Gm Purchasing Chrysler: not a Very Good Idea

By: Lisa Ziegler

According to Fortune's Alex Taylor the idea of General Motors purchasing Chrysler is ridiculous saying that GM's number one problem is overcapacity and Chrysler has too much of what GM has already like car brands, workers, assembly plants, retirees, dealers, liabilities, and car models. General Motors is already finding it hard to manage all of these and adding Chrysler brands plus all of its liabilities will be like committing suicide.

It is no secret that General Motors has been trying to slim down for more than a decade now and acquiring Chrysler could only ruin its diet. Plus try to name one automotive takeover that actually worked out. Can't think of one, can you? That's because there is none. There hasn't been a successful automotive takeover in the modern memory but in terms of failures you may be able to name a few like Ford-Jaguar, Renault-American Motors, Studebaker-Packard and others. Mr. Taylor also added that takeovers always look good in papers but crumple in execution.

And just think. Why didn't Carlos Ghosn push through with the Renault-Nissan merger? Simple, because he knew that whole deal is not worth it the effort. The idea behind GM purchasing Chrysler to remain as world's number is simply preposterous and excuse the term-stupid. For one GM needs to strengthen up not expand.

But if Chrysler is to be broken up and sold by parts now that's a different story since General Motors might actually get some very good deals out of it like for instance the Jeep® brand despite the effort of Chrysler to weaken the value of this American icon by producing vehicles that are challenged in quality and functionality the Jeep name still ring a bell with buyers. That's because the Jeep brand has already established a reputation for quality and that goes beyond its line of auto parts like the popular .

GM has already tried to rival Jeep with its Hummer only to end up as a subset of the whole off-roading culture which Jeep dominates. If GM can take their hands on the Jeep® and leave their Hummer to the X-games people it might do them some good.

The modern diesel engines that Chrysler is offering are also a good catch since they are certified top-class. They are no longer smoky and smelly plus they provide excellent mileage. It is not a secret also that diesel engines are the closest solution to the alternative energy problem. And the mere fact that Chrysler has access to Daimler's diesel technology makes it even more advantageous for GM.

The Dakota midsize pickup of Chrysler is not only sturdy but has ample rooms for improvement unlike the small pickups of GM, the Chevy Colorado and GMC Canyon.

The Chrysler Technology Center is another good buy. It was one of Lee Iacocca's good ideas wherein he consolidated all of Chrysler's engineering and researched facilities under one roof and used the new building as a recruiting tool. In case GM bought it they use it instead of their rundown engineering complex in Warren Michigan which they could sell the land and have it converted into a golf course or something.

The Chrysler Group has also some brilliant people which GM can employ to add to their team.

The main point of the matter is Chrysler would only become beneficial to GM if it is bought in parts but not in its entirety.

Car Focus
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 

» More on Car Focus
 



Share this article :
Click to see more related articles