Consultant: GM merger would eliminate most Chrysler vehicles

Consultant: GM merger would eliminate most Chrysler vehicles

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Automotive News October 30, 2008 - 2:50 pm ET

DETROIT -- A merger between General Motors and Chrysler LLC would result in the closing of as many as half of Chrysler's factories and the elimination of all but seven of its core models, according to a report by consulting firm Grant Thornton LLP.

A deal also could result in a loss of 100,000 to 200,000 jobs at automakers, suppliers and other industry stakeholders, said Kimberly Rodriguez, principal of Grant Thornton's automotive practice.

Rodriguez said negotiators may reach an agreement in principal as soon as Tuesday, Nov. 4. Reuters reported yesterday that GM and Chrysler's owner, Cerberus Capital Management LP, have resolved major issues and the final form of any accord will depend on financing and U.S. government support.

"Chrysler as we know it will cease to exist very soon," she said at a briefing with reporters today in suburban Detroit. "There are few options available to either company."

The blended companies would command about one third of U.S. auto sales. "Despite the significant number of families that will be impacted, the benefits of combining the two companies are both structural and strategic," Rodriguez said.

Surviving Chrysler vehicles would likely be the Dodge Ram pickup; Chrysler and Dodge minivans; and several Jeep models, including the Wrangler and Grand Cherokee.

Reply to
Jim Higgins
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Why would GM keep a third line of pickups? And the slowest-selling one? And GM is talking about selling Hummer -- why would they want another line of SUVs?

Face it, selling Chrysler to Nissan would be better for the survival of Chrysler as a car maker.

Reply to
Lloyd

There must be something else going on, maybe there is some sort of bailout deal that they are being promised if they keep the companies American. There isn't a single car in the Chrysler line up that doesn't already have a GM equivalent.

One more thought, there is a curse on Jeep, every company that's owed it has died,

Willys Kaiser AMC and now Chrysler

Reply to
General Schvantzkoph

The Dodge Cummins Ram is a top seller. They won't destroy that line.

Jeep Wrangler has no other vehicle in its market.

Town and Country is one of the best selling of its class.

Reply to
Miles

Cummins can't be replaced by Duramax for a decent sized market.

Wrangler has zero GM equivalent or anything marketed by any major automaker competing against it.

GM doesn't have a Challenger competitor unless you count the STILL unreleased new Camero. Even still, IMHO the Challenger is the better classic reborn muscle car.

Reply to
Miles

One word: Cummins. The Dodge has dominated the "real working" truck market with that engine, and for good reason. Its far superior to the duramax and Navistar (Ford) in every measurable way, from reliability to emissions to power to noise. OK, a few more words too: the new Ram pickup is a significant technological advance over the previous model, and again is a superior design to the GM trucks. Some people will never buy a Dodge branded truck, though, so keeping the GM around for the low-end and weekend worker trucks makes sense.

Because, again, Jeep vehicles are superior vehicles (especially the Grand Cherokee and Wrangler, the latter remains the only vehicle of its type on the market by ANY manufacturer) and they with better name recognition and more POSITIVE name recognition to boot. Hummer is a laughingstock among such diverse crowds as hardcore offroaders and hardcore environmentalists. It should die. Now. Even if GM doesn't get Jeep, its an albatross around GM's neck.

For the second time in recorded history, I completely agree with Lloyd.

Reply to
Steve

Yes, the "Jeep Curse" has been well documented. Although it should be noted that AMC and Chrysler each lasted nearly 30 years with the brand, so its not one of your fast-acting curses ;-)

What amazes me is that ANY company that owns Jeep could possibly fail, because the things sell at an incredible rate. Said companies are always foiled by bad decisions on OTHER vehicle lines, not Jeep itself.

Reply to
Steve

from what I'm told the duramax is an Isuzu engine anyway

Reply to
rob

Renault is still alive (just not in US market).

Reply to
Lloyd

Sure it can. That's not a huge market anyway, especially in this economy.

But do its sales numbers justify keeping producing it?

300 hp V6 in Camaro vs 250 in Challenger? Camaro lighter as well? V8 as much hp as Challenger SRT-8 for (projected) cost of Challenger R/T?
Reply to
Lloyd

This is what I'd see with a Nissan tie-up:

small car -- Nissan Sentra for Nissan, Sentra platform for Chrysler (replacing Caliver) mid-size car -- Nissan Altima for Nissan, Altima platform for Chrysler (replacing Avenger/Sebring) large car -- Charger/300 for Chrysler (Infinity covers premium and large for Nissan) minivan -- Caravan/T&C for Chrysler, minivan on that platform for Nissan (replacing Quest) mid-size SUV -- Grand Cherokee for Chrysler, Pathfinder for Nissan smaller SUV -- Xterra for Nissan, Xterra platform for Chrysler (replacing Liberty/Nitro) small crossover -- Rogue for Nissan, Rogue platform for Chrysler (replacing Compass/Patriot) off-road SUV -- Wrangler for Chrysler large pickup -- Ram for Chrysler, Ram platform for Nissan (replacing Titan) small pickup -- Frontier for Nissan, Frontier platform for Chrysler (replacing Dakota) mini car -- Nissan Versa (maybe Versa platform for Chrysler) dead: Aspen, Durango, Commander, Armada, PT Cruiser

Reply to
Lloyd

Its a joint effort between GM and Isuzu Diesel.

Reply to
Steve

Wrong way to look at it Lloyd. In a bad economy, the HD truck segment remains constant. People that haul heavy things with trucks HAVE to keep buying trucks, and that market prefers the Dodge/Cummins. Its people that buy, for example, the Toyota Tundra as a status symbol and to haul the occasional potted plant home from Lowes that will abandon the truck market.

Go look at said numbers. They're quite large.

Reply to
Steve

Well now we disagree somewhat. I see Nissan getting COMPLETELY out of all truck and SUV production because the ones from Chrysler are already better, especially with the Aspen/Durango hybrid on the way. Nissan just isn't very good at making trucks and vans. Never has been.

The Caliber is a more of a small crossover. See below.

Probably true.

My take: Chrysler replaces Infiniti altogether. The G35 might remain re-badged as a Chrysler since its common with the 350z. Challenger stays in production to kick the Camaro around, which it does rather resoundingly from what I've read of early comparisons.

100% guaranteed. Nissan has proven they can't build a minivan no matter how many times they try.

Pathfinder = dead along with all other Nissan truck platforms, Grand Cherokee platform re-badged for Nissan.

The latest Xterra is actually a very large platform, comparable to the previous-generation Durango. I think its dead along with all Nissan trucks. No replacement.

Compass/Patriot is the same plaform as the Caliber, so the Rogue platform just vanishes and all these go on either an updated Sentra or Caliber platform. Doesn't matter much which.

Not if I'm right and Nissan quits building all trucks. The Dakota plaform then becomes the Frontier for Nissan and remains for Dodge.

Aspen/Durango platform gets rebadged for a Nissan model and includes a hybrid option already in the works, which is NOT in the works for any Nissan.

Reply to
Steve

But the prime market -- contractors and the like -- are out of work and many are going bankrupt.

Reply to
Lloyd

Sales are so slow, Chrysler is closing plants. And the hybrid really doesn't do much -- it's in an old, truckish vehicle that rides and handles like a truck, when the market is moving to crossovers.

It's sold as an econocar. And it's Chrysler's only small car.

Never. The Chrysler name doesn't have the cachet. It once did, but it's been cheapened by too many Sebring, LeBaron, Cirrus, PT Cruiser, etc. models. It's now more like Mercury.

No, you're thinking of the Armada maybe? Xterra is 178 in long. Liberty is 177 in.

Nah. The Sentra is a much better platform than the Mitsu Lancer, which is what the Caliber, Compass, and Patriot are based on.

Dakota is, unfortunately, too old and too big for a compact truck. And not economical enough.

Actually Nissan has a hybrid Altima.

And Durango/Aspen are gone: From Edmunds: The Chrysler Aspen (right) and Dodge Durango (below) full-size hybrid sport utility vehicles have become the first green vehicle casualties in the wake of the automotive industry's declining fortunes.

Chrysler announced today that it will close the Delaware plant where the SUVs and their nonhybrid namesakes are made and discontinue the models. (dated Oct. 23, 2008)

The Auburn Hills, Michigan, automaker won't move their production anywhere else when the plant closes at year's end, Chrysler spokesman Scott Brown told Green Car Advisor, despite the fact the hybrids entered full-scale production on Aug. 22, barely two months ago.

Reply to
Lloyd

Chrysler destroyed Jeep. No longer can Jeep be associated with tough, rugged, built for off road adventures etc. Seems they just took a typical car or SUV, changed the body a tad and called it a Jeep. Even the Wrangler is a far cry from how the CJ etc. series were built.

Reply to
miles

Wrong. Cummins is a large market. The name sells. The Duramax name doesn't hold much sway like Cummins does. Take a look at the Ford work trucks that have the Cummins in them.

Yep. Wrangler is still popular after all these year. Nothing else like it.

First off you can't buy a V6 Challenger at last glance at my dealer. Only the SRT-8. The Camaro never had the muscle car status that the Challenger did and I feel that continues with the new models. Second, the Camaro is still unreleased with only preliminary specifications stated. GM has a history of bloated wishful vapor specs.

Reply to
miles

Crossovers can't do what the Durango can. I can take 7 people comfortably while pulling my 6,000lb trailer. I need such capabilities and did not want to go to the size and expense of a Suburban. The desire for such vehicles is still high. It was high gas prices that hurt the demand for them, but the desire still exists. As gas prices continue to plummet you'll see mid sized hauling capable SUV's rise again.

Reply to
miles

News story:

It's not like the domestic automakers need more worry, but another of their sacred cash cows, the diesel-powered medium-duty pickup, is being slaughtered.

The Detroit Three's "heavy duty," commercially oriented three-quarter ton and one-ton pickups have long been outsized profit centers, largely because their buyers are famously wedded to diesel engines, an expensive option loaded with profit margin.

The industry's overall pickup business already is enduring a well- publicized battering - but now, inflated diesel fuel prices have the historically diesel-favoring heavy-duty customer - those who are still buying, that is - fleeing for the comparative comfort of engines that use $4 gasoline instead of $5-plus diesel.

How bad is it?

Diesel's portion of the heavy-duty pickup "mix" has consistently run at 70 percent or better, on average, for General Motors Corp., Ford Motor Co. and Chrysler LLC. Chrysler, for one, has had diesel penetration rates approaching 90 percent for its Dodge Ram Heavy Duty, which has exceeded 80 percent diesel share since 2005.

Now, however, those numbers are beating a hasty retreat: in May, the ratio of Ford Super Duty Pickups sold with a diesel engine stood at just 51 percent - during the same time last year, the Super Duty diesel take rate was 71 percent.

Looking at January-to-May sales periods for heavy-duty variants of Chrysler's Ram, diesel-engine share reached a high point of 88 percent in 2006, and was 87 percent in 2007. For the same period this year, diesel-engine sales for Ram Heavy Duty are down to 82 percent, while overall Ram Heavy Duty sales are off by 38 percent

Not the question. Considering labor, plant costs, etc., is it profitable?

You can for 2009. SE with 3.5 V6 and R/T with 5.7 V8. Don't know the intro date, but they've been announced (and are on Dodge's web site).

Simply untrue. Z/28 means something. SS means something.

GM started taking orders on Oct. 13. More info:

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LS model with 300-hp, $22,995. Challenger SE with 250 hp is $25,340. Camaro SS with 422-hp V8 is $30,992. Challenger R/T with 372 hp is $30,545; SRT-8 with 425 hp is $42,245.

Reply to
Lloyd

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