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UPDATED: Magna makes plans, seen as only serious bidder, as Chrysler simplifies operations

05/07/2007, 2:16 PM

By ndhapple

Automotive News reports Magna executives have been burning the midnight oil analyzing Chrysler’s strengths and weaknesses, putting together a plan for action should they win in the bidding for Chrysler.

UPDATE: According to a report in German auto magazine Automobilwoche, Magna is the only serious bidder left for the Chrysler division of DCX, and that Daimler has only continued discussions with other bidders as a purely tactical move. This seems to coincide with a report in the Automotive News this week that a sale could be completed by June to the Canadian parts supplier.

Magna executives believe that Chrysler needs to significantly reduce its dealer base, expand its relationship with Daimler, who will own a minority stake and have a management role in the new Chrysler by expanding its parts and components sharing. Magna also believes it’s important to maintain Chrysler’s current management including CEO Tom LaSorda.

A deal for Chrysler could be completed by June, and Magna is seen as having the upper hand. Chrysler executives have a long standing relationship with Magna, who supplies parts to the automaker. The UAW/CAW also favor the Magna deal because they believe the parts maker would keep Chrysler intact and fear private equity firms pursuing Chrysler would break the company up.

Simplifying Operations

Chrysler announced plans to simplify its vehicle option offerings by condensing options into three trim lines and simpler options packages COO Eric Ridenour told Automotive News. Dealers blame strange options orders for making it harder to move cars.

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05/07, 8:23 AM

posted by:

roadmaster96

is it going to be like acura where the only choices are sat nav and engines?

05/07, 8:54 AM

posted by:

Phil

Ah, so basically Daimler wants to keep a minority stake in Chrysler and continue the DaimlerChrysler partnership in much the same way it is now—all without Chrysler’s red-inked bottom line. Just a thing to please shareholders, I guess. Essentially, it looks like Magna wants the company to remain as kind of one company/partnership/alliance, kind of like it is now, except that Daimler and Chrysler will each file separate earnings reports and have different ticker symbols…if that’s the case, that might not be such a bad thing for both sides. And it certainly wouldn’t be the bitter breakup we’ve all been hearing about.

05/07, 9:21 AM

posted by:

HoosierHero

Really there aren’t that many options for a lot of cars. When was the last time you saw a roll-up window on a car that cost over $15k? It seems dealers put more thought into wheels now than anything else- unfortunately! Chrysler will do well to pare down their offerings and focus on making a better product.

05/07, 9:26 AM

posted by:

Stuart

I serious think daimler should sell all or keep all. They are stupid still getting part involved which is always a bad thing. They need a fresh break like BMW after rover to get themselves sorted.

Also if they gonna sell part or all of the company then they should bring back the name Daimler-Benz

05/07, 10:31 AM

posted by:

PrimeGTP

I don’t have high hopes for Chrysler at all. With Daimler remaining at management, and continuing to supply outdated platforms for new Chrysler and Dodge vehicles, it looks like the product will not change, only who has the poor sales figures laid on them.

05/07, 10:35 AM

posted by:

1c3d0g

Phil: I concur. This deal might actually work very well for them in the long term. Either way good luck Chrysler, you’re still the best of the Domestics.

05/07, 10:45 AM

posted by:

gbb

I wish Magna well. I would also like to see Daimler completely out of the picture.

05/07, 12:23 PM

posted by:

purdue

Roll-up windows. I’ve test-driven a lot of cars with them lately.
The Nissan Versa…but it’s $13k
The Jeep Patriot is over $15k with roll-up windows
The Jeep Wrangler (four door) I drove was $21k and had roll up windows.
My Caravan has roll-up windows and stickered at around $19k. (I have to reach outside to adjust mirrors, too. No manual handle inside) And the current Caravan base I think has roll-up windows.
I think the 4-door Ford Focus msrp is $15k and has roll-up windows.
Pontiac Vibe is about $17k and base has roll-up windows.
Corolla is about $14k and has roll-up windows
Toyota Matrix is $17k and base has roll-up windows.

So, in my mind, MANY cars have roll-up windows, including price points north of $15k.

05/07, 12:30 PM

posted by:

purdue

Just checked. A dealer here has $32k Wrangler Unlimited and it has roll-up windows.

05/07, 12:58 PM

posted by:

HoosierHero

Jeeps are definitely more of the “rugged” flavor, but for the rest of those I don’t know where you are shopping, but you are getting screwed!

05/07, 2:32 PM

posted by:

PrimeGTP

“Simplifying Operations” meaning more cars with idiotic option packages like requiring a sunroof to get anti-lock brakes..

05/07, 3:34 PM

posted by:

FallGuy

All these articles give the impression that “Magna is buying Chrysler” by itself. Actually, as I understand,
Onex Corporation will be the majority owner of the new Chrysler, with Magna as a minority partner and Daimler retaining a smaller minority stake. It seems unlikely Onex will let Frank Stronach run the show with Onex money for long

05/07, 3:55 PM

posted by:

F451

Is there really a need for Chrysler? Really? Sell the models that are still desirable to other car manufacturers, and put Chrysler to rest. Between the unions, and Daimler simply using Chrysler to gain US benefits, Chrysler has suffered enough.

05/07, 8:42 PM

posted by:

0GSharK6

I’m glad my $17k Tiburon has power windows and power/heated outside mirrors. But that’s aside the point. Here’s hoping Chrysler can get something going in the right direction instead of cheap ass interior designs and crap transmissions.

05/07, 9:21 PM

posted by:

purdue

Hoosier,

That makes no sense. Where one shops has nothing to do with whether a dealer has a base car or not. Where you at in Indiana? And why do you equate roll-up windows with getting screwed? That makes no sense. Some people prefer them. They don’t break.

05/07, 10:46 PM

posted by:

Blakkarr

So does this mine the ME412 (Mr. Impossible) and FIREPOWER (Viper’s clone in a suit and tie) will stand a fighting chance at production? Will a new compact sedan based on the C230 drive parts now be likely (Like what Chrysler wanted for the NEON)?

Will Chyrsler finally make a profit?

(Cue the dramatic music!)

05/07, 11:03 PM

posted by:

autonutt

“Also if they gonna sell part or all of the company then they should bring back the name Daimler-Benz

Comment by Stuart, posted on May7 at 9:26 am”

I would suspect that after the separation is official that the company will drop the tarnished Daimler name and simply become Mercedes-Benz.

05/08, 1:44 AM

posted by:

TOZO

Don’t trim options! Trim the slow-selling models! Think BIG!

05/10, 9:30 AM

posted by:

Hal

Article in the FT today about Gaz investing in Magna.
http://www.ft.com/cms/s/a6d10e44-fee0-11db-aff2-000b5df10621.html

 
 
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