 
1 - 1 of 1 Posts
Top