Chrysler was actually the first joint venture in China, (dis)gracing the Chinese landscape with countless Cherokees. And this is where Chrysler might end up. Beijing Auto, a state-owned automaker that makes Hyundai, Mercedes and a few local brands, has “set up a work team in charge of the acquisitions and restructuring affairs, which will mainly involve its merger of a smaller Chinese carmaker Fujian Motor and purchase of US auto giant Chrysler’s assets,” Gasgoo reports. The reports are quite detailed, this time:
Beijing Automotive Industry Holding Corp (BAIC, or Beijing Auto) is expected to get Beijing city’s financial support of 10 billion yuan ($1.47 billion) for acquisitions and restructuring and for own brand creation. The Beijing municipality will extend to Beijing Auto funding of up to 10 billion yuan. Five billion yuan will be used to buy Fujian Motor, a company that already makes some Chrysler models in China, including the Grand Voyager minivan. The remaining five billion yuan will be used to buy Chrysler’s seven models, an R&D center, engine model, assembly line, and to create its own brands.
Chrysler LLC quit a joint venture between Beijing Auto and Daimler AG in late 2008, a year after Daimler sold its control of the US automaker, but Chrysler’s 300C sedan is still made at the Beijing venture. Sources said Beijing Auto’s work team has departed to the US for asset-acquiring talks with Chrysler. Rumors of an asset sale by Chrysler to BAIC had been floated before, but quickly denied.
Actually, and factually, it was American Motors which initially set-up a joint venture with Beijing to manufacture JEEPS in China, then of course, Chrysler bought up AMC. But close enough…
Menno,
Couldn’t it be argued (unless I’ve cocked up my timelines) that Renault actually did it since AMC was owned by Renault at the time?
5 billion yuan is about 745 million dollars. Sounds like Fiat got a better deal buying Chrysler assets than Beijing Auto!
Someone wants to buy Chrysler? Pfff… That is a new low, even for China.
R
Katie, your timeline is right on. Renault bought into AMC in the late 1970’s and increased their share percentage until selling out to Chrysler.
But these vehicles were engineered at the Plymouth Road, Detroit facility (which had been the Kelvinator appliance HQ, then Nash-Kelvinator HQ, then Rambler HQ until I think the late 1960’s when it simply became the engineering center). Chrysler used it as the Jeep and added Dodge truck engineering to the facility, and it only recently closed down.
One of the chief engineers, however, WAS a Frenchman from Renault; Castaing (sp) who later became one of the higher execs in Chrysler after he chose to stay on in the states.
It’s said that Castaing’s input is what made the all-new Jeep Grand Cherokees of the early 1980’s (still produced new in China to this day) handle emergency maneuvers so well on the expressway/motorway; they don’t flop over and kill people like Ford Exploders and other Stupid Utility Vehicles tend to.
But AMC really did a lot of their own engineering and design work, much more than people realize. Even under Renault ownership.
The AMC swan song, the 1987 “Eagle” Premier, was done at Plymouth Road and actually was NOT based upon the Renault 25 as some European magazines had reported. It did share the PRV V6 engines and Renault automatic transaxle from the Renault 25 luxury car, however.
I’ve driven the Premier; it was a FAR nicer car than virtually anything else on the road in 1987, and deserved to be given a chance to save American Motors. Of course, once Chrysler bought the company (for Jeep), the Premier – still wet behind the ears – became the red-headed left-handed step-child shoved into the basement and forgotten.
Chrysler did clone a Dodge Monaco twin from the Premier and promptly shoved it into the attic to be forgotten, too. Idiots.
So if BAIC buys Chrysler, does that make them ineligible for further U.S. funded bailouts? If so, I’m rooting for BAIC! I wouldn’t buy a Chrysler product now, and wouldn’t buy one if it were Chinese, so I can’t really see a reason to object. Let Ford and GM remain as America’s only automakers, I’m fine with that.
Wouldn’t it be hilarious if quality improved under a Chinese-owned Chrysler?
“Wouldn’t it be hilarious if quality improved under a Chinese-owned Chrysler?”
If they learn from the Hyundai-Kia model (which I think they are studying), it will.
Could someone please call Obama with the news before he dumps another 100 gadzilion taxpayers’ dollars down the rathole?
Menno,
Thanks for the history lesson.
I was close to proving you wrong, but fell at the final hurdle!
Better luck next time, eh? ;O)
There was no (dis)grace with the Jeep Cherokee! As one who has indepth experience with the Cherokee, I can say that they were great cars for the time and a true segment builder. Admittedly, they were rough around the edges, didn’t ride so well, etc. but they did what they were supposed to do and did it well and with a certain amount of aplomb.
Does nobody here see anything wrong with this picture? Sure, Chrysler needs to restructure/die…whatever…but are we SO sold into the Chinese that we’re willing to allow them to build our cars for us? God knows we buy everything else from them (I just about refuse to step into a Wal-Mart anymore). While I’m not a fan of continueing to bail out the D3 (2.5, whatever)…I’m also not a fan of giving the Chinese cart-blanche to our market. Is there NO pride left in this country??
I was in Shenzhen for about a month. Saw a few Cherokees, and the glossy magazines showed the 300 as a desirable car. However, as far as US brands go, Buick and Ford seemed to predominate. My impression is that the Chinese are more impressed with German luxo cars, and somewhat suprisingly, given their general animosity towards the Japanese, Toyotas were popular (Chinese may hold a grudge, but they are not stupid to value).
Those poor Chinese, victims of American salesmanship…
@rpol35:
There was no (dis)grace with the Jeep Cherokee!
That was meant in a Chinese subtext. The Cherokee was (and still is) quite ubiquitous in China. For a while, it was the vehicle issued to mid-level officials. Finally, they complained, said, they wanted “a real” car and “not a farm truck.”
Definitely better than the Russian Gaz Jeep it replaced.
Not that I would buy either, but I’d take a Cherry before a Jeep. What are they trying to do with this acquisition, exactly?
Given that my wife (born British bless her heart) “has” to have a proper kettle to properly boil water, and the only place we seem to be able to get them is a regional small electronics store, ABC warehouse; I have to share a story about Chinese goods on that back-story.
These kettles are intended for Canada, but are sold by this store in Michigan, and they cost$25. They are provided with a 180 day (???!!) warrantee. Not 6 months… stick with me here.
Well, we’re on our 3rd one, now. Yep, you can sure see why they give them a 180 day warrantee. They don’t function any longer than about 185 days. Literally.
Made in China. Of course.
My parents had household electronics which literally, no exaggeration, lasted decades.
Made in the USA. Of course.
Yeah, right; Chryslers are totally crap quality now. What will a Chinese Chrysler be like?
Total and complete crap in every way would be a great guess. Not to mention, liable to accordion in an accident, given the results of Chinese car manufacturers in crash tests in Europe last year (which at least, they did try to improve right away… I’m talking about the Brilliance BN6).
Yes I know, I know, “some stuff made in China is great.”
I just never seem to buy any of it… and when I look for “stuff not made in China” it’s a case of:
a) can’t even find anything close to what I need NOT made in China
b) the not-made-in-China product is 400% higher in cost because it’s made in Mexico (and will it last any longer? Unknown…. Are the innards made in China and assembled in Mexico? Unknown…)
c) the not-made-in-China product is 1000%-1500% higher in cost because it’s made in Germany/Holland/Japan. Are the innards made in China? Unknown…..
Once proud US, Dutch, Scananavian, European, German, Italian, Canadian manufacturers now sell stuff contract manufactured, where? China.
“Would you like fries with that?”
Menno,
Think about it for a second. Apart from manufacturing, what else is ubiquitous with China?
Cheap labour!
And therein, lies the connection.
Apple computers have the majority (if not all) their hardware made in China. Millions of iPods, Apple macs, etc are sold in the world, with (relatively) few complaints.
When manufacturing is contracted, if the licenser is pressing for the lowest price, they’ll get the lowest quality workers.
So for a kettle to be sold for $25, how cheap do you reckon the labour would be?
“Does nobody here see anything wrong with this picture? Sure, Chrysler needs to restructure/die…whatever…but are we SO sold into the Chinese that we’re willing to allow them to build our cars for us? God knows we buy everything else from them (I just about refuse to step into a Wal-Mart anymore). While I’m not a fan of continueing to bail out the D3 (2.5, whatever)…I’m also not a fan of giving the Chinese cart-blanche to our market. Is there NO pride left in this country??”
There is now an MGTF 500 cabriolet back on the market in England.
SAAIC from China, came in when MG Rover was in trouble and started talks…just like this…they then ummed and ahhhed for 6 months while MG went slowly bankrupt, then pulled out at the last minute…so then MG went bankrupt….then when all was thought lost the saviour Nanjing Automotive happened to stop by and lo and behold boutght MG ROVER for peanuts… thereby saving the UK govt. millions in bailouts or failure costs and also saving the Chinese funders millions in the bargain….Next, as soon as the deal was done, they came in with a fleet of lorries, packed up all the machines and shipped them back to China…
They even bastardized the name from ROVER to ROEWA for the Chinese market…perhaps they will start the Cryzla brand when they take your machines back to beijing, and build the Chinese Cryzla 300C….
So far I don’t see this reported anywhere but Gasgoo and TTAC. You’ve scooped the American media, if it goes through.
i hope one day we will get rid of all chinese made products so you whiners can pay 5 times the price for a rubbermaid container made in north america and your kids will work a 16hr shift at a rubber plant making $15/hr with no benefits or pension. our standard of living is the best in the world due in no small part to cheap labour in other countries. if you really had to decrease your salary AND increase your cost of living so you can support high priced union labour like the UAW instead of cheap foreign labour, i really doubt you would.
Dear Chysler and President Obama,
I respectfully request a refund for my purchase of Chrysler Debt. Your restructure plan and product do not meet my needs. Since, the product I bought does not work as adverstised, I would like my refund in full, today.
Please credit my account ASAP.
Sincerely yours,
@sutski:
The Chinese changed the name from Rover to “Roewe” because after they acquired MG Rover, BMW “remembered” that they in fact own the Rover brand and forbade the Chinese from using it (many people know BMW used to own Rover and BMW clearly didn’t want its name associated with some future cars made in China). “Roewe” is what it sounds like when the average Chinese person prounounces “Rover”, so the Rover 75 became the Roewe 750, etc. The MG brand the Chinese got though, so they still call them MG.
If the Chinese were to acquire brands from Chrysler, I’m sure they’d get the the full rights and there won’t be “Chryzla”. However, if Chrysler goes into liquidation, I wouldn’t be surprised if Daimler swoops in to buy the just the brands and the logos, to make sure no future perhaps Chinese product becomes even loosely associted with the now lost name DaimlerChrysler.
celica, yes some of what you say is actually truthful; looking at everyday products purchased by everyday Americans in 1950 vs everyday products purchased by everday Americans in 2009 shows us that, as a percentage of income, products were about 500% more costly back in 1950.
Reflect on that for a moment and instead of thinking “oh my God that’d kill me” think of how it would BENEFIT America, Americans and the world, too, to make more products in the USA.
For one thing, we’d be over this insane idea that we live in a throw-away society.
Stuff would need to be be engineered to last, and REPAIRABLE. As in replacement parts available.
Repair shops would flourish eventually, giving opportunities for folks to own their own livelihood.
My parents bought a dining room set – made in the USA – in 1968. They’re elderly so they know exacty how much “everything” cost them over the past decades (except for maybe the last few years). Normal for their age.
The dining room set is still in near perfect order, and cost $750 new in 1968.
A new Ford Fairlane cost $2456 in 1968. A new equivalent Ford costs 10 X that.
Would you spend $7500 for a new dining room set right now if you knew it would last 41 years plus?
Funny, the bottom of this page loaded an ad for Chinese mail-order brides. LMAO. My cookies must reveal my weakness for ladies of the asian persuasion…
“Would you spend $7500 for a new dining room set right now if you knew it would last 41 years plus?”
No.
If I paid that kind of prices for everything, my standard of living will fall off a cliff. I would rather buy a $500 set that lasts for 10 or 12 years, and get new ones after my kids have grown up.
That’s the beauty of cheap stuff, it’s like in the movie American Beauty, if I had all that expensive stuff, I’d spend my whole day worrying about not damaging that expensive furniture and not living my life. If I had Ikea grade stuff, I wouldn’t give a crap if my kid peed on it or took a marker to it. I can replace it without taking a big hit on basic quality of life stuff.
My friend has a M3 that he treats with kiddy gloves, driven 3000 miles a year, in good weather only, and spends tons of time babying it. For me, if the fear of depreciation takes that much out of an ownership experience, I’d rather buy a Miata and flog the hell out of it, rain or shine.
Hazard: according to the MG Rover Org site Roewe sounds like”wrong way” in Chinese, not Rover. They evne use a similar badge. Not the Viking Ship but some sort of frou frou with a red background and similar shape.
And IIRC according to the same site, the rights to the Rover name went to Ford when it bought Land Rover, which is now owned by Tata.
The 300 C is “gangsta”; Chryzla fits. Why not adopt a new hip invented spelling for their other cars: Ughvenguh,Compazz, Azpen,Lib-R-T, Calibro… .
Menno: You’d like the movie “Executive Suite” with William Holden and Barbara Stanwyck. Pretty much the theme of your post and done about 50 years ago. Ahead of it’s time, I think, but the ideas are still pertinent.
Chinese are hard working, and humble and value knowledge. And teacher is more respected than a general. I don`t see a reason why Chinese wouldn`t excel in car building. It is just a matter of time.
AMC designed completely the XJ Cherokee.
ZJ, which is the first Grand Cherokee, was done when the company was under Chrysler ownership.
Allpar is full of interesting information about AMC and Chrysler after they bought them.
menno,
ABC Warehouse is the sleaziest appliance store around. Not in the sense that they’re dishonest, just that you feel like you need a shower after you’ve been there, like you were with a hooker or something. I was once shopping for a refrigerator and the salesman there asked me if I wanted the price “with or without the free trip”.
If you want a proper electric tea kettle, try Williams Sonoma or some other housewares place. They have a cool looking Cuisinart electric teakettle for $80.
Everyone uses Apple as an example of how Chinese vendors can make first world quality goods. I’m not convinced. It’s going to take at least two or three product cycles before any Chinese automaker is ready for prime time in North America. At the NAIAS this year, BYD, the Chinese automaker started by the cell phone battery giant, got a lot of publicity for their electric propulsion efforts. As is customary at auto shows there was a cutaway of a car, in this case their new serial hybrid. Under the skin you can see the kind of things that betray a questionable approach to quality. The welded seams in the unibody had sealant applied that looked more sloppy than something you would see in a US car from the 1960s or 1970s. The castings for the engine and drivetrain were rough looking, with visible grinding marks. Now this is a display vehicle at a major auto show. The Chinese automakers don’t yet fully grasp the whole quality and quality perception thing. It’s going to take 2 or 3 product cycles, at least, for that mindset to change.
@jurisb
I guess you didn’t get the memo, it’s cool to make fun of anything Chinese. Besides, they are made by the devil.
“So far I don’t see this reported anywhere but Gasgoo and TTAC. You’ve scooped the American media, if it goes through.”
You dont see it reported anywhere else because its BS.
Just a rehash of an old rumor.
jurisb :
Chinese are hard working, and humble and value knowledge. And teacher is more respected than a general. I don`t see a reason why Chinese wouldn`t excel in car building. It is just a matter of time.
Exactly. It’s only a matter of time before the Chinese learn to make an appealing, quality car. IIRC, the prevailing wisdom of the 50s and 60s was that Japanese cars (and other manufactured goods) were crap too, and we all know how that turned out.
“Chrysler was actually the first joint venture in China, (dis)gracing the Chinese landscape with countless Cherokees.”
(dis)gracing….. What the hell is that?
*Something* must have come back to Southfield/Highland Park/Auburn Hills (take your pick) from China. With the state of the U.S. trade deficit for the 30 years or so this is a very silly statement to have made.
Yes, Ronnie, I was there last year (in the basement) and this year (upstairs) and saw the same BYD cut-away both years. I have to admit I was intrigued – thinking to myself – these amateurs (no insult – just accurate) are going to introduce their “Volt” before Generous Messup is, and humiliate them. Oh but of course; the GM product will have to actually run in Northwestern Michigan as well as Arizona, and survive “the wall” and get at least 4 if not 5 stars (crash test).
On the other hand, I am well aware that the Chinese mean business. My best pal’s step-son is teaching English over there in Beijing, and he knows that if he doesn’t go back, he has no good job prospects back here.
There, despite his under 30 year lifespan, he is respected because he is a TEACHER.
I have nothing against China particularly, and certainly nothing against them as a people. I just think that the American (?) and other companies which solely think of one thing (their immediate bottom line and to hell with their country) and order ultra-cheap crap from China to replace US made products, are doing us all a disservice. Even the Chinese.
Surely it is better to sell fewer decent products and gain a good reputation than many throw-away products and be known as the shoddy producer.
As an automotive example, look no farther than Hyundai, which learned this lesson and is now producing some VERY good products.
Sure, Hyundai sold a boat load of cars their first few years in Canada and the US, then they learned that they should have paid more attention to quality and less to price, and it took 20 years to claw back a reasonable reputation.
Introducing the new Chrysler, now with lead paint finish.
I don’t read this as buying Chrysler..it sounds like they are negotiating for Chinese assets and rights to vehicles. There’s not enough information imho to extrapolate any further.
Kurt B, I’m thinking the same thing. Sell the ability to make a model(s) domestically with a different badge. Hyundai did the same thing with the Santa Fe, though HuaTai had to find their own engine supplier! Rover-engined 300C anyone?
This is directed more to the comments from menno and dilbert but…
The problem as I see it isn’t that a “quality table” costs $7500 or that it is smarter to buy Ikea and not worry about damages.
The problem is that we are losing the ability to create quality items in our quest to make do with something cheap.
If everyone buys Ikea kitchens (I did), who will be the next to learn to be a skilled cabinate maker? To make that custom kitchen out of fine woods and carved moldings? If you can find someone, the cost will be to high.
My father is a skilled craftsman as was his father before him. They are/were famous in their little circles for the quality of work they did/do. My brother and I grew up in the throw away society and would rather just buy cheap, and replace as necessary rather than commit to hard work and creativity.
Unlike my brother (who is very creative and inhereted my fathers talents), I grew up appreciating those skilled craftsmen; the last true woodright (wooded ship builder), the machinist who can make the car part for you (with out a CNC machine). We saw the erosion on craftmanship being replaced with technology and the integrated chip. Japan and China replaced America as a manufacturing powerhouse due to cheap labor and we bought into the idea that we could always replace it.
But a common theme in my high school years was surviving in a post nuclear war world. That meant knowing how to rebuild a world that lost it’s technology. This was a very real fear for young Americans. It fueled an amount of self sufficiency and a thirst for at least a taste of the (soon to be) lost knowledge.
Another example can be found in architecture. I find it quite incredible to look at 16th through 19th century buildings with all their detail, and then compare it to the boxes made in the last two. Why are there no gargoyles and sculpted cornices? Because it is cheaper to not add them.
The question is what is best for society as a whole? I don’t have the answer, but I think it is a mix of both. However, with all this “green thinking” popular today, in the long run we will most likely have a bigger price to pay.
Celica and Dilbert what you are missing is that if the manufacturing jobs come back to the U.S. then that will mean millions of new jobs. When you have a major influx of jobs with a set number of workers the pay scale will go up so you will make more money and be able to buy the higher cost products. Also as Menno said the higher cost products promotes recycling and creates jobs repairing the products.
The lead paint joke is not funny anymore. Every single post on China, someone has to come up with it.
So, if Cerberus sells Chrysler to the Chinese, where does the money go? Will Cerberus, separate from Chrysler LLC, collect the money and pay out to investors while leaving Beijing Auto to work out a way to repay the bailout?
I’m guessing they structure the deal such that a new LLC is formed with all of Chrysler’s assets, the money from the sale goes to Cerberus, and Chrysler LLC is allowed to declare CH7 and die along with their debt to us.