We were all ready to start this week anew, leaving behind the reports of a supposed sale of Chrysler to General Motors. But alas, that ain't going to happen.
Both the Detroit News and Automotive News came out with stories this morning making it clear that talks between the two automakers are serious and have been going on for some time.
The initial reports about GM sharing its GMT900 truck platform may or may not have been true, but according to Autonews, what's being discussed would go well beyond simply exchanging some engineering for cash.
The high-level talks have been taking place over the course of the past two months, beginning in December, with Rick Wagoner, GM's chairman sitting down with Dr. Z from DCX. The two automaker's CFOs have met on at least four separate occasions to discuss the buyout/merger/absorption, but naturally, both companies have declined to comment.
The Detroit News had some particularly interesting tidbits, including the idea that if GM were to purchase Chrysler, it would no longer exist as a company unto itself. All of Chrysler's brands and products would just become part of GM's overall organization. As an example, Jeep, one of DCX's most valuable brands, might be partnered with HUMMER as the General's off-road arm.
The risk versus reward for GM is tipped further towards disaster than success, with massive cannibalization of products, excessive debt, mismanaged product lines (within both automakers) and we haven't even gotten into the UAW and the catastrophic amount of layoffs that
could would take place.
Since we can't encapsulate every morsel of information here, we'd encourage you to read through the
Detroit News piece and, if you have a subscription, check out the
Automotive News article on the same topic.
[Sources: Detroit News, Automotive News ndash; Sub. Req.]
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