Would a GM and Chrysler Merge Be Insanity?

With all due respect Gerald, it's not gonna happen. Its funny how removed Ann Arbor is from Detroit.

Initially I thought it was a crazy idea and now I changed my mind. A merger would be very bad for US consumers but great for GM - here's why
(i.) Chrysler sells based on low prices, Chrysler/Dodge/Jeep have depressed average transaction prices to rental companies, corporate fleets and to private buyers.
(ii.) If GM boosted all GM and Chrysler group fleet prices by 5-10% there's not much the rental companies and fleets could do. Yes GM and Chrysler total sales would decline (as Ford picked up a little of the slack) but profits would skyrocket.
(iii.) The overlap in product ranges is so significant that the combined new product development expenses could be slashed
(iv.) GM already has good overseas distribution and could quickly put the best Chrysler/Dodge/Jeep products through these channels, to gain share overseas even if the US combined share tanks

I do not own either product, but there are advantages from a productive perspective. GM would gain access to Dodge's diesel technology since selling its controlling stake to Toyota. The minivan market, which GM gave, would be theirs again with the Chrysler Town & Country and Dodge Caravan. Perhaps even more important GM would have access to Chrysler's design and engineering expertise. I personally do not like most of the products from either company, but it would allow GM to fend off Toyota's reign of terror on their sales. GM's executives realize they can't beat Toyota with brand identity so volume will be the weapon of choice. Toyota run for NO.1 has been highly publicized with good reason, but this is GM answer.

One additional thought - I am not sure how strong are the creditionals of Gerald Meyers in the area of mergers and acquisitions, or whether he was misquoted in the article. Any idiot should know that cost savings are a great way to pay for an acquisition in a mature industry. The greater the overlap in products, production, marketing etc etc then the greater the potential cost savings.

Don't believe me well consider the tremendous success of the Exxon and Mobil merger. Or think why would XM and Sirius want to hook-up.

The downside to ANY GM acquisition is simply the weakness of the GM executive team and their continuing ability to screw up the basics. So one could argue if they don't manage what they've got now, then imagine the chaos if they have a bigger company. Everything else [besides Executive Management] is in GM's favor.

Sure, similar products would be eliminated. So would similar jobs. This decision would destroy metro Detroit.

If GM were to purchase Chrysler, it may operate Chrysler as a separate entity (as DaimlerBenz should have done). GM and Chrysler would lower combined cost by sharing (the unseen) components and marketing their legendary features and options (HEMI, LS, Viper, Corvette, etc.) to create the perception of separate companies.

One challange would be dealer networks in the US. Both companies have expressed and interest in decreasing the quantity of dealers. How that would 'hash' out when GM and Chrysler dealers could conceivably sell product from both manufacturers, I don't know...caos...

In a utopian world, GM could purchase Chrysler and fund their legacy debt. At the same time, they can synergize and create fantastic concepts and production models to set benchmarks in their own categories while returning excellent profits and increasing shareholder value.

GM could make more money by dismantling almost all of Crysler and Dodge (saving Jeep), and using the plants, manpower and technology to create a few hundred thousand more GMs that people might actually want to buy. Buick and Pontiac could be expanded instead of thrown to the wolves.

Really, is there any use for Chrysler right now? Why would you want a 300 when it's so played out, get a Lucerne.
Sebring? Aura.
Caliber? Astra. (actually GM should keep the Caliber, it's not that bad)
Ram? Remember the old Rams that no one bought? We didnt need a Dodge pickup then, and we can do without one now. The Sierra and Silverado are sufficient. There are only a few Ram guys that would mind.

Yep, thats the plan. The Big 2. Ford would thrive as well without the competition. Ford might actually be able to fend off Toyota if all the domestic fans had only 2 to choose from.

GM is already brand-crowded, what would they do with it beside shutting down Dogde and Chrysler .... merging Jeep and Hummer ?

Chrysler can't help Gm in any way. All they have is an aging MB E-Class chassis, a "less-good-than-gm" full size pick-up truck and a corvette-wannabe that sure looks good but does not sells a lot.

I don't think it's going to happen.