Rumor: GM and Chrysler in merger talks & other shakeups

un-dee

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That article is the most one-sided piece of information i've read in a long time. Why the hell would Mercedes want to ruin the company and then sell it at a HUGE loss afterwards? And don't start talking about all that money merc "stole" from Chrysler (a company they owned at that time), fact is they made a huge loss, another fact is the US car market changed rapidly since 1998, just look at GM and Ford

E: 35bn ? on Chrysler alone, not counting the loss of value of Daimler
 

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Let me throw one back to you - why the hell would Mercedes want to ruin their own company by throwing away their quality reputation in favor of volume? Well, that's exactly what they did when they discontinued the W201 190E - they specifically announced that their cars would no longer be "overbuilt" as in the past, and look what happened. Their market share went up for a couple of years, their quality went way down, then market share declined. It's gotten so bad in America that Mercedes is having to run commercials stating "please come back, we've fixed all the quality problems that drove you away, honest, we know we didn't deliver before, but this time will be different, we promise you a Mercedes!"

Honestly, the "post-W201" Mercedes seems to have been some of the most inept management in the auto industry since Detroit's glory days, going for the quick buck and bragging rights rather than safeguarding the long term existence of the brand. Heck, they even seem to have adopted some of GM's penny pinching ideas. The only reason they're even still on most people's radar is because their engineers are actually able to sometimes engineer around their beancounters.

A great example is the second generation C-Class (W203). They sold a bunch of them, but they all seem to have disappeared. All you see on the roads today are the first genners (W202's - which were originally going to be the "new" 190E) and the current ones (W204). The second genners are nowhere to be seen. Wikipedia backs this up:

http://en.wikipedia.org/wiki/Mercedes-Benz_C-Class said:
In the United States, the C-Class automobiles are the least expensive of the Mercedes-Benz lineup as the A-Class was not imported there. However the W203 C-Class did acquire a poor reputation for reliability compared to other Mercedes-Benz models, an area which was targeted for improvement in the replacement model.
 
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un-dee

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I never said Mercedes is an error free company, to be honest I think they completely screwed up in many ways. I just don't think the demise of Chrysler is their fault and some people see them as a welcome scapegoat to distract from their own major screw-ups.
Chrysler may have been very profitable in 1998, but the market was different and if you look at the lineup most of the 90s Chryslers were just plain shit. And cars like the 300C, Crossfire and Charger were only started when Merc started to gain more influence in the company because they were not satisfied with Chryslers performance, and for all people I know these are pretty much the only Chryslers they'd somehow consider buying. My sister drives a pre-DCX Neon and its the shittiest car a member of my whole family ever owned. When I read in that article how great the Neon was it just strikes me as cynical.
 

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Thing is, in the US, the Neon was competitive in its class. What it lacked in refinement it made up in cheap.

And, most importantly, you could get it in SRT4 form.

Mercedes also gave us the shitty Dodge Nitro, the character violating Jeep Compass and Patriot, the "new" Sebring, the "new" Avenger, they wanted to give us Chinese made cars, they hobbled the Pacifica in favor of their own R-class (also a disaster), they brought out the Jeep Commander at the exact wrong time, they refused to develop the Plymouth/Chrysler Prowler, they let the PT Cruiser die from lack of interest despite incredibly high sales, the list of Mercedes-originated post-DCX screwups is pretty long.
 

smib

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This is so much better than school. I learn way more.
 

thedguy

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After 1998 Chrysler still had some of it's "Chrysler/AMC-ness." What Chrysler gained in 1988 with the buyout of AMC, they pretty much lost when Mercedes finally got all the control over Chrysler, which was about 2002.

Chrysler WOULD likely still be profitable because what they got from AMC was the skill to adapt to the market QUICKLY. When the turbo compact car market hit guess what Chrysler came up with in less than 2 years? The SRT-4. When they saw the response to the Viper concept, they had the car ready to go 18 months later. First thing Mercedes did was institute a 2+year delay on all development as Germany has to approve it first.

Before that when people were wanting fun to drive small cars like the Nissan Sentra SE-R, Honda Civic Si, Acura Integra GSR and Type-R's. Chrysler took the neon, tweaked the suspension a bit and offered an "ACR" package which removed a bunch of weight (and unlike in europe I believe it actually LOWERED the cost o the car), and sold it to anyone with an SCCA membership and promptly watched it hand Miata's their asses in national autox events. The neon is a very good little chassis, is dirt cheap and the engine hos loads of potential for modification.

The other problem they had with mercedes is the Chrysler engineers were forced to use Mercedes expensive designs. I've read many articles quoting their engineers as saying they could have made many things cheaper if they would have been allowed to design it themselves. Too top it off, Chrysler in the 90's started seeing massive improvements in quality and reliability because they outsourced many parts and found out that they could get things cheaper and better built if they shopped the projects around rather than do everything in house... mercedes made them use Merc's designs first.

If there is one thing Mercedes has yet to really figure out is how to build a cheap inexpensive car bigger than a roller skate.
 

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It is just such a shame that Chrysler is on the edge on the cliff. A lot of the cars that they had in the 90's (Neon, Cab Forward cars, Jeep) were very competitive products of their days. Even today, I think the 94 Neon still looks very cute and distinctive in terms of its design, though it had it's own safety issues. In a little over ten years, they have made a reputation for building some of the cheapest and nastiest cars on sale today (Caliber, Avenger/Sebring) that trails the market leaders by huge margin. Apart from the new Dodge Ram, Viper, and possibly the LX cars, most of their cars just suck.
 
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thedguy

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Mercedes should have been smarter with Chrysler and just left the damn company alone, do the merger and collect a check at the end of each year. Perhaps office Chrysler the US of the E-class chassis like they did and also throw them a bone and give them the w201 to tweak for a Cirrus/Sebring replacement. With the 2.4 turbo and rwd I'm sure it would have sold quite well.
 

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I think they took a look at the GM/Saab example from 1990-on and drew *entirely* the wrong conclusion from it.

For those that don't know, GM tried the "hands off" approach and Saab *totally* screwed the pooch with GM's money. Instead of fixing the multitude of problems with their products, they instead made more of the same and then wondered why their customer base appeared to be evaporating. GM was forced to step in and assume more direct control. While GM's made some missteps with the brand (the 9-7 comes to mind), they still lose less money from Saab than they did before GM started booting out Saab execs.
 

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Axing Plymouth was about 30 years overdue; the brand should have been taken out and shot in the 70s after the musclecar era died because it had no real brand identity of its own after that.

Chrysler was actually trying to address that problem - the PT Cruiser was developed to be a Plymouth, but by the time got approval, the Germans had already killed off the brand.
 

Spectre

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Chrysler was actually trying to address that problem - the PT Cruiser was developed to be a Plymouth, but by the time got approval, the Germans had already killed off the brand.

Yeah, I remember. They thought they'd use the Plymouth brand for their retro cars. Not a bad idea, but I don't know that it would have worked - and the DCX merger plus the Germans' desire to rethink, rethink, and then rethink again slowed down everything post-Prowler, as has already been stated.

Not that the Prowler was greatness personified, but it wasn't bad and it looked spectacular. That car alone exemplified the adventurousness of Chrysler - *nobody* has come out with something as daring since. I mean, really, a factory-built hot rod??? Coolness. The only shame about it was that it didn't have a V8, though it was RWD.
 

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Spectre

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I think the worst thing that happened in the merger was that Mercedes threw away was the exceedingly rare spirit of cooperation that Chrysler had with the UAW. Yes, you read that right - the UAW was cooperating with an automaker and *didn't* view them as the enemy! (The above articles WheatKing linked reference this, I'm expanding on the theme here.)

What happened with the UAW at Chrysler was that around 1979, when it was clear Chrysler was going to hell in a handbasket was that Chrysler sat down with the union and said, "Look, you know we haven't been doing well. You may think that we're hiding money or massively overpaying execs. Here's the real books. Go over them yourselves. Maybe you can come up with a better answer, but even if we cut everything on our side to the bone, we have very little time to live unless you help us. If you don't help us, we'll all be out of jobs, both management and labor, and there's nothing we can do."

The UAW (apparently) took the books, had their accountants go over them and the proposed management-side cuts and came back to the table a few days later white as a sheet; apparently the UAW accountants had determined that it was actually *worse* than the Chrysler accountants had claimed. The UAW immediately agreed to the concessions that Chrysler needed and then offered up some additional voluntary concessions, in exchange for restoration plus bonuses if Chrysler managed to survive and prosper. Then the UAW started working with management to fix the problems and get good product out the door, to the point where shop stewards would sit on the drunk, the lazy, and the troublemakers and tell them "Work, do your job right, or we're ALL out of work, even management."

Between this, the bailout, and all the other now-well known factors, Chrysler paid back the loans early and was back on their feet by 1990 as the most agile and most innovative of US makers. The UAW membership rightfully had a feeling of ownership and of having worked to help save the company; and, as the above article showed, the management was willing to get into the trenches and work with them. (There is a possibly apocryphal story about how one day a bunch of assembly line workers at the K-car plant got desperately sick - not faking, really sick - so a bunch of engineers and management came down to the plant and filled the vacancies that day so the product would get out the door.) That extended to more and more cooperation and involvement in the process of making cars on both sides, and even contract negotiations became far less adversarial than usual. Right before the Mercedes takeover, the UAW workers were even starting to be directly involved in product planning sessions, not just engineering practicality discussions. This is why Chrysler, while still having some of the typical UAW issues, had far, far fewer of them than GM or Ford.

Mercedes shows up, announces a few years later that they "vill be runningk ze operations vith proper decorum" from now on", and with that threw away the one time in post-war history that the UAW had actually done something to benefit everyone involved instead of just themselves. With that isolation of labor and management, the UAW justifiably felt betrayed and went back to their old practices.



****

A great example of how bad Mercedes screwed up is to look at the interiors of a Dodge Cirrus before the takeover and the current Sebring. Sad to say, but the current interior is obviously cheaper and made of inferior materials to the older car. The switchgear is actually worse. And sure, the Cirrus was obviously parts-bin-engineered, but it was *good* parts in that bin to begin with. Not the highest quality, but good! To use the Mercedes comparison, no, it wasn't quite on par with the S-class, but it was almost as good as the W202 C-class. And the older cars' interiors actually held up well over time, something that I haven't seen on post-takeover designs.

No, Mercedes gets the blame for this one. Sorry.
 

argatoga

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Not that the Prowler was greatness personified, but it wasn't bad and it looked spectacular. That car alone exemplified the adventurousness of Chrysler - *nobody* has come out with something as daring since. I mean, really, a factory-built hot rod??? Coolness. The only shame about it was that it didn't have a V8, though it was RWD.

It also needed a stick shift.

Back on topic. The merger seems like a bad idea, too much redundancy. GM seems to have gone insane as of late. This and their decision to push back all their cars in development isn't good policy.
 

thedguy

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A great example of how bad Mercedes screwed up is to look at the interiors of a Dodge Cirrus before the takeover and the current Sebring. Sad to say, but the current interior is obviously cheaper and made of inferior materials to the older car. The switchgear is actually worse. And sure, the Cirrus was obviously parts-bin-engineered, but it was *good* parts in that bin to begin with. Not the highest quality, but good! To use the Mercedes comparison, no, it wasn't quite on par with the S-class, but it was almost as good as the W202 C-class. And the older cars' interiors actually held up well over time, something that I haven't seen on post-takeover designs.

No, Mercedes gets the blame for this one. Sorry.

I can only say this, at the Autoshow a couple of weeks back every Chrysler there had the absolute worst material quality I've ever seen in any car I've sat in in the past 20 years. Beating out even the 80's Camaro's and firebirds.
 

smib

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I can only say this, at the Autoshow a couple of weeks back every Chrysler there had the absolute worst material quality I've ever seen in any car I've sat in in the past 20 years. Beating out even the 80's Camaro's and firebirds.

AHA!! I can now tell my girlfriend that if I get third gen Camaro or Firebird I'll have better interior quality than the 300C(her mother and father both have one, and her brother might too.)
 

thedguy

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AHA!! I can now tell my girlfriend that if I get third gen Camaro or Firebird I'll have better interior quality than the 300C(her mother and father both have one, and her brother might too.)

A Play-Skool childrens play set has a better interior than Chrysler's currently sitting on dealer lots.
 

tigger

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Back on topic. The merger seems like a bad idea, too much redundancy. GM seems to have gone insane as of late. This and their decision to push back all their cars in development isn't good policy.
The only good thing about it that I've heard is that Chrysler has something like 11 billion in cash reserve. That money could cover a lot more 'restructuring' at GM.

A Play-Skool childrens play set has a better interior than Chrysler's currently sitting on dealer lots.
Indeed. I was in a Charger the other day and I was surprised at how cheap it felt. My brothers '96 Bonneville actually has a nicer interior.
 

bartboy9891

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A Play-Skool childrens play set has a better interior than Chrysler's currently sitting on dealer lots.

Playskool at least figured out how to make products made from plastic with rounded edges. After being in a Jeep Commander, it looks like they're deliberately tried to make the dash and glovebox area as sharp as possible. I knew most Chrysler products were not competitive in terms of their interiors, but I guess I didn't realize how bad they really were.
 

thedguy

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The only good thing about it that I've heard is that Chrysler has something like 11 billion in cash reserve. That money could cover a lot more 'restructuring' at GM.


Indeed. I was in a Charger the other day and I was surprised at how cheap it felt. My brothers '96 Bonneville actually has a nicer interior.

I'm one of the last people to bitch about interior quality, at least materials, as it just doesn't bother me. I honestly couldn't believe just how bad they were in the new Chrysler's though. Was only made worse when the Kia's and Hyundai's were cheaper, had as more or more power, and had interiors that were better than anything from the "big 2.5".

The really sad thing about all of this, the Charger/300c/Challenger all have significantly nicer switch gear on the HVAC controls than a current model C-class Benz. My friend told me to feel them on the cheaper benz's after first checking out pretty much anything else and they are junk.
 
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