So Mercedes and Chrysler are officially divorced

Automatic Washer - The world's coolest Washing Machines, Dryers and Dishwashers

Help Support :

C

Cybrvanr

Well-known member
Joined
Jan 23, 2005
Messages
1,287
Cerebus Capital Management has purchased the Chrysler division and will take the division private. This may be good news for Chrysler, since companies typically do good under private ownership. The thing is, I think Daimler Benz was good for Chrysler, as there was a lot of "inbreeding" between the vehicles, and the Mercedes-Benz engineering were great for the Chrysler vehicles, and made them best sellers.

So, My question is, what is going to happen to the 300C, which uses a Mercedes driveline, the Mercedes-powered diesel Jeeps, the SLK-clone Crossfire, or the big Sprinter vans. All of these vehicles have been extremely popular and a nice boost to their sales.

...I certainly hope they don't go back to using crappy Mitsubishi designs!!!
 
I dunno.. What would america do without Jeep or the Soccer Mom Icon the Dodge Caravan/Chrysler Town and Country?? I wouldn't mind ahving a caravan for hauling stuff, but the history of chrysler makes me think not..

Oh well all we can do is wait and watch
 
Cue up Tammy Wynette singing D-I-V-O-R-C-E . . .

I think it is highly unlikely that Daimler would break up Chrysler when there are apparent suitors for the company as a whole, since to do so would guarantee an endless amount of bad will for them here in the US. It would also be messy, messy, messy due to the unions and healthcare obligations. BMW did just that with the remnants of the popular-priced British industry, but by the time they did it those companies were in a much worse state than Chrysler.

Daimler is pretty unlikely to do anything to affect the viability of current Chrysler products which rely on Daimler-Benz technology, as this would hugely affect the value of Chrysler in a negative manner and none of the products, except the Sprinter, could be marketed as Mercedes-Benzes anyway. I wouldn’t expect either the diesel Jeep or Crossfire to survive long. Neither sells well at all. The Crossfire is just too expensive to sell under the Chrysler name, and the funky styling doesn’t help either. The diesel Jeep should be a great idea, but I think Chrysler limited the production greatly and I’m not sure if it is even still available.

Chrysler may very well have to start collaborating with Mitsubishi again, since they desperately need some modern small cars and they have none. Chrysler has done very little in the way of from the ground up car platform design in the last 30 years. The K-car which saved the company in the ‘80s was based heavily on the Omni/Horizon platform, which was based on VW technology. The big front-drive sedans of the ‘90s with the longitudinal V-6s were based on the Eagle Premier platform, which was mostly designed by Renault. Most of Chrysler’s energy and design skills seemed to have gone into Jeeps, trucks, or minivans, which leaves them ill-equipped to design a competitive small car, and with gas at well over $3.00 gallon they can’t survive on selling the big stuff alone. And, even if they had the design skills, the costs would be crippling, so I don’t see much alternative to working with Mitsubishi. Mitsubishi quality can vary from good to bad, but the same can certainly be said for Chrysler, so in a sense they are made for each other.
 
It's possible that the brand may be cherry-picked as happened with Rover in the UK. The Mini, which BMW had spent a fortune relaunching was simply retained by BMW when they sold the company.

I don't think Daimler-Chrysler was a particularly sensible idea anyway. Daimler-Benz AG was and continues to be a very well established brand in the US. It really didn't need Chrysler for any particular reason. I never understood why they did it in the first place.

Even if Daimler-Chrysler wasn't demerged, apparently the group was renaming itself Daimler-Benz AG anyway, so the Chrysler name would have just been a subbrand.

There has been absolute uproar over the last few years at shareholder meetings !

 
As for the technology

I assume Chrysler's new owners will get a licencing deal for what they have for a limited period of time i.e. until those lines are run out. Then have to renegociate it with Daimler-Benz AG again, if that's even possible.

It's unlikely that Daimler will want anyone else using its technology, particularly a potential compeditor, even if it's an ex-partner in a failed merger.
I would say that's the last Merc. technology that will be seen in Chrysler cars.
 
private equity

I suppose, technically, Chrysler is now owned by Cerebus and Daimler. But anyone who knows anything about how equity capital holdings work can only see one future for Chrysler: The firm is toast.
Private equity holdings exist for one reason: Minimize their own risk while maximising profit. They are the naked face of un-abashed capitalism.
I am not saying this is good or bad, just telling it like it is.
We can kiss Chrysler good-bye. That, in my opinion, is a horrible thing for the workers.
(As for Daimler, I am happy to see them get back to the business of building and selling premium trucks and cars. Jürgen Schremp damaged the company in so many ways, Chrysler was not even the worst of it all.)
 
Three headed dog replaces 5 stars

In Greek mythology, Cerberus was the hound of Hades, a monstrous three-headed dog with a snake for a tail.

Cerberus guarded the gate to Hades and ensured that spirits of the dead could enter, but none could exit.

(They will) Dump everything, sell every piece of real estate. Keep the 300 and minivan, plus Jeep. Add some small cars from China. With a slight redesign and re-badge, kind of like Ford did with Fusion (Mazda).

The tricky thing is to get rid of pension and health care, I don't know how they do that without going to Federal Bankruptcy Court. But they may do that.

Martin
 
Anyone remember Carl Ichan and TWA? Look where there are now.

Cerebus Capital also controls such firms as Anchor Glass(which is now in bankruptcy court), National and Avis Car Rental, The Formica company which makes counter tops and such, Burger King, and a number of Marriott hotels. They are also currently pursuing Albertson's grocery as well as Chrysler. Cerebus employee payroll is larger than ExxonMobil's, it is one huge company!
And let's not forget that Cerebus was also involved in the Air Canada mess a couple of years ago. Fortunately, they found another investor and got rid of Cerebus before too much damage could be caused.
 
I worked for a company that was bought out by investment capital. It worked very well. The company regrouped for a couple of years and then took itself public again. I got stock options priced at $3 when it was private, and then was able to sell them for as much as $20 when it went public again.

I would expect Cerberus to follow a similar strategy with Chrysler. Restructure it and make it profitable again (not impossible, it made a profit this time last year), and then take it public for a big killing in the stock market. Of course, they will need to work hard to make it profitable and a stock that investors get excited about. Innovative fuel economy technology and car designs might be one way for Chrysler to do that.

Like others here I doubt that Daimler will pull the plug on technology already in current Chrysler models, or even those under development. But at some point I would expect Daimler's technical involvement to lessen, or at least to come at a cost.

Note on Chrysler history: the Omni was not based on the VW Rabbit. The only part that was VW was the motor - the rest of the car was Chrysler (AMC) derived. It got a bad rap in Consumer Reports and Chrysler addressed the handling issue that CR claimed existed, but not before some damage to sales was done.

Chrysler was actually on a very good roll prior to the 1998 "merger" with Daimler. It was the most profitable car company in the WORLD at the time. It accomplished that in part by heavy use of computer aided design and manufacturing, in the name of the Dassault CATIA system (released in a PC version as Solidworks, which is a wonderful program as well, I've used it). The second generation LH cars, the 300M, was the product of this approach, as well as other later models.

One of the biggest problems with the merger is that a lot of Chrysler talent went out the door when Daimler stepped in. If Cerberus is serious about this venture, they'll be contacting some of the previous players to see if they will return to the "fold" (with the exception of Eaton and Lutz!). I like to think that Chrysler has a fighting chance in this, but a lot probably depends on how well labor and management can resolve the crippling long term $18 billion in liability for pensions and retirement health care. Cerberus does have the bankruptcy card up its sleeve as a lever in negotiations, but I hope that is not needed.
 
AMC . . .

AMC had nothing to do with the Omni/Horizon. It was an independant company in '78 when Chrysler introduced the Omni/Horizon. In '79 Renault bought into AMC, and controlled it until '87 when Chrysler bought it.

The origins of the Omni/Horizon do have a European component other than VW, in that Chrysler France (Simca) developed their own Horizon which went into production first in '77 but shared little other than styling with the American versions. The Simca Horizon used Simca engines and a torsion-bar suspension. The American cars used the VW based engine and gearbox and a McPherson strut front suspension like the Golf. I know Chrysler paid VW for the engine and gearbox designs but have no idea if they just copied the suspension or actually paid for VW design work. I've always felt it was a shame that they didn't use the Simca suspension since torsion bars were a Chrysler tradition since '57, and French suspensions are usually a lot better than German or American suspensions. Probably the struts were cheaper (if VW used them, they must be cheap!).

The CU allegations about unsafe handling were just stupid. A good friend of mine was a young engineer at Chrysler in Detroit in the late '70s and part of the Chrysler team which investigated the situation. They found that 1) the CU test was in no way indicative of any real world driving conditions, and 2) the first Omni/Horizon models had an unusually heavy steering wheel, which became an issue during the test as the CU test driver was instructed to let go of the wheel after turning it. The heavy wheel had a lot of inertia and slowed down the car's response. Chrysler ended out lightening the wheel a bit. To put things into perspective, this was the same test that caused CU to claim the Fiat X1/9 also had unsafe handling, when pretty much every other critic throughout the world raved on and on about the safety and excellence of the X1/9's chassis. CU should have stuck to testing vacuum cleaners.
 
We had a Dodge Omni for a few years. I actually liked it. I thought it handled well and got good gas mileage for the time. But I did notice that everytime we brought it in for regular maintenance the people at the dealership were less than happy to see one of "those" come in the door. I asked a mechanic about this one time and he said that they were the crappiest cars he had ever seen!
 
Now Ford

If Cerberus buys Ford, they could:

Truck: Ford (Dump Dodge trucks)
Car: Chrysler 300 (Could be made into Limos and New Yorker)
Car: Crown Vic (Police only) Dump Lincoln and Mercury
Mini-van: Chrysler Town and County (Nothing to dump from Ford)
Car: Mustang
Car: Charger
Suv: Edge
Suv: Jeep
Small car: From China

This could be a viable company.

Chord or Forcler

Martin
 
Direct-Drive Whirlpools . . .

If Chrysler could design and build cars as reliable as DD Whirlpools then they would really have a bright future. I use a DD Whirlpool from the late '80s. It is making some noises now, probably the DD coupler, but it has NEVER had a failure or service call in 20 years of use!

Contrast this with the '92 Chrysler product which was owned by two family members. It was nice to drive when running, but in spite of careful service it had endless warranty claims (over $6000 worth as I recall), parts availability was pitiful (nine months to get an important anti-lock brake part under warranty!), and several times I found that the dealer's parts manuals were just plain wrong. The latter lead to the car becoming unmaintainable since nobody at the dealership could figure out what parts to order when the drawings in the manual didn't correctly portray the car. The paint peeled off in sheets in spite of having never been wrecked or repainted (aside from repaint needed to fix the peeled areas). It was finally donated to a good cause in exchange for a tax write off. As far as the DD Whirlpool goes, I have a new DD coupler on the shelf since it is worth fixing, unlike the car.

It's sad to think that back in the '60s the Valian and Dart were probably the closest American cars to the DD Whirlpool: not sexy, but just simple, reliable, economical, and well engineered. Now Chrysler would rather everyone remember the 300s, Barracudas, Chargers, Imperials, and other flashy cars, but the truth is that they were always niche vehicles and it was the Valiants, Darts, Satellites, Coronets, Furys and Polaras which kept that company afloat. The people who once bought those cars are now buying Corollas, Camrys, Civics and Accords, and it is Honda and Toyota who are laughing all the way to the bank.
 
Hydralique,

You're correct that AMC was not part of Chrysler when the Omni/Horizon were introduced. I don't know what I was thinking. However, the only VW designed part, as far as I can tell, was the motor, and that was modified by Chrysler to enlarge it to 1.7 liters. Don't know about the transmission - that's certainly possible. The rest of the car was loosely patterned after the Rabbit, but as far as I know it was not a VW design. The entire car was larger and roomier than the Rabbit, with a softer ride designed to appeal more to American drivers, despite mimicking the VW suspension format. VW was instrumental in the cars' success, in the sense that it was willing to provide the motor, saving Chrysler at least two years, since Chrysler had no 4 cylinder motor of its own at that time, although it's certainly possible that Mitsubishi could have provided one.
 
Chrysler has ditched the old "Rambler 6" that they inherited from the buyout of AMC. That was their best motor, and they used that in the Cherokees, Wranglers, and even in the Grand Cherokee for a while. These motors were extremely tough and quite powerful. Chrysler blames it on the castings and other machinery needed to make the engine wearing out to the point they cannot be repaired. Not renovating the line that makes these engines however is a big mistake, as this engine is a big part of the reason why Jeeps are so liked!

With the re-design of the Grand Cherokee, and the Wrangler, they have basically removed all vestiges of the old AMC designs from their products, and I think, shot themselves in the foot. Jeeps are now just basically re-badged Chryslers. I am not forseeing the Jeep nameplate being the once formidable nameplate in SUV's anymore with this mistake. Yes, fuel prices are not going to help any either. In fact, they have already begun watering the division down with the Compass model..basically a small station wagon car with some Mitusbishi mechanicals and the Jeep vertical bar grill.
 
Optimistic

I, for one, am very optimistic. There has been very much reassuring from the Cerberus folks that they are, for now, not at all interested in chopping Chrysler to pieces. They're not stupid, I think they know how profitable Chrysler can be if it is run properly. And I think that is what they'll try to do. Chrysler's LH vehicles were quite popular through the end, and pretty reliable. They also had really nice interiors, compared to the spartan and ugly LX interiors with their cement seats.

The Pentastar is also back my friends, as the new Chrysler Corporation logo. It will be refreshed for a modern look and released when the deal is final. It's pretty exciting. Cerberus will have the freedom; Chrysler will have the freedom to do all the things Daimler's pride said was verboten.

If Cerberus decides to be evil and sign the death papers to 80,000 directly linked jobs [nevermind the thousands of indirect Chrysler jobs]...then it will be a sad day. I doubt they would deliberately put hundreds of thousands of people out of work in this post Enron world. They'd be sued out the ass, and I have a feeling the government would notice all those jobless people.
It would be corporate suicide for them to just close up shop. But IF they did, i'd mourn, and jump on the Ford bandwagon, since they too are making some stunning strides in the right direction. They need support too.

Long Live Chrysler Corporation!

5-17-2007-15-43-54--johnb300m.jpg
 

Latest posts

Back
Top