One of our informants within GM tells us that Renault/Nissan (R/N) has entered the negotiations for Chrysler owner Cerberus’ final dispensation of Chrysler. Apparently, “Nobody wants to swallow Chrysler whole.” Although this one comes at us from deep left field, we have heard rumblings that GM wanted to merge Jeep with HUMMER– which we completely discounted at the time. We’re now told that GM and R/N are casting lots for production capacity. Allegedly, only one brand (as a brand) will survive the evisceration. You guessed it: Jeep. So the split would look like this: Jeep/minivans – GM. Trucks/SUV capacity – R/N. Cars? Neither one wants anything to do with them. The unnamed source close to the story familiar with people close to deal says that’s been the hang-up for Cerberus. Interesing…
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Bankruptcy liquidation would make this carve up much easier; too bad that Cerberus has strong Bush administration connections and doesn’t want to loose its poorly invested equity, or that of its well connected investors.
What end would be served by merging Hummer and Jeep? Jeep doesn’t need to get contaminated with Hummers bad PR rep, and the Wrangler really doesn’t need a pseudo-military redesign.
toxicroach:
HellifIknow
Hummer into Jeep is a natural: it potentially reduces GM’s liability for Hummer, and will provide desperately needed volume to the numerous Caddy/Hummer points that have been created.
Given the similar grills, it’s almost a perfect badge swap. The new H3T in particular would be a fantastic offering under the Jeep nameplate.
The challenge, obviously, is how the dealer buyouts would work.
Now this rumour almost, ALMOST makes sense from a business perspective.
Ergo, it cannot possibly be true.
The question is – would Nissan take on “some” of the Chrysler/Dodge dealer network, and since most of those are now melded with Jeep franchises, who would “decide” which dealers would go where?
Perhaps Nissan would get the Dodge “brand” with pickups – and then badge-engineer Nissan cars with Dodge grills and nameplates, and of course, sell Nissan badged Ram based pickups. Kind of a Chev/GMC pickup scenario – one pickup, two brands.
Nissan could potentially then add quite a bit of sales potential since Nissan dealers are far a few between in “flyover country” wheras Dodge dealers are a dime-a-dozen.
Nissan would get the Mexican Hemi V8 plant, the Mexican truck plant.
As for GM, would they then take Jeep in toto as well as the Chrysler brand (billed as the “minivan division”), the Detroit area V6 plant (which manufactures the 3.8 V6 for both the minivans and the Jeep Wrangler), the Toledo and Detroit area Jeep plants, the Kenosha 3.7 V6 engine plant and possibly one or both minivan plants?
Maybe also badge-engineer a couple of GM cars with Chrysler grills to keep the dealer lawsuits at bay.
This would mean virtually all Chrysler/Dodge cars would die (including the 300/Charger/Challenger built at the ex-AMC Eagle Premier plant in Bramalea, Ontario). Obviously Belvedere, Illinois would die (Compass/Patriot/Caliber), Toluca would die (PT Cruiser), and the plant building the much (and quite rightly) maligned Sebring/Avenger.
Don’t know what would happen to the Dodge Journey. But Nissan has nothing like it. Might work to keep it? The Nissan Quest is no sales force major….
As for the Chrysler four cylinder engines, they’re built under a 33% Chrysler owned collaborative effort (except PT Cruiser).
What a total mess….
Maybe instead of picking over the bones of Chrysler, it’d be best to let it die as Studebaker-Packard did.
If Cerberus were “stuck” with the Bramalea, Belvedere and (whatever plant builds the Sebring/Avenger) and offered “Plymouth” franchises to all of the current Chrysler/Dodge/Jeep dealers, then sold the whole shebang off to the Chinese or Indians (let the buyer beware), that might be the final final piece of the puzzle.
Plymouth Charger, Challenger, Avenger, Caliber. They’d have to buy the corresponding engines currently used until the next-gen cars came along (engineered in Bangladore or Shanghai or wherever).
Better yet take Hummer and Saab off GM’s hands and lump it in with “Plymouth”. Then sell it to the Chinese or Indians…
menno:
I’ll be surprised if SHAP (Sebring/Avenger assembly) is shuttered due to the recent level of investment. Yes, the S/A are horrible, but the plant and labor force have value, IMO.
I can’t see the logic of leaving any of CLLC’s existing brands separate, as opposed to being absorbed into GM/RN.
How does the status quo help GM in terms of their interest in Jeep and problems with the Hummer liability?
Why not just let, say, Jeep dealers cut deals to merge into whatever GM dealer they can find to buy them out, perhaps with some level of GM subsidy as currently is the case with BPG? Once they offload Jeep, most dealers would simply turn in their remaining C & D franchises, saving GM significant buyout dollars.
Menno,
While we’re at it, maybe we could throw in Edsel for free.
Why would GM want the minivans? I could see Nissan wanting this more than GM.
Only things of value I see are:
-Jeep
-Dodge Ram trucks
-Hemi V8
-Minivans
-Auburn Hills Tech Center (this place is seriously impressive)
Thats about it. The LX cars have value, but need updating. Still, I don’t see Nissan or GM wanting these, especially not GM. Nissan already has a RWD platform as well.
Just to clarify, Wrangler V6 is built at Trenton Engine in Trenton Michigan. Brampton is the Ontario plant you’re thinking of.
The Jeep Curse continues…
At this point I think there is more credibility in Carlos Ghosn management ability then Rick & Lutz. I hope Jeep will join Renault/Nissan for the Jeep name sake. Jeep can actually benefit from Nissan engines. GM will bring only prolonged agony to the table.
Hummer + Jeep = makes Hummer easier to sell off later??
This idea makes much more sense than a GM-Chrysler merger and, while we are indeed living in crazy times, I believe that indicates it is far more likely as well.
I still think Mr. Anonymous has been pushing all the GM-Chrysler merger press to either bring Gohsn to the table or to get more out of him. These rumors remind me of the baseball pre-season trade press where teams will express interest in a player just to drive up the cost for their competitors.
Lets face it, Gohsn has no real incentive to act on Chrysler now. Cerberus is obviously desperate and Chrysler is getting less and less valuable by the day. Gohsn can wait for Cerberus and the bankruptcy court to do all his cost cutting diry work before swooping in to feed on the scraps the rescue. Only the threat of someone else taking the truck business he craves will scare him into action.
Ah, so the parting out scenario gains a bit more rumor mill traction. It certainly makes more sense than for GM to use federal money to gulp down Chrysler whole and spit out most of the workers.
Whatever happens, Cerberus needs to take one mother of a haircut on its misadventure.
Could make sense for R/N but only makes the GM position “less idiotic”, if there is such a thing.
Bunter
If there are any Chrysler plants that would be “worth it” to another automaker, it’d be Belvidere, Sterling Heights, and Toluca.
They’re Chrysler’s most modern plants, and at Belviedere and SHAP, the Sebring, Avenger, Caliber, Compass, and Patriot can all be built interchangeably on either line. At Toluca, the PT Cruiser and Journey, two cars that have almost nothing in common, and be built on the same line.
http://www.allpar.com/corporate/flexible-manufacturing.html
Maybe VW would be interested in flexible North American production like that?
Wasn’t HUMMER a development of AM General, the Military Vehicle division of AMC? As in AMC Jeep. Seems like a match made in Heaven, or at least Wisconsin.
Why are we assuming Jeep is so viable? Dealer lots are piling up. Wranglers and GWs do very very good if they can get up to 20mpg on highways, and will probably not make it.
Jeep is a one-trick pony, and if their niche is not hot that pony don’t trot.
Ronin is correct, Jeep is very much a niche vehicle. Everyone on here agrees that Chrysler watered down the name by slapping it on all sorts of detritus over the years (Compass? Commander? Patriot?), seems logical that it’s next iteration (and owner) will take it back to it’s low volume niche roots.