Sunday, October 12, 2008


GM + Chrysler = Not so good idea?

I heard something on the news lately about the two companies joining. Something about two big companies that are struggling combining resources. The only thing I could picture is the incompatabilites of the two different corporate heirarchys grating against each other and the result is an even less effective and more inefficient morass with a bigger risk involved. If some eggs in two different baskets start smelling a little funny, you don't get a better result by putting all the eggs in one basket with the funny smelling ones. But what do I know, I'm just some Joe Shmoe everyguy... If anything both companies probably need to get leaner and meaner in their own separate ways.

Basically the result of a Chrysler GM merger would be this:
1. There would be no more Chrysler or Dodge. The only real survivor would be Jeep, and that's because GM is likely to dump Hummer from their lineup. The other two brands have too much overlap and identity conflict with other existing GM brands. It would be like getting two more Oldsmobiles while you're trying to better refine the Saturn that replaces it.
2. Lots of layoffs. Engines and such would be consolidated. This might actually be good from the perspective of a bigger company, but would suck for those working in production. Again, you might get a V6 dualcam or hemi from the Chrysler side, but GM already has a better product for other powertrains.
3. What would the funding go to? Something as a PR dealbreaker such as the Volt really needs to be pushed out to the public. GM shot its own foot with the EV1, and the Volt is the only bandage for that PR mess on the near horizon. If it's good and viable, that's even better. But to focus on it and do it right would mean taking on anything outside of other planned projects off the table.
4. Improved brand identity means cutting out excess product. Pontiac SHOULD be sport(y) cars only, not trucks, vans, etc. Cadillac SHOULD be the top of the line in every respect. Buick should be built for comfort and not for speed. Chevy is the regular Joe cars, with a few halo models for tradition's sake. Saturn is where the experiments take place, afterall it's the obvious Oldsmobile sucessor - and Oldsmobile wasn't so great at overlapping the Buick niche. GMC is trucks and vans, no doubt about it. WTF to do with Dodge and Chrysler? Dodge overlaps GMC and Pontiac, and Chrysler is Chevy and Saturn. How do you prevent dilution under the same roof?

What I'd call for is that GM would be smarter to stay the course without eating what may be a moldy giblet. (Sorry Chrysler fans, but I'm looking at overall company health.)

Chrysler needs to pursue venture capital from elsewhere to bolster its own health and preserve brand identity as a separate company. Maybe some up and coming player with no real U.S. recognition would be better with a stake. I'd suggest looking at India or China for good offers. Yes it sounds wierd, but it would be a better fit. And for quality and timliness's sake, they would be smart to keep production in the U.S. and maybe even import from the U.S. for their own market. Incorporating Chrysler development into their own home markets and perhaps being able to push an entry model developed in their country into a Neon sucessor wouldn't be bad either. If they're iffy, perhaps they should watch how Tata handles the Jaguar brand and go from there.

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