Rumor: GM to buy Chrysler

About 10 years ago, in 1997, Chrysler was an independent and profitable American automaker. They were the third of the “Big 3” domestic automakers, but were looking to become bigger and better in every way. So that same year, Chrysler Corporation entered with a supposed “merger of equals” with DaimlerBenz AG of Germany. The $37 billion wedding between the German and American automakers produced DaimlerChrysler. Fast forward to today, and Chrysler is bleeding money ($1.5 billion in 2006) and Mercedes is desperate to get it off its hands. Not surprisingly, Chrysler is worth a lot less now that Mercedes is finished with them; $13 billion according to JPMorgan Chase, down from the $37 billion which Benz handed over to get its hands on Chrysler in 1997. Now that a sale is imminent though, an interesting debate has risen over what will happen to Chrysler, or more accurately, who will get Chrysler? Will an investment firm tear the company apart and basically sell the 3 divisions (Chrysler, Dodge, and Jeep) for scrap? Or will a Chinese company that knows nothing about cars buy Chrysler and use it to force their way into the American auto market? The most interesting so far though has been the rumor that General Motors, the largest automaker in the world, would snatch up Chrysler for whatever reason.

GMChrysler

General Motors has been the largest automaker in the world for a quarter of a century since they took over the reigns from Ford Motor Company in the 1930s. However, GM is now being challenged by Toyota for that title. Toyota sold over 9 million cars in 2006, just 50,000 less than GM. Is it possible that GM could be trying to buy Chrysler in its pursuit to keep its “#1 automaker” crown?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: