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Will GM bag Chrysler?
BY A CORRESPONDENT
February 19, 2006
If everything goes well General
Motors would own Chrysler, the
struggling US arm of DaimlerChrysler.
Talks aimed at this are currently on,
though GM and DaimlerChrysler bosses
are tightlipped.
Speculation about a possible sale or
spin-off of Chrysler, which sells
Chrysler, Dodge and Jeep vehicles, had
arisen ever since DaimlerChrysler
chief executive Dieter Zetsche said
last week that all options were open
for its struggling North American
unit. There are doubts however on
whether GM would benefit from an
outright merger with Chrysler owing to
the fact that both companies are
struggling. Excess production
capacity, bad sales and a heavy
exposure to trucks and SUVs are said
to be a burden on the automakers. .
Significantly, the pareys and the
speculations come four months after GM
ended talks with Renault SA and Nissan
Motor Company. GM and DaimlerChrysler
already have a joint venture with BMW
for a hybrid system that will be used
in an upcoming version of the Dodge
Durango SUV.
Meanwhile analysts say that the only
one to benefit would be Daimler
because they would get rid of
Chrysler. Pointing out that there's
room for cooperation on joint
ventures, industry expert said that a
full merger may not happen. Chrysler
has last week announced a
restructuring plan that will see
13,000 jobs axed. The revamp also has
plans to close an assembly plant in
Delaware and reduce production shifts
at other facilities.
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