Thursday, October 16, 2008

Measure the coffin

The town in which I was born and raised is a factory town. The owners of those factories and the area's single largest employer; Chrysler. The consequences of a failure of Chrysler would be beyond comprehension, most likely reducing that city to a ghost town in a matter of months.

Months ago I put Chrysler on deathwatch due to their horrible market position and stale line up. A few weeks back I removed Chrysler from the deathwatch because it seemed as if there was the glimmer of beating Chevy's Volt to market with a NEV/EV of their own. The recent rumors of a GM-Chrysler "merger" have again changed my opinion and I now believe that Chrysler will cease to exist by the end of 2009. There will be no "merger" because there are only four things about Chrysler that GM cares about.
  1. Superior Minivan product. GM will just rebrand the Chrysler vans and trash their existing crappy vans.
  2. The Jeep brand. GM tried to create their own version of Jeep with Hummer....that went well.
  3. The $11 billion in cash that Chrysler is sitting on will help GM try to reverse their current financial problems or at least keep them afloat for a few months.
  4. Getting rid of 1.5 million units of competitor products. The only people left buying Chrysler cars are American brand loyalists that are likely to end up buying a GM product rather than running to Toyota or Honda. Ford will probably benefit from this as well.
I disagree with Jalopnik's article in one way. The Chrysler/Dodge/Plymouth brand names will not die because GM will sell them to the Chinese or Koreans. Or they will buy more Daewoos and rebrand them like they do with the Aveo.

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