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DCX to launch $13 billion auction of Chrysler; Hyundai not interested

02/19/2007, 1:57 PM

By admin

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.

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02/19, 2:06 PM

posted by:

car-a-holic

“were not selling Chrysler” what a load….but im not sure I ever saw the advantage in this pact unless its point was just to get MB into a better US market position, like they are in now. Look for Nissan, Renault to be extremely curious about this if Gambling Motors bows out of the running…..

02/19, 2:10 PM

posted by:

car-a-holic

in any event these might be the the last laps for Chrysler if Gm gets a hold of it….

02/19, 2:14 PM

posted by:

F451

Absolutely no surprise here. Only GM or Ford (of the American car companies) would understand all the fine points. and minute details associated with this type of acquisition, and neither is really in a position to buy Chrysler.

02/19, 2:15 PM

posted by:

Kaptain75329

This is like some kind of surrealistic nightmare. Just when GM was starting to get back on track. What the hell does the Chrysler group bring to the table other than a great but otherwise irrelevant minivan? On the other hand, GM owning the rights to HEMI and other Dodge/Chrysler technologies could prove to be a blessing in disguise. And Jeep merging with Hummer isn’t that bad an idea either: expanding the range of both does seem workable.
.
My big problem here is all this talk about eliminating overlap. Right.. because GM has such a steller reputation with cutting the fat and bloat. I wish they’d take GMC exclusively commercial and just pull the plug on Buick already — way past the expiration date.

02/19, 2:30 PM

posted by:

Kenny W

For the most part I agree with Kaptain75329. I can’t see how this is a good thing for GM as the cons heavily outweigh the pros.

02/19, 2:33 PM

posted by:

Madcapp

I woulda bought a new Challerger if it were a Daimler-Chrysler, but not if its a Hyundai-Chrysler.

02/19, 3:26 PM

posted by:

zerotosixty

The cons of GM buying Chrysler Group would FAR out weight the pros. Jeep is the only marque they would gain anything and they would as Kaptain said obtain the Hemi name. They would only be completely secure as the Number 1 auto maker in the world. Toyota would have no chance. But there are just too many cons to list.

02/19, 3:26 PM

posted by:

wetstuff

Fleamarket Ebay is reportedly worth >$50Bil. ..and no UAW & whinning dealer headaches. It’s less than two weeks of War over there. $13B doesn’t look so large anymore.

02/19, 3:41 PM

posted by:

Kaizen

To zerotosixty: There is no point to being the world’s largest automaker if you lose billions of dollars. If GM and Chrysler merge, since both lose large amounts of money separately, they’ll just have a earnings statement with a larger loss as one company. And we don’t care about becoming #1. We, at Toyota, would rather care about being the most respected and successful automaker before becoming the largest.

02/19, 3:52 PM

posted by:

anyclearer

I dont think anyone on here really knows all the pros and cons. but Im sure there are more pros then the obvious. No business person would take on a company if the cons so obviously out weighted the bad. And discountinuing a brand cost alot more money then trying to rebuild it. You have contracts with dealerships and alot of other companys you would have to pay off. Buick isnt in its prime but like any brand could turn it around. The new Lucerne is a beautiful car. You got to remember in just 2 years almost every car GM has out has made a good turnaround even though its been a long time comging. From the malibu to the out dated tahoe and suburban. I think most of their problems have been from them getting to use to being on top. But now they have to correct things. If they do buy Crysler, im sure its in their best interest.

02/19, 4:06 PM

posted by:

Blakkarr

Here’s hoping a smart investment firm picks up Chrysler. That would be the best bet. They could call the shots better than another car company that would have to look out for itself and treat Chrysler like a competitor which is what might be DCX’s problem. An investment firm with automotive experience would look to make the company better rather than hold it back to keep themselves looking good.

“Hyundai not interested…” Thank the car gods! LOL.

Seriously maybe some of these smaller and struggling car companies should just merge together into a larger more stable entity.

02/19, 4:19 PM

posted by:

car-a-holic

to Kaptain75329:

If GM removed GMC from the line up, they would lose nearly as much in sales as Chevy acounts for! This SAME ideology of laying Oldsmobile to rest COST GM marketshare equivilent to the combined total sales of Mitsubishi, Plus the millions in costs to compensate dealers too. Its far too costly….GMs prolems are not the brands…it has been the mindless corporate rules, laziness, arrogance of complacency that have dimished the product differentiation and stiffled development. Keepeng GMC is a must….but Chrysler too? hmmmmm

02/19, 4:22 PM

posted by:

murphy1

anybody think about the nascar implications of a merger like this? ford participation is way down, understandably, and we know chevy likes to be the only gm rep (ask pontiac), so it would be 30 chevys, 12 fords, and 5 toyotas. hmmmmmm, very interesting. chevy, the new york yankees of nascar! yuck.

02/19, 4:27 PM

posted by:

F451

We are probably witnessing the historic event of the slow, but deliberate demise of the American car manufacturers. The writing has been on the wall for decades, and it is now coming to fruition. At least if GM bought Chrysler we would only have to attend one funeral verses two.

02/19, 4:39 PM

posted by:

slider5634

Somehow, I don’t see GM buying the Chrysler group as being a viable option. What they would gain from this aquisition doesn’t come anywhere close to the money they would lose.
They would have to either use the aquired Chrysler tech in their own vehicles and then axe Chrylser and Dodge — which would be suicide considering the nightmare it was to axe Olds.
Or, they’de have to restructure the Chryler and Dodge brands to compete in different markets.
I don’t see either as an option, but the second option is even less viable as GM has a brand for every car market/niche known to man — with the exception of maybe an exotic car brand.

02/19, 4:42 PM

posted by:

deutschetouring1337

Heh, Chinese anyone?

02/19, 4:53 PM

posted by:

Blakkarr

Aside form that I wonder if this will greatly affect Chrysler’s ability to produce some new machines. Will this affect the Challenger, for one? How about the possible “Imperial”. Strap in a V10 (the 5L V10 developed for the Chronos Concept) or a NA V12 from the ME412, and that is a winner(even at $80k+). The Nassau? Will that become the shape of future Chrysler cars?

How is all this affecting their sells. As word gets out, people will stop buying for fear Chrysler will not be around in a couple of years.

That said, Chrysler needs to stand alone, and the only way that’s going to happen is if an independent firm buys the company.

As for NASCAR, I could personally care less. When they stopped building the cars Detroit built, that is stopped racing modified off-the-lot cars (hence the term “stock” or “Modified Stock” cars), Detroit no longer had a reason to build cars that could when the race. So the death spiral of gross mediocrity began when racing no longer really had a bearing on vehicle development. It’s, i think, one of the reasons Europe makes such great cars, Germany in particular. They race almost everything they build and use every bit of experience to build ‘em better the next time around.

If Detroit really wants to win a war of perceptions against Imports, they need to get the “Stock” back in Stock Cars. Be forced to bring, to market, cars that can win races, and do so at a price that turns a profit while not turning off fans and still meet daily needs for years to come. Building hot V8 RWD cars is cool but if they aren’t the ones actually racing and winning… who really cares in the long run. Muscle cars going through even to the 1980s made their names actually winning races everyone knows about. Today’s muscle cars don’t really have that and it is hurting them.

Modern NASCAR sucks because of the over reliance on fixed and uniform platforms that give no room for real innovation, such that one year GM might have an advantage and next year FORD or Chrysler might. They don’t even run on four-wheel independent suspensions, making this quite nearly to only on-road sport that still does. The only thing NASCAR ever brought us, is nearly indestructible engines and they don’t even allow for much variation in those engines. But with proper regular maintenance, an American engine, usually V8s, V6s and the still rare V10, are utterly unstoppable.

Racing improves the breed… It’s really that simple.

02/19, 4:55 PM

posted by:

HoosierHero

Awwww, a heartwarming story about one troubled carmaker buying another.

02/19, 5:17 PM

posted by:

TimG

I guess I’ll believe this when I see it. I can’t see GM entering this mess. Where’s Kirk Kerkorian when you need him most?

02/19, 6:21 PM

posted by:

lanapat7

12 months back, Nissan would have jumped on this merger. But with Nissan’s current problems, I guess it will pass on this opportunity.

02/19, 6:21 PM

posted by:

Stuart

I really hoped daimler held onto Jeep atleast even dodge. But it will be nice to hear the Daimler-Benz corp again.

02/19, 6:29 PM

posted by:

Fatstrat

I doubt the merit of this story at this point.
What I don’t doubt is that it would be worth looking at for DC.

02/19, 6:55 PM

posted by:

atomicbri

I think this shows that Daimler had no clue on how to resurrect the Chrysler brand. Come on now….they are pumping out things like the Sebring….The so-so looking new Minivans….the Caliber is ok, but to cheap inside. To me this reflects more on how clueless Mercedes was on how to own other companies. They couldn’t get Smart right nor could they figure out what to do with Mitsubishi. Maybe Toyota will buy Chrysler, than Toyota would be #1 for sure. And maybe even Toyota can infuse quality into Chrysler, while it has its hands on the technology of HEMI and such. I just can’t even begin to fathom what GM would see in purchasing Chrysler. Only if they were to get rid of Buick and Pontiac….but I don’t see Pontiac leaving anytime soon. The 300 is soo much better than any Buick, however would a purchase mean no more using of the MB platforms?? This will be interesting to see how this pans out.

02/19, 7:06 PM

posted by:

swamprat

The only viable product that Chrysler builds is the 300/Charger/Magnum.. That will be history when Daimler ditches Chrysler. GM would be idiotic to buy this company. I’m not a fan of GM or anyone else, but GM does seem to have better product on its shelves. This is a disaster for automakers and their workers. We are seeing the dissolution of our auto industry in front of our eyes.

02/19, 8:45 PM

posted by:

Richard

Blakkarr wrote “Here’s hoping a smart investment firm picks up Chrysler. That would be the best bet. …”

Do you have any clue of the track record of money people who buy manufacturing firms. Money people know money and little else. They tend to think only through the current quarter, but Chrysler’s problems are long-term. This-quarter thinking will not feed the bulldog.

I don’t know what can be done to save Chrysler, Dodge, and Jeep. The Daimler-Benz merger with Chrysler Corporation was supposed to have been a merger of equals, but it turned out to be a German takeover. The Germans turned Chrysler’s product into parodies of American cars. What they are doing to Jeep is a crime.

Still, the Jeep brand is not totally lost. GM can ditch the Jeeps which aren’t trail-rated and position the rest as low-cost SUVs in a Hummer-Jeep group. Although GM has dropped its own minivans, Chrysler’s minivans have a large enough market presence to warrant saving. Dodge trucks? They are behind Chevy and GMC and have no compelling reason to exist. Dodge and Chrysler SUVs? Ditch them. This leaves Dodge and Chrysler passenger cars. I would hate to see these brands disappear, but I would not buy them. What to do? What to do?

02/19, 9:52 PM

posted by:

LamborghiniZ

lee oswald: It’s never time to buy a Ford.

02/19, 11:01 PM

posted by:

Blakkarr

Richard,

I know Chrysler is in deep over their heads. But I also know that if they are to survive, they need someone how knows what they are doing. Most investment firms don’t think long term, not seeing the company as a possible regular source of revenue. You’re right most will not keep the company long. But then Daimler-Benz is about to dump Chrysler for losing the comparatively small sum of 1.3 billion… Not small to us average people, but not that much to an auto company. GM and FORD individually lost more.. a lot more.

You are also right, that DCX was supposed to be a merger of equals.. which in truth almost never happens. And like I said DB did everything they could to keep Chrysler afloat but never really let them get ahead and independently solid (I may not have said it on this thread). Huge brassy cars and trucks without getting Chrysler to fill in the smaller cars equally well was not a smart thing. When Chrysler asked to use older C-class parts to help develop a new Neon, DB said no. A FR Neon would have been a compact sports car fan’s dream.. like the second coming of the AE-86 Trueno but better.

What an investment firm needs to qualify as a good backer of Chrysler, since they can become profitable if properly guided, is patience, a strong and clear understanding that this is an at least 15 year commitment and the strength of leadership and control to push Chrysler to make the moves needed to become solidly self sustaining ad forward moving. You’re right not many of them have that. But some that back auto parts suppliers, who might be foreign as well, may present a ray of hope… which is all I’m trying to provide by bringing it up. You might not like Chrysler, I don’t know, but I feel for those who do. As a fan of American cars period, I don’t want to see Chrysler go… or at least go badly.

Believe me I do understand but simply saying “no” to investment firms who have no interest in keeping their existing lines up over those of their “partner” but seeing their company turn a profit, and maybe their parts suppliers as well. Kind of like growing the hay for the horse and getting that horse back up to speed and into the running again.

But even if Chrysler goes the way of AMC, and GM buys or keeps Jeep, that would be may be the ultimate irony in all this. Chrysler bought AMC killed everything but kept Jeep, and then GM would killl everything but keep Jeep… It’s almost creepy.

Also I think Hummer might look a little cheesy next to the serious off-road legend of the battle tested, trail rated Jeep, working on 70 years of service since WW2. The H2 is a re-dressed Tahoe and the H3 is a slightly beefed up re-dressed Trailblazer. The GC would eat the H3 for lunch and the H2 would likely give way to a more robust and capable “Rescue” spin-off. Without the H1, dropped a little bit ago, Hummer is just a Bling-mobile division despite having respectable off-road credentials.

As for buying a FORD (as a FORD fan, sadly): At your own risk… expect the F-150 and the Mustang… at least for the next 3-4 years.

Sorry if I run a bit long.

02/19, 11:05 PM

posted by:

Blakkarr

Jinx! I am really getting to deep into this. If there is a buyer for Chrysler we WILL hear about it. It’ll be all over the news, the Web, and Car mags all over the globe.

I’m not saying much more on the subject until more concrete info comes in.

Sorry…

02/19, 11:24 PM

posted by:

europerspective

Atomicbri, What makes you think that Toyota would buy into Chrysler. I can’t remember them ever showing interest in other carmakers.

02/19, 11:54 PM

posted by:

S-60-driver

^ ^ ummm, recently, Toyota and Ford held a meeting with each other!
.
anyways…. i hope to god GM buys Chrysler and get into a HUGE mess and then, BAM, gone!! No more GM!

02/19, 11:57 PM

posted by:

S-60-driver

GM can get Chrysler all they want, but Toyota will get #1 spot all the way. Its not the volume of cars. Its the reputation and quality. GM cars suck and Chrysler is even worse! Put two together….. ohhhh god.

GM just doesn’t “get” it!!

02/20, 12:22 AM

posted by:

Kaizen

WE DON’T CARE ABOUT BEING NUMBER 1!!! We would like to see all automakers comeback, because a resurgence through competition is good for the US economy.

02/20, 1:12 AM

posted by:

v8havoc

OVERLAPPING IS GOOD DAMMIT!!!!

it gives the consumer choices and yet GM still makes the money…

for example: a consumer in the market for a pickup will consider, silverado, f-150, or ram 1500

2/3 options belong to GM, instead of making half of the money in the pickup line by cuttin overlapping cars, they make 2/3…

this might not have been a good explanation but i hope u understand, GM would be stupid to buy out DC just to kill off models…

GM should also….HEMI EVERYTHING!!!

02/20, 2:01 AM

posted by:

car-a-holic

…until gas goes to 5$ a gallon….

02/20, 2:06 AM

posted by:

LJ

Well, Hyundai gave Chrysler and Mitsubishi the BLOCK for the engines they use now, in an experiment called GEMA( Global Engine Manufactruing Alliance). 2 factories in Dundee MI ,and I think 1(or 2?) is S Korea, and 1 is in Japan!
As for Hyundai being a “small player”? lol…NOT.
Look up some net searches for Global Sales…. I think in 05(or 06) Hyundai/Kia Group( some name like that, it linked the 2 together, since Ford was out-bidded by Hyundai, for Kia, nearly a decade ago) They are in 6th place, AHEAD OF HONDA(9TH PLACE) AND NISSAN (7TH PLACE).

Why do they need Chrysler’s headaches( bsides maybe SUV’s and Trucks, but I believe they do have these overseas, and only the Chicken Tax prevents such things being in the USA.. at least until Kia finishes the new auto/truck plant in GA in 2 years, or less, then they can build them there).
Speaking of GEMA: Wonder what would happen if Chrysler ceased to exist? Would they(or their buyers) have to pay off the remainder of the contract( until/through 2011, think it is for 2011).
Or would another buyer say” hey,like the new GEMA engines,maybe we can make a deal?”
Mitsu is also involved, to a degree, with GEMA.

BTW: Hyundai sold almost 500,000 units last year, and Kia was maybe 6-7Kunits short of 300,000 units sold in USA… Not what I would call small sales, compared to Suzuki’s 101,000+ and Mitsu’s 118,000 or so sales last year.
Hyundai was 7th,behind Nissan, and Kia 9th, behind(I think) BMW!!!!!!
It was close, though.
(both ahead of Mazda, in sales, and everyone seems to praise Mazda so much,ya know?).
Not trying to benaasty, just trying to straighten some falsehoods here about “smaller car makers”, lol.

Hyundai/Kia have their own Unions to put up with.
Why would they want more headaches?
(PS: GEMA in Michigan is UAW, btw, 550 or so Union workers up there).
Small numbers, though.

Anyhow, I don’t care who buys Chrysler. They do have a few vehicles that sell 100,000+ per year(PT Cruiser, 300,Minivans, trucks).
take care/not offense.

02/20, 2:52 AM

posted by:

gsh

dude hemi isnt even that great….

02/20, 4:29 AM

posted by:

Whiplash-C6Z06

“GM interested in Jeep and Dodge…”

Looks over that new 600hp Dodge Viper. Then looks to the new upcoming super corvette.

Corvette and Viper. Is there financial room for both those cars under the same company? I see GM saying buh bye to the Viper after it cannabilizes whatever technology it can. The corvette’s been around too long (and getting a world beater reputation with the C6 Z06) for it to worry about getting the axe.

02/20, 5:33 AM

posted by:

Gogogodzilla

To be honest… the best thing that could happen to Chrysler is if a non-automaker bought it. But I really don’t see that happening.

And if an automaker is going to be the one to buy Chrysler… then a foreign automaker would be best. For if Ford or GM were to buy Chrysler, they would only be buying it to reduce the competition. IE – to shut Chrysler down. For if Chrysler is shut down, then all the die-hard, ‘gotta buy American’, Chrysler owners will have no choice but to buy Ford or GM. Which is a win for them, but not for Chrysler.

02/20, 7:26 AM

posted by:

DialM4Speed

MB should have never been allowed to buy Chrysler. It was a stupid move from the beginning. What will most likely happen is some Chinese company will buy it. I’d love to see it become a 100% American company again but I know that ain’t happening. So were down to the big two.

02/20, 7:48 AM

posted by:

PrimeGTP

GM should also….HEMI EVERYTHING!!!
Comment by v8havoc

How old are you?

02/20, 9:05 AM

posted by:

Saud

Dear god what the heck is going on-GM buying Chrysler?
Kill me now

02/20, 11:46 AM

posted by:

CarStar

I hope G.M. doesn’t seriously consider buying
Chrysler- there is such an overlap of divisions…
and everything G.M. buys, it ruins. They (GM) would
be better off buying shares of Honda or some other
oriental automaker that has strengths it doesn’t have.
I would prefer to see a Renault-Nissan-Chrysler
merger since that would be a far better fit for
all companies involved.

02/20, 1:43 PM

posted by:

Richard

Blakkarr wrote: “Also I think Hummer might look a little cheesy next to the serious off-road legend of the battle tested, trail rated Jeep, working on 70 years of service since WW2. The H2 is a re-dressed Tahoe and the H3 is a slightly beefed up re-dressed Trailblazer. The GC would eat the H3 for lunch and the H2 would likely give way to a more robust and capable “Rescue” spin-off. Without the H1, dropped a little bit ago, Hummer is just a Bling-mobile division despite having respectable off-road credentials.”

I am pleased that you agree with so much of my previous post, but I must take issue with your comments about Hummer. GM’s recently discontinued Hummer H1 is the civilian version of AM General’s HUMVEE, which is still very much a part of the US military’s arsenal. The Hummer H2 is based on the GMT800 platform, but was engineered to be the less-expensive sibling of the H1, not its less-capable sibling. The HUMVEE is known to go anywhere that a soldier can keep two tires on the ground. The Hummer H1 retains this capability. The H2 inherited it from its older sibling. I don’t know know specifically about the H3, but I can only assume that the H3 can go anywhere the H2 can go and that is darned near everywhere.

Gogogodzilla wrote “…then a foreign automaker would be best….”

It appears that you have zero knowledge of Chrysler history. Daimler-Benz is second offshore owner of a domestic automanufacturer. The first was Renault. Renault bought American Motors including Jeep Corporation. Renault was a spectacular failure had to sell the old American Motors/Jeep-Eagle to Chrysler Corporation.

The takeaway message is that offshore owners of domestic manufacturers have two strikes. Which offshore manufacturer is your candidate for Strike 3?

02/20, 4:29 PM

posted by:

Kaptain75329

“to Kaptain75329:
If GM removed GMC from the line up, they would lose nearly as much in sales as Chevy acounts for! This SAME ideology of laying Oldsmobile to rest COST GM marketshare equivilent to the combined total sales of Mitsubishi, Plus the millions in costs to compensate dealers too. Its far too costly….GMs prolems are not the brands…it has been the mindless corporate rules, laziness, arrogance of complacency that have dimished the product differentiation and stiffled development. Keepeng GMC is a must….but Chrysler too? hmmmmm” – Comment by car-a-holic, posted on February19 at 4:19 pm
.
I’m not advocating they kill GMC, but I’m thinking it would be better for the brand to be fleet/commercial/government instead. There’s just a lack of identity and clear definition of GMC. They’re marketed professional execs and construction worker types, but only when they be not gettin’ they fo-shizzle-ma-nizzle on wid da “bling bling” homies dawg, naah whadda I meeeen? (wtf) GMC offers SUVs and crossovers all pulled from Chevy to compete in the same market with identical products AND winds up competing with Chevy on the upper east side to boot. Talk about an identity crisis. Buick is this same problem, but at least GMC can go somewhere – Buick’s been dying a slow death for far too long.

02/21, 2:34 AM

posted by:

Blakkarr

Richard,

I will not doubt that the H2 and H3 are both better set-up for off-road, but they are actually, as I said, redressed GMC SUVs. That is how they are less expensive and the H3 can go many more places the H2 can simply by being smaller…. less big… sorry.

 
 
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