There have been quite a few different articles popping up about the possibility of GM buying Chrysler and my question is what would that do to Michigan's all ready ailing automotive industry? Would the good out weigh the bad?
This question is of course not an easy one to answer. There is no quick fix to either GM or Chrysler's problems. Even if GM were to buy Chrysler and get it out of the red while helping GM itself turn around, these things aren't likely to happen any time soon. For any of the benefits of a marriage such as this there would first have to be some house cleaning, meaning redundant managerial departments would be rolled into one (lay-offs) and most likely plants would be combined to make better use of economies of scale (more lay-offs). Not to mention it would compound GM's growing health care problems. The UAW would have a problem with lay-offs (as would I) that the new super company would have to over come. Then there would be the problems integrating dealers.
It's easy to see how the combining of these two companies could be bad for Michigan, but could it be good? The merger would allow the company to take advantage of greater economies of scale by sharing parts and R&D between more cars. It would allow Chrysler to better integrate it's engineering into it's parent company in ways that Daimler could only dream of (there aren't a whole lot of Mercedes built on Chrysler bodies, but it would be no problem building a Buick on a Chrysler body). The benefits of the the two companies coming together could save them billions and ensure their future better than if they were alone.
Then course you can't bring this subject up without mentioning the possibility of Toyota knocking GM out of the number one automaker spot. This spot isn't something GM wants to give up and combining the two companies would make GM that much harder to knock from it's spot. Not to mention that both Renault-Nissan and Hyundai want an American brand and are interested in a Chrysler buy. GM can't be very happy about the idea that either of these companies getting their hands on Chrysler.
My question still remains though, would this be a good deal for Michigan in the long run? I would have to think that anyway you slice it, if GM were to buy Chrysler it would hurt Michigan in the short term. But are they any ways that Michigan's ecomony comes out a winner in a deal like this? And would it really hurt if Chrysler were sold to Nissian or Hyundai? Right now it is already held by a German company. Also is it really worth all the hoops GM would have to jump through in order to make a deal like this profitable for them? Right now I think Michigan would get the short end of the stick when it comes to a deal like this, but really I have no idea. If all the talk in various media outlets are any indication this is a real possibility.
Here are just a few links to articles on the Subject:
http://www.msnbc.msn.com/id/17186447/
http://www.freep.com/apps/pbcs.dll/article?AID=/20070217/BUSINESS01/702170320/1014
http://www.businessweek.com/autos/content/feb2007/bw20070220_219247.htm
http://www.businessweek.com/bwdaily/dnflash/content/feb2007/db20070218_013874.htm
A quick google search will turn up a lot more
This question is of course not an easy one to answer. There is no quick fix to either GM or Chrysler's problems. Even if GM were to buy Chrysler and get it out of the red while helping GM itself turn around, these things aren't likely to happen any time soon. For any of the benefits of a marriage such as this there would first have to be some house cleaning, meaning redundant managerial departments would be rolled into one (lay-offs) and most likely plants would be combined to make better use of economies of scale (more lay-offs). Not to mention it would compound GM's growing health care problems. The UAW would have a problem with lay-offs (as would I) that the new super company would have to over come. Then there would be the problems integrating dealers.
It's easy to see how the combining of these two companies could be bad for Michigan, but could it be good? The merger would allow the company to take advantage of greater economies of scale by sharing parts and R&D between more cars. It would allow Chrysler to better integrate it's engineering into it's parent company in ways that Daimler could only dream of (there aren't a whole lot of Mercedes built on Chrysler bodies, but it would be no problem building a Buick on a Chrysler body). The benefits of the the two companies coming together could save them billions and ensure their future better than if they were alone.
Then course you can't bring this subject up without mentioning the possibility of Toyota knocking GM out of the number one automaker spot. This spot isn't something GM wants to give up and combining the two companies would make GM that much harder to knock from it's spot. Not to mention that both Renault-Nissan and Hyundai want an American brand and are interested in a Chrysler buy. GM can't be very happy about the idea that either of these companies getting their hands on Chrysler.
My question still remains though, would this be a good deal for Michigan in the long run? I would have to think that anyway you slice it, if GM were to buy Chrysler it would hurt Michigan in the short term. But are they any ways that Michigan's ecomony comes out a winner in a deal like this? And would it really hurt if Chrysler were sold to Nissian or Hyundai? Right now it is already held by a German company. Also is it really worth all the hoops GM would have to jump through in order to make a deal like this profitable for them? Right now I think Michigan would get the short end of the stick when it comes to a deal like this, but really I have no idea. If all the talk in various media outlets are any indication this is a real possibility.
Here are just a few links to articles on the Subject:
http://www.msnbc.msn.com/id/17186447/
http://www.freep.com/apps/pbcs.dll/article?AID=/20070217/BUSINESS01/702170320/1014
http://www.businessweek.com/autos/content/feb2007/bw20070220_219247.htm
http://www.businessweek.com/bwdaily/dnflash/content/feb2007/db20070218_013874.htm
A quick google search will turn up a lot more
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