Author Topic: GM in preliminary talks to buy Chrysler: source  (Read 1894 times)

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Henny

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GM in preliminary talks to buy Chrysler: source
« on: February 16, 2007, 05:17:28 PM »
Fri Feb 16, 2007 2:14pm ET
By Megan Davies and Kevin Krolicki

NEW YORK/DETROIT (Reuters) - General Motors Corp. is in preliminary talks to buy Chrysler, the struggling U.S. arm of DaimlerChrysler AG, a source familiar with the situation said on Friday.

The talks, described by the source as exploratory, were first reported on Friday by the trade journal Automotive News.

GM and Chrysler parent DaimlerChrysler declined to comment.

Shares of DaimlerChrysler rose in reaction to reports of the talks. GM shares slipped at first but then moved higher.

Automotive News, citing unnamed sources in Germany and the United States, said the companies were engaged in high-level talks about GM buying Chrysler Group, which sells Chrysler, Dodge and Jeep vehicles, in its entirety.

The source who spoke to Reuters said it was questionable whether GM would want Chrysler's finance business, having sold its own finance arm, GMAC, last year.

Speculation surrounding a possible sale or spinoff of Chrysler has built since DaimlerChrysler Chief Executive Dieter Zetsche said earlier this week that all options were open for its struggling North American unit.   Continued...

http://today.reuters.com/news/articlenews.aspx?type=topNews&storyid=2007-02-16T201710Z_01_N16201834_RTRUKOC_0_US-CHRYSLERGROUP-GM.xml&src=rss

Plane

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Re: GM in preliminary talks to buy Chrysler: source
« Reply #1 on: February 16, 2007, 07:44:46 PM »
It is all for naught unless they can design popular cars.

sirs

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Re: GM in preliminary talks to buy Chrysler: source
« Reply #2 on: February 16, 2007, 08:00:08 PM »
It is all for naught unless they can design popular cars.

Or cars the Government says you have to drive      :-\
"The worst form of inequality is to try to make unequal things equal." -- Aristotle


Xavier_Onassis

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Re: GM in preliminary talks to buy Chrysler: source
« Reply #4 on: February 16, 2007, 11:09:00 PM »
I made my last car payment in 1972.

I have three rules to save money:
(1) Never buy a new car.
(2) Never buy a car from a dealer.
(3) Avoid buying parts from a dealer: only very few cannot be bought for less elsewhere or found in good condition in a junkyard.

The average markup on used cars is 100%. That is, if they sell it for $10,000, they paid $5,000 on average.
The "special service" dealers advertise on their "pre-owned" vehicles is mostly hogwash. As a rule, every car I have seen on a dealer's lot had a dirty dipstick and most of the tranny fluid on the dipsticks smelled burned, which means 5 years old or more. The brake fliud tened to be black, meaning it had not been changed.

Their "special service" generally involved polish, wax and radio repair.
 
"Time flies like an arrow; fruit flies like a banana."

yellow_crane

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Re: GM in preliminary talks to buy Chrysler: source
« Reply #5 on: February 16, 2007, 11:22:35 PM »
A few years back, I drove a Dodge Van.

The water pump blew, and I took it to one of the new chained automotive repair places--Pep Boys, I think.

Told me it would cost $380.00. 

I remarked at the seeming excess.

They assured me they could prove it on their computer.  Removal of each belt itemized, etc etc etc.

I bought a rebuilt water pump at an auto parts store for $l9, and put it on in just under an hour.

Soon we'll have a corporation charging us for the air we breathe.

The_Professor

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Re: GM in preliminary talks to buy Chrysler: source
« Reply #6 on: February 16, 2007, 11:59:06 PM »
An issue here is that GM purchasing Chrsler will not help their situation. Average labor costs at Chrysler are higher than at both GM and Ford, so this would not be positive in their efforts to increase profit margin on each vehicle they build.

A much better solution is the one mentioned recently in the WSJ, I believe. Apparently, a Chinese automotive firm is in secret negotiations with Chrsyler to use their existing dealer network to distribute jointly-produced vehicles. The Chinese have been looking got ways to break into this market and this might be an excellent method. Chrsyler mgiht do better by merging with this Chinerse firm and only porudce here in the USA some of their more profitable larger vehicles while making money hadns over fist via selling low-priced Chinese-made vehicles. Apparnely, the Chinese believe they can sell a fullypequipped SUV with an UNLIMITED 10-yewar warranty for around $13K and a subcompact with the same UNLIMITED 10 year warranty for UNDER $8K.

Ouch says Detroit!
« Last Edit: February 17, 2007, 10:54:10 PM by The_Professor »

Xavier_Onassis

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Re: GM in preliminary talks to buy Chrysler: source
« Reply #7 on: February 17, 2007, 12:17:19 AM »
Observe how rapidly Hyundai has entrenched itself in the US market. I owned an 89 Excel with a standard transmission. it was underpowered and cheesy, but it was well designed and easy to work on. For example, you could remove the dash cluster in ten minutes. A 1989 US car was vastly more complicated, and yet the dash cluster was not really much more sophisticated that the Hyundai's was. Every year, Hyundai has made cars that are more and more reliable, and they are generally rated as almost as dependable as Toyota, and considerably cheaper. They also have a warranty that US cars don't have: ten years or 100K.

The Chinese will probably take longer than this to have a good, cheap car, but it is probably inevitable that the US auto industry will have to specialize in luxury cars as Mercedes and BMW have done, because the cheaper segment of the market will not be cost-efficient for them to compete in.

That Pep Boys estimate probably was based on a 'flat rate' book, which states the number of hours that it might take a one-armed chimpanzee to replace the water pump. They then billed that fanciful figure at $125 per hour, with a 200% markup on the parts. It would have taken them a day to get the job done, at least, and there is no guarantee that they would have done a better job than you did.

Newer cars have this big dumb "engine cover" which is designed to keep you from even knowing what your engine looks like.

It is a far better proposition for me to repair my 17 and 25 years old Benzes than to buy newer ones that I have no hope of fixing, because every operation involves at least resetting the computer.


"Time flies like an arrow; fruit flies like a banana."