# Could Chrysler be bought out by an ambitious EV upstart?



## xrotaryguy (Jul 26, 2007)

*General Motors* and *Ford Motor* are in trouble, but their problems seem minor compared with Chrysler, a company closely wedded to light trucks, meaning pickups, minivans and sport utilities--Jeeps too.

more...

Here is the bit that caught my attention


> Another possibility: Someone else buys Chrysler. Now that makes sense. The general feeling is that Chrysler's owner Cerberus (Daimler of Germany, the previous owner, still has 20%) would sell Chrysler if it can do it without too much loss. Actually, I cannot figure out how much Cerberus actually paid, in real dollars, for Chrysler, but I suspect that a buyer today could grab Chrysler for just a few billion dollars.
> Many Americans have that kind of money, and some of them might want to own an auto company. Heck, Bill Gates just invested in *AutoNation* (nyse: AN -  news  -  people ), the auto dealership group. Maybe he would want an automobile manufacturer to go along with it. Kirk Kerkorian is buying into Ford. Maybe he could switch to Chrysler, which he once tried to get. Or why not buy both?
> Perhaps another automaker building an empire, such as Nissan/Renault or *Tata Motors* (nyse: TTM -  news  -  people ) would want an American partner. An infusion of cash and technology could make it possible for Chrysler to build new small cars here.


Perhaps a company like Nissan could pick up Chrysler and start building EVs . They certainly the money to do it. Better yet, a company like Tesla could buy the ailing company. Perhaps a group of potential EV manufacturers could execute a "group buy" of sorts and decide who gets which factories. Google could do something like this for the Aptera. Perhaps as the US' traditional auto manufacturers decline, EV manufacturers will step in and acquire the remaining infrastructure.


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## Coley (Jul 26, 2007)

I can't imagine that buying them would be a good deal.

The engine manufacturing end of the business along with all of the supporting ICE add-ons would be worthless to an EV builder.

Much better to start an EV business from scratch.

The expense of new machinery etc. could be written off much better than buying a business with used equipment. 

Used equipment is selling at junk price....

Not a good deal in my opine...


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## saab96 (Mar 19, 2008)

The auto industry could use a good culling. Survival of the fittest.


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## xrotaryguy (Jul 26, 2007)

I just don't want to see my country's economy take a good culling.


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## Coley (Jul 26, 2007)

Chrysler was bailed out once and should not have been.

Can't see any reason to buy it and have some group lose more money on it...


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## lazzer408 (May 18, 2008)

It's an american car company...bury it in the back yard with the other 2 or sell it to Tesla.


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## david85 (Nov 12, 2007)

As much as I hate to be using something that george w. bush said as a piece of wisdom, I think this situation fits. The domestic american automakers have to make products that are relevant to todays situation.

I have not pity for any of the big 3 or 2.5 or whatever they're called now. I really do feel for workers in ontario that just lost their jobs, but something had to give sooner or later.

Its not just about their rekindled love affair with the "hemi", its everything about the auto industry. Its the stupid discount gimmicks. Its the mass consumption principle that can no longer work in an era when vehicles can return 10 years of reliable service and still be decent at the end if that. These companies survived by selling as much as possible to take an absolute portion of the market at all cost and ran razor thin profits per car, but instead they ended up saturating the market with cars that devalue faster than they can be payed off. Id addition, they are not developing new cars fast enough to stay modern in terms of performance and fuel efficiency. Nothing about this picture was sustainable, but when the price of oil went through the roof, well we see for ourselves what the results are.

As another forum member said: 

adapt or die, its the way of the universe.

We know how simple electric cars can be, they have not excuse for not trying.


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## joseph3354 (Apr 2, 2008)

every auto company on the planet has the capability to do exactly what we are doing...conversions.an ambitious company could shift to converting their new cars in less than 6 months,but they don't get it or they are too beholden to the oil companies to make the shift.the auto companies in this country are doomed to fail because they have never adapted to their environment.it would be nice to see some ev company buy out chrysler,but i don't think it will happen.


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## avn-tech (Jun 16, 2008)

Group,

I don't think Crrysler is for sale, as the company was recently purchased from Mercedes (who took a large loss).

The bailout of Chrysler, saved the government millions (if not billions) of dollars. If all chrysler employees went on unemployment and welfare, we would sunk into a ressesion that would have made the stock market crash of 29 look like a normal day of trading.

As far as building what the american public wants, I think that the US auto makers have been doing that. But public opinion has shifted in the last year.

I remember in the 70's when the american public said why don't you build cars like the japaneese. When the auto makwers responded, the public did not like what was made (pinto, vega, chevette, ect). Those cars were just like the japaneese cars, and the public was not happy with them. They were good deals at the time(but not a cadaliac), and lots are still on the road.

The problems with the US auto makers are complicated, first there is approx a 5 yr lead time on new products. Then the companies gave concessions to the unions when times were good, theat are costing them a fortune. The US auto makers are paying retirement to more employees then are currently working on the line.

When the retirements were neg, the life expectancy was not what it is today. Also health care cost have gone thru the roof, adding additional drain on the companies.

Anouther thing hurting the auto makers is that americans buy foreign cars (employing forign workers). While japan does not allow american inports that would compwete with Japaneese companies. This created an artificial economy in japan (all money earned was kept in the economy, unklie america who spent most money earned buying overseas products).

Bottom line, America is now paying the bill for what we have done over the last 20+ years and continue doing (Fuel, housing, credit, ect). Be carefull of buying the media hype of what is wrong with this country, look into the real issues (yes this group is better informed then the general public).

Yes I am going to build an electric truck (S-10) to help ease my dependance on oil. I first looked at building an electric car (X-19) in 1992. At that time range was approx 20 miles, and cost about $10K - $12K, fuel was $2.00 a gallon (not cost effective). Today with gas fluctuating between $4.00 - $5.00, miles on a charge between 30-50, and cost $10K-$12K. The cost of an electric car/truck is justified.

Sorry to get on my soap box, maybe its just that I am curretly running for mayor of my local city. Now back to your regularly scheduled program (building elect cars)


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## david85 (Nov 12, 2007)

Good post, avn-tech

I've heard the argument of protectionism before when it comes to cars made in the USA that cannot be exported to china, japan or korea. But Given how obsolete domestic products are in respect to fuel efficiency and performance, I have a hard time picturing some one in south korea buying a chrysler 300M when Hyundai already makes cars that are cheaper, better on fuel, made locally.......

The CAW president often uses the argument of unfair trade to justify why domestic cars and trucks are not selling like they used to, but I still feel it has more to do with lack of flexibility and, like you rightly pointed out, long lead times on new cars designs that are close to being obsolete by the time they finally make it to show rooms.


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## avn-tech (Jun 16, 2008)

David85,

You are right, most of the world would not buy american cars. However they would like to buy american food (beef, citrus, rice, ect), which we cannot import into japan. Japan also has a fax paper shortage, but american companies can not import fax paper to japan.

I think that any country that restrics our ability to seel our products in their country, should not be allowed to sell products here.

Thank You
Avn-Tech


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## saab96 (Mar 19, 2008)

joseph3354 said:


> every auto company on the planet has the capability to do exactly what we are doing...conversions.


Just because they have the capability doesn't make it a good business decision.

People are still wining about the parallel hybrid premium, let alone plugin hybrids or full blown BEVs.

If you were to line up two vehicles straight from the factory, a gas burner and a BEV drivetrain, the BEV is going to wind up more expensive by a wide margin because of the battery pack. That's why it's not being done. They are taking a wait and see attitude regarding battery pricing rather than trying to push the cost down themselves, though. That I think is a mistake. They have too much leveraged in internal combustion. They should look at batteries as an integral part of their business and bring the R&D in house.


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## david85 (Nov 12, 2007)

Its possible that history may be about to repeat itself. In the 1980s japan went into a voluntary quota system for exporting cars to the USA after seeing how much pressure Detroit was ready to bring to bear on Washington to protect its own interests. Toyota now makes cars and trucks that are more american than ford or GMC when it comes to how much of the vehicle is made on american soil. The catch is that the profits still go home to japan at the end of the day.

International trade is an ongoing work in progress. There is supposed to be free trade between canada and the USA, but really there isn't. Every country has its own set of special interest groups that are able to change the rules to better suit their own interest. 

Japan is a very protectionist country and their auto industry has been able to bring extraordinary pressure to bear on the local government in the way of some of the most unreasonable safety standards seen in the world. Its justified in the name of safety, but in reality its a reason to force average citizens to trade up every 2-3 years so the automakers can justify their constant production of new cars and keep people working.

Each country has its own way of managing its economy and for better or worse, it has worked for the most part in the last century. Putting up trade barriers in the USA to protect domestic automakers may be all that can really save the former big 3 now. How the mighty have fallen......


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## joseph3354 (Apr 2, 2008)

saab96 said:


> Just because they have the capability doesn't make it a good business decision.
> 
> People are still wining about the parallel hybrid premium, let alone plugin hybrids or full blown BEVs.
> 
> If you were to line up two vehicles straight from the factory, a gas burner and a BEV drivetrain, the BEV is going to wind up more expensive by a wide margin because of the battery pack. That's why it's not being done. They are taking a wait and see attitude regarding battery pricing rather than trying to push the cost down themselves, though. That I think is a mistake. They have too much leveraged in internal combustion. They should look at batteries as an integral part of their business and bring the R&D in house.


gm's stock is at it's lowest point in 50 years.ford may end up in bankruptcy,their stock is pitifully low priced.chrysler is owned by a business conglomerate that would sell it off just to cut their losses.

do you really think they are making good business decisions?

as a community,we can push battery prices lower by spending a mere $500k.just think how low prices could be brought down by the auto companies spending millions.if they did that ,the cars they could build would be comparably priced with today's hybrids.instead of converting their existing designs ,they are whining about having to spend hundreds of millions of dollars trying to reinvent the wheel.KISS principle applies to this situation as easily as it does for us converting our old beaters.the auto companies just don't get it.


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## xrotaryguy (Jul 26, 2007)

The Chrysler bailout of the 80's was a huge success story from what I recall. Chrysler borrowed from the fed so that it could retool. The retooling took place, the fed was repaid ahead of schedule, and the US economy was spared the demise of a large corporation. 


The primary reason that American auto manufacturers have trouble competing is that they are saddled with high legacy costs. These costs include paying pensions to retired employees, paying unreasonably high wages to union workers, the pegged rate system (which requires manufacturers to pay 8 hours to a worker who only works 5 hour days in certain automated plants), plants that are required to run at 80%+ capacity by the auto unions regardless of demand, etc. GM for example only has about 25% market share in the US (25% of cars sold in the US today are sold by GM), but it is paying out pensions for a large retired work force from the days when that company held 50% market share. About a year ago, the UAW and GM agreed that the UAW would take over health care benefits for retired workers. Until that agreement, GM was paying more than $15 billion per year in health care – and that was for people who don't even work for GM anymore. To put this number in perspective, consider that Toyota spends about $17 billion per year in new product development. That's a big nasty drain on GM.


This is why GM has not been keeping pace with technology or with new models. The company did not have the money to do it. It was not management's decision to retain old models for extended periods. 


Last time I checked, GM was spending about $8 billion per year on new product development for Chevy, GMC, Pontiac, Cadillac, Buick and Saturn. I don't know if GM spends its “own” money on Suzuki and Daewoo. Toyota spends its $17 billion on only Toyota, Lexus and Scion. Basically, Toyota spends twice as much on half as many brands.


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## Maccabees (Jun 21, 2008)

Someone may buy one or more of the US automakers but they will fall more in value first. They are too heavily invested in obsolete technology to be purchased at anything above a "fire sale" price.

The problem with Ford, GM, and Chrysler is not that Americans just want to buy Toyota, Honda or some other manufacturer's vehicles; it's that those vehicles are just better and can be purchased at a more reasonable price. The "big 3", soon to be the "vanishing 3", are not sinking because they produced what the public wanted. They are sinking because foreign car manufacturers have been producing what the public wanted and still wants. New product development does take years, but it takes years for Toyota, Honda, etc. too. They seem to be doing just fine.

The "vanishing 3" have sunk themselves. When you charge too much for too little, you are living on borrowed time. The bottom line is that GM, Ford and Chrysler made their own beds. Now they will die (not lie) in them.

While Chucky Darwin did not write in view of the auto industry, what he said was true in this regard: only the fittest survive. 

Ford, GM, and Chrysler are no longer "fit". They fought progress at so many turns. (opposing higher mpg standards, selling the rights to NiMh batteries to Chevron, killing the EV-1, and the list goes on and on) Now they are reaping what they have sown. 

I'm not surprised they are sinking; I'm surprised it took so long.


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## KarmaTiger (Aug 5, 2008)

avn-tech said:


> David85,
> 
> You are right, most of the world would not buy american cars. However they would like to buy american food (beef, citrus, rice, ect), which we cannot import into japan.


For the most part, it's not that Japan wants to buy these things from the US but that the US would like to sell these things to Japan. They're doing just fine with rice from southeast asia, and prefer grain fed beef to the corn fed American variety.


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## david85 (Nov 12, 2007)

KarmaTiger said:


> For the most part, it's not that Japan wants to buy these things from the US but that the US would like to sell these things to Japan. They're doing just fine with rice from southeast asia, and prefer grain fed beef to the corn fed American variety.


 
At least they are supposed to feed them corn.......

KarmaTiger and Maccabees, 

Welcome to the forum, and thanks for sharing your thoughts.


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## xrotaryguy (Jul 26, 2007)

GM will not go down any time soon. GM is China's largest auto manufacturer. The company has been investing heavily in developing nations and it shows. Their business in the US is in the pooper, but overall, they're more healthy than their domestic sales would indicate. Hopefully GM will get on the ball with EVs and plug-in hybrids. I doubt the developing world can afford gasoline any more than we can.


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## Maccabees (Jun 21, 2008)

GM's vehicle production efforts in China may allow them to survive as an international company. I doubt that is going to be much comfort to the thousands of current GM workers in the US that don't speak Chinese.

From 2001 - 2007 the US lost 2.7 million jobs to China, more than 2/3's of which were in the manufacturing sector. For "GM international" to survive, they may need to accelerate that process. 

For domestic GM efforts however, they may want to bring back the song used in prior ad campaigns. I can hear Bob now, "like a rock". (sinking, that is.)


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