GM and Chrysler Talking Possible Merger???

[Stewart G Griffin]

GM is doing just fine in every country except the US.  GM has made some mistakes in the past, but I believe that ultimately our government and their rules/regs has destroyed GM.

I can't figure any other reason why GM would be doing great in every country in the world except this one.

That's easy, styling.  In saudi arabia and the middle east, of all places, the caprice and lumina are RWD! i will try to find a link if time.

So, anyways, based on my limited reading i think what is being planned if this happens (and if it does happen, i may never buy a new gm car ever) what gm will do if they "merge" with chrysler is that they (gm) will basically shut down, end, chrysler. And get all the cash from liquidation.  Apparently gm needs cash bad.  Gm may keep some of the good stuff, i.e., cummins engine, possibly the hemi etc. But chrylser will be like packard, pierce arrow etc.

So maybe i was right----this is 1979 all over again and this time Chrysler WON'T survive.

i think the strategy is quite simple;  The emphasis should be all on styling and then lower the price even below cost if nessesary temporarily.  The dealers and salespeople will suffer initially, but they will make up for it in volume.  Then, when everyone gets "hooked" on GM (like in the 60's), raise the price back up.

For example, i think we can agree that the "new" camaro has missed the mark as far as styling;  The challenger and mustang are better looking.  The new malibu, while heavily advertised which was good, also, i feel, completely missed out on styling.

So:
1) The guy at the head of styling at gm ( i forgot his name) needs to be canned or demoted/transferred.  He pisses me off (although cadillac styling is ok at the moment).

2) Find new design people.  It is not hard to find designers with talent.  There are a lot of creative people out there.  #1 above is not one of them.

3) The price strategy (while seemingly suicidal) should be to "dump" cars on the market selling them near, at, or even below cost temporarily.

People basically buy cars based on looks;  If all cars look the same, which they most certainly do, then the general concensus is that toyota/honda/nissan quality is superior (even if they have to pay slightly more) to all others which is certainly debateable.  Therefore, if you have knockout looks and the price is attractive you will get the sale because people put looks above quality.  This is because the average car buyer doesn't intend to keep the car for more than 5-10 years and considers the car as "disposable."  Therefore s/he can live with "supposed" lower quality in exchange for good looks.

Therefore, my strategy is sound and very likely to suceed.

There was a time when the Japanese copied GM, now it's the other way around.  Don't worry about the others, do your own thing.  Stick to your guns.  Alright those APV minivans flopped but that was a fluke;  Every now and then there will be flops.

[GoatBeard]

Stewart, I don't disagree with what you say; however, what I mean is that unlike all other governments across the world, the US is the only one who MANDATES how the big 3 has to implement whatever it is the government decides WE need.

We need more gas mileage.  We need better impact resistance.  We need less emissions.  It's our government destroying these companies in this country.

Our government seems to break everything it gets involved in.  If it could just let the free market alone, there would be no problem.  If the Chrysler cars/trucks got 10 MPG and Ford cars/trucks get 15 MPG the free market would correct it.  This means, with high gas prices people would search out the vehicle who gets the better mileage --  when no one buys the Chrysler cars, Chrysler would make a vehicle (or vehicles) that get better mileage.  But rather than letting the market decide whether they WANT a car that gets 10 MPG verses 18 MPG, our government MANDATES they make a car/truck that gets 18 MPG.  The list of mandates is endless -- no other country does that.  This is the reason, in my opinion, that the Big 3 are in such dire straights in this country and no other.

In my opinion, it's micromanagement by big government to the point of ruination of the company -- or even the industry.

One of the original things the federal government was supposed to do is to keep the infrastructure up-to-date, and that's a failure.  Social Security wasn't a terrible idea until government was able to "borrow" that money for other "projects" -- now Social Security is bankrupt.  Now we (read: our government) own shares and sit on boards of huge conglomerate banks and insurance agencies.  There will eventually be a "package" to bail out the auto industry.  They want to become involved in "Big Oil" because they "make too much money" (which is really like an 8% return on ALL of their investments).  Some people are saying how wonderful it'll be to let the government become involved in health care.  All one has to do is look at all the programs our government has ruined and how much money they spent to ruin them to realize that government-ran health care would be not only a huge failure, but an expensive failure. 

Maybe the best thing for the government to do is to get out of the way of success AND (probably more importantly) get out of the way of failure!

[JJSZABO]

Stewart, I don't disagree with what you say; however, what I mean is that unlike all other governments across the world, the US is the only one who MANDATES how the big 3 has to implement whatever it is the government decides WE need.

We need more gas mileage.  We need better impact resistance.  We need less emissions.  It's our government destroying these companies in this country.

Our government seems to break everything it gets involved in.  If it could just let the free market alone, there would be no problem.  If the Chrysler cars/trucks got 10 MPG and Ford cars/trucks get 15 MPG the free market would correct it.  This means, with high gas prices people would search out the vehicle who gets the better mileage --  when no one buys the Chrysler cars, Chrysler would make a vehicle (or vehicles) that get better mileage.  But rather than letting the market decide whether they WANT a car that gets 10 MPG verses 18 MPG, our government MANDATES they make a car/truck that gets 18 MPG.  The list of mandates is endless -- no other country does that.  This is the reason, in my opinion, that the Big 3 are in such dire straights in this country and no other.

In my opinion, it's micromanagement by big government to the point of ruination of the company -- or even the industry.

One of the original things the federal government was supposed to do is to keep the infrastructure up-to-date, and that's a failure.  Social Security wasn't a terrible idea until government was able to "borrow" that money for other "projects" -- now Social Security is bankrupt.  Now we (read: our government) own shares and sit on boards of huge conglomerate banks and insurance agencies.  There will eventually be a "package" to bail out the auto industry.  They want to become involved in "Big Oil" because they "make too much money" (which is really like an 8% return on ALL of their investments).  Some people are saying how wonderful it'll be to let the government become involved in health care.  All one has to do is look at all the programs our government has ruined and how much money they spent to ruin them to realize that government-ran health care would be not only a huge failure, but an expensive failure. 

Maybe the best thing for the government to do is to get out of the way of success AND (probably more importantly) get out of the way of failure!

Ditto

"Maybe the best thing for the government to do is to get out of the way of success AND (probably more importantly) get out of the way of failure!"

+1

[Lt.Del]

Maybe the best thing for the government to do is to get out of the way of success AND (probably more importantly) get out of the way of failure!

Nice!
Let the bad times happen, there will be good times around the corner.  Teach people how to tighten their belts regarding their own budget.   And, if you got an interest only loan, don't blame the banks for foreclosing!  Read the contracts prior to signing. If you are not smart enough to do that, you are not smart enough to be a homeowner.

I don't want my son to pay for all of our gov'ts mistakes.  I'll pay my share, I don't want the problems disguised for the "present-day" politician's job.   These policitian's only know "today".  Make it better today.  Who cares about tomorrow, that is tomorrow, when I won't be a politician, it wont matter then.

Yes it does matter.  I'll bite the bullet. I don't want the problems compounded exponentially for my son's generation. That is what we are doing.

The less government, the best government.    Economics has a way of healing itself. Give it time, not borrowed money that the next generation must pay for.  We are turning into the U.S.A. = Unites Socialists of America

[gerardo0367]

From info from within GM owns part of Toyota and Chrysler in bed with V W and we already know also with M Benz. Chrysler and VW are sharing the Carvan,Chrysler is getting the VW diesel engin for the Carvan . GM in in bed with most of the inports out there and they get a cut so to speak if Toyota sell a lot of car GM makes $$$$ , I have worked for GM dealers and i am curruntly enployed at a Jeep and Nissan dealer   Later

[Dragon]

From info from within GM owns part of Toyota and Chrysler in bed with V W and we already know also with M Benz. Chrysler and VW are sharing the Carvan,Chrysler is getting the VW diesel engin for the Carvan . GM in in bed with most of the inports out there and they get a cut so to speak if Toyota sell a lot of car GM makes $$$$ , I have worked for GM dealers and i am curruntly enployed at a Jeep and Nissan dealer   Later

Yeah GM and Toyota have been working together since the '70's, so I wouldn't doubt that GM does on shares in Toyota....  I mean look at the various Yoters(Camry's,Corolla's,etc) and Chevy's(Cav's,etc) over the years, that have been rebadged for not only the US Market, but various World Markets.....

Automanufacturers World Wide have been partnering up for years, as that is one of the Fastest ways to get a firm foothold in a Region, rather than taking a risk putting themselves out there alone....  Really attempting to put yourself out in the Shark World, is one of the fastest way for your Company to disappear( Look at what happened to Preston Tucker in the 40's, and Various Companies over the years who attempted to take on the Big3)...

Ofcourse VW was going to pair up with Chrysler for their new Routan Mini van(VW's Audi Q7 is another successful result of the Caravan/Stratus platform), after all Chrysler's Caravan was pretty much the Number 1 Mini van world wide... VW's old vans and buses were the only ones that have a higher following.....  The
Caravans were one of the main reason why MB wanted to have anything to do with Chrysler, and why they still have interest in them... MB finally got their minivan crossover that they were sorely lacking, and they are soon to benefit from long R&D that did a joint venture with GM,VW, with the Hybrid Transmission that they came up with....  Really the list of joint Manufacturers goes on long, but when it comes down to it, some Old Favorite names might be lost, but I'm sure a new one(s) will be the end result....

[Captkaos]

For real world proof:  Pontiac Vibe = Toyota Matrix.  Same drivetrain, just different sheetmetal.  They are built in the same plant.

[chrpmaster]

I have never understood the resistance to buying foreign cars and trucks.  The constant saying is that all the "profits" get shipped overseas and somehow that is bad.  Maybe I am looking at it wrong but if a foreign car manufacturer has a 10% profit margin on their vehicles didn't they leave 90% of the purchase price here?  Isn't the paychecks they give the American workers a "profit" to those workers.  I haven't heard of anyone who works at a foreign owned plant being forced to work there.  If there is a notice that they are taking applications there is normally lots more applicants than positions.  So I guess these workers keep and spend their paychecks here in the US.  The labor cost of  building a car is a lot more than 10% of the purchase price so it would seem that the foreign companies are getting screwed in the deal since they take a lot less money out of the country than they leave behind for us.  Isn't this money that the workers wouldn't have gotten otherwise?  What about all the construction workers that built the plant and the suppliers of the plant?  Do they not get paid for their work?

All of this makes me think that having foreign companies build cars here is probably a good thing rather than being limited to the options the big 3 offer.  Plus their quality has gotten better due to the competition from overseas.

[ccz145a]

For real world proof:  Pontiac Vibe = Toyota Matrix.  Same drivetrain, just different sheetmetal.  They are built in the same plant.

And years ago there was the Dodge Stealth and the Mitsubitchi 3000 something

[GoatBeard]

It's far better if they are built here.  If for no other reason it creates jobs and bolsters entire regions with the money that's spread around from the plants.  The other good thing is that the free market would "force" the big 3 into competition via gas mileage or whatever.  If the big 3 don't make it in the market that includes competition from other car-makers -- then it's their own fault and they should fail.  But what will happen is that our government won't let the big 3 fail and we will be in the car business. 

The problem with "free trade" is that we import all kinds of stuff basically for free but we pay to export it.  That's why you have 98% of the stuff you buy made in 3rd world countries.  They can ship it here and sell it here and make huge profit margins.  Go to any other country and you'll be hard pressed to find anything made in the USA -- it's just not profitable.  If you do find something made here, it'll be extremely high-end and no one can afford it.  There are other concerns with "worker rights" in other countries, but that's not as much of a concern to me, personally.

Since the US has the 2nd highest tax rate on businesses in the world, it drives businesses to move to other countries to produce their goods AND THEN ship them back here to sell them!  Think about that -- they move their business from the US, make their widgets, then ship them back to the US to sell them.  That's insane.  If we had tax rates that encouraged businesses to come here and set up shop, they'd love it because they would be able to make a lot of money and spend next to nothing on transportation of their goods.  The logistics of transportation from one country to another is huge.

Also on topic is this --
One candidate for president is talking about giving a "$3,000 credit" for each employee hired.  The problem is that if I hire someone and pay them $40k, in reality it costs me $54k for that person to work for me.  That's assuming I provide insurance for my employee.  The $3k that's being "credited" to me is inconsequential if my taxes will be raised $25k per year.  I'm still going to be in the hole a massive amount.  The only way for me as an employer to offset the difference is to get rid of one or more of my workers.  If there are businesses who do not currently provide healthcare, they will be mandated to carry it for their employees -- this will run many companies out of business.  If you pay someone $10 an hour, that is raised to around $14 an hour if you include healthcare.  This is not even considering that most small businesses have the worst time paying for worker's comp alone.

If the owner of a business brings home $70k per year and that owner is taxed at a higher rate, the owner will still bring home the $70k.  I mean, it's not like he's going to cut his own pay because the government decides he should pay more taxes.  The owner will reduce his workforce to compensate for the extra money he is expected to pay.  One candidate for president says that $250k is the threshold for higher tax brackets.  If I'm the owner who brings home $70k but my business does $800k per year, that ALL goes on my tax forms and I'll be paying higher taxes.  So just because my business did $800k does not mean I "Made" that much for myself.

Out of the $800k per year profit, say I have 15 employees that make $530k total, so each employee makes around $35k per year.  The other $200k was spent to make the widget that we sell.  The last $70k is my salary.  Since I will be paying $25k in taxes and pay $35k for each employee, if I get rid of one employee I can give myself a $10k raise with the extra $10k difference in taxes vs employees.

Say Chrysler goes under -- a lot of the people who work there have the knowledge to create their own business, employee some people and continue on.  When they see the wall they have to climb in order to do that, they will sit at home and collect unemployment.  This country needs to encourage people to create jobs, no matter if they are huge companies like Toyota who come here and give 20k people jobs, or if it's someone who got laid off but has the skill set to lead and the knowledge to produce something that would sell.  They both create a lot of jobs so they should not be punished by our government, but encouraged in every way possible.

[JJSZABO]

Nicely put GoatBeard