GM - Chrysler merger. Why?
Focused on saving jobs?For a while analysts speculated that GM was interested in Chrysler because Chrysler had about $11 billion in cash that GM very much needed. However, since it will take about $10 billion of tax payer money to merge Chrysler into GM, where's the gain? Why not just give them the money to work through the credit crisis independently?
None of the Big 3 have demonstrated that they are yet ready to compete in the new automotive world. The Chevy Volt is the only thing for the Big 3 to hang their hat on, but the Volt still has not been proven in the real world , and it won't be for more than 2 years. Moreover, GM's new small car hope, the Chevy Cruze, is probably going to be delayed.
Thus, how does a merger with Chrysler make GM more competitive? How does it make GM's products more competitive? While this merger might help save US auto jobs - a noble goal - will it make the US auto industry any more successful? And, is trying to save jobs on the back of a yet unproven business model wise?
Labels: chevy volt, chrysler, GM
posted by Dahcredyns at
6:56 AM
2 Comments:
Damn shame we can't save the auto companies and trash the unions. That, alone, would save to auto companies about 40% of their labor costs, improve quality, and make them more competetive.
And don't slam me with some justification for how the mean old big car companies would mistreat their workers without the unions. Nissan has no union in their US auto plants and their workers are perfectly delighted to work for a little less pay, and no union hassle. They are much more productive and happier.
I don't disagree that unions have been a part of the problem.
Still, even if the unions were forced to accept non-union wages and benefits, sales would still be down double digits.
Honda, for instance, isn't facing the same sales declines as US automakers because it has focused much business on small cars such as the Civic and the CRV.
How does merging with Chrysler help GM on this front, that's what I'm wondering.
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