GM Using The Mercedes Playbook

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You mean when I buy a Hyundai? <G>
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On Jul 19, 6:08 pm, edward ohare

Mercedes has diesels and hybrids. Chrysler, well, they discontinued their only hybrids and diesels. The new Grand Cherokee is based on a Mercedes model.

Yeah, full-sized fwd. Check Impala sales? Pontiac G6? Oh, not around.

That's what is selling.

Better ride and handling. You know, things that people like. Things that got the Ram named MT Truck of the Year and winner of a C/D comparison.

So you're saying customers don't care about ride and handling?

Oh yeah, that 1970-era design Ram van was such a huge seller.

Notice how many delivery trucks (FedEx, etc) are Sprinters?

And what does that tell you?

No, heavy, inefficient, poor ride and handling, poor mileage, poor reliability.

And what would that be? The only platform in common is the Liberty/ Nitro, and the Nitro looks nothing like the Liberty.

Uh, you might have noticed, no Durango any more.

Just Subaru sells a ton of station wagons. Volvo, Audi, etc.

That rwd platform you think so little of is going to used by Fiat for the upscale Alfa-Romeo brand.
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On Jul 20, 11:58 am, " snipped-for-privacy@gmail.com"

"Starting in 1998, troops of managers started flocking to Auburn Hills on a corporate jet. Soon the Germans discovered that Chrysler, which has a long history of boom-and-bust cycles, was in much worse shape than they anticipated. It spun deeply into crisis in 2000, racking up $4.7 billion in operating losses the following year alone. Mercedes had to make the ultimate sacrifice, squeezing its own costs to pump out better profits for the group."
-- http://www.businessweek.com/magazine/content/05_33/b3947001_mz001.htm
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an opinion piece from the past........
Automotive News -- August 3, 1998 - 12:01 am ET d us a Letter to the Editor
THE PHRASE 'merger of equals' has just about disappeared from all references to DaimlerChrysler. Practically speaking, Daimler-Benz has swallowed Chrysler.
That settled, the House of Daimler is now getting lots of advice on how to domesticate the new division. Lately, the opinion givers all sound the same: Take firm and immediate control. Act like a senior partner. Give up the idea of two headquarters.
It may be time for a different voice, something along the lines of 'Let Chrysler be Chrysler.'
Bob Eaton wasn't kidding himself on 7 May in London when he called it a 'merger of equals.' Chrysler made twice as much money as Daimler last year on about the same amount of revenue.
Yes, BMW lost time by allowing Rover an early, unruly hands-off period. But every merger and acquisition is different. Each has its own set of rules. And this deal is like no other in the history of industry. Any industry.
Chrysler doesn't need to be digested. It needs to carry on as Chrysler, not turned into Mercedes-Benz of Michigan.
The textbooks say that can't work. Jeffrey Garten, dean of the Yale School of Management, says that unless Daimler imposes its culture on the new company and takes complete charge, 'don't be surprised if the deal fails.'
His textbook model? Japan's Sony Corp. gave too much control to reckless American managers when it bought CBS Records and Columbia Pictures in the late 1980s. A disaster resulted. Sony had to send in scores of Japanese executives to clean up the mess.
But comparing Bob Eaton and Tom Stallkamp to Peter Guber and Jon Peters, the wild-spending duo who ran Sony Pictures into the Hollywood turf, is like comparing Sense and Sensibility with Liar Liar.
Heeding the advice of Garten and others to act 'quickly and decisively' to integrate Chrysler could crash the merger on takeoff.
When a carmaker is acquired it is usually the brand that has to be carefully preserved. The corporate culture often has to be scrapped. But Chrysler's culture must be protected. Cherished, even.
General Motors still operates in the USA with more or less the same corporate mindset as in the 1950s. But Chrysler came up with an interesting recipe. Take what Bob Lutz saw in his early days at BMW, 30 parts; Bob Eaton's lessons from GM Europe's turnaround in the late 1980s, 30 parts; Francois Castaing's experiences as a young race-car engineer at Renault, 20 parts; Lee Iacocca's get-out-of-debt sense of urgency, 15 parts; Walter Chrysler's ancient antipathy to General Motors, which he quit in a huff in 1920, 5 parts. Mix.
It is a marvelous brew.
It would be easy for Daimler to impose itself on Chrysler, much harder to blend the two companies - saving the best of both. But that is the right recipe.
You can send an e-mail to Richard Johnson at: snipped-for-privacy@compuserve.com
Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/19980803/SUB/808030811#ixzz0uGLndf3W

"Starting in 1998, troops of managers started flocking to Auburn Hills on a corporate jet. Soon the Germans discovered that Chrysler, which has a long history of boom-and-bust cycles, was in much worse shape than they anticipated. It spun deeply into crisis in 2000, racking up $4.7 billion in operating losses the following year alone. Mercedes had to make the ultimate sacrifice, squeezing its own costs to pump out better profits for the group."
-- http://www.businessweek.com/magazine/content/05_33/b3947001_mz001.htm
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In article

http://www.businessweek.com/magazine/content/07_25/c4039024.htm Checking Under The Hood Of The Chrysler Deal
Even though it has been 30 years since I worked for Chrysler (DCX ), the auctioning off of the division by Daimler deeply offends me ("A deal that could save Detroit," News & Insights, May 28). The idea that Daimler (DCX ) has been dragged down and German investors have somehow been cheated is a myopic vision of the situation.
What happened to the *** $8 billion survival fund Chrysler had in the bank when the merger occurred? Was it used to buy Detroit Diesel Corp. outright and Mitsubishi Motors shares? Why did Daimler get rid of competent American management at Chrysler and install "sock puppets"?
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Wasn't there. Read Chrysler's 1997 annual report (I rechecked it -- I was a stockholder). 8 billion was the value of assets over liabilities -- that includes plants, machinery, etc., not all cash.

A lot resigned rather than work with the Daimler folk. Happens a lot in mergers, take-overs, etc.
Besides, part of the reason for coming together was to save money by avoiding duplication -- of people as well as other things.
And as for Mitsubishi -- Daimler was intersted in buying into Nissan, but the Chrysler folks said, "no, they're about to go bankrupt. Buy Mitsubishi -- we worked with those guys before."
Of course, Mitsu was in bad financial shape and has misled everyone, including covering up recalls, warranty work, etc. When Damiler found this out and got rid of their piece of Mitsu, in return for the deception, Mitsu gave Daimler Mitsubishi Fuso trucks, which Daimler still owns.
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On Tue, 20 Jul 2010 13:28:07 -0700 (PDT), " snipped-for-privacy@gmail.com"

Show me that the people who created the LH cars, the PT Cruiser, and the 3.5 and 4.7 engines left BEFORE Mercedes took over. You can't.
Chrysler's problems at the beginiing of this century were due to cyclical market downturn. To be expected. Remember Bush and Greenspan couldn't stand still for a little economic discomfort - what was occuring was a normal cyclical adjustment - and cut taxes, sent out tax rebates, and cut interest rates. The bill for refusing to take a little discomfort back then came due as real pain in 2008.
Its true Chrysler has been a boom an bust company. For the first few years of its existence, it had a license to print money. They it mistepped with the Airflow.
It recovered from that and for a short time over took the terribly mismanaged Ford Motor Company in sales. But boring set in and it was in trouble again by the early 50s.
Engineering and styling brought it back in the mid 50s. But they blew it on product quality and then product offerings. They came out with mid size cars - a new category - the same year Ford did, but foolishly droipped their full size cars (Plymouth and Dodge).
Came back again starting in 65 with a license to print money. By the mid 70s they were in trouble again, and came back yet again with first the K cars and the the minivans.
Iacocca ran the K car platform one generation too many and it was trouble again. They pulled themselves out yet again with product: the LH cars and the Neon.
Its true Chrysler was a boom and bust company. Mercedes sure fixed that problem!
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On Jul 26, 10:39 am, edward ohare

Lutz did.

Exactly, and they could see another bust coming and were worried about surviving it.

How so? Chrysler was run as an independent unit, reporting its own profit and loss. And it had both profit and loss under Daimler. More loss than profit, especially towards the end.
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the weekly flights of German bosses who didn't understand the market. Dropping the LH line for the RWD 300 must have been a factor. Sure the 300 sold OK, but not to the LH customers who went elsewhere.

the cash off to Mercedes.
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Oh BS. For most of the time it was DCX, Mercedes sales kept Chrysler going -- the Chrysler unit lost money. That's why DCX stock dived and why they sold off Chrysler so cheaply.
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In article

You read a different story, likely from the other side of the pond, released by the Daimler take over artists. Here is what a insider Chrysler saw in the early years of Daimler control of Chrysler: http://www.allpar.com/ed/mistakes.html
By 2005 Daimler's influence on Chrysler was seriously losing their traditional customers. I know, because I was there.
Daimler sold off Chrysler cheaply because they knew they screwed up Chrysler and want to limit their losses. They did OK, because they kept the pile of cash Chrysler had 10 years ago. More recently Cerberus also did OK by Chrysler. In 2008 GM was thinking of taking over Chrysler to get at another cash pile. When Cerberus dumped Chrysler that cash was gone, vanished. So twice in 10 years Chrysler's cash was ripped off. By then Chrysler not only lost many customers, but Cerberus cut so many designers Chrysler couldn't design cars to go around their recent new V6 engines.
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the Pacifica design studios and Arizona proving grounds were also sold off during Mercedes rein , supposedly to get more operating capital and pay some debts.
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Jeep Grand Cherokee, it was a pile of junk.
--
Clive


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In article

Yes to some, the Chrysler 300 series is very good in a segment of the market. But Chrysler lost their traditional FWD customers. We started buying Chryslers in the early 80s because of their FWD cars. Over the years we bought many of their cars new. A few years ago I had to replace my '95 Concorde with a used 2004 300M which I love. Nothing since the 300M interested me. I did have two weeks 300 experience with a rental 300, not my kind of car even if it was FWD.
Our next FWD cars likely won't be Chrysler's, unless they finally come out with something that fits today's mid priced market. For now Chrysler is surviving selling trucks and the truck like 300.
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On Tue, 20 Jul 2010 08:58:38 -0700 (PDT), " snipped-for-privacy@gmail.com"

And diesels and hybrids are real big sellers, aren't they? They're like building sporty cars. They're an ego statement. People look at them and say "cool" but then by something else.
The origin of the Cherokee shows the problem. You don't take expensive cars and try to modify them so they can be sold for cheap. You go the other way.

A relevant comparison is Intrepid sales versus Magnum sales

Talking about ride and handling is ludicrious when customers have shown they want a vehicle jacked up sky high. Ride and handling are not high on the priorities of commerical buyers and don't fit the ego of personal buyers.
Past winners of the Motor Trend Car Of The Year include the Renault Alliance, the Plymouth Volare/Dodge Aspen, the Chevrolet Vega, the Chevrolet Corvair.

C'mon. Ford was the number one selling pickup during a time when it had Twin I Beam front suspension. Quirky handling, rode hard, and ate up tires.

You over rate Sprinter sales. Their small numbers are quite visible on the road because of their appearance.

My point. As with the thoughts of turning Dodge into a wagon brand, they got a higher percentage of a negligible market.

Which doesn't change the stupidity of the decisions I've mentioned. When they did the redesign of the Dakota and Durango, they gave each uniquq front sheet metal. They gave the Durango torsion bars and kept coils on the Dakota.
Has Mercedes never heard about sharing parts? This was a smart time to share parts. NOT recreasing the sheet metal on Jeep models to sell as Dodges, merely sticking in a Dodge grill, is a dumb time to share parts.
There's no conistency is what Mercedes did in these instances. Except that the decisions were wrong.

Subaru, Volvo, and Audi, don't sell a ton of cars, let alone a ton of station wagons. And your examples further prove the stupidity of the decisons. Foolish for Dodge to have Volvo and Audi as targets, because it didn't have the brand name value to compete with them, and the idea of Dodge aiming for Subaru, well gee, that's like Coca Cola considering RC Cola instead of Pepsi their target.

Which proves once again its not suitable for a mass market car.
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On Jul 26, 10:22 am, edward ohare

They're efficient. They let the manufacturer make bigger, lower-mpg cars.

Sedan vs wagon? Bizzaroworld? Charger vs Intrepid is more apt, but the economy has been quite different in the 2000s and the 1990s.

Yeah, I must see 1 truck a week jacked up sky high.

Sure they do. If Susie Soccer Mom is buying a pickup (or her husband is), she wants one that rides and handles like a car.

Uh huh, and Olds Toronado, Chrysler minivans, Ford Taurus (original), ...

Yep, and Dodge was a far distant third. How are you going to overtake #1 if you just make something just like #1? Where's the incentive for any Ford buyers to switch to a me-too vehicle? Especially one lower in quality and reliability?

I see them all the time. UPS, FedEx, plumber, AC repair, ...
The diesel 6 gets over twice the fuel mileage of the old Ram. And carries more inside.

Again, offering a "me-too" vehicle -- especially one not updated in 20 years -- doesn't get you anywhere.

Sharing parts? The problem was, most Mercedes parts were too costly for Dodges. How many parts does BMW, say, share with Mini? Ferrari with Fiat?

Why? Subaru sold 125,000 cars TYD through June 2010, with a much smaller lineup than Chrysler (basically 2 cars and 2 "trucks").

Was the Pontiac G8? (Which GM is now making a police car off)
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On Mon, 26 Jul 2010 13:28:56 -0700 (PDT), " snipped-for-privacy@gmail.com"

You explained why, in your view, people should buy them in large numbers while ignoring the fact they don't.

Normally yes, however, Mercedes replaced the Intrepid sedan with the Magnum wagon. If you want to evaluate the quality of that decision, compare Intrepid and Magnum sales.

You aren't paying attention. Over the last 20 years or so, the manufacturers have jacked up the trucks. Current mid sized trucks are taller than full size trucks were 20 years ago. Current full size half tons are at least as tall as 1 tons were 20 years ago.
They did it because that's the look customers want. They didn't provide any significant load capacity increases by jacking up the trucks. Because so many of the truck buyers don't need that. After all, its pretty tough to strain the capacity of a pickup even with the be completely full groceries.

Well, if Mercedes really believed that, not only would they have done the coil suspension they've done, they'd lower the Ram. They didn't. So they didn't get anywhere near full benefit of the design.

Having part of a large market may be better than having 100% of a smaller one. Often you don't need something drastically different. You just need something different in detail.
Dodge jumped into competitiveness with the orignal Freightliner styled Ram pickup. Mechanical features were similar to Ford and Chevy. What made it sell was the tough truck image, which was there functionally but the styling really gave the tough truck impression. And that's what customers wanted.
You can logic out "better" all you want but that doesn't mean its what people think. VW's Rabbit based pickup, and the Dodge and Plymouth Horizon/Omni coupe based pickups. Don't you think they were better in just about every way than the Japanese sourced small pickups Chevy, Ford, and Dodge were selling? Yes, they were. Did they sell? No.
And what happened to Ford when they made their full sized truck just slightly smaller for a few years? Chevy almost caught them.
Often companies shouldn't build something completely different. Often just different in details works. Following your view, the original Escort/Lynx and the Omni/Horizon should not have been built since they followed the Rabbit format.

And costs more. And has less power. And really contradicts your ride/handling pitch on the pickups.

Me too gets you lots of places lots of the time. It can give you a share of a large market which might be better than all of a small one. The reason CVS and Walgreens build their stores right across the street from each other. The reason many towns have streets referred to as "auto dealers row". The reason why companies other than Bayer make aspirin. The reason why most companies choose to make standard potato chips rather than going after Ruffles or Pringles.

Yet that is what they tried to do. They treated Chrysler as a captive customer for over priced parts.
You know, I don't know if what you say is due to lack of knowledge or denial. But I usually only have discussions of this character with people who still believe Saddam had Weapons Of Mass Destruction.
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space, but it's poor handling and vision left me very happy to return to my '95 Concorde. The only good thing here was many got a real cheap Magnum when they were cleared out. Of course the rest of the 300 line has sold fairly well, being a unique car in todays market.

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We have the trucks and buses here too.
--
The problem with socialism is there's always
someone with less ability and more need.
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--
Clive


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