Thứ Bảy, 17 tháng 2, 2007

Why Buy Chrysler?

Speculation is rampant about who may buy the Chrysler group from DCX. The Detroit News reports one rumor that GM is considering buying out Chrysler.

I'm not seeing it.

Where is GM strong? SUVs (Hummer, GMC, etc), crossovers, trucks, high end luxury cars, large family cars, sports cars (Corvette, coming Camaro) and economy cars (Aveo, Cobalt). Where is Chrysler strong? SUVs (Jeep), minivans, trucks (Ram), large family cars (300 family), sports cars (Viper, upcoming Challenger?), economy cars (Caliber family).

Both companies are weak on near-luxury (Buick) and moderately priced mid-sized cars.

Where would the "synergy" be, to use the management buzzword of the decade? GM needs viable mid-sized cars, not more trucks. The only Chrysler properties that would make sense for GM to buy would be Jeep, because of the obvious Hummer/Jeep tie-in and a corner on the hard-core off-road market, and maybe the minivan lines.

In addition, Chrysler brings bloated inventories, cranky UAW locals, debt, too many dealers, pension and healthcare obligations--in other words, more of the same problems GM already has.

If Chrysler is spun off from DCX, I would expect that it would be bought by an overseas company which wants a larger presence in SUVs and trucks (Hyundai), or a private investment group.

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