Report: GM could eliminate Chrysler after acquisition
December 31st, 1969
Late on Friday it was reported that General Motors was in preliminary talks with Chrysler’s parent company Cerberus Capital Management over a possible deal to acquire the Auburn Hills carmaker. Since then Chrysler CEO Bob Nardelli has confirmed that the talks had taken place but stated that no final decision had been made.
What hasn't been discussed are the potential benefits or synergies that could be formed by the two struggling carmakers merging.
One of GM’s main objectives in its restructuring strategy is to streamline its operations by reducing the number of brands and vehicles it sells, as well as the number of dealerships that it either owns or that sell its vehicles.
This has left many wondering why GM would want to take on all of Chrysler’s problems, including its associated models and dealers. One possible scenario, and one of the most likely options for GM, is to absorb Chrysler and put an end to its 83-year existence.
The information was revealed by an inside source at GM, who told The Detroit News that GM was considering a number of options for Chrysler but this was the most popular. The move would be similar to Chrysler's own 1987 acquisition of American Motors Corp. (AMC), and would allow GM to retain some of Chrysler’s 2.7 million sales while also eliminating its competition.
According to analysts, Chrysler's only assets of value to GM would be its Jeep brand and minivan range. The real benefit is to reduce capacity in North America. Not surprisingly, unions are opposed to the idea as such a move would eliminate thousands of jobs, cause more plant closures, and have a devastating effect on automotive suppliers.
Late on Friday it was reported that General Motors was in preliminary talks with Chrysler’s parent company Cerberus Capital Management over a possible deal to acquire the Auburn Hills carmaker. Since then Chrysler CEO Bob Nardelli has confirmed that the talks had taken place but stated that no final decision had been made.
What hasn't been discussed are the potential benefits or synergies that could be formed by the two struggling carmakers merging.
One of GM’s main objectives in its restructuring strategy is to streamline its operations by reducing the number of brands and vehicles it sells, as well as the number of dealerships that it either owns or that sell its vehicles.
This has left many wondering why GM would want to take on all of Chrysler’s problems, including its associated models and dealers. One possible scenario, and one of the most likely options for GM, is to absorb Chrysler and put an end to its 83-year existence.
The information was revealed by an inside source at GM, who told The Detroit News that GM was considering a number of options for Chrysler but this was the most popular. The move would be similar to Chrysler's own 1987 acquisition of American Motors Corp. (AMC), and would allow GM to retain some of Chrysler’s 2.7 million sales while also eliminating its competition.
According to analysts, Chrysler's only assets of value to GM would be its Jeep brand and minivan range. The real benefit is to reduce capacity in North America. Not surprisingly, unions are opposed to the idea as such a move would eliminate thousands of jobs, cause more plant closures, and have a devastating effect on automotive suppliers.
Report: GM could eliminate Chrysler after acquisition
October 16th, 2008
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October 16th, 2008
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October 16th, 2008
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GM and Chrysler are in immediate need of loan funds, while Ford seeks only a standby line of credit
Enlarge PhotoWhat hasn't been discussed are the potential benefits or synergies that could be formed by the two struggling carmakers merging.
One of GM’s main objectives in its restructuring strategy is to streamline its operations by reducing the number of brands and vehicles it sells, as well as the number of dealerships that it either owns or that sell its vehicles.
This has left many wondering why GM would want to take on all of Chrysler’s problems, including its associated models and dealers. One possible scenario, and one of the most likely options for GM, is to absorb Chrysler and put an end to its 83-year existence.
The information was revealed by an inside source at GM, who told The Detroit News that GM was considering a number of options for Chrysler but this was the most popular. The move would be similar to Chrysler's own 1987 acquisition of American Motors Corp. (AMC), and would allow GM to retain some of Chrysler’s 2.7 million sales while also eliminating its competition.
According to analysts, Chrysler's only assets of value to GM would be its Jeep brand and minivan range. The real benefit is to reduce capacity in North America. Not surprisingly, unions are opposed to the idea as such a move would eliminate thousands of jobs, cause more plant closures, and have a devastating effect on automotive suppliers.
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Comments (5 total)
Meet the top commenters on the LeaderboardAnother not so smart move by GM! Continue to bring negative PR to your company by putting people out of work when you need to attract as many current and new customers to buy...
The only way that GM can survive is to continue "putting people out of work". They have too many dealerships and factories pumping out products that no one wants or needs. They have no choice but to thin down their lineups heavily and stop making identical vehicles under different badges (GMC Yukon and Chevy Suburban for example). That means closing factories and dealerships so you might as well get used to seeing more people lose jobs.
Chrysler deserves to go IMO. They have wasted too many chances for so long.
Oooo smart move GM, but Chrysler and waste money that could go into R&D
The only way buying Chrysler makes sense is if they plan to kill off most of the company. Cerebus sells Jeep & Dodge truck to Nissan/Renault (see later post) and the rest to GM. Who keeps the mini vans and maybe the 300 platform and shutters Dodge and Chrysler along with their dealer network. Besides the Mexican plants, Chrysler does have a few modern production facilities so GM would likely move some existing production there and close some of their old plants.
Benefit-GM has a more efficient factory floor and it keeps the production facilities and dealer network out of the hands of an Indian or Chinese company.
Downside-Several hundred thousand Americans unemployed at Chrysler, GM and the suppliers. Mostly in the midwest at a time when the rest of the economy is tanking and could still take GM down. A whole bucket of no good.
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