Chrysler Restructuring – Valentine's Day Massacre 2007

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  1. 'Sack 02/15/2007, 3:34 pm:

    Your blog correctly states that DCX would consider selling the Chrysler Group. Well, yes, of course. Who wouldn’t? Isn’t it the responsibility of the Directors to consider anything that maximizes shareholder value? Wouldn’t they be negligent if they didn’t consider such an option?
    The challenge isn’t being willing to sell. That part is easy! The trick is to find a buyer. And who is there that has the money to buy such a large company, and the automotive management savvy to successfully run it? Who would really want to buy into all those UAW/CAW contacts? Take on all those relatively old plants, excess dealers, too many models etc.
    GM and Ford have all the people and facilities they need – and more dealers,brands and models than they want. Renault/Nissan have plenty to do keeping Renault (in Europe) and Nissan (in Japan, the USA and Europe) making an adequate return. It isn’t in the Toyota or Honda DNA to make such an acquisition. If Daimler can’t make a go of it, BMW (especially after the Rover experience) and VW are unlikely to have a shot. FIAT is busy with their own recovery effort. So is Mitsubishi. Who’s left? Maybe an entrepreneur like Penske? Perhaps…if they could get out of the UAW contract commitments. But you’d have to call it a long shot at the very best.
    As in many areas, it is a lot easier to buy something than it is to sell it!

    ‘Sack
    All very true. The latest vibrations are about technology sharing with General Motors – not a sale or acquisition. That might make more sense.
    Just think, Daimler reported good profits for 2006 even with Chrysler Group holding it down. Much of the profit was by their commercial vehicle operations – better known as Freightliner in the USA. Freightliner and all other heavy truck makers pulled ahead substantial sales into 2006 before new diesel emissions standards increase the price and operating costs of their products by a bunch. DCX wants to avoid getting a double whammy in 2007 with both Chrysler Group and Freightliner down.
    ED

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