Chrysler.....what a debacle

[TheProfessor]

General Motors offered DaimlerChrysler no cash in its bid to acquire the struggling Chrysler Group from the German-American automaker, according to a new report citing people familiar with the proposal. GM did offer Daimler a small stake in GM stock, but also asked that the Germans pay it to take Chrysler off their hands.


According to a story published by the Detroit News today, General Motors offered to pay Daimler nothing for Chrysler, Dodge, and Jeep, and actually wanted more than $1 billion to help defray Chrysler's health care costs.

GM said it would give Daimler a stake of less than 10 percent in GM stock. Assuming GM offered an eight percent stake, that would equate to roughly $1.44 billion in stock. Considering GM wants Daimler to pay it more than a billion dollars, GM would be paying Daimler next to nothing ($200-$500 million) for Chrysler.

The details of this offer make a proposal by Canadian auto parts supplier Magna sound more reasonable. As previously reported, the company has offered $4.7 billion to buy the Chrysler Group. Analysts value Chrysler anywhere between nothing and $13 billion. While Magna's offer is viewed as low, it is considerably more generous than the one presented by GM.

Daimler-Benz paid $36 billion in 1998 to acquire Chrysler.

Source = http://www.leftlanenews.com/report-gm-offered-next-to-nothing-to-buy-chrysler.html

What a pitiful state Chrysler has sunk to.

[Wild Weasel]

I talked this over with a friend of mine.

We decided to take it over for nothing as well, but couldn't find Dr. Z's phone number to make the offer. :(

[3GFX]

I'll pay them 1 Dollar.

[TheProfessor]

I'll pay them 1 Dollar.

You'll be over paying.

[Xenon]

hahaha... This is funny.

That's how crappy Chrysler is. No one even wants it. Not even for free.

[Broli]

damn, that is a bit insulting for chrysler, damn funny, but still

[CanadaGTO]

hahaha... This is funny.

That's how crappy Chrysler is. No one even wants it. Not even for free.

Let's not take too much joy in this. Remember there are a significant number of Canadians employed by Chrysler, including a great many at the Brampton Plant. These are real peoples lives effected here, nothing to laugh over.

[iconicrocket]

Someone will step in the void and take up the slack, I mean market share. Namely Honda or Toyota or even a European carmaker. Magna and Chrysler merging is a train wreck waiting to happen.

I think they need Mr. Ghosn from Nissan to fix it all up. Either that, or it's time to put this horse to rest, and declare bankruptcy and pay everyone back.

[mazidane]

Let's not take too much joy in this. Remember there are a significant number of Canadians employed by Chrysler, including a great many at the Brampton Plant. These are real peoples lives effected here, nothing to laugh over.

I have to agree, I've had the opportunity to work at the plant in the past, not as a DCX employee but as a consultant and I have to say that they do make a decent car there, the 300, both the C and SRT versions are absolutely a dream to drive and looks like they might be building the Challenger as well, certainly better than the crap GM is turning out these days, and don't get me started about the Saturn Aura winning car of the year, I'm still dumbfounded about that one!:loco

GM should stick to making Trucks, the one thing they do well!

[billyfo]

just 2 or 3 yrs ago, when 300 and Magnum (sp?) selling well, all said future DCX looked good, now when no one buy it even Jeep not selling good also, it becomes a garbage.

[TheProfessor]

But why aren't Chryslers selling well these days? Aren't most of the cars/trucks they offer better today because of the DCX merger than before? I was reading in the paper a few weeks back about how the new Sebring was practically a Mercedes C-class underneath the body.......how can they not be selling well?

[Wild Weasel]

I think Chrysler is suffering the same issues as Ford and GM, where legacy costs are so high that they just can't compete anymore. Even with good cars and decent sales, they keep hemmoraging money.

The difference here is that Mercedes wants no part of it anymore while GM and Ford don't have any choice but to try and make the best of it.

I agree that Magna buying them is a bad idea and I suspect that Frank just wants some sort of legacy beyond the parts business or something.

[rinse]

Maybe it's just the negative stigma that is associated with Chrysler.

[TheProfessor]

There's just as much of a negative stigma attached to the other domestic manufacturers IMO.

[Wild Weasel]

That might be the case in some circles, but they also have their die-hard fans. Chrysler has put out some really good cars lately, and is one of the few makers to take some real innovative jumps with things like the PT Cruiser, the 300/Charger/Magnum, the SRT4, etc.

Just imagine what they could do if they had as much money to spend on designing and building cars as many of the import companies have!

[TheProfessor]

I've never once read anywhere that domestic car companies do not have as much money to spend on the design of their vehicles as compared to imports. Even if that were the case, there's a reason for it and it's because they've made other errors which have cost them. Finally, it's not necessarily the design of imports that makes them sell well.....in fact, design is often one of the most critized aspects of Japanese automobiles.

[Wild Weasel]

It's true, and there is a reason for it. As I understand it, the unions have just pushed too far for too long.

Domestic manufacturers now have huge costs they have to pay that have nothing to do with making cars. In the US, they have to pay for health care and pensions for years of retirees. That has partially to do with mismanaged pension funds, but that doesn't change the fact that they have to pay it.

With that in mind, when they charge $30k for a car, it might cost them $20k to design and build it while another $9k goes to legacy costs.

A similar import costing $30k will have $26k worth of design and parts in it, and another $2k in profit.

Of course, you're not going to pay $30k for the $20k worth of car when you can get $26k worth of car from the import company, right?

So with that in mind, it's amazing that they manage to compete at all. Just think of how much better they'd be with that extra few grand in them?

I think the best thing that could happen to the domestics would be to go bankrupt and start fresh. It's sad... but they're really drowning in stuff that has nothing to do with cars and that's bad for us... the car people. :)

[TheProfessor]

I think the best thing that could happen to the domestics would be to go bankrupt and start fresh. It's sad... but they're really drowning in stuff that has nothing to do with cars and that's bad for us... the car people. :)

I was thinking the same thing. While I personally do not like domestics at all, I would still rather they be around as they pump huge amounts of money into the local economy and have their fare share of die hard enthusiasts.

I feel bad for the employees of Chrsyler but not for the Chrysler Corp.

[MajesticBlueNTO]

ford just might go bankrupt if their 'way forward' plan isn't profitable. they've bet the farm, literally (physical and information assets), to secure an 18B loan to keep them going.

if the 'way forward' turns out to be a bust and isn't profitable, when the creditors come calling, ford loses the shirt off its back!

[TheProfessor]

ford just might go bankrupt if their 'way forward' plan isn't profitable. they've bet the farm, literally (physical and information assets), to secure an 18B loan to keep them going.

if the 'way forward' turns out to be a bust and isn't profitable, when the creditors come calling, ford loses the shirt off its back!

How would/could that affect Mazda?

[MajesticBlueNTO]

what chrysler didn't have (and what they were hoping for with their 'merger' with benz) that Ford and GM have, are European (and other parts of the world like Holden for GM) divisions that compete with the best of them in the local markets.

The European cars are often better in terms of powertrain, handling, fuel efficiency and the domestics often draw upon the european divisions for inspiration, hell, even a downright copy (saturn aura).

Chrysler did benefit from the 'merger' with the LX cars (300, Charger, Magnum) using the old E-class platform. where they fail is in the answer to the question "what's next?". is there any product coming up that can sustain the momentum that the LX cars once built up? DCX probably can't see any so they might as well cut their losses.

another ailment of chrysler is their designs are often great, but the mechanical components fail them miserably in the mainstream cars (drive a regular 300 and then a 300C and you'll see how terrible the regular 300 is).

the list goes on...and the prospect of buying chrysler looks daunting.