Yeah, right. That makes perfect sense; for all the common sense reasons you're about to post below. And yet, Fortune's senior editor Alex Taylor Three Sticks offers the possibility within his '08 auto industry preview. "Speculation is building about Cerberus' exit strategy from Chrysler, as well as its timing. Will it try to merge Chrysler with Ford or sell it to another automaker, or go to the public with an IPO?" At least Taylor's on board with TTAC's Chrysler Suicide Watch theme: "Crosstown rivals are watching carefully because a Chrysler in distress could lead to suicidal industry-wide price-cutting." Wow, all three Motown automakers could be jumpers? Now that we didn't consider. While he's at it, Taylor allows himself some xenophobic posthumous projection regarding India's Tata motors assuming control of Jaguar. "Winston Churchill must be spinning in his grave." And speaking of theoretical quotes… "The other day, a GM executive was speculating that the auto industry was sorting itself into two categories: two super-companies, GM and Toyota, with annual production of nine million vehicles each, and all the rest." Alex torches his straw man and concludes "the world is becoming a fluid place." This is news?
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Ford + ChryCo= AMC + Renault
Looks like 2 swimmers drowning trying to save eachother.
Ford will buy Chrysler?
With what? $1 and a truck full of circa-1985 NOS Escort door panels?
Ford’s already mortgaged to the teeth, and they’ll be lucky to hang on for 5 more years themselves. Chrysler has NOTHING Ford would want, with the exception of Jeep.
Of course, nobody wants anything at Chrysler except Jeep.
Seriously, this sounds like a typical investor-planted rumor, i.e., Cerberus is looking for the Greater Fool, and hopes to gin up some interest by floating a “Ford’s gonna buy us” trial baloon.
Chrysler makes good cop cars, too. And rental cars.
It may be possible to turn the Chrysler/Dodge brand into an exclusive Fleet-customer only brand. However, I can’t see a company like Ford actually wanting to spend money on the rights to use the Chrysler name.
This reminds me of the dot com crash of the 2000. Companies spent millions building brand recognition (think Pets.com) yet the businesses themselves were not viable, so the brand recognition wasn’t worth much in the end.
Just how much is the name “Chrysler” worth these days?
Another analogy is “Magnavox” or “Zenith” or “Westinghouse”. You occasionally see these once-powerhouse brand names slapped onto cheap flat panel TVs in the department stores. But we all know those companies are dead and someone merely bought the rights to use the name.
Sometimes the big brand names of yesterday don’t mean that much anymore.
Zenith and Magnavox are alive and well – only Westinghouse has went the way of a licensed name. That fleet-only thing worked great for Checker, too.
I thought the same thing about HP buying Compaq. Of course, that only really worked because Sun Micro and Dell imploded while IBM sold off the PC biz.
Ford buying Jeep would be interesting if Ford weren’t slowly bleeding to death. Why would they open another artery?
But Chrysler is the poison pill to swallow for anyone interested in Jeep.
i wish toyota would buy jeep.
a toyota-built wrangler would be pretty great
“It may be possible to turn the Chrysler/Dodge brand into an exclusive Fleet-customer only brand.”
Too small of a market. Fleet sales make sense as a part of a larger business, but not as a stand alone company. Just ask Checker!
“Zenith and Magnavox are alive and well”
Uh, no.
http://en.wikipedia.org/wiki/Zenith_Electronics
Zenith is a member of the South Korean conglomerate LG Group by way of LG Electronics, which acquired a controlling share of Zenith in 1995 and the rest in 1999.
http://en.wikipedia.org/wiki/Magnavox
Philips acquired Magnavox’s consumer electronics division in 1974. The Magnavox name is still used by Philips to market “value-priced” (lower priced) consumer electronics.
Just because you see a brand on the shelves at your local China-mart doesn’t mean that they are still the company you remember. Marketers count on those residual historical name associations to improve sales and get higher prices, but it is a ruse.
Sound like what happen in Britain in the 70’s. It was called British Leyland. We all know how well that worked out.
Or, Ford & Chrysler = Studebaker & Packard. That one was described back then as being like “two drunks trying to help each other cross a busy road.”
What if VW buys Jeep. VW could drop a host of TDi engines into the jeep models and the Jeep fans of the world would buy every single one since they have been asking for years.
If Dodge concentrated on building the best Ram, Dakota and Sprinter they could and dropped everything else, im sure it would become relatively successful.
chrysler..well…i dont think there is hope. my prediction is it will become a front for a chinese auto maker.
Ford + ChryCo= Packard + Studebaker
Ford and Cry-sler.
One POS pulling another,
Yes, it makes perfect sense for a red ink bleeding, SUV heavy, small car needin’, over-dealered car maker to merge with the exact same type of company!
A fleet-only manufacturer would work, I think, for Cerberus. They can sell Jeep off for a fortune, then buy Ford’s St. Thomas assembly plant, and Chrysler can build the Crown Vic/Grand Marquis/Town Car, plus all the Chrysler fleet vehicles (Charger, Sebring, etc.) It is sufficiently small enough for Cerberus to not care much about, and there’s a guaranteed market, which is something Chrysler doesn’t have right now. Plus, Chrysler would then dominate the police, taxi and livery market.
The fleet only idea will not work. Expensive ongoing engineering is going to be required to meet market demands as well as regulatory emissions and safety standards. Those costs need to be spread over a large enough customer base, and fleets don’t do it. Even a fleet dedicated company isn’t going to get 100% market share of fleet business when other makers will be motivated to sell a certain number of units at prices just over incremental production costs in order to load balance, etc.
The only fleet only kind of vehicle I can think of in the market worldwide is the custom built London Taxi, which is an anomaly in the cab market. The last US company which had a long go in that business was Checker. They died off when the modern regulation on emissions and safety got under way seriously in the 70s and 80s. Checker was not able to generate sufficient cash to reinvest in the business. The Marathon cab continued in production for over 30 years, but the tooling was worn out and the money to bring the car into the modern era wasn’t there. End of the line.