GM-Chrysler not a Good Combination
The possible merging of General Motors and Chrysler is seen by most analysts as a desperate move to survive. However, it is still unclear how such merging would result to anything positive for either company or for the US auto industry as a whole.
The only beneficiaries of the possible merging are the DaimlerChrysler’s shareholders who are hoping to finally ditch the Chrysler Group.
Buying the Chrysler Group would put General Motors, world’s largest automaker and maker of popular GM Buick parts in a bad position due to the basic fact that Chrysler is an embodiment of everything that GM is trying to avoid which is to become overly reliant on light trucks resulting to excessive production and losses in North America.
John Casesa, an industry consultant and former Wall Street analyst said, “It would increase exponentially the challenge that GM management faces in executing its turnaround.”
Until now General Motors and DaimlerChrysler still refuse to give any official statement on the speculated merging. According to Chrysler spokesman Michael Aberlich, “We’re not going to comment on the rumor of the day.”
Most people are questioning is Chrysler really worth it? In terms of products the only thing that Chrysler has that GM doesn’t have are minivans. It is also interesting to note that the Chrysler Town & Country and the Dodge Caravan are the nation’s best-selling minivans while GM is in the process of giving up on the minivan market completely. And if ever the merging really pushed through then General Motors will be the new proud owner of Chrysler’s minivan fleet.
But most analysts think that Chrysler’s minivans are not enough of a reason for GM to buy a losing company especially when there is that risks of an overlapping portfolio of products. In the auto industry it is not easy to dispense overlapping products. Unlike the merging of banks in which half of the branches are eliminated, including the back offices and in the process keep all the customers.
Not to belittle the management capability of General Motors but it is no secret that the automaker is finding it hard to manage all of its eight brands and adding three more would become an impossible mission even for the world’s numero uno. Imagine managing Jeep and Hummer at the same time would demand for a juggler’s ability. And if you think that’s difficult just wait till GM has to market Dodge Ram pickups and its very own Chevy Silverados which are considered to be the lifeblood of both Chrysler and GM. The bottom line here is that GM and Chrysler has the same products which will compete with each other instead of competing with those of other automakers. So instead of gaining General Motors will likely to lose more out from its merging with Chrysler.
About Author
Noah Scott is a 30 year old native of New Jersey, writer, and car fan - having grown up with both parents being auto enthusiasts. He works for an automotive consultancy firm and regularly contributes articles to car magazines.
Source: ArticleTrader.com