Despite the volume of comments posted on our Web site about a potential GM-Chrysler merger, most writers fall into three categories: don’t do it, it won’t work, do this.
324457 calls for a federal block against any takeover of Chrysler and a general uprising against GM. “Let a great and promising American icon automaker live and rise again. Be outraged, fight!”
common sense, who apparently is a Chrysler employee, says his fate “is in the hands of executives who lied numerous times” and asks for some compassion from media types analyzing what brands or plants are most vulnerable in any post-merger cuts.
Some writers see a GM-Chrysler hookup as unworkable.
Pamela says “Just look at the British auto industry and the Studebaker-Packard merger. The merger of weak or hurting companies does not solve the root problem.”
X-Car Guy says it’s hard to shed brands without paying off dealers, adding. “I see no real positive coming from such a union. More brands to shed, more plants to close, more consolidation, more distractions for an already overwhelmed management team. I have had intimate dealings with both organizations and I would be hard pressed to find any synergies between these two corporate cultures.”
Q says most analyses miss “the litigation expenses that will result. GM has over 6,500 franchised dealers, Chrysler has over 3,500. (Buyouts) make this an impossible pill to swallow.
Specific recommendations are all over the map.
gmdealerguy packages his complete plan into a single paragraph. He starts with a standard swap, with GM trading its remaining 49 percent of GMAC to Cerberus for Chrysler and its assumed $10 billion in cash. Then he adds “Cerberus can negotiate the cash out of Daimler (owner of 20 percent of Chrysler LLC) so they can finally wash their hands of Chrysler. GM can package Jeep and Hummer to pawn off to some oil-rich country or China, keep the Town and Country for a van to sell, sell Nissan the Dodge truck line and auction off any remaining factories and technology.”
Sean says the Detroit 3 should cooperate on “components that aren't noticeable to the consumer: brake systems, electrical/charging system components, possibly even full platform/chassis sharing.”
aXXel says “It would be better for all three of these drunks to merge together because then you could have some immediate and measurable savings and synergies with the Fed acting as the host for a form of Automobiles Anonymous. And three drunks going down the street have a better chance of not falling on their faces when they hit that curb.”
Raymond says, GM needs Chrysler the way Daimler did, as a cash cow,” citing Chrysler’s assumed $11 billion cash reserves. He adds “if Chrysler were by itself, I think they would weather the storm.”
Jeff is short and sweet: “GM should buy Chrysler then close all but three of their plants. Sell the other plants to Fiat, Nissan or Tata. Keep Jeep and Dodge brands. (Shut) Pontiac, Saturn and GMC. Sell Hummer and Saab. Keep Chevy, Buick and Cadillac. The rest can go.”
But there are a couple of philosophical points.
Louis asks “is a merger with GM really survival? Will Chrysler end up like Oldsmobile?”
And Stan sees irony in GM dealing with Cerberus, which owns most of Chrysler and controls GMAC. He notes that even as Cerberus is “choking off the supply of funds to GMAC, GM execs are trying to bail Cerberus out of the Chrysler fiasco.” He sarcastically calls that “great leadership at GM. They can hardly borrow sugar today and they want to take on more debt?”
So who is right here? Tell us how you feel the situation.