The Second Sign of the Apocalypse: DaimlerChrysler De-Merger to Happen "Soon"

[YSSMAN]

** More News **

U.S. investment bank JPMorgan is making final preparations before starting an auction of the Chrysler Group on behalf of DaimlerChrysler, according to a report by the U.K.'s Times. The news follows a shocking report from last week suggesting General Motors might be considering buying Chrysler.

While reports of a possible Daimler-Chrysler de-merger were met with much skepticism in the auto industry, rumors continue to swirl, with no official denials coming from GM or DaimlerChrysler. Typically, automakers issue statements to the press rejecting rumors of this magnitude, if they are false.

The Times report also indicated Korean automaker Hyundai might be interested in buying the group. Hyundai swiftly issued a statement saying its "hands are full" and it has no intention of buying the American company.

Currently, General Motors is the only party known to be in talks with DaimlerChrysler about an acquisition. GM is said to have particular interest in Jeep and Dodge, but would consider buying the whole group if necessary.

Such a deal would result in a close integration of the Chrysler Group into the GM family, with overlapping products being axed, possible rebreeding, and the pairing of compatible brands like Jeep and Hummer.

JPMorgan will reportedly send information memorandums to a number of potential suitors as soon as the end of this week. If sold, the Chrysler Group would likely go for $13 billion, the report said.

...Hmmm. I'm interested to hear what happens, but things could get VERY messy if they aren't careful...

 

[skip0110]

So they buy all of Chrysler to save Hummer?

 

[YSSMAN]

What is ironic is that HUMMER was a pretty much a spin-off of Jeep, both formerly a part of AMC, which had bought the Jeep brand from Kaiser-Jeep (formerly Willys) after the collapse of their former owners, Studebaker.

The re-branding of Jeep as a "cheaper" version of a HUMMER would be interesting, as the folks at GM have been planning a new model in the HUMMER line to better compete against the Wrangler. Would they in-turn just make a "beyond-Rubicon" model and call it the H4?

...The biggest problems I see come in the form of Dodge and Chrysler. Given that every single one of their models competes directly with a GM product, God only knows what kind of mess that would create in Detroit and Auburn Hills. Would they get power-hungry and just kill the Chrysler lines? Would they soldier on and just keep making them? Or would we see a vast merger of the two lines to perform one similar task?

Its anyone's guess in that mode. In that respect, it is hard to say what exactly each brand would end up doing. Chrysler would presumably take the old spot left vacant by Oldsmobile, despite the fact that Buick and Saturn have been doing double-duty for that... And Dodge would presumably slot between Chevrolet and Pontiac, further segmenting sub-brands that are so similar and yet completely different in mentality.

The big question, at least in my mind, is what exactly would happen to Chrysler's "Big three";

- The Challenger? With the Camaro and GTO, is there room for the HEMI-powered model?
- The Charger and 300C? The Zeta program further complicates matters here, particularly when the GM models are so much better...
- The Ram? Its one of the best-selling and most widely-known trucks in America. Can they afford to get rid of the truck made for non-conformists and MOPAR fans?

...This also brings up the question of GM choosing to minimalize brands and their models, which has been an ongoing topic for some people who are fans of the brand. In a nutshell, we would see a restructure of GM in a way in which the given brands would build only what they are good at, virtually attempting to limit the overlap to the best of their ability, and thereby minimalize development costs for the various models.

It is an extremely complicated mess of ideas, models, and philosophies. There isn't a clear answer here, as no one in America wants to see Chrysler flounder about and be on the verge of collapse, again. Could they move to a Japanese brand like Toyota? Maybe. Would another German pick it up? It isn't too far of an outside possibility. Or do we see Chrysler going indie once again?

...Hard to say, and the answers are hard to come-by...

 

[Tornado]

In a nutshell, we would see a restructure of GM in a way in which the given brands would build only what they are good at

So, Saturn, Hummer and Saab would just stop making cars? I'm okay with that. Probably should have happened a decade ago.

 

[1X83Z]

So, Saturn, Hummer and Saab would just stop making cars? I'm okay with that. Probably should have happened a decade ago.

I liked Hummer until about 1999. I liked Saturn until 1996. I've always hated Trollhattan.

 

[skip0110]

If they buy Chrysler, they should name it Oldsmobile!

Oldsmobile Magnum? Oldsmobile Ram? Oldsmobile Viper?

This merger is never going to happen, or if it does, there is going to be minimal sharing of platforms so consumers will still identify the Mopars as unique.

Many, many people would be very angry if a smallblock found its way into a Chrysler product under any name, or vice versa with the Hemi.

 

[YSSMAN]

So, Saturn, Hummer and Saab would just stop making cars? I'm okay with that. Probably should have happened a decade ago.

The current philosophy would change a bit, but we wouldn't see the destruction of every brand. My ideals, thus far:

- Chevrolet builds the "reasonable" models that "make sense"
* Malibu, throughly Americanized Vectra, slightly larger overall
* Impala, a G8 for the everyman
* Camaro
* Corvette
* Silverado, cheap trucks, still the best trucks
* Tahoe (see Silverado)
* Blazer, comes back as a GMT960, poor-man's Enclave

- Pontiac "builds excitement"
* RWD G6
* G8/GTO
* Solstice

- Buick "nice, old-people cars"
* Invicta (Holden Caprice/Statesman)
* Enclave

- Saturn "American Vee-Dub, by way of Opel"
* Astra
* Vectra (upscale Malibu, more variations)
* Zafira
* VUE

- Saab "still Swedish"
* 900 returns with RWD, going for BMW 3-series
* 9000 returns with RWD, going for BMW 5-series
* Sonett returns, formerly Saturn Sky Red-Line, going for Z4

- GMC "HD trucks"
* Jimmy makes the return (Colorado long-since-past)
* Sierra HD only
* Yukon LT (Suburban)

- Cadillac "trying to be 'world standard' again"
* CTS, Kill the E-Class!
* STS, Stop the S-Class!
* SRX, Destroy the ML-Class!
* ULS, GM "Halo" car, think Sixteen

- Hummer "back to basics"
* H4, think Wrangler
* H3, H2 replacement, no increase in size

...thats the basic idea, interpreted by me of course...

 

[1X83Z]

Many, many people would be very angry if a smallblock found its way into a Chrysler product under any name, or vice versa with the Hemi.

I'm not an automotive brand purist in any way shape or form; I hate government intervention in business and I love the idea of businesses acquiring other businesses, even to the extent that a monopoly is formed.

...but I would hate the described scenario.

 

[Tornado]

- Saab "still Swedish"
* 900 returns with RWD, going for BMW 3-series
* 9000 returns with RWD, going for BMW 5-series
* Sonett returns, formerly Saturn Sky Red-Line, going for Z4

Sales would tank even more than they would if they continued to sell the 9-5 for another decade.
​

- Cadillac "trying to be 'world standard' again"
* CTS, Kill the E-Class!
* STS, Stop the S-Class!
* SRX, Destroy the ML-Class!
* ULS, GM "Halo" car, think Sixteen

Never, ever happen in the next decade at least.

- Hummer "back to basics"
* H4, think Wrangler
* H3, H2 replacement, no increase in size

Why do they need and even smaller Hummer? Isn't the H3 bad enough at everything?

 

[skip0110]

Every American marque diluted their brands so much in the 80's that they are having real difficulty bring them back into focus now.

I mean, having brand separation was not an issue in the 60s--honestly, how much difference is there between a Buick GS Stage 1 and a Olds 442? But ask anyone passionate about those marques and they'll explain to you the difference between the Buick and Oldsmobile "flavors" of the same concept. But today, it seems that someone higher up is mandating a brand "philosophy" that limits the creativity of the designers, engineers, and product development staff of that particular brand.

If GM gave the brands more freedom to define themselves then we could have sporty Buicks and sporty Pontiacs--as well as luxury Chryslers and luxury Cadillacs under the same umbrella.

 

[1X83Z]

Why do they need and even smaller Hummer? Isn't the H3 bad enough at everything?​

Actually I sort of agree with him - I think the H2 was a necessity for Hummer for obvious reasons and obviously the Hummer name carries some notoriety in the off-roading community, meaning a Wrangler-sized and Wrangler-capable H4 would sell surprisingly well, if they did it right. The 3.5-liter 5-cylinder in the H3 would be the perfect engine for the task, too.​

 

[YSSMAN]

More news:

General Motors stands a 50 percent chance of buying Chrysler, Jeep, and Dodge from DaimlerChrysler, according to Merrill Lynch analyst John Murphy, who said such a move would be a "defensive maneuver."

"Given the transformation the U.S. industry is beginning, we would not rule out a tie-up,'' Murphy said in a memo to investors today. "GM may view the acquisition as a defensive maneuver to box out new competition."

With Toyota's sales climbing, GM's "global volume lead is certainly in question," he said. "The acquisition of Chrysler would certainly allow GM to maintain its crown for many years to come."

Chrysler could add as much as $9 billion in value to GM due to products and "operating efficiencies including reduced research and development and advertising costs per vehicle," Jon Rogers, an analyst at Citigroup.

The UAW might also be more willing to make concessions if Chrysler is owned by an American company rather than a foreign one, Rogers said.

Financially speaking, yes it would seem like a moderately strong option for GM to buy into Chrysler. As a protectionary measure, I can see the reasoning behind that as well.

...But isn't this somewhat similar to what happened with DCX? They joined together in hopes of covering each other's rear-ends, and in turned ended up operating as completely separate entities, Chrysler failing on many fronts, while Mercedes managed to recoup much of what it had lost in the process.

I'm still having a hard time wrapping my head around having a Dodge somehow be related to a Chevy... Thats blood and water, oil and water, peanut butter and tartar sauce...

 

[1X83Z]

It's crazy. A fifty percent chance? I honestly never would have predicted this.

 

[TopHat]

But why? This is why I should run Chrysler like my relative K.T. Keller did.... He was C.E.O. or something like that.


My great grandpa would get a new chrysler every 2 years!

 

[harrytuttle]

Essentially they are the same brand.

In product equivalents and desirability, sure. They certainly deserve each other in a bizzare way. Misery loves company.

 

[L8 Apex]

I mean, having brand separation was not an issue in the 60s--honestly, how much difference is there between a Buick GS Stage 1 and a Olds 442?

Plenty, when you consider that up until the mid-1970s or so each GM had a tremendous amount of autonomy (i.e. their own design studios, their own assembly plants, their own engines, etc.). Ask any GM insider from the olden days and they'll tell you that the inter-division rivalries were fierce...and the variety and quality of models offered by each division was high as a result.
But as soon as the higher-ups decided to try to get away with putting Buick engines in Pontiacs, Chevy engines in Oldsmobiles, and building Cadillac Sevilles on the Chevy Nova platform, things went to hell in a handbasket, and haven't really recovered since.

If GM gave the brands more freedom to define themselves then we could have sporty Buicks and sporty Pontiacs--as well as luxury Chryslers and luxury Cadillacs under the same umbrella.

See above.

As for the original topic, well...crazier things have happened.

Here's what I would do with the assets of Chrysler, if I were GM:
Corporate:
-Dodge brand: Kill. I hate to euthanize any brand, but if I had to pick one from a business/marketing standpoint, this would be it, as there would be WAY too much price and product overlap with Chevy, Pontiac and Saturn. Read on for what I'd do with its models.
-Chrysler brand: Keep. Sharpen its focus on the affordable, "American and proud of it" luxury segment.
-Jeep brand: Keep. Axe the leather-lined dinosaurs (Grand Cherokee and Commander) and candy-@$$ crossovers (Compass and Patriot) and reposition it as a line of hardcore, affordable off-roaders, and steer anyone who wants something ritzier into a Hummer.
-Hemi V8s: Keep for Pontiac and GMC, to keep them from being merely rebadged/reskinned Chevys.
-MDS: Drop in favor of Active Fuel Management.
-Bluetec diesels: Keep and sprinkle through the lineups of the various brands where appropriate.

Dodge:
-Caliber: Kill. Cobalt, Aveo, Astra and G5 are plenty to cover the compact market.
-Avenger: Keep. Reskin and rebadge as the new Malibu sans V6s and rename the upcoming Malibu the Chevelle (since it is more upscale).
-Charger: Kill. G8 and '09 Impala will take care of the affordable and sporty rear-drive family sedan market.
-Magnum: Keep. Reskin and rebadge as Nomad (*raises flame shields*) or some other wagon name from Chevy's past (Kingswood, Brookwood, Handyman, etc.)
-'09 Challenger: Keep. Reskin and rebadge as Oldsmobile 442* (with LS2 power) and/or Buick GNX (with twin-turbo 3.6L "High Feature" V6) and sell in super limited numbers for one or two years.
-Durango: Kill. Leave any truck-based SUVs to Hummer, Chevy, GMC or Cadillac (in the case of the Escalade).
-Caravan: Keep. Rebadge as Chevy Greenbrier (and hope the target demographic is too young to remember the Corvair-based originals).
-Dakota: Keep. Reskin and rebadge as GMC Sonoma to better distinguish GMC from Chevy trucks.
-Ram: Keep. Reskin and rebadge as GMC Sierra for same reasons as Dakota.
-Sprinter: Kill. Wouldn't want a pricey (but super cool, IMO) relic from the previous owner, would you?
-Viper: Keep! Reskin and rebadge as the Pontiac Banshee, complete with the 6.1L SRT Hemi in the base model and the new 8.4L V10 in the GXP model. Then let the Chevy and Pontiac fanboys go at it!

Chrysler:
-PT Cruiser: Keep. Reskin and rebadge the wagon as the Pontiac G5 Safari (and kill the Vibe), while the convertible would be reskinned and rebadged separately as the Pontiac Tempest.
-Sebring: Keep. Reskin (please!) and rebadge as the new Saturn Aura, while the current Aura evolves into the revived Oldsmobile Cutlass.*
-300: Keep. But please, ditch the wheezy 2.7L V6 version. And price them a bit lower.
-Town & Country: Keep. Distinguish it from Chevy Greenbrier through unique design and features (real wood paneling, perhaps?).
-Aspen: Kill. Why did DCX bother with this thing, again?
-Crossfire: Kill. Plenty of two seaters in the new company as it is.
-Pacifica: Kill. Plenty of crossovers built off the Lambda platform.

Jeep:
-Wrangler/Wrangler Unlimited: Keep. Affordable stump jumpers for people that view Hummers as too pricey/yuppie.
-Liberty: Keep. A slightly more conventional alternative to the Wrangler sisters.
-Compass: KILL! Seriously, did they really think this joke of a Jeep would sell?
-Patriot: See Compass.
-Grand Cherokee: Kill. Leave the bigger, ritzier SUVs to GM's existing brands.
-Commander: See Grand Cherokee, plus it's ugly as sin and was the wrong vehicle at the wrong time.

Now, as for those asterisks above. As a self-proclaimed Oldsmobile fanboy, if I was in charge of a new Chrysler-owning GM I would spend another couple billion or so to relaunch Olds like so:
-Cutlass: Reskinned and rebadged evolution of the current Saturn Aura, with a standard EcoTec I4 and a couple of GM "High Feature" V6s as options. New Saturn Aura would be derived from new Chrysler Sebring and moved downmarket as a result.
-Starfire: Rebadged Saturn Sky. Saturn version would be canned.
-442: Reskinned and rebadged Dodge Challenger built in super-limited numbers. Standard model would have the LS2 and a six-speed manual or auto, while the W-30 would have the LS7 and six-speed stick.
-88: Reskinned and resbadged Pontiac G8/ Holden Commodore. GM V6, GM V8, and diesel or hybrid versions offered.
-98: Reskinned and rebadged Holden Statesman/Caprice. GM V8 and diesel versions offered.
-Bravada: Rebadged Saturn Outlook. Saturn version would be canned.

There's a good chance none of this will ever happen, but that's what I would do as dictator of GM-Chrysler.

 

[ND4SPD]

Oh dear god, I never knew it was a 50% chance of this happening! Oh the humanity! It'll be too weird to see a Vette and a Viper rolling out of the same company.

 

[1X83Z]

-Aspen: Kill. Why did DCX bother with this thing, again?

I'm honestly surprised to see intelligent people making this argument, as YSSMAN did earlier. It's obvious why the Aspen was necessary - Chrysler is trying to play up its premium status, and they needed a premium SUV. Obviously they went about it the wrong way, but it was considerably cheaper than developing their own - particularly if it was another huge flop, like the Pacifica.

 

[TopHat]

Pacifica? A flop? I'm gonna have to say bs on this one! Where can you prove it was a flop?

Ok, now on the topic of the Aspen, Doug is correct on that one. But the problem is, it really wasn't a "large" enough SUV to be competitive.

 

[YSSMAN]

I'm honestly surprised to see intelligent people making this argument, as YSSMAN did earlier. It's obvious why the Aspen was necessary - Chrysler is trying to play up its premium status, and they needed a premium SUV.

But there is where we reach the problem. Given that all Chrysler dealerships are saddled with a Jeep dealer, the train of thought is supposed to be that the Jeep Cherokee and the Jeep Commander in Limited trim are the "luxury" SUVs for Chrysler. But now that we have the Aspen, we just get a Dodge Durango with a big chrome grille, some crazy art-deco wheels, and an interior that is a cross between that of the Durango and that of the 300C... Whoopdy doo!

...And thus far, the Aspen hasn't been doing to well either...

Its what you get when you try to play games with GM... Just as Lincoln about the all-new Navigator.

 

[TopHat]

Yeah, but the thing is Jeep isn't a luxury brand, as Chrysler has become. Jeep is the off roading brand, they still sell the Wrangler don't they?

Chrysler needed a true Truck-based SUV.

 

[Tornado]

Yeah, but the thing is Jeep isn't a luxury brand, as Chrysler has become. Jeep is the off roading brand, they still sell the Wrangler don't they?

There is a problem with that statement:

Ever since the second generation that has been a luxury SUV.

Chrysler needed a true Truck-based SUV.

Nope. They still don't. And the Aspen is truck-based, anyways.

 

[Jim Prower]

-Dodge brand: Kill. I hate to euthanize any brand, but if I had to pick one from a business/marketing standpoint, this would be it, as there would be WAY too much price and product overlap with Chevy, Pontiac and Saturn. Read on for what I'd do with its models.

Kill off my favorite brand name, will ya...

How about we kill Pontiac instead? I see them as far more useless, and Dodge would fit nicely in their place. Swap out the platforms that don't work, (Caliber, Nitro, Avenger) and keep what's left, move it upmarket. forget the truck line. oh, forget any sort of those damn Chevrolet V8s in any Mopar-branded product, because I don't want any part of it.

Then Chrysler can replace Buick (Direct competitors) and Jeep completely replace Hummer. the Army can keep them, and Escalades are more popular with the hip-hop crowd anyway.

and then, hopefully, GM lets Chrysler go off on their own.

 

[1X83Z]

Ever since the second generation that has been a luxury SUV.[/SIZE][/FONT]

Have you ever off-roaded in a '99-'04 Grand Cherokee? It may be luxury on the inside, but it's all Jeep when the going gets tough.

Why would Chrysler need a truck based SUV? Does any other premium brand have such a vehicle?

 

[Jim Prower]

Why would Chrysler need a truck based SUV? Does any other premium brand have such a vehicle?

Cadillac Escalade. Lincoln Navigator. The darlings of the Hip-hop world.

 

[TopHat]

I think someone forgot their [sarcasm/] tags. I was just reading the fastlane blog, they are declining comments on this matter right now.

 

[YSSMAN]

Why would Chrysler need a truck based SUV? Does any other premium brand have such a vehicle?

Anyone who builds a full-size "SUV" is supposed to use a full-size truck frame. Thats why we have the Escalade on the GMT900 platform of the Silverado, the Navigator on the same platform as the F-150, the QX56 on the Titan, etc. I believe Toyota will be doing the same with their next Land Cruiser on the Tundra.

 

[Tornado]

Have you ever off-roaded in a '99-'04 Grand Cherokee? It may be luxury on the inside, but it's all Jeep when the going gets tough.

I understand that, but I don't see how that is a problem. To answer your question, though, yes.

 

[1X83Z]

Cadillac Escalade. Lincoln Navigator. The darlings of the Hip-hop world.

Most of the money is to be made in the car-based SUV segment. Chrysler simply needs to go there first, with something other than the Pacifica.

I understand that, but I don't see how that is a problem. To answer your question, though, yes.

A problem?

I agree that Jeep is a premium brand - the Jeep name enjoys better resale values than most other premium brands, and it's recognized on a higher level than brands like Buick and Lincoln, which are passed off as 'premium.'

 

[Tornado]

A problem?

I thought you were referring to the fact that it has off-road prowess as being a problem.